An entrepreneur should be the opportunity seeker and his most important task is to Identify, discover and to select the best business opportunity. A good opportunity must be capable of converting into a feasible project.
An entrepreneur may come across multiple opportunities but he has to select the most promising and possible opportunity because the success of the enterprise depends on the proper identification and selection of the project.
Table of Contents
Identifying Business Opportunities
Project Identification is the foremost step for starting a new business but is one of the most difficult tasks. Therefore, project identification is the process of selecting the few possible projects out of the several opportunities available:
Idea Generation
This is the first and most important stage in project identification. It is an intellectual process that requires vision, initiative, scheme and inquisitiveness. The Project idea can come out from one or more following sources:
- Trade fairs and trade journals.
- Through experience of others in the particular business,
- Success stories of friends, relatives.
- Surveys, reports, newspapers, periodicals.
- Detailed analysis of demand and supply
- Government policies and support for the development of the various sectors.
- Increasing demand of certain goods and services in the domestic market as well as foreign market.
- Easy Availability of raw material, skilled labour
- Invention of new technology.
Idea can be generated with the help of the following methods:
- Brainstorming
- Focus Groups
- Problem Inventory Analysis
Brainstorming
This technique was originally used by Alex Osborn in 1938 in an American company to persuade innovative thinking in a group of six to eight people. Through this method a large number of ideas are generated without any criticism. In this method, people are encouraged to produce as many ideas they can generate without any criticism and evaluation. It works on the principle of no criticism and quantity raises quality.
Focus Groups
This group consists of 6-12 members belonging to different socio-economic backgrounds to focus on the particular matter. The group has a moderator to have the detailed discussion. Ideas are generated and detailed discussions are carried on to identify the excellent ideas.
Problem Inventory Analysis
This method is more like a focused group method but in this method along with generating ideas, it also considers the problem a product faces. In this method, focus group is provided with the list of the problems in a general product category and then identifying and discussing the problems of the products in that category.
Choosing Right Line of Business
Once the idea is conceived then prospective entrepreneur has to go through the detailed analysis to choose the right type of business and has to input his cost and time to examine the potential of his ideas. To analyse, he has to:
- study the environment of the product
- future prospects of the demand of the product.
- availability of technology.
- access to technical know-how
- access to the market
- availability of raw material and skilled labour
- availability of customers
- complexity of legal provisions
Identifying a business opportunity is complex and very risky task. Therefore, prospective entrepreneur has to go through various analysis. Before selecting the best opportunity, an entrepreneur explore and analyze all business opportunities. For analyzing the available business opportunities, following explorations can be done:
Environment Exploration
This means the study of the environment factors that has an impact on the business. This includes the study of the economic factors like gross domestic product, national income, per capita income, social factors like demographic features, lifestyle, values, beliefs etc. technological factors like, labour intensive technology, capital intensive technology etc. political environment like, political parties, stability of the government, personal interest of the politicians etc and the legal environment i.e. laws and regulations.
Present Business Exploration
This exploration is related to the present scenario of the business like the consumption pattern, demand pattern, income pattern etc.
Opportunity Selection
As soon as the project identification ends, project selection starts. In the project identification phase, an entrepreneur may have identified different opportunities which he considers good for him. In this phase, he/she has to select the best opportunity out of the identified ones which is most promising and most profitable under the given conditions.
Project selection refers to the balanced choice of a project where the cost ratio is low and profits are more. This is the most important phase as the whole project depends on this phase only.
Swot Analysis Entrepreneurship
The prospective entrepreneur should conduct SWOT analysis to select the best opportunity. He/she should anaylse the strengths, weaknesses, competitive advantages (opportunities) and challenges (threats) offered by each of the idea.
On the basis of this analysis, the most suitable project opportunity is selected. The prospective entrepreneur should select the best opportunity with the help of the following criteria:
- Investment Size
- Location
- Technology
- Equipment
- Marketing
- Selection of Product
Investment Size
It means the cost of the project. In terms of Investment, an entrepreneurs should choose between the small scale, medium-scale and large-scale business on the basis of the funds he can raise from the various sources and the amount he is investing. Entrepreneur should choose the project which suits best of his investment.
Location
The location of the project should be such that which provides advantages. It should be such that is near to the market, transport facility is easily available. It should be at the places where there are the facilities of Industrial Development Corporation and other agencies. The proposed location should have variety of skilled and cheap human resources.
Technology
Entrepreneur should give due consideration to the technology required for the project. He/She should select the project which requires the verified and easily available technology.
Equipment
An entrepreneur should choose the best equipments for the project and should take the advice of the experienced consultant. The cost and quality of the equipments should be within the budget.
Marketing
An entrepreneur should choose the project which has wide scope to enter into the market and can help in making good market share and profits. He should not go for the projects which are having cutthroat competition and are difficult to enter as a beginner.
Selection of Product
An entrepreneur should select the product which he/she thinks will earn profits. He/she should take into account the government policies, present market size, demand etc.
