 Problem solving is the act of defining the problem,

diagnosing the problem's root cause, identifying and

implementing a solution, and sustaining results.
 Idea generation is the process of coming up with new
ideas, solutions, or innovations.
A creative process that involves exploring
different perspectives.
In entrepreneurship, "problem solving and idea generation"
refers to the core process of identifying a market need, then
creatively developing and evaluating potential solutions to
address that problem, essentially forming the foundation for
a new business concept or product by generating innovative
ideas to fill a gap in the market.

Entrepreneurs often visualize an opportunity

gap, a gap between what exists and what could
exist.
• is the process of using innovation and creative solutions
to close that gap by resolving societal, business, or
technological problems.
• Sometimes, personal problems can lead to
entrepreneurial opportunities if validated in the market.
• The entrepreneur visualizes the prospect of filling the gap
with an innovative solution that might entail the revision
of a product or the creation of an entirely new product.
 In practical terms, it implies that while solving one problem may
alleviate immediate issues or concerns, it can also introduce new
challenges or consequences that need to be addressed.
It reflects the idea that life is filled with constant change and
challenges, and solving one problem doesn't necessarily mean an
end to all difficulties, but rather a continuation of the process of
problem-solving and adaptation.
This highlights the complexity and interconnectedness of issues in
life.
Johann Goethe
Adaptive approach seeks
solutions for problems in ways that
are previously tested and known
innovative model
to be effective.

Innovative model problem solving,

uses techniques that are unknown.
uses outside-the-box thinking and
searches for novel solutions.
Questions existing assumptions
State what appears to be
the problem.

Gather facts and opinions

Re-state the problem Therefore, start with what you

assume to be the problem
Identify alternative solutions

Evaluate alternatives It can later be confirmed

or corrected.
implementation

Evaluation
What happened?

Where, when and how did it occur?

What is it’s size, scope, and severity?

Who and what is affected?

Likely to happen again?

Need to be corrected?

May need to assign priorities to critical elements

The real facts help make this possible, and provide
supporting data

The actual problem may, or may not be the same as stated in

Step 1.
Generate multiple ideas.
Do not eliminate any
possible solutions until
several have been
discussed.
 Very good
Average

Which will provide the optimum solution?

What are the risks?

Are costs in keeping with the benefits?

Will the solution create new

problems?
Choose the one which yields
optimum results
Who must be involved?

To what extent?

How, when and where?

Who will the decision

impact?

What might go wrong

How will the results be

reported and verified?
• Test the solution against the desired
results.
• Make revisions if necessary.
 A "business idea" is a concept or plan
for a venture that aims to generate
profit by providing a product or
service to a market.

It outlines what a company will sell

and how it will operate to meet
customer needs and generate
revenue.

A good business idea usually identifies a problem or unmet need in the market
and proposes a solution to address it.
• You need an idea to start a new business
• To identify and respond to market opportunities
• To respond to changing consumer wants and needs
• To stay ahead of the competition
• Because the life cycles of products are limited
• To ensure that businesses operate effectively and
efficiently
• Business ideas can help specific groups of people
(elderly, disadvantaged, those with disabilities)
• Business ideas help to solve natural resource
scarcity, pollution and depletion.
Business exhibitions

Customer Complaints

Natural
scarcities
  Each business idea should be evaluated in terms of:

 Present market. The size of the presently available market must

provide prospects of immediate sales volume to support operations.
 Market growth. There should be prospects for rapid growth and high
return on invested capital
 Costs. Some of the costs involved include: a) start up costs, b) costs of
raw material inputs, c) labor costs, d) selling costs, e) efficiency of
production processes, f) service, warranty, etc.
  Continued...

 Business risks. In assessing business risk consider the

following factors: Market stability in economic cycles ,
Technological risks , Import competition Size and power of
competitors , Legislation and controls , Time required to
generate profit
“if you don’t know where you are
going, Any road will get you there,”

- Lewis Carroll
 Setting Entrepreneurial Goals
Your entrepreneurial goals should be your own. You should
set goals for things you really want to achieve.
A SMART goal is a short statement that a person makes to
lead them in the direction of what they want to accomplish
 Project Work
Business idea Generation

24
 Project work
Generate business idea ?

• Describe your business idea? ,

• why you generate your business idea? / opportunities

• what sources help to you to generate your business idea? ,

• how you evaluated your business idea? ,

25

• and what are your goals with respect to your business?

NB:- assume the maximum investment cost of your business must

be below 100,000 ETB and the location Axum.
• The first step every business founder has to take is to create a business plan.
• A description of the opportunity, the problem to be solved and the solution
that the new company has to offer.
• Typically the plan includes a 5 year plan on expected incomes, profits and
cash flow.
• A business plan is mostly done as a research work before the founder even
begun to build a product or design a service.
• The assumption is that it’s possible to calculate most of the unknowns of a
business in advance, before you contact a bank or investors and actually
execute the business idea.
• Once you receive money, you begin developing the product or service.
• The founder or the founding team invests hundreds of hours to get the
product ready for launch, with almost no customer input.
• First customer feedback is collected after launching the product, when
the sales department attempts to sell it. And too often, after investing
months or even years in development.
• customers might not need or want most of the products features or
services offered.
• It’s simply unrealistic to provide five-year plans to forecast
complete unknowns.
• The plans are generally fiction, and dreaming them up is almost
a waste of time.
• You might go quickly from failure to failure, all the while
adapting, iterating on, on improving their initial ideas as they
continually learn from customers.
• Lean startup is a methodology for developing businesses and products
that aims to shorten product development cycles and rapidly discover if
a proposed business model is viable;
• This is achieved by adopting a combination of business-hypothesis-
driven experimentation, iterative product releases, and validated
learning.
• It is a model that seeks to prove the viability of a business through the
optimized and reduced use of resources in order to ensure success.
• LEAN start up aims for a higher likelihood of success in a project’s
initial stages.
• It is a work methodology in which startups tend to have a greater
chance of success thanks to their adoption of innovative practices,
techniques, and tools that favor a constant flow of opportunities
and the substantial reduction of interruptions and external
obstacles.
The general purpose of Lean Startup methodology is the reduction of
risk, decreased losses, and the time management necessary for the
creation, positioning, and maintenance of startups in their market.
Effort optimization
Constant monitoring: The Lean Startup process is executed
progressively and step by step and gives managers and supervisors the
opportunity to follow operations in detail using key performance
indicators
• Rather than engaging in months of planning and research,
entrepreneurs accept that all they have on day one is a series of
untested hypotheses – basically not more than an idea.
• So instead of developing a business plan, founders summarize
their hypotheses in a framework called business model canvas.
• The business model canvas is a diagram of how a company
creates value for itself and its customers.
Businesses get out in the market and ask potential users and partners
for feedback on all elements of the business model, including product
features, pricing, distribution channels, and customer acquisition
strategies.
Using the customers input they revise their assumptions and start the
validation process over again to test small adjustments (iterations) or
even more substantive ones (pivots) to the hypotheses that aren’t
working.
Rather than wasting time creating elaborate business plans, The
Lean Start-up offers entrepreneurs, in companies of all sizes, a
way to test their vision continuously, to adapt and adjust before
it's too late.
it provides a scientific approach to creating and managing
successful start-ups in an age when companies need to innovate
more than ever.
 In the past start-ups often operated in ‘stealth mode’
to avoid alerting potential competitors, exposing
prototypes to customers only during high
confidential ‘beta’ phases.
 The Lean start-up methodology makes this obsolete
because it predicts that in most industries customer
feedback is more valuable than cadenced unveilings.
• The Business Model Canvas is a shared language, a defacto
standard for describing, visualizing, assessing, and changing
business models that describe the rationale of how an
organization creates, delivers, and captures value.
• The challenge is that the concept must be simple, relevant, and
intuitively understandable, while not oversimplifying the
complexity of how enterprises function.
Nine building block of business model canvas

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Building blocks of 1 to 4

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Building blocks of 5 to 9

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 project progress 2
Develop the business model canvas using the nine
building blocks for your idea!

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