Is Your Idea An Opportunity?
Demand driven – Innovative - Feasible
So what’s the difference between an idea and an opportunity you may ask? An idea is a creative connection between two or more pieces of information. That only turns into an opportunity when there is a need, problem and either actual or potential demand for a product or service.
Your opportunity also needs to be innovative. Evidence suggests that innovating companies sustain a higher performance and grow faster than non innovators. That doesn’t mean you have to come up with a cure for cancer or something that’s never been done before.
Innovation may result in new products or services but it is not confined solely to their development. Austrian economist Schumpeter identified five ways in which an entrepreneur can cause market changes through introduction of innovation. As well as new products or services there is also new methods of production, for instance Henry Ford’s production line for the Model T was innovative compared to hand crafted cars manufactured previously. Another innovative method is new markets, it is innovative to take existing products or services and sell them into new markets – Starbucks was on every street corner in the US so they expanded by coming to the UK.
New marketing methods can be another form of innovation, the product or service remains the same, the market doesn’t change, the key innovation comes from the way in which it is marketed. That could be actual channel used, for instance Amazon revolutionised the book selling industry by using the internet, or the way in which benefits are sold, consider how McDonalds changed their marketing method after negative media such as Supersize Me. The final form of innovation is new methods of operating, altering the internal structures of a business
Perhaps the most important factor you need to consider when determining whether your idea is an opportunity is feasibility, particularly as a young entrepreneur. Product ideas in particular can take a lot of testing, you need to consider who can carry this out and how much it will cost.
Market Assessment
You might have come up with a great business idea but what is your market? Who is going to be interested in buying your product and why? What pain or problem are you solving and what element of innovation are you offering that will make them transfer allegiance from their current suppliers?
You need to consider in some detail who the market is – general public or business? Where are they based – locally, nationally or internationally? Are there common themes amongst the market i.e. are they all students? How big is this market, how many potential customers could you have? Is it a growing or declining market? How much are they willing to pay? Answering these questions will help you segment your market to target promotion at them in an effective manner.
You also need to consider who is your competition is and you must think laterally! If you’re planning to set up an Italian restaurant then your competition is not just other Pasta / pizza places but all eateries, even take away.
To assist in your hunt for answers you’ll need to carry out some market research. Business Gateway have some excellent information you should check out as do NESTA in their Creative Enterprise Toolkit which is well worth a look.
Another marketing area to consider is how you’re going to let your market know that you exist and encourage them to buy. How are you going to sell for instance, via a website, retail outlet, telesales, etc? How are you going to promote the business? Flyers, television ads, dancing girls high kicking their way through the streets? Last but by no means least how much are you going to charge?
For more information on developing a marketing plan then again Business Gateway has useful information.
Further market research / marketing resources:
Intellectual Property
One competitive advantage that can differentiate you from your competition is intellectual property. IP protects unauthorised exploitation of your rights and rewards innovation. There are four main areas of IP:
- Patents – which cover new technical concepts and inventions
- Trade Marks – which cover brands, image and reputation
- Design Rights – which cover form and appearance
- Copyright – which covers the expression of an idea such as text, graphics, art and music
IP can be a complicated area so it’s not unusual to feel daunted by it. Take a deep breath, have a read at the UK IP Office My IP guide and take proper advice!
In conjunction with our colleagues at the Scottish Institute for Enterprise current students can access their Patent Fund support which can provide funding for up to 50% of the initial filling costs of a patent. Contact Greig for further information.
Further IP resources:
Funding Needs
Once you’ve investigated whether your idea can be an opportunity then we can discuss your funding needs and possible sources. Public sector funding isn’t as generous as it once was but for innovative opportunities there can be funding potential from the likes of PSYBT, NESTA Starter for 6, Shell Livewire, Scottish Enterprise, Scottish Executive and local authorities.
As public sector funding is generally match funding (i.e. they will not cover 100% of the required costs) there will also be the need to find further finance. This may come from ‘friends, families and fools’, banks or business angels. Further information on these can be found in our Financing guide. For potential high growth businesses the high growth guide from Business Link will be useful.
At this stage it’s worth reviewing your efforts so far by carrying out a First Screen.