Question: “Regardless of the amount of finance already invested by an entreprene
ID: 1171186 • Letter: Q
Question
Question: “Regardless of the amount of finance already invested by an entrepreneur in pursuit of a business idea, not all ideas are considered opportunities.” Do you agree? Why or why not? Also I have to comment on the response of two of my peers. Their response is below. I highlighted it as response 1 an response 2.
This is response 1:
Developing and seeing one’s business ideas come to fruition is a cherished moment for entrepreneurs. Kuckertz et al. (2017) stated that “there are plenty of ideas and that instead of ideas entrepreneurial opportunities are the fundament to entrepreneurial activities.” Entrepreneurs have to acknowledge and accept when a business idea does not have the ability to become a favourable market opportunity. Thus, I am in full agreement with the captioned statement.It is necessary to move beyond solely focusing on the investments made but rather on eliminating the probability of high losses in the future.
According to Elsbach (2003), “coming up with creative ideas is easy; selling them to strangers is hard. All too often, entrepreneurs, sales executives, and marketing managers go to great lengths to show how their new business plans or creative concepts are practical and high margin—only to be rejected by corporate decision-makers who don’t seem to understand the real value of the ideas". Firstly, the offerings longevity is a crucial factor that needs to be addressed. While an idea may appear to be presently attractive this is no indication that it will be sustainable in the long term. Heinonen et al. (2011), stated that “results show that creativity is not directly associated with the viability of the business idea. Creativity does, however, strengthen the creative opportunity search strategies and the use of opportunity identification strategies based on knowledge acquisition."
Furthermore, it is of grave importance that entrepreneurs know “how to allocate their resources and capabilities. Extant literature on divestiture has shown that firm divestment decision is influenced by prior firm resource investments, firm performance, firm size, firm R&D intensity, and the diversification level of a firm” (Berry,2010). Thus, market and industry search are instrumental in measuring the successful transition of an idea into a profitable business opportunity.
Response 2:
“Regardless of the amount of finance already invested by an entrepreneur in pursuit of a business idea, not all ideas are considered opportunities.” Do you agree? Why or why not?
I render my unequivocal and uncontaminated support to the statement made -“regardless of the amount of money expended to an idea not all ideas are considered opportunities”. According to Bygave (1997) “the entrepreneurial process is a course of action that involves all functions, activities and action associated with identifying and evaluating perceived opportunities and the bringing together of resources necessary for successful implementation”. This statement is indicative that the entrepreneurial process is a wholesome one and does not merely rely on allocating and expending finances to an idea but ensuring that this idea is re-evaluated and tested with the required criteria to ensure that this idea is perceived as an opportunity.
According to the Oxford dictionary an idea is defined as “a thought or suggestion as to a possible course of action” Therefore words such as suggestion, thought, proposal, insight, and concept are considered synonyms of the word idea. As a result of this, one can reasonable say that ideas are many, and an entrepreneur must have the intuition to discern which ideas are feasible and doable. The idea must be developed and must follow a criterion which extends beyond financing to be considered a perceived opportunity.
According to Sooperatives articles, there must be certain criterions that must be met to allow or preclude an idea from being an opportunity. These are the following listings:
- They must create value or add significant value to customers
- They must solve a significant problem, or meet a significant want or need for which someone is willing to pay a premium.
- They must have a robust market, margin, and money making characteristics.
- They are a good fit with the founder and management team at the time and market place.
Financing is a fundamental element that ensures that a business idea comes to fruition. I say this to say, any idea that is not perceived as an opportunity is unable to reach the latter stages of financing. Therefore it behooves me to say that the only financing that an idea which is not perceived as an opportunity can reach is the early stages of financing which is the seed capital and start- up capital. The degree of financing will vastly differ from a general idea or an idea perceived as an opportunity.
Conclusively, I must say that it is essential to note that not all ideas are opportunities regardless of the amount of resources expended. An entrepreneur must be able to distinguish between an idea and an opportunity.
Explanation / Answer
Regarding the statement given, I believe that not all ideas can be considered as opportunities. There are several business ideas that entrepreneurs may think of but there is no guaratee that such ideas can become good opportunities. The idea should also be needed by the people so that it can be considered as an opportunity. Many a times, the entrepeneurs spend a lot of money on the ideas expecting that this will help to make the idea convert into a successful business opportunity. Thus, I strongly agree with the statement that has been given.
Response1: This response also agrees with the given statement but it also stresses on the fact that entrepreneurs have to possess the skill of creativity. Creativity alone has the capacity to transform an idea into an opportunity. Moreover, it also emphasizes on the fact that the proper allocation of resources also has a very important role to play in the success of an idea into an opportunity.
Response2: This response highlights the fact that entrepreneurs should not just simply spend money on their idea so that it becomes a successful business opportunity but it should also test whether the idea is a feasible one or not and whether it has the capability to become a successful opportunity. The entrepreneur should have the intuition and the scientific thinking to prove that the idea can be converted into an opportunity. Thus, instead on blindly spending money on the idea, the entrepreneur needs to do some research and ensure that it is a good opportunity as well.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.