business opportunities
- 1. 4.Introduction Opportunities can exist on paper or in the form of ideas. Opportunities usually related to the entrepreneur’s work experience,hobbies, or social environment. Opportunities can be found in many ways and in many places. Many people see opportunities but only entrepreneur acts upon them.
- 2. 4.1 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.
- 3. 4.2 Sources of business ideas and opportunities can be obtained through primary and secondary sources. a) primary sources refer to first-hand data or information gathered directly through : - ~ observations. ~ experiments. ~ interviews. ~ surveys.
- 4. Observation ~ data is gathered by observing and recording the respondent’s actions in activity. Experiments - experiments or product sampling is another option.
- 5. Interviews - field research covers interviews with customers, suppliers, competitors, and industry experts. - interviews conducted in two ways : ~ personal interview ~ telephone interview Surveys - refers to the development of a short questionnaire with respect to the targeted product. - the questions should be very specific.
- 6. b) 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 :- ~ reliable ~ available references ~ mass media and electronic media although secondary source relatively inexpensive, they often become outdated and outmoded, given that they are used for a purpose other than for which was intended.
- 7. Reliable existing data - cab 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.
- 8. 4.3 PROCESSING OF REGONIZING, ANALYSING AND CHOOSING A BUSINESS OPPORTUNITY Identifying, analysing, 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.
- 9. Process in recognizing, analysing and choosing business opportunity e) Matching societal values, a) Recognizing customer c) Performing self-assessment community’s response or needs and wants people’s acceptance d) Screening or b) Analysing or scanning f) Preparing or constructing choosing business the environment a business plan opportunities demographics, Industrial linkage Experience Competition population structure, income, and taste Knowledge Legality Development projects by the public and Study on local resouces Fixed capital private sectors Skills requirement, working, capital and growth Financial ability opportunities Technological New government breakthrough policies and regulations Interest Business risk, financial risk such as credit, cash liquidy, Import and export data Mass media and Networking loan and currency electronic media exchange
- 10. Recognizing Customer Needs And Wants An entreprenuer has to be sensitive in identifying the needs and wants of customers. A need is something basic in life. Wants are something that is more than a basic need.
- 11. Scanning The Business Environment The business environment should be analysed in terms of :- ~demographics ~local resources ~new government policies and regulations ~data on import and export ~industrial linkage ~development projects by public and private sectors ~technological breakthrough ~sources from mass media and electronic media
- 12. Demographics Are the characteristics of people in a population. If entrepreneur studies the demographic of his customer, he/she will be in a better position to predict the product or servis that they will buy. Needs and wants are based on the structure, income, and taste of population.
- 13. Local Resources Still an abundance of local resources that are untapped and have the potential to become investment opportunities. Fountains and natural attractions at certain location can be turned into business ideas
- 14. New Government Policies And Regulations An entrepreneur can identify business opportunities by referring to the existing law and government regulations.
- 15. Data on import and export The continuous increase in the value and quantity of imported and exported products or services reflect 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.
- 16. 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.
- 17. Development projects by public and private sectors There are various developmental programmes by the government and firms that have directly or indirectly opened up business opportunities for entreperneurs.
- 18. Technological breakthrough New technological breakthrough can create new markets and opportunities for business
- 19. Mass Media And Electronic Media Can be sources for generating business ideas. Example : a job advertisement posted by a company foor the vacancy of sales executive can be consideras a business idea to the entrepreneur.
- 20. Performing Self-evaluation Self-evaluation must be made before making a commitment. Should be based on the ~ individual’s experience ~ knowledge ~ skills ~ financial ability ~ interest ~ networking ability
- 21. Experience An entreperneur runs a business that’s suit his experience in the profession. The intelligence to find an opportunity from past experience can be a way to gain success in business. Knowledge Entreperneur has to be equipped with the knowledge on a operating a business.
- 22. Skills Entreperneur must have the necessary skills in carrying out his job. Skills usually born from experience and knowledge. Advantages that is difficult to obtain.
- 23. 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.
- 24. Interest Is an important aspect Must be taken seriously It can give self-confidence Entreperneur will be able to concentrate on his profession
- 25. Networking ability Entreperneur needs to know how to reduce unnecessary procedures and bureucracy in the business. Should be mindful.
- 26. assessing society’s values, community’s response, or society’s acceptance Chemistry between a business ideas and the society is an important aspect that must taken before starting a business. Business opportunity must be consistance.
- 27. choosing a business opportunity Criteria that must be choose by entrepreneur in business opportunity is :- Legality Competitors Capital requirement Risk Legality The sugestion of business ideas must be prove by the law.
- 28. Competitors Those who are in the same business Have a potential to serve the entrepreneur ‘s customers. Entrepreneur can identify competitors by asking customers from his existing business. Competitors are identify ~ the entrepreneur should identify the strength and weeknesses of his competitors in term of organizational terms.
- 29. Capital requirement Capital – the amount invested in the company. Three types of capital : a) Fixed or permanent capital Fixed capital is the amount of the capital that been used to buy the asset of in the company.
- 30. b) Working capital Referred to as operating capital Also known as assets of business that can be used to supports business operations. Often used to pay bills and salaries, to buy inventories and others. c) Plantation or growth capital Not related to current business situation. Used to help small business change its primary direction.
- 31. Risk Define as a period of uncertainly experienced by a business as a result of unforeseen events which lead to either poor earnings and resultant failure. Entrepreneur should be aware of the risks.
- 32. Risks face by entrepreneur based on the following aspect : The level of difficulties in entering the business field The size or amount of capital to be invested The amount of profit that can be gained from the revenue The ability and competency of existing workforce or human resources in managing the business Management of energy resources The product’s potential to penetrate the market
- 33. Two types of risk : i. Business risk ii. Financial risk i. Business risk The factors which have the tendency and potential of adversely affecting a business operation and ultimately its profitability. Two types of business risk : i. controllable ~ can be manage by entrepreneur ii. Uncontrollable ~ almost impossible to prevent
- 34. ii. Financial risk Risk associated with any form of financing Four categories : i. Credit risk ~ risk when clearing or settlement of payments are not made when due. ii. Liquidity risk ~ risk of insufficient liquid resources to make all payments on the due date. iii. Loan risk ~ a form of financing whereby entrepreneur borrows money as a source of capital to conduct his business. iv. Currency exchange risk ~ the high flexibility and changes in currency value impose a high risk.
- 35. 4.3.6 Constructing the Business Plan The final step taken by entrepreneur in recognizing, analysing and choosing a business opportunity.
- 36. 4.4 APPROACHES TO SEEKING A BUSINESS IDEA There are several approaches of seeking business ideas Fulfilling needs and interests Analysing life problems Diversifying the usage of goods Observing changes in the community Using the latest technology Observing and establishing a network
- 37. Fulfilling needs and interests Ideas for setting up business are found from an individual’s different needs or interest that are constantly changing. Analysing life problems Problems experienced in life can sometimes provide a good idea for starting a business if the enterpreneur thinks creatively
- 38. Diversifying the usage of goods Today’s community prefers devices with multi- purpose usage The concept of recycling also a source of starting a business Observing changes in the community Those who are alert with the changes in the community’s lifestyle
- 39. Using the latest technology Changes in technology can change the structure of the industry and the market Give’s an entrepreneur the opportunity to innovate his products and services Observing and establishing a network Create a network at the workplace and make it a source of innovative ideas
- 40. 4.5 GUIDLINES IN CHOOSING A BUSINESS IDEA & opportunity The guidelines in choosing a business idea or opportunity are: Data collection and research Preparation of a complete business plan Establishnment of linkages or networks Funding Hiring of a workforce if necessary Confidence and good time management
- 41. Data collection and research Entrepreneur collects information as much as possible pertaining to the business Carry’s out research in relation to the services, products, or relevant industries Methods to produce the output, competitors and obstacles that might hinder the progress of the business Reads journals Attend any gathering of industrial societies to keep himself informed with latest information
- 42. Preparation of a complete business plan Prepare a complete business plan which includes the business mission Establishnment of linkages or networks A pontential enterpreneur should develop a lingkage or network with other enterpreneurs when he starts his business Should register as a member in professional clubs
- 43. Funding Learn how to obtain funding from friends,family members financial institutions or the government Hiring of a workforce if necessary Is an important asset to succeed in an enterpreneurial business Should hire workers only when there is a necessity
- 44. Confidence and good time management Enterpreneur has to have confidence Manage time wisely so that can balance time between the business and the family and friends Should have the added-value to attract customers, distributors and retailers.