A MARKET IS WAITING FOR YOU!!

Your business idea

Janet’s experience

Janet has a small farm and her husband works in a nearby mine, but even though both of them
have jobs, they do not earn enough money to pay for their children’s education. Janet decides to try and
start her own business by rearing chickens to sell. She knows how to do it and her uncle gives her a loan of
$400 to start the business. However, before she buys the chicks, someone tells her that there is a huge
demand for sunflower oil because of its lack of availability in the market. Traders are knocking on the doors
of local farmers asking them to produce it. Thinking she can earn a lot more money from pressing
sunflower seeds for oil, Janet changes her business idea and starts an oil pressing venture. Janet has
never grown a large quantity of sunflowers. She spends all the money from the loan to buy seeds, fertilizer
and the oil pressing equipment. Since she uses most of the family farmland to grow sunflowers, there is
less land to grow maize and vegetables for the family to eat. The chemicals from the fertilizer begin to
make her children sick. She now has to buy more food for the family. It takes a lot of time and effort to
process the oil, so, Janet has to employ someone to help her. A lot of other farmers have started growing
sunflower seeds too. Therefore, by the time her oil is ready to sell, the market is already saturated with the
good and Janet cannot find a buyer. To reduce her losses, Janet has to sell the oil at a very low price to a
local shop. As a result, Janet makes very little money and she is not able to pay back the loan.

What is wrong with Janet’s business idea? Why?

Now look at another case:

Lily’s experience

Lily had been working in the assembly line of a garment factory for more than five years. Her salary
was low and she was often required to work overtime. Lily’s sister-in-law came to visit and complained to
Lily that she was unable to find any good clothes for her 12 year-old daughter. She said that the clothes in
the stores all seem to be either made for younger children or for adults. After the visit, Lily decided to go
around to the clothing shops in her town. She saw young teenage girls shopping in the stores, but she
noticed that the number and variety of clothes geared to that age group was limited. She had already been
thinking of quitting her job and opening her own business.

Therefore, Lily decides to design some pretty clothes and dresses for young teenage girls. She
makes some drawings of clothing that would appeal to that age group. She then takes her drawings to the
local clothing shops, asking the owners if they would buy the dresses in the drawings, how much they
would pay for them and how many they would buy. The shop owners seemed to be quite happy with her
designs and said they would display her clothes. Lily then uses her savings to buy a sewing machine and
some material to make her first batch. She works in the evening after getting off from work at the garment
factory. All of the dresses she makes sell very well and the shops are willing to pay her in cash upon
delivery. Lily then decides to quit her job to focus on her own business. Within six months, Lily starts
receiving regular orders from the shops. She plans to buy one more sewing machine and hire one of her
friends to work for her.

Why is Lily successful in her own business? What did she do that made her successful?
Starting a business is not an easy job. It takes a lot of work and a lot of planning. The effort and the money
it takes to start a business may be lost if you do not start the right business. The right business begins with
a good description of your business idea.

2. What makes a business idea?

A business idea is a short and precise description of the basic operation of an intended business.
Before you start a business, you need to have a clear idea of the sort of business you want to run.

Your business idea will tell you:

• Which need will your business fulfil for the customers and what kind of customers will you
attract?

• What good or service will your business sell?

• Who will your business sell to?

• How is your business going to sell its goods or services?

• How much will your business depend upon and impact the environment?

A good business idea will be compatible with the sustainable use of natural resources and will
respect the social and natural environment on which it depends.

3. Brainstorming

Brainstorming means opening up your mind and thinking about many different ideas. You start with
a word or a topic and then write down everything that comes to mind relating to that subject. You continue
writing for as long as possible, putting down things that you think of, even if they seem irrelevant or odd.
Good ideas can come from concepts that initially seem strange.

Brainstorming works best in a group. Get your family or friends together and ask them to help by
writing down ideas they have when they hear the word or subject matter.

Structured brainstorming is when you think of the different processes that are involved in the
operation of a particular business and the goods/services that can be offered with respect to those
processes. This is different from thinking about random items related to a particular business field and type.

Try to think of all the businesses that are related to different aspects of a product:

• Those involved in production

• Those involved in the selling process

• Those involved in recycling or re-using materials

• Those indirectly related (spin-offs)

• Those involved in servicing

However, when considering the following five criteria, her list has been reduced to only six ideas.

• Which need is to be fulfilled?

• What good or service will the business sell?

• Who will the business sell to?

• How will the business sell its good or service?

• How much will the business depend upon and impact the environment

Try to answer these questions for each idea:

WHICH

• Which unfulfilled need do you want to satisfy for your customers?

• Which needs do your goods or services satisfy for the customers?

WHAT

• What goods or services do your customers want?

• What quality of products do your customers want?

• What information do you have about the goods or services for this business?

• What are the positive or negative impacts your business will have on your community and the natural
environment?

WHO

• Who will be your customers for this particular business? Will there be enough of them to make your
business profitable?

• Who are your competitors and what are their strengths and weaknesses?

HOW

• How will you be able to supply the quality of goods and services that your customers want?

• How much do you know about the quality of goods and services that your customers want?

• How does running this sort of business suit your personal characteristics, skills and situation?

• How do you know that there is a need for this business in your area? • How do you think you will feel
about running this business in ten years?

SWOT ANALYSIS

One method people often use to decide the most suitable business idea is a SWOT analysis. It helps you to
focus on the possible problem areas and the potential advantages of each idea.
A. Inside the Business

To analyse the strengths and weaknesses of your business idea, evaluate what will the business be good
at and what the potential drawbacks or problems might be.

Strengths are the specific positive aspects which will give your proposed business an advantage over
similar business ventures and the competitors. It could be that you propose to sell a better quality product
or that you have a location which is more accessible to your customers. There will always be demand for
new products that offer new ways of solving old problems or are more efficient than other products. Could
your good or service benefit from having a Fair Trade or Organic Product certificate? Customers are
inclined to pay higher prices for Fair Trade or Organic Products.

Weaknesses are the things that your business will not do as well as other businesses. Perhaps your costs
will be higher because your business is located a long way from the source of supplies needed for
production and you will have to pay more for transport or perhaps you are unable to meet the quality
standards of the competition.

B. Outside the Business

To analyse the opportunities and threats of your proposed business, look at the external environment. What
aspects of the environment will benefit the business and what aspects will negatively affect the business?

Opportunities are on-going potential developments that will be good for your business. It could be that the
demand for the product you are proposing will increase because of an influx of tourists. It could also be that
new regulations enacted by the government for the promotion of green jobs and social enterprises will
result in a higher demand for the type of products that you will provide.

Threats are events that may negatively affect your business. For example, the business idea could be so
simple that other people may start similar businesses in your area and reduce your share of the market.
There could also be proposed legislation affecting the operation of your business, such as restrictions on
the import of certain products.
Bear in mind these simple rules for successful SWOT analysis.

 Be realistic about the strengths and weaknesses of your business when conducting SWOT analysis.
 SWOT analysis should distinguish between where your business is today, and where it could be in
the future.
 SWOT should always be specific. Avoid any grey areas.
 Always apply SWOT in relation to your competition i.e. better than or worse than your competition.
 Keep your SWOT short and simple. Avoid complexity and over analysis
 SWOT is subjective.

Unique Selling Proposition (USP)

Unique Selling Proposition is the factor or consideration presented by a seller as the reason that
one product or service is different from and better than that of the competition. Before you can begin to sell
your product or service to your target customers, you have to sell yourself on it. This is especially important
when your product or service is similar to those around you.

USP would require careful analysis of other businesses' ads and marketing messages. If you
analyze what they say or what they sell, not just their product or service characteristics, you can learn a
great deal about how companies distinguish themselves from competitors.

Here's how to discover your USP and use it to increase your sales and profit:

 Use empathy: Put yourself in the shoes of your customers. Always focus on the needs of the target
customers and forget falling in love 27 with your own product or services. Always remember, you
are making this product or providing for the target customers to eventually increase sales, earn
profit and not making this product or services for yourself. Essential question such as what could
make them come back again and again and ignore competition? Most possible answers will be
focused on the quality, availability, convenience, cleanliness, reliability, and friendliness.
 Identify what motivates your customers. It is very important for you to understand and find out
what drives and motivates your customers to buy your product/service. Make some efforts to find
out, analyze, and utilize the information what motivates the customers in their decisions to purchase
the products/ services.
 Discover the actual and genuine reasons why customers buy your product instead of a
competitor's. Information is very important in decision making. A competitive entrepreneur always
improve their products/services to provide satisfaction and of course retention of customers. As your
business grows, you should always consider the process of asking your customers important
information and question that you can use to improve your products/ services.