BYU-Hawaii business students and others interested in competing in the university annual business plan competition went into a more serious mode of preparation with the November 8 entrepreneurship lecture on how to determine if an idea will make a good business opportunity.
Dr. Gregory V. Gibson, director of the Mark and Laura Willis Center for InternationalEntrepreneurship at BYU-Hawaii, described the lecture as a "kickoff to the business plan competition," and added that this year there willbe "a lot more prizes and a lot more mentors involved."
Dr. Gibson outlined a series of preparation workshops between now and December 7 when the business plan "idea form" must be turned into the school of Business. A summary is due December 14, "if you want to be assigned a mentor," he said, and final plans are due on January 25, 2006. This school year's competition starts February 9, 2006.
As in the past, students may submit business plans for "developed economies " — such as Japan, Korea and the mainland, and "developing economies" — such as some Pacific islands, the Philippines and Indonesia.
"I think this is going to be a great contest this year," he added. "I'm working with external donors to have a grand prize," Dr. Gibson said.
Elder John Simcox, a BYU-Hawaii service missionary and "entrepreneur in residence" who previously operated a chain of retail jewelry stores with his wife, then delved into how "to take an idea and bring it into an opportunity. You have to understand all the dynamics of a successful business."
"Brainstorm with friends. Mentors can help. They're very important. We've all had them," he said. "Then, once you get on track,you have to be enthusiastic. Push through detractions; but remember, a great idea does not guarantee success. Everything takes a lot of work, a good leader, and a driving force to bring it into being."
Elder Simcox reminded the students they need to be very aware of the competition.He also suggested they "look for an expanding market, one that has the ability to grow beyond where you're at. Whether you're there or not, it will continue to grow. It's also easier to sell new customers than take customers from the competition, and it's always better to bootstrap a business than to start up a new one."
Elder Simcox stressed that "high margins are a key. Nothing makes up for lack of profit, so higher margins are better. This doesn't mean there are no low-margin opportunities, but all the other factors need to be in place."
He also said it's important for a budding entrepreneur "to be committed totally to your business, and believe in it. You have to like it,and like the people associated with it."
"You don't want to enter a business where you have to educate the customer. That's an expensive process," he continued. "And you need to have some kind of competitive advantage."
"As you think about a business, can you set a realistic target and reach it?" Elder Simcox asked. "That's not always easy to answer.You have to stretch yourself. The key: Is it possible?"
"Is the window of opportunity open? You want to be in an environment where the window's open, and not likely to close right away. You want to be very careful you're not going to be outdated a year from now," he continued. "Typically, research shows a business has to be operation for five years before it's successful."
Elder Simcox explained opportunities can take many forms, such as "repeat business, not a one-time sell. If it's a one-time sell, you have to have high margins and low costs to survive."
"There needs to be a built-in sense of urgency," he continued, suggesting that automatic payment and shipping programs have high potential. "The customers need to do something on their part to stop that transaction, not on your part."
He also explained that "a practice is where one individual with tremendous talent does everything in the business, whereas a business is built on the talent of the organization. We always enjoyed the occasions when we went away for a while and the business was doing better than when we left."
Other important factors include speed of service or providing the product, convenience, appealing to multiple generations, and "customer service, customer service, customer service."
"Success is not built on one client, product or customer. It'sa dangerous position if you depending on one customer or product," ElderSimcox said. "At the same time, you have to stay focused and not get confused with a lot of different products. That's a careful line you have to walk. Be very careful."
"Recognize the fact that a great team is more important than havinga good idea."