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NVIG Suggestions Tips

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15 views5 pages

NVIG Suggestions Tips

Uploaded by

callywang02
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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New Venture Business Idea Assignment

Recommendations for Success

ITEM 1
Remember a new venture is more than a new product/service
- Include descriptions of (a) your product or service, (b) your target market, and
(c) the functions you will perform and/or outsource as a new venture.
- This applies to questions 1 and 3a.

Give thoughtful consideration to your target market


- E.g., product may be good for X demographic, but the target market is both X
and Y since Y are influencers and purchasers
- E.g., businesses and/or consumers

Be succinct and clear


- Avoid broad sweeping descriptions of your vision that don’t make your
intentions apparent to the reader
- e.g., “It’ll be a diner where people come to relax after a hard day at
school” (unclear vision)
VS.
“Middle income restaurant serving authentic Italian food with gangster
theme, video arcade and dance floor for teens, located in malls near movie
theatres in New York and other major urban centers” (succinct and clear)
Be novel
- your job is to do something new (new product/service, new market , or some
combination thereof), so “a grocery store in Cincinnati” without some novel
concept in terms of location, inventory, services isn’t worth including
- if your idea builds upon an existing one acknowledge this openly

ITEM 2A
Specifically address (a) your product or service, (b) your target market, and (c) the
functions you will perform and/or outsource as a new venture.

Choose a SPECIFIC target market


- Don’t assume your product/service will appeal to the entire consumer
market/globe
- Don’t assume you’ll have the resources to reach the entire globe with your
new venture even if the product/service is global in nature
- Avoid statements like “everyone needs clothes/food so our product is a global
product”

ITEM 2B
Remember the purpose of this analysis is to ascertain the potential of your new
venture idea – Be decisive about each item as a pro/con for your new venture.

Be careful when making assumptions about demand cycles


- e.g., demand for some small ticket luxury items increases during economic
downturns
- e.g., remember demand may not always be constant (e.g., holiday purchasing,
seasonality, etc.)
- demand may precede or coincide with season of use

Be realistic about your chances of substituting existing products


- e.g., idea is to produce new packaging for a specific product line for a multi-
national corp – don’t they already have supplier relationships or in-house
facilities for this – if so what’s your edge if your business is about one new
product idea?

Be specific regarding market size


- You may not know an exact dollar figure but you might be able to estimate
the number of customers, provide a projection of your penetration, suggest
whether the market is growing/shrinking, and list reasons for growth and/or
threats to it
- Market size is not based on the number of units your new venture sells, the
units you sell represent your penetration into the new market

Be specific regarding price vs. performance features


- demand elasticity e.g., buy more/less when price fluctuates
- stability of price e.g., gasoline vs. pencils
- stability of market – customers come/go, repeat or not, substitutes
- price-quantity relationship – e.g., bulk deals?

Be realistic about customer finances


- e.g., don’t overestimate their cash on hand
- e.g., don’t offer financing for trivial purchases

ITEM 2C
Remember the purpose of this analysis is to ascertain the potential of your new
venture idea – Be decisive about each element of environment as a pro/con/both.
Separate your firm from the environment
- Understand that environment influences your firm
- Don’t portray your firm as a part of the environment when conducting this
analysis. Your job is to consider the influence of the environment on the firm.
- E.g., you have a high tech product so technology is relevant but not simply
because you have this product or rely on it for your success. It is relevant to
the extent competitors in the environment who are tech savvy are on the verge
of coming up with a better idea, to the extent your technology is non-propriety
and could be copied by someone in the environment, to the extent your
technology can be substituted by another existing idea outside the firm, or to
the extent a radically new alternative from the outside could make your idea
obsolete.
- Always focus on/research the environment first and then consider how it may
influence your new venture. Consider the following examples regarding the
demographic segment of the environment:
o Poor example: Our product/service will likely appeal to X
demographic (this is a discussion of your target market not an external
environment analysis)
o Good example: X demographic is growing or shrinking by Y%
(citation included as a footnote) so that’s good/bad for our new venture
in the following ways…

Be sure to consider aspects of the general environment carefully


- if an aspect of the environment applies then explain the potential effect on
your business
- if not say so in your report but be sure you’re right
- don’t exaggerate or stretch reality just to say something about each element of
the environment thereby discrediting your ideas

Avoid platitudes
- Be specific
- This aspect of the general environment could influence us if it were to change
vs. the economy is moving in X direction so this means Y for the potential of
our venture

General Comments
DO’s

Avoid contradiction’s
- e.g., “every home will have one” + “only middle/upper income homes will be
able to afford one”

Answer all the questions


- you might have a great idea, but if you don’t demonstrate this by answering
all the questions in the assignment thoroughly your grade will suffer

Avoid a last minute rush


- Last minute assignments are often VERY apparent
- They lack rigor and research

ACKNOWLEDGE an existing business


- You can work on growing a very new/small start-up that is in existence BUT
the requirements are different
- You’ll need to make an appointment with me to review the status of such a
business and its appropriateness for this assignment

Avoid colloquial language


- Your writing style should be professional
- Your goal is to attract an investor with your idea
- E.g., Avoid “We’d have like 10 products for guys and like three for women”

Conduct external research


- Data is often required to answer parts of this assignment
- External research validates the conclusions you draw
- Include citations as endnotes

DON’Ts

Don’t exaggerate
- Be realistic about the opportunities/threats and don’t try to oversell your idea
- Put yourself in the mindset of an investor
- e.g., demand: unlikely everyone will buy your product, so what is a reasonable
estimate of market penetration and what is the size of the market?

Don’t assume lower costs mean lower prices


- e.g., just because your new product/service is cheaper than existing solutions
doesn’t automatically mean you should charge less for it nor does it mean that
your customer’s costs will be lower

Don’t include bogus information


- e.g., regarding international market demand, state of a technology, etc.

Don’t assume everyone thinks like you do


- Investors can’t see inside your head so you need to be clear about your new
idea – Because it is new you need to be thoughtful and specific so your
concept is clear
- Remember you may not be part of your target market, so you can’t truly
understand the market’s preferences without significant effort
- Don’t assume your target market shares your personal preferences
- Avoid statements like “everyone wants”, “everyone will like it”, “everyone
needs it”

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