The starting point for any successful new venture is the basic product or service to be offered. This idea can be generated internally or externally through various techniques.

The possible sources of new ideas range from the comments of consumers to changes in government regulations. Monitoring the comments of acquaintances, evaluating the new products offered by competitors, becoming familiar with the ideas contained in previously granted patents, and becoming actively involved in research and development are techniques for coming up with a good product idea. In addition, there are specific techniques entrepreneurs can use to generate ideas. For example, a better understanding of the consumer's true opinions can be gained from using a focus group. Another consumer-oriented approach is problem inventory analysis, through which consumers associate particular problems with specific products and then develop a new product that does not contain the identified faults.

Brainstorming, a technique useful in both idea generation and problem solving, stimulates creativity by allowing a small group of people to work together in an open, nonstructured environment. Other techniques useful in enhancing the creative process are checklists of related questions, free association, idea notebooks, and the "bigdream" approach. Some techniques are very structured, while others are designed to be more free form. Each entrepreneur should know the techniques available.

Once the idea or group of ideas is generated, the planning and development process begins. If a large number of potential ideas has been uncovered, the ideas must be screened and evaluated to determine their appropriateness for further development. Ideas showing the most potential are then moved through the concept stage, the product development stage, the test marketing stage, and finally into commercialization. The entrepreneur should constantly evaluate the idea throughout this process to be able to successfully launch the venture.