Innovation

Business ventures have some common factors amongst themselves. But they need to have some unique selling
proposition (USP) to survive. It is for arming the business with a USP that the organizations need to innovate.
Innovation helps a business house to survive when the winds of change hit the market, in fact innovation fuels in the
winds of change. Innovation is not just creation of new ideas/ thoughts but it is also about translating them into
products/ services. Hence Innovation can be defined as the successful exploitation of new ideas – incorporating new
technology, design & best practice is the key business process that enables the businesses to compete effectively.
Innovation is something more than idea generation it is because idea has little significance till it is converted into
some useful product/ services. Innovation is the process of conceptualizing an idea and then transforming that idea
into a product/ service. Usually innovations are being made with a desire to overcome a need or a problem.
Innovation can be at the spark of light and can also take generation of experimentations. Innovation usually make
the life more comfortable for a common man. Process of transforming ideas into products/ services at times even
take lifetime of many. The characteristics of Innovations are
• Innovations are the harbingers of change
• Innovations can take place at the spark of light or can take generation of experiments
• Innovations can be both revolutionary as well as extension to the existing products/ services.
• Innovations provide a USP to a business.
• Innovations are action oriented i.e. active and searching new ideas.
• Innovations help in making the product, service or process simple and understandable.
• Innovations help in making the product, service or process customer based.
• Innovation is all about trying, testing and revising.
Thus innovation refers to a process of creation/ value addition of a product/ service/ process that can solve an
existing problems or tap an opportunities.
Creativity
“Being different for the sake of being different may attract attention but that is not sufficient value. True creativity
must deliver real value.”
- Edward de Bono
Creativity can be defined the process of developing an original product, service or idea that makes a socially
recognized contribution.
Novel combination of old ideas can also be considered as creativity. Hence Creativity is the ability to bring some
thing new into existence from either an exiting or new idea.
A creative person conceives an idea, which is new. It is immaterial whether he takes any action. Hence the emphasis
is on the ability and not the activity of bringing anything new.
• Creativity is a continuous process in which required party to work hard and continually improve ideas and
solution. Creative person will work hard by making gradual alteration and refinements to their work.
Creativity in entrepreneurship also implies the organization environment such as team climate, teamwork
and others. Creativity in entrepreneurship includes the management in the organization that will lead to
successful company.
• Entrepreneurs need new ideas for setting up / running new business ventures. An entrepreneur who is
creative and brings her / his ideas into reality turns out to be successful in business.
• Creativity has also become important in the present highly competitive market where the business needs to
differentiate itself from others to survive.
• The next question that comes to mind is – Are creative persons born or made? Some of the psychologists
were of the view creativity as a function of the brain’s right hemisphere and creative persons are born and
not made. But various scientific researches have proven that human brain can be conditioned under
stimulating environment to become creative. It is for these reasons that organizations & consultancies
organize training sessions on creativity.
Sources of Innovative & Creative Ideas
• The Various Sources of idea generation are:
• Present & potential Consumers
• Existing Companies
• Raw material Providers
• Distributors & Retailers
• Research & Development
• Existing Employees
Myth around creativity and innovation
There is a great misunderstanding of considering innovation/ creativity as synonymous to invention. But this is not
true; innovation is in fact utilization of the inventions that lead to increase in the overall growth & profitability of
the organization. An inventor gives idea and an innovator implements the idea for economic gain. Some individuals
can be both inventor & innovator. The innovator (entrepreneur) commercially exploits the invention produced by
him or by any other person. Similarly entrepreneur also exploits even creative ideas for commercial gains .
• Apart from misunderstanding innovation to invention there are many more myths in relation to innovation;
they have been discussed below along with reasons as to why these are myths and not facts:
• MYTH 1: Innovation is planned and predictable: This myth is based on the old concept that innovation
should be left to the research and development department under a planned format. In truth, innovation is
unpredictable and may be introduced by anyone.
• MYTH 2: Technical specifications should be thoroughly prepared: this is a myth, as thorough preparation
often takes too long. Quite often it is more important to use a try/test/revise approach than spend time in
preparation and planning.
• MYTH 3: Creativity relies on dreams and ideas: Even this is not true, the fact is that accomplished
innovators are very practical people; they create (and not dream) useful products from the innovations they
make.
• MYTH 4: Technology is the only driving force of innovation and success: This again is a myth. Technology
is certainly one of the sources for innovation, but it is not the only one. Moreover, the customers/ market/
changing demands are the driving forces behind any innovation. In fact market-driven or the customer based
innovations have the highest probability of success.
Difference between Innovation and Creativity

The importance of creativity & Innovation has swollen up with the rising competition amongst corporates.
Successful entrepreneurs are realizing that ‘Creativity, Innovation and even incremental value additions’ are
imperative ingredients to survive the ever rising competition. Schumpeter has identified the importance of
innovation in his definition on ‘entrepreneurship’.
Schumpeter (1934) listed five different kinds of innovations or ways to act as an entrepreneur:
1. The introduction of a new good or quality of a good.
2. The introduction of a new method of production.
3. The opening of a new market.
4. The utilization of some new sources of supply for raw materials or intermediate goods.
5. The carrying out of some new organizational form of the industry.
Whatever may be the kind of innovation (as discussed above) or whatever might be the degree of innovation
(remember de bono pointed out that even incremental changes can amount to innovations.) the Keyword is
INNOVATION to survive in the business.
Irrespective of sector, creativity & innovation have become imperative for thriving in business. Organizations
recognize the fact that to maintain competitive advantage they must continually seek to identify, develop and make
best use of all available resources. In response to the rapid rate of change in competition and the pressures of
technological advances, corporate executives are unanimous in their stated desire to make their employees and their
organizations more "entrepreneurial".
The traditional view has been that this is accomplished through individual creative people and, more recently, teams
of individual creative people.
Consequently, "entrepreneurial" organization has been seen less as an organization in which innovativeness is an
embedded part of the organization's process and structure, and more the "place" within which (a) innovations have
been developed, (b) innovative people happen to reside and work, and (c) whose controls are capable of being
overcome so that top management can reluctantly agree to accept the innovation. Corporate executives then seek to
find means by which to unleash the creative talents of their people and to lower the built-in barriers to new ideas
that could bubble up from the depths of the organization.

Process of Creativity
Brilliant ideas do not come out of the blue they evolve through a creative process wherein ideas are germinated
developed and matured by imaginative person. The process of creativity involves six stages
• Stage I: Task Presentation
The first stage to the process of creativity is idea germination. The idea germinates from personal interest/
inclination or an existing problem or future opportunity. The important thing at this stage is how far is the idea
motivating enough to capture the attention of the entrepreneur. But a lot of internal motivation is required to learn
about a problem/ or to tap an opportunity and if the perceived problem is motivating enough to capture the
individual’s attention, one moves to the Stage II.
• Stage II: Preparation
Preparation is the plan for a conscious research of a solution to the problem/ opportunity, it involves seeking
information about the problem and how others have tried to solve it. This stage builds up and activates information
that is relevant to the problem. At this stage a market research is often conducted for new products and services.
This stage does not generally deliver any results. However, the effort of gathering information and knowledge is
useful for the final solution. Successful gathering of information at this stage motivates entreprenur to move to
Stage III.
• Stage III: Incubation
In this stage the knowledge and information is assimilated. It is a stage of subconscious assimilation of knowledge.
Herein the subconscious intellect assumes the control of the creative process and the limitations of human logic do
not affect the solutions.
• Stage IV: Idea Generation
Multiple ideas and solutions (alternative courses of actions) are generated at this stage. These ideas are brainstormed
to assess the feasibility, by using previous experiences, insight and fears. Thus this is the stage of evolution of
alternative ideas or solutions.
• Stage V Idea Validation
Ideas generated in the previous stage needs to be verified and proved realistic, useful and practical. Various
approaches to the problem are attempted using previous experiences, insight and fears. Ideas are recognized as
being feasible. This is the stage that refines knowledge into application.
• Stage VI Outcome Assessment
An assessment of the creative process can either lead to the achievement of goal wherein a creative idea or solution
to the problem is located or no progress in this direction is achieved. In any case the creative process ends. If the
result is between the two extremes then the process returns to stage I
Idea Generation
Entrepreneurship is being able to create and run a business. In entrepreneurship, idea generation is one of the main
factors that lead to its success. The idea thought of here should be able to solve a problem. Idea generation is
described as the process of creating, developing and communicating abstract, concrete or visual ideas. It focuses on
coming up with possible solutions to perceived or actual problems and opportunities.
And along with being unique, the idea should also be easy to execute. For example, let’s suppose you feel a lot of
people have a problem understanding legal jargon and legal proceedings. So, in this case, your entrepreneurial idea
could be setting up a platform that caters to all the legal needs of people and helps them understand it.
Good Entrepreneurial Business Ideas
 MARKET DRIVEN
• Solve a problem
• Find a market need
• Customer focused not product driven
• Target an identified, sizeable market segment
 UNIQUE
• Differentiated (vs. commodity)
• Faster
• Better
• Cheaper
 FEASIBLE
 • Attractive –there is a demand
• Achievable –it can be done
• Durable –it lasts
• Value creating –it is worth something
• Safe
• Affordable for target market
 FUNDABLE
• Revenue stream
• Manageable risk
• Sustainable -Market exists with frequency of purchase
• Scalable or Replicable
• Barriers to entry
• Growth potential
• Exit plan
 INNOVATIVE
• Possible to create new and unprecedented products.
• Improve existing products
• Launch the same product by changing consumers’ minds and perceptions about how the product should be
used.
• Innovative products drive consumer interest, increasing their chances of buying. It also reduces promotional
costs.
Sources of Business Ideas
The starting point in any product development is the generation of business idea/project idea.
• Export Potential
• Consumers
• Friends, family and other contacts(Network)
• Employees
• Examine surroundings –Hobbies/activities–Education–Work Experience–Personal Life
• Recognized needs not effectively met
• Substitutions
• Geographic or business niches not currently served or under served
• Changes in – Market/Industry/Legal/Political factors/ Technology factors
• Government assistance
• Various studies/reports
• Area Studies: identify the development of a potential backward area or a district.
• Sub-Sectoral Studies: identify the opportunities in specified sectors like food processing.
• Resource-based Studies: identify the opportunities based on utilisation of natural or industrial
resources such as forest-based industries, marine-based industries, industries using rubber as the
main raw material, etc.
• Pattern of Product Consumption: identify the pattern of product consumption of the country.
• Surveys: study relating to existing industrial establishments.
• Demand Forecasting: forecasting of demands made by Industrial Chambers such as CII, FICC1,
ASSOCHAM, etc.
• others

Idea Generation Process

The process may be different for different organizations and different people. But there are three main steps in the
process.
• Identification of the question or the problem we need to solve.
• Looking for ideas and probable solutions.
• Selecting the most suitable idea and execute it.
For example, let’s suppose you are opening up a restaurant. So firstly, you need to identify what question you need
to answer. Let’s assume you want to decide upon a name for the restaurant. Now you will use different techniques
(brainstorming, mind mapping, etc) to come up with ideas for names. In the last step, you will choose the most
appropriate name from the different names you came up with within the second step.

Idea Generation Techniques

• Mind Mapping - Mindmapping is a graphical technique for imagining connections between various pieces of
information or ideas. Each fact or idea is written down and then connected by curves or lines to its minor or
major (previous or following) fact or idea, thus building a web of relationships.
• Reverse Thinking - As the term ‘reverse thinking’ itself suggests, instead of adopting the logical, normal
manner of looking at a challenge, you reverse it and think about opposite ideas. For example: ‘how can I
double my fan base?’ can change into ‘how do I make sure I have no fans at all?’ You may notice that the
majority of participants would find it easier to produce ideas for the ‘negative challenge’ simply because it is
much more fun.
• Brainstorming - This process involves engendering a huge number of solutions for a specific problem (idea)
with emphasis being on the number of ideas.
• SCAMPER
• S -Substitute
• C – Combine
• A – Adapt
• M – Modify
• P – Put to another use
• E – Eliminate
• R – Reverse
• Synectic - Synectics is a creative idea generation and problem solving technique that arouses thought
processes that the subject may not be aware of. It is a manner of approaching problem-solving and creativity
in a rational manner.
• Role-Playing - In the role playing technique, each participant can take on a personality or role different from
his own. As the technique is fun, it can help people reduce their inhibitions and come out with unexpected
ideas.
• Storyboarding - Storyboarding has to do with developing a visual story to explain or explore. Storyboards
can help creative people represent information they gained during research. Pictures, quotes from the user,
and other pertinent information are fixed on cork board, or any comparable surface, to stand for a scenario
and to assist with comprehending the relationships between various ideas.
• Brainwriting - Brainwriting is easy. Instead of asking the participants to shout out ideas, they are told to pen
down their ideas pertaining to a specific problem or question on sheets of paper, for a small number of
minutes. After that, each participant can pass their ideas over to someone else. This someone else reads the
ideas on the paper and adds some new ones. Following another few minutes, the individual participants are
again made to pass their papers to someone else and so the process continues. After about 15 minutes, you or
someone else can collect the sheets from them and post them for instant discussion.
• Forced Relationship - The forced relationships method introduces two random and seemingly unrelated
items and forces you to create a connection between them. This technique encourages innovative thinking in
order to build those relationships and possibly develop a new product. You can conduct forced relationship
activities in group settings or individually.
• Collaboration - As the term indicates, collaboration is about two or more people joining hands in working
for a common goal. Designers frequently work in groups and engage in collaborative creation in the course
of the whole creative process.
• The 5 W’s - This method often begins with a real or hypothetical problem that you could address with your
team. You would ask them why a problem happens or is happening. After the initial round of responses and
forming an answer, a facilitator asks again and again until the fifth time. The reason for asking the same
question five times is to find deeper answers, as the first response is typically more shallow.
• Listening - People prove to be a very good resource when you are trying to generate ideas. Even those who
aren’t your employees and customers can be very resourceful. So, you must always go beyond your
immediate circle and invest in listening. Socializing with people in your immediate social circle and even
those beyond it can be very effective.
• Accidental Genius - This idea generation technique believes that writing can help you come up with good
ideas. Here writing is believed to be a trigger for ideas. This technique asks you to write freely without any
editing. So, whatever problem you are facing just start writing the answer without being concerned about the
right or wrong aspect of it.
• Visualization - In this technique, we approach the problem visually. This is because visualization makes
things easy to understand. And as a result, we can come up with ideas and solutions easily. For example,
suppose you want a new setup for your production unit.You can have pictures taken of the current setup and
work on it. Looking at the pictures will give you a better idea. You will be able to make changes to the setup
so that it increases productivity and saves on time.
 • Removing Assumptions - There are a lot of assumptions about how things work. This technique requires us
to list all the assumptions and then start removing them one by one. These assumptions work as stimuli for
us to come up with new ideas. For example, suppose you want to open a new school with innovative
features. First list down all the assumptions you have about a school,
• There should be physical classrooms
• A fixed curriculum decided beforehand
• More emphasis on theoretical knowledge

Entrepreneurial Motivation
Entrepreneurship is to a great extent the product of motivation. Motivation refers to the inner drive that ignities and
sustains behaviour to satisfy needs. Behaviour is always caused and it is not spontaneous. In other words, human
behaviour is goal directed or directed towards satisfaction of needs. A person’s behaviour is shaped by several
socio-psychological factors such as his goals, education level, cultural background, work experience, etc. When a
person, feels some need tension arises in his mind until the need is satisfied. The tension motivates him to take
action. If the action is successful need is satisfied otherwise the person changes the action until the need satisfaction
occurs.
Entrepreneurial motivation may be defined as the process that activates and motivates the entrepreneur to exert
higher level of efforts for the achievement of his/her entrepreneurial goals. In other words, the entrepreneurial
motivation refers to the forces or drive within an entrepreneur that affect the direction, intensity, and persistence of
his / her voluntary behaviour as entrepreneur. So to say, a motivated entrepreneur will be willing to exert a
particular level of effort (intensity), for a certain period of time (persistence) toward a particular goal (direction).
The need for and significance of entrepreneurial motivation in running an enterprise can best be appreciated as:
“While an organization is like a vehicle, entrepreneurships as driving and the entrepreneurial motivation as fuel or
power that makes the organizational vehicle move or run.”
Motives for starting enterprises
R.A. Sharma classified all the factors motivating the entrepreneurs into two types as follows :
Internal factors
(a) Educational background
(b) Occupational experience
(c)Desire to do something pioneering and innovative
(d) Desire to be free and independent
(e) family background
External factors
(a) Assistance from Government
(b) Financial assistance from institutions
(c) Availability of technology and/or raw materials
(d) Encouragement from big business units
(e) Heavy demand for product
Murthy, Sekhar and Rao on entrepreneurial motivation classified the factors behind entrepreneurial growth into
three categories as follows :
1. Entrepreneurial ambitions
• To make money
• To continue family business
• To secure self-employment/independent living
• To fulfil desire of self/wife/parents
• To gain social prestige
• Other ambitions-making of a decent living, self-employment of children, desire to do something creative,
provide employment to others.
2. Compelling reasons
• Unemployment
• Dissatisfaction with the job so far held or occupation pursued
• Make use of idle funds
• Make use of technical/professional skills.
• Others-maintenance of large families, revival of sick unit started by father.
3. Facilitating factors
• Success stories of entrepreneurs
• Previous association (experience in the same or other line of activity)
• Previous employment in the same or other line of activity
• Property inherited/self-acquired/spouse’s
 • Advice or influence (encouragement) of family members/ relatives/mends.
• Others- association as apprentices and sleeping partners.

Barriers to Entrepreneurship
In today’s world, each one us dreams of being an entrepreneur and starting up something that we are passionate
about. It’s all about making a difference in the world of business and solving the pain areas of the target audience
through our offerings of products and services.
Entrepreneurship requires a thorough thought process, radical thinking, market know-how, and a strategic plan that
is clear and crisp. Also, the vision and mission need to be divided as per the short term and long term goals and
objectives.
However, easy and simple it may sound on a piece of paper or the powerpoint presentation slides, there are various
Barriers to Entrepreneurship that each of the entrepreneurs taking the risk has to face and get through.
#1 Finances
We are all bustling with ideas that are unique and can make for an amazing business start-up. But no matter how
good your idea is, you will always need stable finances and funding from the investors to begin the process and take
the first step towards your journey of entrepreneurship.
And getting a sound financial investment or funding can be one of the biggest Barriers to Entrepreneurship as many
of banks, private investors, angel investors, and organizations find it quite difficult to believe in the start-up ideas
owing to the risk of failure and losing their money.
#2 Fear of not to be a success
We all go through the fear of failure. And if the fear is associated with the risks and stakes taken in the stream of
business and entrepreneurship, the level of fear elevates.
There is a fear if we are on the right track, is the idea worthwhile, will there be profit, will I find investors, and
various such fears and tensions act as the Barriers to Entrepreneurship.
#3 No strategic plan in place
Lack of proper planning and strategy in place is one of the most common Barriers to Entrepreneurship. Many of us
think to build a business out of a hobby without having any sort of long term and short term vision and plan in
mind.
Running a fully-fledged business or being an entrepreneur requires a huge amount of skill set, passion for excelling,
strategic vision, the mission to accomplish the goals, market research, and a lot more.
Right from the target market, finances, human resources, to a proper strategic plan is required to build a successful
business or a brand in the market.
#4 Human resource issues
Entrepreneurs cannot handle and run a business alone by themselves. We require the support of human resource to
carve a niche in the market.
Employees with the required knowledge, expertise, and experience are needed for the efficiency of the business
processes and high levels of productivity.
First of all, it is quite difficult to find the employees that share the same vision and wavelength of the business. Plus
paying a hefty annual or even a monthly retainer income is a problem of the start up’s as the finances at hand are
always limited, and the overheads and expenses are also to be taken care of.
And secondly, it is also difficult to manage human resources as each of us work with a different mindset and
perspective. Hence, human resources and employees can be as one of the Barriers to Entrepreneurship.
#5 Stringent rules and regulations of the market
It is not very easy for entrepreneurs to enter the new market as there are quite many rules and regulations imposed
by the government authorities.
Plus there are various laws and compliances to be adhered to such as taxation, environmental regulations, licenses,
property rights, and much more than act as the Barriers to Entrepreneurship.
Some of the countries have many corrupt officials that act as a hindrance for the new entrepreneurs and start-up
brands to start or expand their business in the new market. And if the brand is planning to expand its
business operations in any of the foreign countries, it gets even more difficult.
#6 Fewer opportunities
Even though there is a lot of talent pool in the market with the aspiring entrepreneurs buzzing with the ideas, but
the opportunities presented to them are quite less and fewer.
Reasons such as nepotism and corruption act as the Barriers to Entrepreneurship with not many vital and lucrative
opportunities.
#7 Lack of capacity
Even if there are opportunities presented to the aspiring entrepreneurs, there is a lack of capacity in some them to
embrace the opportunities with open arms. The reasons can vary from lack of knowledge, lack of education, lack of
willingness, lack of strategic knowledge, and cultural hindrances amongst others; but the factor of motivation and
zeal gets missing.
To start a new business venture amidst all the risks and market-related issues, it requires a lot of hard work, passion,
and high capacity to handle all of it.
#8 Less market experience
The experts always mention that one should never rush in setting up a business. It is quite necessary to gain a
relative amount of work experience by working in the industry domain or sector of choice and as per the education
levels. It also helps to sharpen the required expertise and find the ground in the career graph.
Once the person is ready to take risks and have a relative amount of market exposure, he is ready to take the
entrepreneurial plunge.
#9 Lack of risk-taking capacity
It is always said that entrepreneurs never sail in safe waters and are never confined to their comfort zones. Lack of
risk-taking capacity is the psychological mindset and perspective towards the business and acts as one of the major
Barriers to Entrepreneurship.
The budding entrepreneur has to have a structured and organized approach towards the various business elements
and should risks rather than averting them.
#10 Corrupt business situations
As mentioned earlier, if the business situations and the environment are not very supportive and corrupt for the
young and aspiring entrepreneurs, it acts as one of the top Barriers to Entrepreneurship.
Bribing, rampant corruption, unfriendly ties of government with other nations, inconsistent laws, stringent
compliances, and enforcing regulations that are unhealthy and negative in their approach hamper the growth of
businesses in the country.
Russia is one of the examples of having an unhealthy and unsupportive business environment.
#11 Inadequate training
With no proper education, development, training, entrepreneurial skills, and technical know-how acts as the Barriers
to Entrepreneurship.
#12 Lack of practical knowledge
Having a strong educational background is just not enough to pursue business as it requires practical knowledge as
well to stay relevant amidst the various market cycles. And many entrepreneurs lack practical knowledge.

Business Development Process

Step 1 – Initial Idea Exploration, Identification and Assessment

The origination of a new business idea can come from a variety of sources. It may come from the board room of an
existing business or a group of producers sitting around the kitchen table. Regardless of the setting, you may want to
use the following approach to formulate the business concept. Anytime during Steps 1 and 2 you may decide that
your idea is not viable, in which case you may want to abandon the idea.
 Formulate general business idea(s) or concept(s) - Define your business idea or concept and describe why
it has merit. Your idea may involve filling an unmet need in the marketplace with a new product, providing
 an existing product in a new form, producing a product better or cheaper than competitors, or other ways in
which value can be added. Remember, an idea is only viable if people are willing to pay you for what it
provides. For example, a premium product is only viable if someone is willing to pay more for it.
 Identify alternative business models or scenarios for the idea(s) - A business model describes how the
business will function in producing the product or service and providing it to the customer. A business
scenario is a logical assemblage of the essential business elements starting with raw materials procurement
and ending with the sale of the final product, and all the stages in between.
 Investigate idea/concept and alternative business scenarios - Conduct an initial informal investigation of
the validity of your idea. Investigate the scenarios or models. Early in the process this may be nothing more
than a series of telephone calls to knowledgeable individuals. Does your idea make sense? Identify business
scenarios/models for further study and eliminate those that are not viable.
 Formal investigation - You may want to conduct a formal assessment such as a pre-feasibility study or a
marketing study of the idea and various scenarios or models. This may involve using consultants to
investigate various aspects of the project. It may involve eliminating additional scenarios/models or
identifying new ones.
 Refine scenarios - Select those scenarios that are viable for further study and eliminate the rest. As you go
through Step 1 you should accomplish two things:
1. Through the process of elimination you will reduce the number of scenarios/models under
consideration for further study.
2. Refine and flesh-out the remaining scenarios/models.
Step 2 - Idea/Concept and Scenario/Model Deliberation and Assessment
 Further refine the business scenarios/models - If you have conducted any of the formal assessments
described above, you have information that can be used to further refine your business scenario/models. So
by now you should have refined your idea to one or a small number of specific and detailed business
scenario/models that you want to assess. This is critical before you move to the next step.
 Conduct feasibility study - A feasibility study will provide a comprehensive and detailed assessment of the
market, operational, technical, managerial and financial aspects of your business project. These factors will
feed into the economic assessment of your project (is it profitable?). If you have already conducted a pre-
feasibility study, marketing study or other study; these materials can be used in the feasibility study.
Feasibility studies are usually prepared by consultants, so you will need to investigate consultants who are
familiar with your type of business and experienced in preparing feasibility studies.
 Analyze the feasibility study - When you receive the feasibility report, the first step is not to begin
deliberations on whether to proceed with the project. Rather, you need to determine the completeness and
accuracy of the study. Does it address the issues you want addressed? Was there a thorough investigation of
the critical issues? Challenge the assumptions and conclusions of the study. Only after you have accepted the
study as being complete and comprehensive can you move to Step 3.
Step 3 - Go/No-Go Decision
This is the most critical step in the entire business development process. In a sense, it is the point of no return. Once
you start down the path of creating a business, it is difficult to turn back. If you have unresolved doubts or
reservations about the project, you should not proceed. That is why it is important to have an open, honest and
thorough discussion when making this decision.
You may find that there is division in your committee. Some members may want to move forward while others may
want to end it. This is not uncommon. Each needs to take an honest look at the other side’s arguments. If the issues
cannot be resolved, each side needs to go its own way with no bad feelings. At this point, the remaining members
need to determine if they want to proceed with business creation.
Commitment to the project is another important factor to consider before you proceed. Most beginners to business
development greatly underestimate the time and effort required to start a business. A financial commitment by
project members at this time (everyone throws some money in the pot) is an important sign of commitment to
creating the business.
This step involves making one of the three possible decisions listed below:
 Decide that the project is viable and move forward with it.
 Decide to do more study and or analyze additional alternatives.
 Decide that the project is not viable and abandon it.
Step 4 – Business Plan Preparation and Implementation
If you decide to proceed with creating a business, you will need to prepare a business plan. A business plan is an
outline or blueprint of how you will create your business. If you conducted a feasibility study, it will provide some
of the information needed for your business plan. Also, business planning often involves the use of consultants.
However, don’t turn the process completely over to a consultant, you need to stay integrally involved in the
planning process. Remember, it is your business.
Although planning can involve considerable time and effort, it is the easiest part. Implementing the plan is much
more difficult. Many prospective businesses experience problems or failure due to the improper implementation of
their business plan. This step requires commitment and dedication. Unforeseen problems will emerge. Your
persistence is critical.
Implementing your business plan will include, but is not limited to:
 Creating a legal structure
 Securing market access
 Raising equity and securing financing
 Hiring management and staff
 Constructing facility
 Other
Step 5 – Business Operations
Now that you have successfully started your value-added business, your work has just begun. Producer groups often
forget that once the business is created, it takes constant attention for it to remain healthy and viable.
Operating a business is very different than starting a business. It requires a different set of skills. So the people who
create the business may not be the best people to manage the business.