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CHAPTER 6
Business Opportunity Identification

A good business opportunity is that which is a techno-economically and

commercially viable and feasible and environmentally sustainable
proposition. Every entrepreneur needs to identify a sound opportunity. To
identify an opportunity, one needs to:
i. Collect basic information on local resource base, e.g. agriculture,
forest and mines
ii. Collect information on Opportunity Identification (OI) exercise
done earlier (if any), by DIC, banks, other financial institutions, etc.
iii. Discuss the potential business opportunities with existing entre-
preneurs
iv. Discuss with octroi and sales tax officials about the inflow of
goods
v. Collect information on new major investment going to materialise
in the area
vi. Collect negative list of banned items for financing
vii. List out poor performing industries
viii. Collect information on skill base—especially on handicrafts, etc.
ix. Collect information on availability of infrastructure like power,
water and transport, etc.

The opportunities in the food-processing sector may be classified on the basis

of the following parameters:
1. Natural Resource-Based Opportunities: such as the ones based
on cereals, cash crops, fruits and vegetables, agro-wastes, animals,
marine-based, processing of food products like cereals and pulses,
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fruit preservation, pickles, honey, etc.

2. Local Industry Based: those dealing in supply of intermediary raw

material, ancillarisation, job-work, recycling of industrial wastes,
by-products, etc.

3. Local Demand Based: which may include products like bread, bis-
cuits, flour, spices, etc.

4. Export Based: any local product, which is being exported; or

resources available locally to manufacture the items, which have
good export potential

Following the above method, will offer a large number of business opportu-
nities. However, please remember, these opportunities are location and time
specific. An opportunity today may not remain an opportunity tomorrow. Or
an opportunity in a forest area may not hold good in the deserts of Rajasthan,
as the resource base will change. Moreover, one would also need to assess the
viability and feasibility of the opportunities before pronouncing them as busi-
ness opportunities.

An opportunity may be absolutely viable but may not be feasible if it is

mismatched. For example, although setting up a large flourmill may be a per-
fectly viable proposition, it may not be feasible to set up one in Sunderbans
for an illiterate rural or tribal man. Therefore, one needs to consider the fol-
lowing facts before deciding upon an opportunity:

 One’s Education

 Experience

 Economic Background

 Investment Capacity

 Family Background

 Managerial Capabilities

 Market Competition with other Producers/Size of Market

 Location of the Unit

 Availability of Technology and Process Know-how

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 Availability of Raw Material

 Availability of Skilled Workforce

 Availability of Required Infrastructure

 Project Cost

 Export Potential

 Life-cycle of the Product and Future Growth of the Product

 Shelf-life of the Product (highly perishable like milk or long-term

like capital goods or consumer durables, etc,)

 Profitability of the Product

 Degree of Risk

 Gestation Period

 Government Policy

After ascertaining these factors, a SWOT analysis of the entrepreneur vis-à-

vis the identified opportunity should be conducted. If both match, one can
proceed for a preliminary feasibility study through market survey. It is advis-
able to zero in two to three opportunities to finalise one.

A set of introspective questions while deciding upon an opportunity:

 How comfortable are you with the technology? Will you be able to
handle it?
 What is the situation of competition? How will you withstand the
competition?
 Will you be able to muster enough resources (especially finance)?
Will you be able to manage investment from your own resources?
If not, how do you plan to get funds?
 How critical is the government support for your product?
 Is raw material easily available? If not, how will you manage regu-
lar supply of raw material?
 Will you get adequate skilled manpower? If not, how will you
manage?

Business Opportunity Identification 51