Developing Start up Ideas - Introduction To Business - ثاني ثانوي

PLANNING A CAREER IN... SMALL BUSINESS OWNERSHIP 20 siness Management &Administration Entrepreneurship should be about fulfilling dreams—for the entrepreneurs themselves, their families, their employees, and their communities. The journey should always be about more than just the money. As a small business owner, what you do matters, not just to yourself, but to others as well. As look to your you future career path, there are definite advantages to initially working for someone else. It can allow you to learn an industry, build relationships, and develop important skills for the future. But many individuals choose to start their own company early in life too. We all know entrepreneurs and small business owners who will not be the next global business tycoon, but who will build or already own small businesses that create value and make a difference in the community. These small companies are the heart and soul of local communities and an increasingly important element of the Saudi economy. Related Job Titles Entrepreneur Director Analyze Career Opportunities in... SMALL BUSINESS OWNERSHIP Use library and Internet resources to learn more about careers in entrepreneurship. Choose one of the job titles listed in the box and answer the following questions. 1. Are there any minimum educational requirements for the job? Explain other training or education that might be needed for advancement. 2. Is this a career that interests you? What can you do now to help prepare yourself for this career? What it's like to work as a... Small Business Owner After much deliberation, Haifa finally followed her dream of setting up her own small business. For many years, she had craved the responsibility and independence of being her own boss. However, she didn't have a specific business type in mind, and struggled to think of a unique start-up idea. She didn't want to take the risk until she found a business plan that she cared about enough to devote her energy and savings to. Then one day the question answered itself. A store came up for rent in her local town, and she was offered the remaining homewares stock for a good price. Haifa decided to reopen the store temporarily, then use the profits from selling the stock to convert the space into an office to develop a new business plan. Haifa enjoyed running a store more than she had expected and made a good profit. She decided to forget her other plans and expand the range of homewares with her own designs. It wasn't easy running her own small business, and although the store wasn't her original plan, it turned out to be a rewarding challenge. What about you? Do you have what it takes to be a small business owner? It requires serious thought and d you may need to begin very small, but dream big if you want. Follow a dream that care about and enjoy a life that you truly want to live! you really وزارة التعليم Ministry of Education 2024-1446 Starting a Small Business | 235

8.1 Developing Start-up Ideas Link to digital lesson www.ien.edu.sa Learning Outcomes Once you have completed this lesson, you should be able to: 8.1.1 Understand the concept of opportunity recognition. 8.1.2 Describe three basic types of start-up ideas. 8.1.3 Describe common sources of start-up ideas. Key Terms Opportunity Recognition Start-ups New Technology Ideas New Market Ideas Pivot New Benefit Ideas Focus on REAL LIFE Hani has an idea for a tech start-up that he thinks could be hugely successful in Saudi Arabia and other parts of the world. He's often outside and fed up of his cell phone running out of battery, with no means to charge it up. So he has developed an idea for a lightweight and flexible solar panel that can be integrated into a phone case, to charge up in the sun during the day. However, after carrying out some research, he discovers that another small company in Jeddah has already had a similar idea and started developing a basic product. At first, Hani is disappointed, but he soon realizes that his design is more innovative and offers additional benefits. If successful, he believes that the technology could have a range of other applications for other small devices, including wearable solar panels integrated into the fabric of clothing accessories or bags. Hani decides to continue on with his original idea and is determined to make his products the market leaders. LO 8.1.1 IDENTIFYING BUSINESS OPPORTUNITIES The purpose of this lesson is to help you identify a business opportunity that is best suited to you and has higher odds for success than other possible options. By studying this lesson, you should be able to distinguish among the different types and sources of start-up ideas. You can be certain that entrepreneurs are going to keep coming up with innovative ways of doing things. And the new businesses they create often change the way we live. However, an entrepreneur must be able to recognize a start-up idea that can lead the way to sound business prospects. In fact, identifying imaginative new products or services that may lead to promising business ventures is so central to the entrepreneurial process that it has its own name opportunity recognition. What hobbies, interests, and experiences do you have that could help you achieve your Life-Span life-span goals? Describe steps you could take Plan now that would expand your experiences and opportunities for achieving your life-span goals. 236 Chapter 8 | Starting a Small Business وزارة التعليم Ministry of Education 2024-1446 GE44.PATHWAYS.G02.ITB.SB.PP1.indb 236 08/05/2024 09:14

What sets entrepreneurs apart from everyone else is their ability to see the potential that others overlook and then take the bold steps necessary to get businesses up and running. Often, the identification of a new business opportunity is the result of an active search for possibilities or insights derived from personal or work experiences. Perhaps you already have a business idea in mind that you would like to pursue. With good planning and the right strategy, you may soon be on your way to success as an entrepreneur. On the other hand, you may have a passionate desire to start your own company but are not sure that you have locked onto the right business idea to get you there. Or maybe you have an idea in mind but are not sure if it is a good business opportunity. No matter which group you fall into, taking the rights steps will help to get you started on the right foot, with the right idea and the right strategy. This lesson focuses mostly on opportunity recognition and strategy options as these apply to start-ups that is, businesses that did not exist before entrepreneurs created them. However, as you read this lesson, keep in mind that many of the insights and strategies described here also apply to ongoing small businesses, not just to start-ups. CHECKPOINT What is opportunity recognition? ར 100 14.5km Are you able to recognize current opportunities for business ideas? Which new technologies might inspire a new start-up? LO 8.1.2 TYPES OF START-UP IDEAS So how do you get started? It all begins with a promising business idea. But new venture concepts are not all equal, and they can come from many different sources. By recognizing the nature and origin of start-up ideas, an entrepreneur can broaden the range of new ideas available for his or her consideration. Figure 8-1 shows the three basic types of ideas from which most start-ups are launched: ideas to enter new markets, ideas based on new technologies, and ideas that offer new benefits. Each type of idea has its own unique features. وزارة التعليم Ministry of Education 2024-1446 Entrepreneurial Success Latifa Al-Walan is a businesswoman and information engineer, who invented the first electronic machine used in making Arabic coffee in the world (Yatooq), and she was able to register a patent for her invention in her name. Search for more information on the success story of Latifa Al-Walan, give a brief presentation about how she developed the idea for the Yatooq machine, and her journey in the world of entrepreneurship. 8.1 Developing Start-up Ideas | 237

New market ideas New technology ideas New benefit ideas Offering a new prepaid laundry service to college students that is available on other campuses Using remote- controlled drones equipped with digital video cameras to detect and map evidence of irrigation failure in arid countries Developing an app that allows pet owners to see openings in the schedules of all vets in a city and set up emergency appointments by pushing '1' on their smartphones Can you think of examples of each of these types of ideas? FIGURE 8-1 Types of Ideas that Develop into Start-ups New Market Ideas Numerous start-ups develop from new market ideas—that is, those concerned with providing customers with a product or service that does not exist in a particular market but does exist somewhere else. Indeed, many of the largest companies in existence today were initially launched with a vision of applying existing ideas in new contexts. Because it has so much potential, taking this angle on new venture ideas should be given careful consideration. New Technology Ideas Other start-ups are based on new technology ideas, which involve new or relatively new knowledge breakthroughs. This type of business can be high risk because there is usually no definitive model of success to follow, but it can also offer tremendous promise. You should pay close attention to the fundamental features of a well-conceived new venture of this type. For starters, the technology involved needs to be unique, better than others currently available, feasible to implement, and focused on a market need that is deep enough to generate sufficient sales. Also, the founders should have the knowledge, skills, resources, and connections necessary to build a profitable company around the new technology. Because of the complexities involved with new technology businesses, it often becomes necessary for entrepreneurs to pivot at some point after start-up. This refers to refocusing the start-up as it unfolds or completely recreating it if the initial concept turns out to be seriously flawed. If the initial idea turns out to be unsound, it is best to “fail fast and fail cheap." While pivoting is sometimes helpful for other types of start-ups, it is common and frequently necessary (often more than once) for those based on new technologies. P238 Chapter 8 | Starting a Small Business Ministry of Education 2024-1446

New Benefit Ideas New benefit ideas are based on offering customers benefits from new or improved products or services or better ways of performing old functions― account for a significant number of start-ups. For example, a growing number of successful start-ups have been launched offering healthier alternatives to sweet treats and snacks, highlighting that focusing on new benefits can sometimes lead to really great business ideas. CHECKPOINT What are the three key types of start-up ideas? Can you think of any novel applications for new technologies? LO 8.1.3 COMMON SOURCES OF START-UP IDEAS Ideas for a start-up can come from anywhere, but for now we will focus on personal/work experience, hobbies and personal interests (see Figure 8-2). Personal/Work Experience One of the primary sources of start-up ideas is personal experience. Often, knowledge gleaned from a present or former job allows a person to see possibilities for modifying an existing product, improving a service, becoming a supplier that meets an employer's needs better than current Hobbies and interests Other leads Experience in work and life vendors, or duplicating a business concept in a different location. Perhaps your personal contacts (your network) include suppliers that are interested in working with you or customers whose needs are not currently being met. Start-up concepts may even result from trying personal circumstances or misfortunes, especially when the entrepreneur can use work experience or technical skills to address the challenge at hand. Regardless of the situation, these insights may lead you to an opportunity with tremendous potential. Where do your best ideas come from? FIGURE 8-2 Typical Sources of Start-up Ideas وزارة التعليم 8.1 Developing Start-up Ideas | 239 Ministry of Education 2024-1446

Can you think of a person who successfully managed to turn their hobby into a small business? Hobbies and Personal Interests Sometimes, hobbies grow beyond being leisure activities to become businesses, and they can add surprising energy to the start-up process. For instance, horseback riding enthusiasts might start a riding equipment rental operation as a way to make income from an activity that they enjoy. While we don't expect all or even most small businesses to grow into life-changing technology giants, these success stories prove that fun side projects can sometimes grow into significant new companies with serious profit potential. In fact, recent research has revealed that start-ups based on a personal pastime are more likely than others to generate early sales and reach profitability, and the entrepreneurs who launch these businesses tend to be more deeply committed to them. Other Idea Leads If the sources of start-up ideas just discussed do not reveal a specific entrepreneurial opportunity that is right for you, examine the following methods shown in Figure 8-3, which have been useful to many entrepreneurs: Tap into personal contacts with potential customers and suppliers, professors, patent attorneys, former or current employees or co-workers, venture capitalists, and chambers of commerce. Visit trade shows, production facilities, universities, and research institutes. Observe trends. For example, the move away from dependence on oil is linked to material limitations, energy shortages, emerging technologies, pollution problems, and social movements. Pollution problems can indicate that there is a demand for sustainable alternatives to polluting technologies, which may become more popular in the future. Pay close attention to all forms of change, including shifts in specific industries and markets, demographic swings, and emerging discoveries or scientific breakthroughs. Read trade publications, and profiles of entrepreneurs and various business opportunities in trade periodicals. Search the Internet, where you can find an unlimited supply of information on the start-up process, specific opportunities, and online tools that profile business ideas that can be browsed by industry, interest, and profession. Pu 240 Chapter 8 | Starting a Small Business Ministry of Education 2024-1446

Do you have personal contacts who could help you with a start-up idea? Search the Internet Read trade publications Tap personal contacts Other leads Identify change Visit trade shows Observe trends 9 CHECKPOINT What are the common sources of start-up ideas? Can you think of any other potential start-up generation leads? FIGURE 8-3 • Other Leads for Generating Start-up Ideas وزارة التعليم Ministry of Education 2024-1446 8.1 Developing Start-up Ideas | 241

Business Insight Online Customer Reviews You are looking to buy a new technology product. Which brand should you buy and what store should you patronize? Answers to these questions often start with personal contacts. According to a Nielsen online survey, 84% of global respondents stated that word-of-mouth recommendations from friends and family are the most influential source of information. Nielsen also found that consumer opinions posted online are now the second-most important source of information. Many small businesses rely on good feedback from online reviews to attract new and returning customers. Currently, over 60% of customers read online reviews before making a purchase decision. Studies have shown that positive online reviews influence consumers to buy products or services and negative online reviews cause consumers to refrain from buying them. A number of customer review and rating sites now operate online. These businesses offer consumer ratings and links to purchase products or services. As the consumer online review process evolves, online reviews are increasingly linked to social networks. This allows you to see reviews written by your friends and family. Online review services can also be an invaluable resource for entrepreneurs looking for new start-up ideas. What better way to fulfil a market need than to consult the direct and honest feedback of your potential audience? Think Critically 1. How do online reviews benefit consumers? 2. How should a small business react to the online review process? Entrepreneurial Success Abdullah Al Dabbas is Chairman and founder of Baja Food Industries Company. He started the company back in 1997 in Riyadh, where he sold Egyptian seeds from a truck on the side of the road. This went so well that he had the idea to expand into a store that sold seeds, nuts, and coffee. Search for more information about Baja and give a brief presentation about Abdullah Al Dabbas's efforts in transforming a small project into a major well-known Saudi brand. p242 Chapter 8 | Starting a Small Business Ministry of Education 2024-1446

8.1 ASSESSMENT Key Concepts Determine the best answer. 1. True or False. Identifying imaginative new products or services that may lead to promising business ventures is known as opportunity recognition. 2. Which of the following is not one of the typical sources of start-up ideas? a. personal experiences b. hobbies and interests c. picking a topic at random d. experience in work 3. The introduction of new or improved features of products or services is known as: a. new benefit idea b. new technology idea c. failing d. knowledge breakthrough 4. True or False. A new benefit idea always comes from a new technological innovation. Make Academic Connections 5. Research Use the Internet or library to research small businesses in your local community. Choose three different types of business. Describe what products they sell or services they offer and identify any special characteristics that make them unique or that differentiate them from other businesses. Explain whether you think these businesses would be attractive start-up propositions, and suggest any innovations or improvements that could be made if you were the small business owner. وزارة التعليم Ministry of Education 2024-1446 8.1 Developing Start-up Ideas | 243