EVALUATING ENTREPRENEURIAL

OPPORTUNITIES
PROCEDURES OF STARTING A
BUSINESS
 Identification of a business idea
 Development of a business plan
 Location of a business demand evaluation
 Registration of the business
o Choice of the business organization
o Business name
 Trading licences / permit
 Start-up and management of the business.
 Means of Generating a Business
Idea
a) identifying a need
b) brainstorming
c) building on ones skill, hobbies or interests
d) spotting a market niche
e) listening to what people say
f) attribute listening
g) gaining from waste
h) look to see and listen to hear
i) research
j) importing an idea
k) day dreaming
 IDENTIFYING A NEED

 A need can be an opportunity and

indeed a consumer buys to satisfy
need.
 Maslow in his humanistic hierarchy of
needs, physical needs to very high
personalized needs.
 identifying an unidentified or unserved
need is a sure way of generating
i) Basic or physiological needs
 first and the most basic need such as thirst hunger and sleep –
in the process of satisfying these needs, entrepreneurs can
generate a lot of business ideas- such as cloth stores, food
stores, building materials et
ii) Safety and security needs
  Human beings require these and entrepreneurs can generate
ideas in the process of satisfying them e.g security, watchmen
e.t.c.
iii) Social needs
 Generally speaking to need should be accepted in the society
e.g membership clubs, beauty clinics etc
iv) Self esteem or ego
 the need only needs recognition e.g need for luxury cars
cellular phones e.t.c
v) self – actualization
2. Brain Storming
 process of detaching analysis of an idea from the
actual ideas.
 The idea may or may not be related to a given product.
In brainstorming even silly and stupid ideas may be
generated.
3. Building on One’s Skill, Hobbies or Interests
  business ideas can be generated through
 i. personal interests and hobbies
 ii. Copying or improving somebody’s ideas. ( skills)
4 Spoting a Market Niche
 Entrepreneurs usually look for gaps in the growing
markets, identifying market sections which are not
being utilized.
5. Listening to what People say.
 These are people who simply say or speak their needs e.g
if these good bus services ----
6. Attribute listening
  This method of generating business ideas is based on
changing the way one looks at something in order to find a
new use for it.
  It attempts to answer the question – what do we do with
this product.
7. Gaining from Waste
  What would appear waste can be used- say recycles to
create a new opportunity.
8. Others
 By soliciting ideas by interview, reading, observations,
listening
 The Process of Screening a
Business Idea.
 After generating business ideas- it is important
that some evaluation through a screening process
be made.
 Screening process is a systematic evaluation
ideas in order to select the best idea which would
suit one.
 Screening process must be done carefully,
objectively, soberly and without any emotions.
 The screening process must therefore evaluate
the following
  The screening process must therefore evaluate the
following
 a) Personal Evaluation
i) the objective for going to business
ii) personal interests
iii) The degree of commitment to the business or others
e.g family.
 b) Personal skills
 The self SWOT analysis – this aims at analyzing ones
 Strengths
 Weaknesses
 Opportunities
 Threats
Components of the SWOT
Analysis (importance of self
evaluation)
The screening process or evaluation helps identify;
 i) Strength
i) Distinctive competence
ii) Adequate finances
iii) Access to economies of scale
iv) Good innovation ability
v) Proven management
 ii) Weakness
i) Lack of key skill
ii) Internal operations problems
iii) Low morale
iv) Poor track records
 iii) Opportunities
i) Potential customers
ii) Potential goodwill
iii) Health
iv) A favourable social network
 iv) Threats
i) strong competitions
ii) Adverse government policies
iii) Political instability
iv) mismanaged economy
v) Unfavorable legislation
c) Market evaluations
 The aim is to create assurance of adequate market
 The main components include
i) Consumer demand analysis
ii) Product price and placements
iii) No. of competitors in markets.
d) An analysis of availability of raw materials in terms of
i) Adequacy
ii) Reliability
iii) Price
e) Analysis of providing technology in terms of
i) Appropriateness
ii) Affordability
f) An analysis of skills available
g) Analysis of the government policies.
Characteristics of a Good Business
idea.
i) Easy to manage and involve minimal risk.
ii) Does not require excessive capital investments
iii) Offers a good returns on capital
iv) The idea has scope for growth, expansion and
diversification
v) Comparative with owner’s goal and interest
vi) Not against expectation of the society
v) Has a short gestation period
vi) Has a readily available market
vii) Easy to exit when necessary.
 The Generation and Sources of
Business ideas
Generation of business ideas
 Entrepreneurs have the ability to see
opportunities in whatever environment they
happen to be
 are sensitive to people’s needs
 use people’s problems as opportunities of a
business
 can use several methods to help generate and
test new ideas.
Techniques/Methods of Generating
ideas or Business Opportunities
a) Focus groups
where a moderator leads a group of peoples through an open , in –depth
discussion through which new ideas are shared.
 Apart from generating new ideas, the focus group is an excellent method of
screening ideas.
b) Brainstorming
 allows people to be stimulating to greater creativity by meeting with others
and participating in organized group experience.
 When using brain storming the following rules must be obeyed.
i. No criticism nor negative comments
ii. The wilder the idea the better ( freewheeling)
iii. Quality of ideas is desired
v. Combinations and improvements of ideas are encouraged.
 c) Problem inventory analysis
 is a method for obtaining new ideas and solutions
by focusing on existing problems.
 In this approach, the customers or consumers are
provided with a list of problems in a general product
category. .
d) Reverse brainstorming
– a group method of obtaining new ideas but by
focusing on the negative i.e by finding fault.
e) Brain writing
– is a form of brainstorming which gives participants
more time to think than brainstorming which dwells on
spontaneous ideas the participants write their ideas
on a special form.
f)The Gordon method-
 method of developing new ideas when the
individuals are unaware of the problem.
 In this method the entrepreneur starts by
mentioning a general concept associated with
the problem. The group responds with
expressing a number of ideas.
g) Checklist method.-
method of developing new ideas through a list
of related issues
h) Free association method
A new idea is developed through a chain of
world association