TOPIC.
6
ENTREPRENEURIAL OPPORTUNITIES
Introduction
Starting a business requires knowledge, skills, abilities and values. It is therefore important that
entrepreneurs develop viable business ideas, by identifying community needs for goods and
services.
Meaning of business opportunity
A business opportunity is a viable idea, which provides the possibility of a return for the
entrepreneur taking the risk. Such opportunities are presented by customer requirements and
lead to the provision of products which add value to the buyers or end users.
Characteristics of a business opportunity
A viable / good business opportunity must be capable of meeting the following:
• Demand oriented, that is should respond to unsatisfied needs of customers who have
the ability to purchase and are willing to exercise that choice.
• Return on investment- provide durable, timely and acceptable returns or rewards for the
risk and effort required.
• Competitive- Equal to or better, from the view point of customer than similar products.
• Meet objectives- Meet the goals and aspirations of the person taking the risk
• Use of available resources and competencies- be within the reach of the entrepreneur
in terms of resource competency, legal requirements etc.
What is a business idea?
• An opportunity in the environment, which can be translated into a business activity.
• The existence of a situation in the environment, which can be advantageously turned
into a business activity.
• The existence of an opportunity , which can be exploited for making money through
the operation of business activities.
Evaluation of business opportunities for viability.
Evaluation helps in minimizing the risks. It involves determining risks and rewards/ returns
and reflects personal goals and competencies, length of window of opportunity.
• You need a feasible idea to start a new business.
• Business ideas need to respond to market needs.
• Business ideas help entrepreneurs stay a head of competition.
• Need to analyse required management skills.
• Know required capital injection and other resources
• The need to develop a competitive edge by providing something new that has little or
no competition.
• Analyse environment- political, economic, legal requirements
Sources of business ideas
Ideas can be generated from:
• Hobbies/ personal interests
• Personal skills
• Franchise- An agreement where manufacturers or sole traders of a trade mark, products
give exclusive right for a local distribution to independent retailers in return for
payment of royalties and their willingness to conform to standardized operating
procedures.
• Business exhibitions
• Undertake market survey/ research
• Listening to customers’ complaints.
• Changes in society
• Brainstorming.
• Innovation- Improving existing products. Looking at things in a new way and
combining two or more ideas in a new way, such as one stop shopping spots, restaurant
and a salon
NB-
• Think of as many ideas as possible
• Go out and listen
• Always analyse ideas carefully before selecting one to implement
• Be simple
• Start small
