Chapter 3- Business Idea Generation

If you prefer to work extensively with people, in which of the following businesses should you probably NOT purse a business opportunity?

Billing Bookkeeping

Which of the following businesses could be most likely pursed by individuals who do NOT prefer to work with people?

Bookkeeping Internet-based businesses Order fulfillment

_________ is the creative process in which a group of individuals are brought together and asked to generate ideas related a specific topic, with little effort given to evaluating the potential of the ideas.

Brainstorming

When conducting a gap analysis, the first column should include the _____.

Business ideas

In the context of business risks, how can an entrepreneur identify competitors to a new potential business?

Competitors

Which of the following are examples of family experiences that build knowledge and can grow into a new business opportunity?

Cooking with family members Tracing family history working on the house or around your family property

Which of the following contribute to personal skill sets?

Current work experience past work experiences hobbies family history

Once a skill analysis has been completed, the next step is to:

Examine the marketplace for opportunities.

Gap analysis involves identifying an opportunity between the demand for a product or service and the availability of the product or service that you can buy from vendors to be resold to your customers.

False

If individuals are not detail oriented, then a business that is procedurally complex and involves managing a wide variety of tasks may be appropriate.

False

The process of generating new business ideas is something that occurs automatically.

False

When brainstorming, the true potential for each idea is often fully evaluated before the process moves onto generating the next one.

False

Why is discussing potential business with family members an attractive way to identify business opportunities?

Family members know you disposition. Family members can provide an honest perspective. Family members know you abilties.

What are the typical categories used to analyze a business idea?

Finances time non financial resources risk competitors

If done well, the process of generating ideas will result in:

Ideas that appear to be an opportunity Ideas that match the founders' skills A list of three to five business ideas.

Which of the following questions could be explored to identify additional skill sources?

In what industry would I prefer to work? What skills were involved in the three greatest accomplishments of my life? What type of magazines and books do I read?

The founder(s) of a business need to be intimately involved in the:

funding the business running the business design the business

A founder or founding team must have synergy, which is a combination of:

understanding of an industry. competitive advantage skill sets

The business owner whose business is both a(n) ______ and a(n) _______ is difficult to beat.

vocation; avocation

The business owner whose business is both a(n) ________ and a(n) ______ is difficult to beat.

vocation; avocation

An individual's hobbies and past work experience contribute to the individual's personal ______ set.

skill

An individual's work experience builds _______ sets that can have direct applicability to the pursuit of a new business.

skill

In hobbies and activities, individuals develop ________ specific to the hobbies.

skills

Successful business ideas are determined by the following:

the creativity of the entrepreneur

The first step in entrepreneurship is:

the desire to own and operate a business.

Each type of business will require different _____ frames.

time

Identify a true statement about the process of generating new business ideas.

As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful.

List the steps that are important to the development of a quality business idea. Start from the first or initial step

1) List and evaluate one's personal skill sets. 2) Analyze the market and look for a gap or a need that is not being met effectively. 3) Compare one's ability to fill the identify gaps with an opportunity available.

Along with the business idea, what else should be included in the first column of the gap analysis chart?

A brief explanation of the business idea.

In the context of identifying new business opportunities, which of the following is the definition of brainstorming?

A creative process whereby a group of individuals are brought together and asked to generate numerous ideas, with little or no effort made to evaluate the potential for each idea

In the context of generating new business ideas, which of the following is an example of brainstorming?

A family gathers after dinner to discuss the various small industries they can set up their land.

What is the suggest starting point for generating business ideas?

Analyzing the skills set of the potential founders

Which are hobbies a good skill source?

Individual are passionate about their hobbies. Hobbies require the development of specific skills.

Which of the following is a principle cause of new business failure?

Insufficient financial resources at founding

Which of the following are the characteristics of a gap analysis methodology for a new venture using a chart?

It is a reasonably quick analysis It requires minimal research

Which of the following statements make interviewing key successful entrepreneurs an attractive way to identify opportunities or gaps?

Most successful entrepreneurs have great ideas Most successful entrepreneurs are too busy with their own business to purse new ventures. entrepreneurs have a keep eye for what businesses are needed in an area.

Which of the following statements are true regarding skills?

Skills are derived from our history. Skills are relatively idiosyncratic to the individual Skills are derived from hobbies.

In the context of nonfinancial resources, for a gap analysis, which of the following are to be considered for a new business?

Special contacts with customers Physical location of the business special contacts with suppliers.

What are included in the first column of the chart used in the gap analysis?

The business idea A brief explanation of the idea

Identify a true statement about the potential founder of a new business.

The founder of a new business needs to be intimately involved in its designing, funding, and running

Which of the following support the rationale for starting a business idea generation process by analyzing the skills sets of the potential founders?

There are literally millions of opportunities. Pursuing opportunities without the required skill set wastes time. Pursing opportunities without the requisite skill wastes money.

Entrepreneurs can examine business risk by considering three threats to business success. Those three threats are:

Threats to sales generations schemes. Threats to operational financing. Threats to the profit margin.

An individual's professional background and hobbies are some of the main resources for new business ideas.

True

Family experiences are an often overlooked source of skills for a new venture.

True

Which of the following questions should NOT be explored to identify additional skills sources?

What are my worst accomplishments in life?

Which of the following are questions an entrepreneur should answer regarding work experience?

What aspects of the job were most enjoyable in what areas would you be considered an event what skills were critical to the jobs you performed

Which of the following are probably questions potential business owners should ask themselves regarding hobbies?

What is it about the hobby that is exciting? What products/services were used in these hobbies? What specfic skills were required of the hobby?

Which of the following questions should be considered by an entrepreneur when analyzing the nonfinancial resources category of a gap analysis for a new business?

What unique capabilities provide the entrepreneur a competitive advantage? What unique skills will be required to run the business?

The finance category on the gap analysis chart examines the:

amount of money required to start a business amount of money required to operate a business amount of family resources that could be committed.

A gap _____ is the relatively simple process of systematically examining the difference between what is expected and what occurs.

analysis

_______ is the creative process in which a group of individuals are brought together and asked to generate ideas related to a specific topic, with little effort given to evaluating the potential of the ideas.

brainstorming

What categories of the gap analysis chart would examine companies doing the same thing as the new potential business?

competitors

Without the needed skills, the founders would be faced with not holding any advantage over the ______ who have the necessary depth in the area.

competitors

______ are uniquely positioned to provide a much-needed honest perspective on your efforts toward creating a new business.

family members

Once a list of skills and abilities have been developed, the next step is to perform a _______ to examine the marketplace for an opportunity that exist between the demand for a product and the supple provided by firms in the market.

gap analysis

Which of the following is NOT a common source of entrepreneurial skills?

genetics

The steps in the process of generating ideas do not occur in a(n) ______ fashion but should occur in a(n) _____ manner.

linear; interactive

the process of generating ideas will result in a list of three or five ideas that:

match the founder's skills appear to be an opportunity.

The initial analysis is a process of:

moving from three to five ideas to a single idea.

High development costs, rapid expansion plans, and high inventory needs are considered threats to:

operating financing

A(n) _______ that uses your education is a potential source of a business.

opportunity

Which type of gap analysis examines the opportunities in the marketplace side-by-side with the individual's ability to address those gaps?

opportunity analysis

Perhaps as important as the entrepreneur's skills in a particular area is the need for the entrepreneur to have _______ for starting a business in that domain.

passion

Once a list of skills, abilities, and interests has been developed, the next step is to:

perform a gap analysis

All new businesses have an inherent amount of _____ associated with the starting and operation of the business.

risk

Threats to profit margin, threats to operational financing and threats to sales generation schemes are three threats to business success that entrepreneurs consider when they examine and characterize business _______

risk

The ability to attract customers to your business instead of your competitors is an example of a threat to _____.

sales generation schemes