LO1: Learn the sources of opportunity entrepreneurs draw on to get business ideas.

• Opportunity recognition is one of the most basic entrepreneurial behaviors.
• Entrepreneurial alertness means that entrepreneurs have a special set of observational and thinking skills that help them identify good opportunities.
• A plurality of entrepreneurs studied knew they wanted to start a business and were very motivated to find business ideas.
• Ideas for new businesses come from a great variety of sources. These include work experience, seeing a similar business, hobbies or personal interests, a chance happening, discussions with family and friends, and education and experience.

LO2: Identify the ways ideas are screened for business potential.

• In assessing the potential value of your business idea, there are six major areas to consider:
  • The product or service: Its description, underlying technology innovativeness, and uniqueness.
  • The market: Target groups, their needs, and market size.
  • The protection of intellectual property.
  • The people behind the idea.
  • The other resources needed.
  • The profits likely to be generated.

LO3: Understand how creativity methods can help business owners recognize new opportunities.

• Creative methods help you identify opportunities beyond what everybody else already knows.
• SCAMPER is a tool you can use to trigger new opportunities for your business.
• Use techniques to help you get into an innovative frame of mind. Read outside your area, invite a "wild card" to a business meeting, have a "scan the environment" day, arrange a mini-internship, solve your customer’s problem rather than selling a product, redesign your work environment to stimulate your innovative skills.
• The creative process has four stages: preparation, incubation, illumination, and verification.

LO4: Understand the five pitfalls that hinder innovation.

• Identifying the wrong problem.
• Judging ideas and opportunities too soon.
• Stopping with the first good idea.
• Failing to get support.
• Obeying rules that don't exist.

LO5: Identify strategies for innovation in your business.

• There are three innovative strategies small business owners can select:
  • Imitative strategies take an idea that somebody else has already discovered and have a business built around that idea.
  • Incremental strategies take an idea and offer a way to do something better than it is done now.
  • Radical innovation strategies reject existing ideas and present a way to do things differently.

LO6: Learn how to conduct a comprehensive feasibility study for your business ideas.

• Conduct an analysis to determine whether or not your business idea is feasible.
• Describe your business idea concisely, including the experience you wish to sell to potential customers, as well as details about your product or service.
• List the unique benefits and limitations of your product or service, at what stage of development it is at now (idea or prototype), any proprietary restrictions and obligations, insurance needs, product or service trends, and any production costs.
• Describe your industry, including its size and trends. Provide the market potential for your product or service, the strengths and weaknesses of your competition, who your customers are, what their needs and preferences are, and how they will find you.
• Compute financial projections. Provide sales revenues, cost forecasts, gross profits, operating expenses, and net profit.
• Write a future action plan. Determine the start-up capital you need and where you can raise it. Consider any further information you need, and begin writing a business plan. Decide where you can find additional support, such as from attorneys, accountants, and other business advisers.

LO7: Learn the model for pilot testing Internet businesses.

• For Internet-based sales and service businesses, it is possible to pilot test the idea online.
• In setting up a pilot test, use free open-source software or low-cost Web hosting services.
• Use a rapid revision process consisting of:
  • Deploy the Web site.
  • Listen to feedback from sales, customers, visitors, and the Web site’s statistics.
  • Revise the Web site based on the feedback.
  • Keep repeating this process.
  • Evaluate the business after getting the Web site closer to its final form.

LO8: Understand the value of building a creative culture in your business.

• Build a company culture that values new ideas and embraces change.
• Create slack time to enable employees to think of new ideas.
• Positively reinforce ideas others bring to you.
• Look to unlikely sources of opportunities.
• Get a room with a view and establish an environment that stimulates innovation.