INTRODUCTION
Opportunities
can exist on paper or in the form of ideas
usually related to the entrepreneur’s work experience, hobbies, or social environment
can be found in many ways and in many places
Many people see opportunities but only entrepreneur acts upon them.
Definition Of Business Idea And Opportunity
Business idea is a business concept that results in profits if it is turned into a tangible product or service. Opportunity also
defined as the potential to create something new that involves change in knowledge, technology, economy, politics, social, and
demographic conditions.
Note: Sources of business ideas and opportunities can be obtained through primary and secondary sources
Primary sources- refers to first hand data or information gathered directly through:
Observation- data is gathered by observing and recording the respondent’s actions in activity
Experiments- experiments or product sampling is another option
Interviews- field research covers interviews with customers, suppliers, competitors, and industry experts.
Interview conducted in two ways (1) personal interview and (2) telephone interview.
Surveys- refers to the development of a short questionnaire with respect to the targeted product.- the
questions should be very specific.
Secondary source- involved gathering data that have already been compiled and are available. It is initially conducted
for one purpose using existing data which is: (1)Reliable, (2) Available references, (3) Mass media, (4)Electical media ,
media although secondary source relatively inexpensive, they often become outdated and outmoded, given that they
are used for a purpose other than for which was intended.
Note:
Reliable existing data- can be used by entrepreneur is existing data which is reliable. - example : information obtained
from annual report of companies.
Reference- an entrepreneur can use reference such as publish information from then library, internet and so on.
Mass media and electronic media- advertisement and information in the newspaper, magazines and internet.
Information on raw materials can be a business opportunity for an entrepreneur.
PROCESSING OF REGONIZING, ANALYSING AND CHOOSING A BUSINESS OPPORTUNITY
Identifying, analyzing, and choosing business opportunities are essential to determine if the venture can make profits
and sustains its competitiveness. The opportunity is identify through input from consumers, business associates, channel
members, or technical people Each opportunity must be carefully screened and evaluated. Evaluation is the most critical
element in the entrepreneurship process.
Recognizing Customer Needs and Wants
An entrepreneur has to be sensitive in identifying the needs and wants of customers. A need is something basic
in life. Wants are something taht is more than a basic needs.
Scanning the Business Environment
The business environment should analyzed in terms of:
Demographics. Are rhe characteristics of people in a population. If entrepreneur studies the demographic of his
customers, he/she will be in better position to predict the product or service thay they will buy. Needs and wants
are based on the structure, income and taste of population.
Local Resources. Still an abundance of local resources that are untapped and have the potential to become
investment opportunities. Foutains and natural attractions at certain location can be turned into business ideas.
New Government Policies and Regulations. An entrepreneur can identify business opportunities by referring to
the existing law and government regulations.
Data on import and export. The continues increase in the value and quantity of imported and exported products
or services reflects a potential market at the local and international level.the same goes for policies on import
substitution industries and export promotion. These issues can be seen as profitable opportunities.
Industrial linkage. An entrepreneur can identify the industry that requires input from other industries. This will
develop linkage among industries of the same sector or different sectors.
Development projects by piblic and private sectors. There are various developmental programmed by the
government and firms that hava directly or indirectly opened up business opportunities for entrepreneurs.
Technological breakthrough. New technological breakthrough can create new markets and opportunities for
business.
Mass Media and Electronic Media. Can be sources for generating business ideas. Example; a job advertisement
posted by a company for the vacancy of sales executive can be consider as a business idea to the entrepreneur.
Performing Self -Evaluation- evaluation must be made before making a commitment which it should be based on the
individual’s experience, knowledge, skills, financial ability, interest, networking ability.
Experience. An entrepreneur runs a business that suit his experience in the profession. The intelligence to find an
opportunity from past experience can be a way to gain success in business.
Skills. Entrepreneur must have the necessary skills in carrying out his job. Skills usually born from experience and
knowledge which is advantage that is difficult to obtain.
Financial ability. Business must be parallel with the financial ability of the entrepreneur. Capital is the most basic
aspect to think about before opening up a business. Start a small business with entrepreneur existing capital.
Growing business will help the entrepreneur in securing financing for expansion.
Interest. An important aspect must be taken seriously can give self confidence. Entrepreneur will be able to
concentrate on his profession.
Networking ability. Entrepreneur nees to know how to reduce necessary procedures and
Choosing a Business Opportunity Criteria
Competitors- those who are in the same business .Have the same potential to serve the entrepreneur’s customers.
Capital Requirement- the amount invested in the company. Three types of capital:
Fixed or permanent capital- is the amount of capital that been used to buy the asset of ithe company
Working capital-referred to as operating capital also known as assets of business that can be used to support
business operations.
Plantation or growth capital- not related to current business situation. Used to help small business change
its primary direction.
Risk – defined as a period of uncertainty experienced by a business as a result of unforeseen events which lead to either
poor earning and resultant failure. Two type of risk:
Business risk-the factor which have the tendency and potential of adversely affecting a business operation
and ultimately its profitability. Two types of business risk:
o Controllable- can be manage by the entrepreneur
o Uncontrollable- almost impossible to prevent
Financial risk- it is a risk associated with any form of financing. Four categories of financial risk:
o Credit risk- risk when clearing or settlement of payment are not made when due.
o Liquidity risk- is the risk of insufficcient liquid resources to make all payment on the due date.
o Loan risk- a fnancing whereby entrepreneur borrows money as a source of capital to conduct his
business.
o Currency exchange risk- refers to high flexibility and changes in currency value impose a high risk.
Constructing the Business Plan
It is the final step taken by the entrepreneur in recognizing, analyzing and choosing business opportunity.the following
are the approaches to seeking business idea:
1. Fulfilling needs and interest
2. Analyzing life problems
3. Diversifying the usage of goods
4. Observing changes in the community
5. Using the latest technology
6. Observing and establishing a network.
Guidelines in Choosing a Business Idea
1. Data collection and research
2. Preparation of a complete business plan
3. Establishment of linkage or networks
4. Funding
5. Hiring of workforce if necessary
6. Confidence and good time management.
