Business Opportunity Notes

Business Opportunities

  • Entrepreneurship involves identifying and exploiting new business opportunities.
  • Opportunity: A situation enabling an entrepreneur to offer marketable products/services to interested buyers.
  • The entrepreneur's job is to locate new ideas and put them into action.

Emergence of Opportunity

  • Opportunity arises when:
    • A product/service doesn't exist yet.
    • An existing product/service fails to satisfy customers and needs improvement.
    • People have unfulfilled needs/wants or problems.
  • Entrepreneurs create businesses to fulfill needs/wants or solve problems.

When Is An Idea An Opportunity?

  • When it can:
    • Create or add value to the customer.
    • Solve a significant problem or meet a demand.
    • Have a robust market, profit margin, and marketing strategy.
    • Fit well with the founder and management team.

Attractive Opportunity

  • Qualities of an attractive opportunity:
    • Contextual: Favorable regulatory and industry situation.
    • Timely: Meets a current need or unmet demand.
    • Important: Customer deems the problem/need important.
    • Solvable: Problem can be solved with accessible resources.
    • Profitable: Customers are willing to pay for the solution.

Opportunity Analysis Process

  • Involves the search for and discovery of business opportunities.
  • Process:
    • Search for changes in the environment.
    • Recognize needs, wants, and solutions.
    • Discovery of opportunity.

Observing Changes in the Environment

  • Changes give rise to needs, wants, problems, and opportunities.
  • Factors to observe:
    • Economic forces
    • Social forces
    • Technological advances
    • Political and regulatory statutes

How Environmental Changes Provide Openings

  • Population and Income Structure: e.g., cyber cafes due to a higher number of teenagers.
  • Social Increase: e.g., security systems due to increased housebreaking incidents.
  • Technological Advances: e.g., e-commerce due to the development of the internet.
  • Government Policies and Regulations: e.g., helmets due to increased driving standards.

Recognizing Needs & Wants Then Find Solutions

  • Needs: Basic requirements for survival.
  • Wants: Personal desires beyond basic needs.
  • Problems: Recognizing challenges people encounter daily.
  • Solutions: Represent business opportunities.

Search & Discover Business Opportunities

  • How to search:
    • Experience and exposure
    • Knowledge and skills
    • Special alertness
    • Social network
    • Creativity
    • Vigilance

Mechanism to Identify Opportunities

  • Where to search:
    • Customers
    • Retailers and distributors
    • Business associates
    • Bankers
    • Consultants
    • Employees
    • Others