Module II – Developing the Business Plan & Opportunity Analysis

Lesson Overview

  • Module II: Knowing the Potential Market Need → Lesson 1: Developing the Business Plan
  • Analogy: Architects use blueprints; entrepreneurs use a business plan.
  • Business plan: detailed, data-driven document answering who, what, why, how, when, where.
    • Contains name, vision, mission, goals.
    • Describes marketing, operations, financial aspects.
  • Entrepreneurship ≠ merely “selling for profit.” Also about:
    • Identifying opportunities (seek, screen, seize).
    • Creating added value in customers’ lives.
  • Learning promise: deeper understanding of entrepreneurship + practical abilities to recognize & capture market possibilities.

Learning Objectives

  • Understand the phases of developing a business plan.
  • Identify business opportunities through seeking, screening, and seizing.
  • Analyze potential market needs by generating unique product concepts.
  • Use the Opportunity Attractiveness Matrix to evaluate & select the two best product ideas for ventures.

Key Definitions & Concepts

  • Business Plan: formal written document that details the business concept, strategy, and financial projections.
  • Potential Market Need: specific customer problem or unmet need recognized as a profitable (or socially impactful) opportunity.
  • Business Opportunity: circumstance enabling creation of value/profit or social impact.
  • Viable Opportunity Characteristics: market demand, scalability, profitability, strategic fit.
  • Risk Appetite: \text{The amount\ and\ type\ of\ risk\ an\ organization\ is\ willing\ to\ accept \rightarrow guided\ by\ culture, goals, stakeholders, regulation}

Entrepreneurial Process (4 Over-lapping Phases)

  1. Identify & Evaluate Opportunity
    • Stay alert to ideas from friends, family, social media, consumers, technologists, agencies, chance encounters.
    • Screen against perceived value, risk, personal goals, skills, personality fit.
  2. Develop Business Plan
    • Careful thinking + analysis.
    • Essential for: refining opportunity, estimating resources, attracting investors, and guiding management.
  3. Determine Resources Required
    • Identify what is needed, where to get it, cost & quality.
    • Compare multiple suppliers for optimum deals.
  4. Manage / Implement Enterprise
    • Execute the plan, sharpen management skills, solve operational & HR problems.
    • Continuous evaluation: Are goals being met?
  • Overlap principle: while doing Phase 1 you already think about Phase 4 (akin to planning-controlling loop in management).

Identifying Business Opportunities

  • Not everyone recognizes or acts on opportunities—even when visible.
  • Sources: technological changes, shifts in consumer preference, market inefficiencies, product/service gaps (Shane & Venkataraman, 2000).
  • Assessment dimensions: market demand, competition, resource availability, risk.
  • Successful exploitation ⇒ innovative offerings + stakeholder value.

Opportunity Seeking

  • Environmental Scanning
    • Monitor market trends, consumer behavior, tech advances, regulations.
    • Goal: see emerging opportunities & anticipate demand/industry shifts.
  • Creative Problem-Solving
    • Reframe unmet needs or inefficiencies into innovation opportunities.
Internal Sources of Opportunity
  • Innovation & R&D within the firm.
  • Process improvements.
  • Leveraging existing assets to craft new products/services.
External Sources of Opportunity
  • Market changes: consumer preferences, demographics, lifestyles.
  • Technological breakthroughs.
  • Regulatory shifts.
  • Competitive landscape changes, global economic movements.

Screening Opportunities

  • Purpose: prioritize ideas aligned with capabilities & strategy.
  • Criteria typically include: market demand, competitive intensity, required resources, risk, financial viability.
  • Benefit: optimal allocation of limited resources; avoidance of low-return ventures.
Opportunity Screening Matrix (General)
  • Rows = opportunity options.
  • Columns = evaluation criteria.
  • Apply scores/rankings → compare relative attractiveness.

Opportunity Attractiveness Matrix (Detailed Framework)

  • Criteria columns:
    1. Personal Considerations (values, skills, passion fit)
    2. Market Potential (customer base large enough for profit)
    3. Operating Potential (technology, methods, raw-material availability)
    4. Financial Potential (revenue ≥ expenditures; capital requirement minimal)
    5. Threat from Competitors (intensity manageable)
    6. Other Risks (weather, security, health, unforeseen events)
  • Scoring scale:
    • Very High = 5
    • High = 4
    • Average = 3
    • Low = 2
    • Very Low = 1
    • Descriptors:
      • “Very High” → exceptional potential across criteria.
      • “Very Low” → no potential.
  • Average score formula: Average Score=∑<em>i=1nCriterion</em>in\text{Average Score} = \dfrac{\sum<em>{i=1}^{n} \text{Criterion}</em>i}{n}
  • Rank opportunities (Product A, B, C …) to isolate the top two for venture development.

Risk Appetite

  • Broader organizational stance toward risk‐taking.
  • Informed by culture, strategic goals, stakeholder expectations, & regulation.
  • Guides all major decisions, including opportunity selection & resource allocation.

Seizing an Opportunity

  • Ongoing strategic activity:
    • Actively scan environment (continuous intelligence).
    • Leverage internal resources & capabilities to craft solutions.
    • Execute effectively with agility and a calculated-risk mindset.
  • Success factors:
    • Entrepreneurial mindset.
    • Strategic foresight.
    • Effective execution.
The Seizing Process (Iterative)
  1. Detect favorable market condition.
  2. Match condition with firm’s resources/capabilities.
  3. Design innovative solution.
  4. Implement, monitor, and adapt.

Practical / Philosophical Implications

  • Opportunity recognition & exploitation underpin economic growth and social impact.
  • Ethical lens: ensure value creation does not exploit stakeholders.
  • Continuous learning: reflective practice strengthens future opportunity spotting.

Administrative Credits

  • Prepared by: Ms. Chloie Marie Leigh Rodriguez (Subject Point Person – Entrepreneurship)
  • Noted by: Ms. Chloie Marie Leigh Rodriguez (Cluster Head – Marketing, Entrepreneurship & Personal Development)
  • Approved by: Mr. Arcturus S. Mancera, M.A. Ed. ML., LPT (Academic Coordinator – Accountancy, Business & Management Strand)