New Venture Formation Research Paper Example | Topics and Well Written Essays - 1250 words

New Venture Formation - Research Paper Example New venture development In order to easily interpret the process of new venture or business development, it is better to split the term ‘business development’ into two such as business and development. The term business constitutes certain significant elements like finance, managerial activities, competition, marketing, and prices. In addition, the basic idea behind the term business is that it largely relates to risk and entrepreneurship. At the same time, the term ‘development’ can be linked with some other aspects such as technological improvement, improved relations, cost reduction, and general welfare. According to conventional views, business development is considered as gradual development of business ideas and business operations; and although the techniques used to promote the business expansion may differ, all of them constitute traditional marketing (â€Å"New venture development†). The traditional marketing was mainly concerned with how to find, approach, and customer retention using the given lines of product. It is obvious that this traditional business development concept has limited scope as it covers only marketing views. Hence, the modern corporate entrepreneurship concept redefines the new business development in a broad manner. ... Recently, scholars have identified that new venture development process has a close relationship with technology and business networks. In other words, the major purpose of the business development process is to recognize opportunities in a fast changing technological world. Phases of new venture formation New venture formation or development includes a series of processes including idea generation and development, market research methodologies, financial forecasting and spread sheet formulation, and new venture funding. These processes/phases are briefly described below. 1. Idea generation and development As Mallett points out, idea generation is the most important phase of a new venture development process as this phase determines the direction of flow of the whole business performance (149). While forming a business idea, an entrepreneur must take different factors into account. He has to ensure that his business idea well suits with persisting market trends and possesses adequate financial sources to successfully launch the product into the market. It must be also emphasized that the business idea should be novel enough to survive the market competition. Idea generation is a very challenging task but putting it into practice can be much harder. Once an idea strikes a person (entrepreneur), he has to chart all the details of what he wants to achieve and how he is going to proceed with it. The entrepreneur must be very careful at this stage since spending too much time in the idea generation phase would stunt the entrepreneur’s creativity. The entrepreneur may seek assistance from managerial experts to make necessary