BUSINESS OPPORTUNITY
A business opportunity is any situation in which a person or organization identifies an
opening in a market and invests resources to take advantage of it.
This is an idea that could be successfully developed into a business
What Is A Business Idea?
A business idea is a concept to offer products or services to customers for financial gain.
When you have a business idea, it's important to evaluate it carefully to help you determine
its viability.
Business viability is like asking whether a business has a good chance of surviving and
thriving, it’s all about figuring out if a business idea or a company is likely to be successful
and make a profit.
A business idea evaluation typically involves studying market conditions, establishing a
target market and analyzing the projected costs of the new venture.
Knowing how to evaluate a business idea can help you plan effectively so you can achieve
your goals.
Before you move forward with your business idea, it's important to complete an evaluation
to help you assess the concept's feasibility.
Feasibility study is an analysis into the viability of an idea. Feasibility studies help answer
the essential question, “should we proceed with the proposed idea?”
FACTORS TO CONSIDER WHEN EVALUATING A VIABLE BUSINESS OPPORTUNINITY
An entrepreneur needs to determine whether the business idea they have in mind is viable
or not. When evaluating the viability of the business opportunity, the following factors need
to be taken into consideration:
A. Personal consideration-These are the abilities and expectations of an entrepreneur.
They include the following;
Objectives-The entrepreneur should evaluate the business idea to find out
whether it is in line with his/her objectives.
Skills-Where a business requires certain specialized skills and those skills
are lacking the idea may be dropped.
Commitments-Where the business is likely to interfere with the
entrepreneurs other commitments it may fail.
Interest-It is necessary to check whether the intended business will interest
the entrepreneur or not. If the entrepreneur will not enjoy running the
business, the idea should be dropped.
B. Business consideration-These are external factors that are likely to affect the
operations of the business and they include;
1. Amount of capital required
Capital is used by companies to pay for the ongoing production of goods and services to
create profit. Companies use their capital to invest in all kinds of things to create value.
Labor and building expansions are two common areas of capital allocation.
2. Availability of market
An entrepreneur should assess the availability of customers before starting a business.
Customers exist where there is a gap/niche in the market.
3. Availability of raw materials
Before starting a venture, assessing the availability, quality, and cost of raw materials
needed for the product or service is essential.
4. Level of competition
This will help determine whether the business will survive or not. When evaluating
competition in a business plan, start by identifying direct and indirect competitors,
analyzing their market share, strengths, and weaknesses. Examine their product or service
offerings, pricing strategies, and customer base. Assess the quality of their customer
service and their market reputation.
5. Government policy
Government policies refer to the actions and decisions made by governments at various
levels to achieve specific goals and objectives. These policies can affect different aspects of
society, including businesses, the economy, and the overall welfare of citizens.
Governments use policies to address issues such as economic growth, social welfare,
security, and international relations
An entrepreneur should consider the requirements of the government before starting a
business e.g. the government may require certain businesses to be located in certain areas
only.
6. Profitability of the business
Profitability analysis is a crucial aspect of evaluating the financial health and sustainability
of startups. It helps entrepreneurs and investors understand the potential profitability of a
business and make informed decisions within certain duration of time.
7. Future growth
Some of the most common growth rate metrics investors and analysts consider in
evaluating a company's future prospects and suitability as an investment. the rate of
expansion an economy can sustain at full capacity and employment.
8. Security
Availability of security should be considered, to ensure safety of your business.
9. Level of development of infrastructure
Easy access to infrastructure such as roads, water, electricity, telephone and postal services among
others enables business enterprises easily make orders for goods and deliver them hence reducing
operating expenses. With low operating expenses, profits can be maximized
MARKET GAP
Market gaps are customer needs that are currently unfulfilled or underserved by existing services
or products.
Pinpointing these untapped opportunities offers businesses a wealth of advantages: from boosting
revenue and expanding their customer base, to enhancing user satisfaction and standing out from
the competition.
GAPS THAT MAY CREATE A BUSINESS OPPORTUNITY IN THE MARKET
Poor quality products
Unavailability of products
Unaffordable prices
Poor services
Insufficient quantities
