THC 304

ENTREPRENEURSHIP
IN TOURISM AND
HOSPITALITY
Module 1: Nature and Scope of
Entrepreneurship

Name of Student:
Course/Year/Section:
Instructor/Contact Number: Lucila B. Bacalla/09177064269
College of Hospitality and Tourism

Course Overview

Course No. THC 304

Course Code
Descriptive Title Entrepreneurship in Hospitality and Toursim
Credit Units 3 units
School Year / Term Second Semester, AY 2021-2022
Mode of Delivery Modular Approach
Name of
Kristin O. Espita , Lucila B. Bacalla
Instructor/Professor
This course describes the skills, knowledge and performance
outcomes required to plan and develop a feasible Business Plan by
understanding the nature and scope of entrepreneurship, scanning
the market of potential entrepreneurial venture opportunities, and
identifying and evaluating the methods of venturing into business
including but not limited to starting one’s own business, buying
Course Description existing businesses and the process franchising. It also emphasizes
on assessing the possible characteristics and mindset of
entrepreneurs, analyzing typical entrepreneurial venture
challenges, errors and rewards, identifying effective strategic
management, developing product and service innovations and
introducing the concepts of environmentally sustainable practices,
social entrepreneurship and intellectual property management.

1. Develop knowledge in assessing the market viability of new

business ideas
Course Outcomes 2. Acquire entrepreneurial personality and characteristics
3. Facilitate conduct of projects/study effectively
4. Display persuasion skills in presenting ideas
A high-quality corporate University of Science, Technology and
SLSU Vision
Innovation
SLSU will:

a. develop Science, Technology and Innovation leaders and

professionals.
SLSU Mission b. produce high-impact technologies from research and
innovations;
c. contribute to sustainable development through responsive
community engagement programs;
d. generate revenues to be self-sufficient and financially viable.

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Module Guide
How to navigate this module

Entrepreneurship in Tourism and Hospitality (HPC 304) is one of most opportune topics
for students in hospitality and tourism programs. The study on entrepreneurship is
necessary as it helps in exploiting business potentials in the hospitality and tourism
industry.

The module is designed to equip students with the knowledge and skills necessary for
making an effective feasibility study especially in the aspect of opportunity recognition
and articulating plans and ideas as they embark to the real world after they graduate.

The module is furnished with pre-test and post-test, discussions, evaluation/assessment

tasks, and formative assessments to help you learn the nature and scope of
entrepreneurship and the crafting of feasibility study.

The modules made use of illustrative diagrams and tables for you to easily understand
the topics. The references used for this are the research output published on some
reputable research sites, published books and e-books, and learning materials related to
entrepreneurship and feasibility study.

This module covers the following lessons, namely: a) Successful Entrepreneur

Personality traits; and b) The Entrepreneurship Process.

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Let’s check what you already

know

Choose the best answer.

1. A clear and concise description of an opportunity

a. business model b. business concept

c. feasibility analysis d. business plan

2. A 30-second to 2-minute presentation that conveys in an engaging way what a

business is proposing and why the listener should be interested

a. marketing plan b. liability c. elevator pitch d. net worth

3. Free promotion

a. culture b. vision c. liability d. publicity

4. The process used to test a business concept

a. feasibility analysis b. focus group

c. consumer trend d. value chain

5. A document that thoroughly explains a business idea and how it will be carried out

a. business model c. mission c. marketing plan d. business plan

6. Paid promotion through media outlets

a. advertising b. asset c. publicity d. vision

7. A study to assist in making the go/no go decision based on a close examination of

product/service, market, industry, and financial data

a. environmental analysis b. industry analysis

c. competitive analysis d. feasibility analysis

8. A review that addresses the roles of the community, region, nation, or the rest of the
world, as they relate to a business

a. feasibility analysis b. environmental analysis

c. industry analysis d. competitive analysis

9. The difference between assets and liabilities

a. vision b. net worth c. liability d. publicity

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10. A concise communication of strategy, including a business definition and

explanation of competitive advantage

a. liability b. asset c. mission d. vision

11. A critical view of industry definition, industry size and growth (or decline), product
and industry life cycle, and any current or anticipated legal or regulatory concerns

a. feasibility analysis b. industry analysis

c. competitive analysis d. environment analysis

12. A company’s plan to generate revenue and make a profit from operations

a. mission b. net worth c. business model d. business plan

13. The combination of the four factors – products, price, place, and promotion – that
communicates a marketing vision

a. advertising b. marketing mix c. marketing plan d. target market

14. Includes telemarketing, direct mail, in-person selling, and other personalized
promotional efforts

a. direct marketing b. advertising c. net worth d. target market

15. The beliefs, values, and behavioral norms of an organization

a. vision b. publicity c. culture d. asset

16. A financial document that summarizes income and expense activity over a specified
period and shows net profit or loss

a. mission statement b. cash flow statement

c. balance sheet d. income statement

17. Groups defined by common factors such as demographics, psychographics, age, or

geography that are of primary interest to a business

a. marketing mix b. proof of market

c. direct marketing d. target market

18. A statement of the marketing goals and objectives for a business and the intended
strategies and tactics to attain them

a. breakeven point b. business plan c. marketing plan d. marketing mix

19. Community activities that are designed to enhance an organization’s image

a. public relation b. vision c. publicity d. culture

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20. An investigation that provides evidence of a market opportunity

a. proof of market b. target market c. asset d. direct marketing

21. Group of businesses with a common interest

a. association b. industry c. trade union d. manufacturer

22. Those most likely to buy a business’ products and services are

a. manufacturers b. other businesses

c. trade organizations d. target customers

23. To develop a new business, first you need to create a

a. plan b. account c. prototype d. layout

24. Means by which you deliver a product or service to the customer

a. direct channel b. distribution channel

c. delivery method d. layout

25. Looks at the people aspect of the business

a. growth plan b. contingency plan

c. organizational plan c. business plan

26. The financial plan presents _______ for the future of the business

a. forecasts b. trends c. finances d. studies

27. Describes how you intend to make money with your business concept

a. brainstorm b. business model c. trend d. prototype

28. The distribution channel through which your product or service flows from the
producer to the customer

a. highway system b. distribution channel

c. value chain d. direct channel

29. When you have a feasible business concept, the next step is to develop

a. business plan b. feasibility analysis b. financial analysis d. industry

30. The process of discovering new ways of combining resources

a. business b. entrepreneurship c. innovation d. planning

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Lesson I. The Entrepreneurial Personality and Process

Intended learning outcome/s:

At the end of the lesson, you will be able to:

1. Examine their entrepreneurial potential;

2. Validate the entrepreneurial personality traits they possess;
3. Explain the model of entrepreneurial process.

Now get started

Introduction

Entrepreneurship is important for a number of reasons, from promoting social

change to driving innovation. Entrepreneurs are frequently thought of as national assets
to be cultivated, motivated, and remunerated to the greatest possible extent. In fact, some
of the most developed nations such as the United States are world leaders due to their
forward-thinking innovation, research, and entrepreneurial individuals.

Great entrepreneurs have the ability to change the way we live and work, on local
and national bases. If successful, their innovations may improve standards of living, and
in addition to creating wealth with entrepreneurial ventures, they also create jobs and
contribute to a growing economy.

Entrepreneurs and entrepreneurship are vitally important within the hospitality

and tourism industries. Although frequently considered distinct industrial sectors,
hospitality and tourism are closely intertwined sectors that meet customers’ recreation,
leisure and entertainment needs, and the needs of international and domestic business
and leisure travelers. Combined, hospitality and tourism contribute significantly to local,
regional, national and global economies.

Like entrepreneurship therefore, hospitality and tourism are important to many

national economies, creating jobs and contributing to national gross domestic product
(GDP). For many countries, domestic tourism is also important to economic health and
the provision of stable revenue streams, particularly in times of environmental
uncertainty. The importance of entrepreneurship in hospitality and tourism therefore, is
not to be understated.

One of the world’s most famous visitor attractions is Disneyland.

This theme park would not have been opened without the efforts of
the entrepreneurial Walt Disney, best known as an animator and
film maker. This entrepreneur first envisaged the idea for a theme
park in the late 1940s as a place where his employees could spend
time with their children.

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Key to remember

Entrepreneurship
Hospitality and Tourism

Let’s Learn

One of the early scholars who defined entrepreneurs, Schumpeter, stated that
“entrepreneurs are those individuals whose function is to carry out new combinations of
means of production”. The entrepreneur is seen not only as a person who is capable of
bearing risks and starting-up a business but also as an individual who uses his/her skills
and personality in order to create value in a company (Gundry, Ofstein, & Kickul, 2014).

Igbojekwe and Anuñobi (2020) described entrepreneurship as one of the eight

key competencies that all individuals should have in order to ease business creation and
innovation. This view is widely accepted because currently, there is high level of
unemployment among young university graduates who have limited opportunity for
employment in corporate organizations. Also, these young graduates of present
generation do not find paid employment in organizations attractive, they desire
achievement, freedom and creativity as key motivators in the workplace. Most young
graduates are always looking forward to either working in big corporate organizations
or setting up fast growing industries of their own believing that this offers a better future.
Equipped with entrepreneurship skill, someone can have a successful professional life
(Daniel, Costa, Pita & Costa, 2017).

Entrepreneurs in hospitality and tourism need to possess the key business,

technical and managerial skills required to become successful entrepreneurs (Ciochina,
Iordache, & Sirbu, 2016). On the other hand, Morris, Webb, Fu and Singhal (2013)
highlight the importance of developing thinking skills and creative skills in educational
processes.

Successful Entrepreneurial Personality Traits

Though hard work is often a factor in success, one’s level of output does not always
determine success in their field — and entrepreneurship is no exception.

There are many factors that can contribute to the success of an entrepreneur as
they launch, operate, and scale their business. These factors can include the timing of
their business launch, how competitive their market is, the reliability of their supply
chain, the amount of capital they are able to obtain, and the current economic climate.

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In addition to these elements, there are a number of traits successful

entrepreneurs have in common that contribute to their business success. Let’s dive into
what they are.

1. Discipline

Starting and operating a business is no easy feat. Unlike a

traditional job where you often have upper-level management
driving business objectives and keeping you accountable, being
an entrepreneur requires the ability to hold yourself accountable
when you do not have a “boss” to do so.

Those who are able to create and execute plants even

without external factors holding them accountable have a
competitive edge in business. When an entrepreneur has self-
discipline they are able to manage the urge to procrastinate and
can take decisive action when needed.

2. Creativity

Though creativity is often associated with artistic output, it is an important trait

for all entrepreneurs to have. Creativity does not only apply to visual elements or
branding. Entrepreneurs who are able to creatively solve problems and think outside of
the box when facing everyday business challenges, they are able to quickly pivot and
implement necessary solutions that lead to business growth.

3. Self-Awareness

Entrepreneurs who have a sense of self-awareness that they are able to apply
professionally to achieve business success. When an entrepreneur is self-aware they are
able to own up to their strengths and weaknesses related to running their business.

With this awareness, they are able to zero in on the tasks and elements of running
the business they can excel in and are more willing to delegate the areas they are not as
strong in. Another benefit of being self-aware is that it increases one’s ability to give,
receive, and apply meaningful feedback. Self-awareness at its finest is accepting your
shortcomings and accentuating your strengths.

4. Resourcefulness

Many entrepreneurs are faced with tasks and challenges they have never faced
before. The ability to be resourceful is a mindset that helps entrepreneurs reach lofty
goals without a clear way to achieve them.

When entrepreneurs are able to work resourcefully, they can effectively problem-
solve and grow and scale their businesses without having all of the answers or resources
to do so. Being resourceful requires a can-do attitude and willingness to work creatively
to effectively manage a business without having the immediate know-how. While having

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access to money and resources can make a difference, a key part of being an entrepreneur
is cultivating those resources yourself.

5. Process-Oriented

Having solid processes in place is essential for any successful entrepreneur. In the
world of business, a process is a repeatable series of steps that help those working within
a business to complete necessary tasks. Processes can apply to various aspects of the
business including sales, onboarding new team members, production, and product
fulfillment.

When business owners have a process-oriented mindset, they are able to work
smarter, not harder. Implementing processes in various areas of the business can prevent
waste, allowing business owners to scale and grow their businesses. Additionally, when
business owners have repeatable processes in place, they are able to easily train new
team members to fulfill important aspects of the business without sacrificing time or
quality.

6. Empathetic

Empathy is an essential trait for entrepreneurs. Whether a business owner

manages a large team of employees or works directly with their customers as a high-
performing solopreneur, they must be able to connect with others on a genuine level.

Successful entrepreneurs are able to put themselves in others’ shoes, considering

the perspectives of their employees and customers as they navigate key business
decisions. In business, empathy can look like anticipating your customer’s needs,
empowering your team members to take time off to recharge when they need it, and
giving both employees and customers’ space to voice their opinions and concerns.

7. Communicative

The top three communication skills for leaders are effective listening, getting a
message across clearly and vividly, and providing feedback in a supportive manner.

These skills can put entrepreneurs at a competitive advantage. When a business

owner is able to effectively listen to their customer, they are able to implement customer
feedback that can help them improve their offerings. Additionally, when business leaders
exhibit these skills with their own employees and team members, they are able to build
trust which can improve productivity and business performance.

8. Self-Motivated

Simply put, when you are your own boss you have to be able to jeep yourself
motivated to work effectively and consistently. Entrepreneurs must be able to work
through creative ruts and points of feeling uninspired to keep their businesses going. This
starts with knowing what drives you to keep going and drawing upon necessary
inspiration when motivation is low.

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9. Confident

If you have an idea you want to bring to life and share with others, you have to
have the confidence to see it through. Whether you are introducing a new product to
market, or are seeking outside funding for your business, you must be able to speak to
what you offer clearly and confidently. Successful entrepreneurs stand behind their ideas
without letting concern over what others may think get in the way.

10. Flexible

To have a sustainable business and see long-term success, entrepreneurs must be

willing to pivot when necessary. Whether it is reformulating a product to make it better,
or revising a business strategy to remain competitive, entrepreneurs who are too rigid
and afraid to embrace change are at a disadvantage.

When an entrepreneur is flexible in their approach, they are able to take

advantage of new opportunities as they come which can pay off in the long run. Business
owners who are slow to adapt to change can miss out on valuable opportunities to
innovate and adapt to their customers’ needs.

11. Risk-Taker

The ability to take a calculated risk is one of the most valuable skills an
entrepreneur can have. When business owners are willing to take risks, they are able to
learn valuable lessons in business that can help their company in the long run.

Taking risks also helps businesses find new ways to differentiate themselves from
the competition, which is especially helpful in saturated markets. In the event the risk
does not have the intended result, the entrepreneur can still apply the valuable lessons
learned to future business decisions.

12. Resilient

Last but certainly not least, successful entrepreneurs must have a sense of
resiliency. While running a business, it is common for entrepreneurs to face closed doors
and to be told "no" often from potential customers and those they are seeking funding
from.

Many entrepreneurs may find themselves starting multiple businesses if their

initial idea does not take off. Some successful business owners may find their first few
business ideas were not sustainable in the long run but can apply those learnings to new
businesses. Whether an entrepreneur is not granted a sale or opportunity or has to start
at square one, being resilient and inventive in the face of challenges is a must.

THE ENTREPRENEURIAL PROCESS

Entrepreneurship process is a course of action that involves all functions,

activities and actions associated with identifying and evaluating perceived opportunities

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and the bringing together of resources necessary for the successful formation of a new
firm to pursue and seize the said opportunities.

Entrepreneurship is a continuous process that needs to be followed by an

entrepreneur to plan and launch the new ventures more efficiently.

1. Discovery: An entrepreneurial process begins with the idea generation, wherein the
entrepreneur identifies and evaluates the business opportunities. The identification
and the evaluation of opportunities is a difficult task; an entrepreneur seeks inputs
from all the persons including employees, consumers, channel partners, technical
people, etc. to reach to an optimum business opportunity. Once the opportunity has
been decided upon, the next step is to evaluate it.

2. Developing a Business Plan: Once the opportunity is identified, an entrepreneur

needs to create a comprehensive business plan. A business plan is critical to the
success of any new venture since it acts as a benchmark and the evaluation criteria to
see if the organization is moving towards its set goal.

An entrepreneur must dedicate his sufficient time towards its creation, the major
components of a business plan are mission and vision statement, goals and objectives,
capital requirement, a description of products and services, etc.

3. Resourcing: The third step in the entrepreneurial process is resourcing, wherein the
entrepreneur identifies the sources from where the finance and the human resource
can be arranged. Here, the entrepreneur finds the investors for its new venture and the
personnel to carry out the business activities.

4. Managing the Company: Once the funds are raised and the employees are hired, the
next step is to initiate the business operations to achieve the set goals. First of all, an

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entrepreneur must decide the management structure or the hierarchy that is required
to solve the operational problem when they arise.

5. Harvesting: The final step in the entrepreneurial process is harvesting wherein, an

entrepreneur decides on the future prospects of the business, i.e. its growth and
development. Here, the actual growth is compared against the planned growth and
then the decision regarding the stability or the expansion of business operations is
undertaken accordingly, by an entrepreneur.

The entrepreneurial process is to be followed, again and again, whenever any new
venture is taken up by and entrepreneur, therefore, it is a never-ending process.

Let’s sum up

 Entrepreneurship is an integral part of a nation’s economy. It helps promote social

change and cultivates innovative culture. Entrepreneurs are considered as
national assets that should be given utmost importance to the greatest possible
extent.

 Similarly, hospitality and tourism industries are considered equally important

with that of entrepreneurship. The industry contributes to national economies by
creating jobs and adding to national gross domestic product. It is therefore not to
be overlooked the importance of entrepreneurship in hospitality and tourism.

 Successful Entrepreneurial Traits: Discipline, Creativity, Self-Awareness,

Resourcefulness, Process-Oriented, Empathetic, Communicative, Self-Motivated,
Confident, Flexible, Risk-Taker, Resilient.

 The Entrepreneurial Process: Discovery, Developing a Business Plan, Resourcing,

Managing the Company, Harvesting.

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Let’s assess what have you learned in this lesson

Evaluation / Assessment
Please take the Entrepreneurial Personality Test below. Make a narrative reflection on
the result of your personality test. The narrative reflection will be rated based on the
rubric of assessment for output.

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Result: Do You Have What It Takes?

12 Points or More: You are a natural risk-taker and can handle a lot of stress. These are important characteristics for an
entrepreneur to have to be successful. You are willing to work hard but have a tendency to throw caution to the wind a little too
easily. Save yourself from that tendency by using cost/benefit analysis to carefully evaluate your business (and personal)
decisions. In your enthusiasm, do not forget to look at the opportunity costs of any decision you make.

6 to 12 Points: You strike an excellent balance between being a risk-taker and someone who carefully evaluates decisions. An
entrepreneur needs to be both. You are also not overly motivated by the desire to make money. You understand that a successful
business requires hard work and sacrifice before you can reap the rewards. To make sure that you are applying your natural
drive and discipline to the best possible business opportunity, use the cost/benefit analysis to evaluate the different businesses
you are interested in starting.

6 points or Lower: You are a little too cautious for an entrepreneur, but that will probably change as you learn more about how
to run a business. You are concerned with financial security and may not be eager to put in the long hours required to get a
business off the ground. This does not mean that you cannot succeed as an entrepreneur; just make sure that whatever business
you decide to start is the business of your dreams, so that you will be motivated to make it a success. Use cost/benefit analysis to
evaluate your business opportunities. Choose a business that you believe has the best shot at providing you with both the financial
security and the motivation you require.

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Lesson II. New Venture Ideas and Opportunity Recognition, and Screening

Intended learning outcome/s:

At the end of the lesson, you will be able to:

1. Hypothesize possible business idea;
2. Acquire techniques in opportunity recognition.

Now get started

Introduction

“Entrepreneurs see trends where others just see data; they connect dots
when others just see dots. This ability to consistently recognize and seize
opportunity does not develop overnight. It takes deliberate practice.”
-Dan Cohen, entrepreneur and educator

Entrepreneurs creatively exploit changes in our world as some contemporary

economists and business experts have defined entrepreneurship. This is in alignment
with Schumpeter’s definition of entrepreneurship but explicitly takes it a step further –
to take advantage of circumstances. These changes can be technologically, like the
explosion in computer technology that led Bill Gates and Paul Allen to start Microsoft, or
cultural, like the collapse of Communism, which led to a great many new business
opportunities in Eastern Europe. Babson professor Daniel Isenberg narrows the
definition of entrepreneurship to “the contrarian creation and capture of extraordinary
value.”

Entrepreneurship is all about openness to new ideas, new opportunities, and new
ways of acting on them. Indeed, this is demonstrated time and again by countless
entrepreneurs’ stories, regardless of the diversity of their industries, whether for profit
or nonprofit, whether a startup or within an existing corporation. These entrepreneurs
have found ways to identify new opportunities that address unmet needs in the
marketplace.

Key to remember

Opportunity – a way of generating profit through unique, novel, or desirable products or

services that have not been previously exploited.

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Let’s Learn

What is an Opportunity?

There are many definitions of opportunity, but most include references to three
central characteristics: potential economic value, novelty or newness, and perceived
desirability. Entrepreneurs create value “by exploiting an invention or, more generally,
an untried technological possibility for producing a new commodity or producing an old
one in a new way, by opening up a new source of supply of materials or a new outlet for
products, by reorganizing an industry”. This view emphasizes innovation as the key to
entrepreneurship.

There are five basic ways that entrepreneurs find opportunities to create new
businesses:

1. Using a new technology to produce a new product

2. Using an existing technology to produce a new product
3. Using an existing technology to produce an old product in a new way
4. Finding a new supply of resources (that might enable the entrepreneur to
produce a product more economically)
5. Developing a new market for an existing product

In addition, a new idea that constitutes an opportunity, whether it is a product,

service, or technology, must be new or unique or at least a variation on an existing theme
that you are confident people will accept or adopt. The idea must involve something that
people need, desire, and find useful or valuable. Or there must be a significant problem to
solve. Finding solutions to problems and meeting customer needs are the essence of
opportunity recognition.

Innovation, Invention, Improvement, or Irrelevant?

Of course, all ideas are not created equal

and not all ideas are venture opportunities. Part
of recognizing an opportunity is the ability to
evaluate ideas and identify those with the
highest likelihood of success. One framework
for doing this it to rate an idea on four different
dimensions: The idea may be an innovation, an
invention, an improvement, or irrelevant. Of
these, innovations and inventions are high in
novelty, while improvements and irrelevant
are low in novelty.

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As an example of an invention that developed into an innovation, consider the story of Dr. Spencer
Silver, the inventor of Post-it notes. More than 35 years ago, Silver was a scientist working for 3M.
His task was to devise a new adhesive, something stronger and tougher that had never been seen
before. During his experiments, he discovered an adhesive that was none of those things – although
it did stick to surfaces, it didn’t bond tightly to them. For years, Silver tried to persuade his colleagues
that he had found something meaningful - the only problem was that he had no idea what the
adhesive could be used for. Art Fry, another 3M scientist, had a problem of his own. Every time he
tried to bookmark particular pages of the hymn book for choir practice with pieces of paper, they
would fall out. Fry remembered Silver’s discovery and they ended up working together to develop
what we now know as the Post-it note.

The Post-it note took off because it was novel, useful and practical – but it became
an innovation of high value only when it hit the market. Opportunities spring from ideas,
but not all ideas are opportunities. Although we all have the capability to generate a huge
range of ideas, not everyone knows how to turn an idea into a valuable, revenue-
generating opportunity.

Opportunities Start with Thousands of Ideas

The first step in creating and identifying opportunities is idea generation: the
more ideas we generate, the greater the likelihood we will find a strong opportunity. At
this stage, it is important to embrace the openness of an entrepreneurial mindset to
consider ideas that might seem impractical, obvious, wild, or even silly. On the surface,
you never know what may turn out to be a good or bad idea.

There are seven main strategies that are effective in the generation of
entrepreneurial ideas:

 Analytical Strategies – involve taking time to think carefully about a problem by

breaking it up into parts, or looking at it in a more general way, to generate ideas
about how certain products or services can be improved or made more innovative

 Search Strategies – involve using a stimulus to retrieve memories in order to make

links or connections based on personal experience that are relevant to the current
problem.

 Imagination-based Strategies – involve suspending disbelief and dropping constraints

in order to create unrealistic states or fantasies. One of the remarkable things about
generating ideas, especially ideas that come from imagination-based strategies, is that
one idea can lead to another, yielding a pipeline of great ideas that may impact the
world.

 Habit-breaking Strategies – means to think creatively, our mind needs to break out of
its usual response patterns. These are techniques that help to break our minds out of
mental fixedness in order to bring out creative insights. One strategy is to think about
the opposite of something you believe, in order to explore a new perspective.

 Relationship-seeking Strategies – plans of action that involve consciously making links

between concepts or ideas that are not normally associated with each other.

 Development Strategies – are employed to enhance and modify existing ideas in order
to create better alternatives and new possibilities.

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 Interpersonal Strategies – require group interactions; ideas are generated as a group

and the group builds on each other’s ideas. Brainstorming is a very common
interpersonal tool for generating ideas that emphasize the creativity of the group over
the individual.

The point of these seven strategies is to focus on generating enough ideas to

eventually create pathways to new opportunities. Not all approaches will work for every
person. Try a few and see what happens. As you try, you are training your brain to think
more creatively!

BUILDING OPPORTUNITIES THROUGH ALERTNESS, PRIOR KNOWLEDGE AND

PATTERN RECOGNITION

Access to the right information is one of the key influences of opportunity

identification. However, access to information is not enough – it is how this information
is used that makes the real impact.

Alertness

To address the question of why some people spot opportunities and some do not,
researchers have suggested that opportunities are everywhere waiting to discovered, but
discovery is made only by those entrepreneurs who have alertness, which is the ability to
identify opportunities in their environment. This means that entrepreneurs do not
necessarily rationally and systematically search their environment or their particular
information sets for opportunities. Rather, they become alert to existing opportunities
through their daily activities – in some instances, they are even taken by surprise by what
they observe.

Some researchers believe that entrepreneurs may be more adept at spotting

opportunities than not-entrepreneurs for several reasons:

 They have access to more information

 They may be more prone to pursuing risks that avoiding them
 They may possess different cognitive styles from those of non-
entrepreneurs

These reasons can be atrobuted to an entrepreneur’s level of alertness as well as

their persistence and optimism. Persistence helps entrepreneurs power through
obstacles and optimisim helps drive persistence. The combinaation of persistence and
optimism encourages a state of alertness and readiness to identify and act on new
opportunities that others may miss or just do not see.

Prior Knowledge

Once entrepreneurs have identified opportunities, how do they go about building

on them?

One of the major factors in the building of opportunities identified is prior

knowledge. Prior knowledge is information gained from a combination of life and work

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experience. Many studies indicate that entrepreneurs with knowledge of an industry or

market, together with a broad network, are more likely to rcognize opportunities than
those who have less experience or fewer contacts. Success entrepreneurs often have prior
knowledge with respect to a market, industry, or customers, which they can then apply
to their own ventures.

Pattern Recognition

Another key factor in building and recognizing opportunities is pattern

recognition. It is the process of identifying links or connections between apparently
unrelated things or events. Pattern recognition takes place when people “connect the
dots” in order to identify and then build on opportunities.

Moving from the idea to identifying an opportunity may seem like a daunting
prospect, but we can all train ourselves to get better at recognizing opportunities. We do
so by identifying changes in technology, markets, and demographic; engaging in active
searches; and keeping our mind open to recognizing trends and patterns. And always look
beyong the imaginary box!

FROM IDEA GENERATION TO OPPORTUNITY RECOGNITION

For an opportunity to be viable, the idea must be new or unique or at least a

variation on an existing theme that you are confident people will accept and adopt. It must
involve something that people need, desire, find useful, or find valuable, and it must have
the capacity to generate profit. We cannot credit divine intervention as the source of new
ideas, nor is every idea an opportunity. The best ideas are based on knowledge and the
ability to transform the idea into a viable opportunity.

Typically, entrepreneurs go through three processes before they are able to

identify an opportunity for a new business venture: idea generation, creativity, and
opportunity recognition.

Idea Generation Creativity Opportunity Recognition

Production of ideas for Production of ideas for Recognition that ideas are not
something new something new that is also only new and potentially useful,
potentially useful but also have the potential to
generate economic value

Increasing Relevance to Founding New Ventures

The journey from idea to opportunity is important to recognize because the

difference between someone who comes up with an idea and an entrepreneur is that the
entrepreneur turns this idea into an actionable opportunity that has the potential to
become a viable business and generate profit. Though the goal is recognizing a value
opportunity, the journey starts with lots of ideas. These ideas can be generated in many
ways, potentially through the strategies discussed earlier. Of those ideas, you need to
determine which ones are the most useful for potential customers. The entrepreneur, is
the one who acts on the opportunity generated.

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Let’s sum up

 There are many definitions of opportunity, but most include references to three
central characteristics: potential economic value, novelty or newness, and
perceived desirability.

 There are five basic ways that entrepreneurs find opportunities to create new
businesses:

1. Using a new technology to produce a new product

2. Using an existing technology to produce a new product
3. Using an existing technology to produce an old product in a new way
4. Finding a new supply of resources (that might enable the entrepreneur to
produce a product more economically)
5. Developing a new market for an existing product

 The idea may be an innovation, an invention, an improvement, or irrelevant. Of

these, innovations and inventions are high in novelty, while improvements and
irrelevant are low in novelty.

 There are seven main strategies that are effective in the generation of
entrepreneurial ideas:

1. Analytical Strategies
2. Search Strategies
3. Imagination-based Strategies
4. Habit-breaking Strategies
5. Relationship-seeking Strategies
6. Development Strategies
7. Interpersonal Strategies

 Typically, entrepreneurs go through three processes before they are able to

identify an opportunity for a new business venture: idea generation, creativity,
and opportunity recognition.

Let’s assess what have you learned in this lesson

1. Applying the techniques and strategies in idea generation and opportunity recognition,
group yourselves into 3-4 members and think of a potential idea and discuss why it is
an entrepreneurial opportunity. This idea will now become the subject of your
feasibility study. Make a narrative of your discussion.

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References

Brookes, M. & Altinay, L. (2015). Entrepreneurship in Hospitality and Tourism. A Global

Perspective. Goodfellow Publishers Ltd. Wolvercote, Oxford

Ciochina, J. Iordache, C.M., & Sirbu Alexandrina (2016). Entrepreneurship in the tourism
and hospitality industry.

Daniel, A., Costa, R., Pita, M. & Costa, C. (2017). Tourism education: What about
entrepreneurial skills. Journal of Hospitality and Tourism Management, 30, 65-
77

Gundry, L.K., Ofstein, L. F., &Kickul, J. (2014). Seeing around corners: How creativity skill
in entrepreneurship education influence innovation in business. The
International journal of Management Education, 12(3)

Mariotti, S. & Glackin, C. (2017). ENTREPRENEUSHIP: Starting & Operating A Small

Business. Pearson Education South Asia Pte. Ltd. Singapore

Morris, M., Webb, J., Fu, J. & Singhal, S. (2013). A competency-based perspective on
entrepreneurship education: A conceptual and empirical insights. Journal of
Small Business Management, 51(3), 352-369.

https://blog.hubspot.com/sales/entrepreneur-personality-traits

https://businessjargons.com/entrepreneurial-process.html

https://quizizz.com/admin/quiz/58ade698868aa5d506b84913/ch-5-feasibility-
business-planning

http://whyfund.net/Entrepreneurship/Test%20%20Entrepreneurship%20Chapter%2
02%20MULTIPLE%20CHOICE.htmg

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