Friday, June 20, 2008

SMEs - ideas versus opportunities

I must say I get fairly intense when people talk about ideas generation being important for developing new businesses.


What is an opportunity. An opportunity exists when in the process of doing our environmental scanning for our PESTEL analysis, we see that by applying our strengths to a current event in one of the environments, we can turn the event into an opportunity. If you do not have the strengths to take advantage of an event, it is not an opportunity. An opportunity is an event that you can benefit from by applying your strengths.

The problem is that most SME owners do not do a regular environmental scan. We are all exposed to the environment around us all the time through a variety of media including newspapers and television. You cannot escape it. The question however, is whether or not you simply observe, or whether you observe in the context of business opportunities.

Do you read the newspaper and think, "I could make money out of that"? Someone who does is opportunity aware, an entrepreneur. If not they are merely SME owners. Ideas are also confused with innnovation. In doing our environmental scanning and observation we often see problems portrayed. Innovation is the task of finding solutions to problems that a particular market has. It could be the product that needs to be innovated, or perhaps the process. Either way, innovation is about changing existing products and/or processes to solve problems.

Finally, successful businesses are built on solving problems, ie. meeting the needs of the market. Ideas that are generated in a vacuum are simply that - ideas. They will not make money. Needs and problems make money for the entrepreneur who solves them.

Strike the word idea from your entrepreneurial dictionary, as it will merely lead to disappointment

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