LESSON 1- IDENTIFYING BUSINESS OPPORTUNITY IN THE ENVIRONMENT

BUSINESS IDEA AND OPPORTUNITY

* A business idea starts with an opportunity
* A business opportunity exists when there is demands for goods and services to meet the needs and wants of community
* Changes in the environment create opportunities: cultural, social, legal, economy, political, and technology
BUSINESS IDEA- is a business concept that results in profits if it is turned into a tangible product or service
BUSINESS OPPORTUNITY- defined as the potential to create something new that involves change in knowledge, technology,
economy, politics, social, and demographic conditions
EXAMPLES OF POSSIBLE SOURCES OF BUSINESS IDEAS
* Based on work experience
* Based on hobby and interest
* Based on chance encounters or observations while travelling
* Based on family business
* Based on suggestions from spouse, siblings, and friends
* Based on local needs, wants, problems, or finding gaps in the market place
* Based on market trend or market growth potential
* Based on copying successful business model

~ Human needs and wants are unlimited

~Next, translate the needs and wants into products and services

PRODUCTS- are physical form, e.g. car, cellphone, books, etc.

SERVICES- non-physical form, intangible product e.g. cab services, telcom network, training, repairs ,etc.

SOURCES OF BUSINESS IDEAS AND OPPORTUNITIES

PRIMARY SOURCES- refer to first-hand data or information gathered directly through:

- observations
- experiments
- interviews
- surveys
OBSERVATION- data is gathered by observing and recording respondent’s actions in the activity
EXPERIMENTS- experiments or product sampling is another option
INTERVIEWS- field research covers interviews with customers, suppliers, competitors, and industry experts. Interview
conducted in two ways: PERSONAL INTERVIEW AND TELEPHONE INTERVIEW
SURVEYS- refers to the development of a short questionnaire with respect to the targeted product. The question should be
very specific

SECONDARY SOURCES- 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secondary source relatively inexpensive, they often become outdated and outmoded, given that they are used for a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.

RELIABLE EXISTING DATA- can be used by entrepreneur is existing data which is reliable. Example: information
obtained annual report of companies
REFERENCES- entrepreneur can used reference such as publish information from then library, internet, and so on.
MASS MEDIA AND ELECTRONIC MEDIA- advertisement and information in the newspaper, magazine and
internet. Information on raw materials can be business opportunity for an entrepreneur.

PROCESS OF IDETIFYING, EVALUATING, AND SELECTING BUISNESS OPPORTUNITY

STEP 1- Identifying the needs and wants of the customers

STEP 2- Scanning the environment and evaluating of oneself in the community
STEP 3- Screening of business opportunities
STEP 4- Selecting a business opportunity and preparing a business plan

Why do you need to identify or analyze the key problems in your community or the unmet needs?
- to understand what is the heart of the problem
- to determine the barriers and resources associated with addressing the problem. And
- to develop the best action steps for addressing the problem
 What are the needs of the community?
- a community needs assessment identifies the strengths and resources available in the community to meet the needs of
children, youths, and families. The assessment focuses on the capabilities of the community, including its citizens,
agencies and organizations.

Environmental Scanning, Self Analysis, and Community Values

3 factors to be considered:
1) Environmental Scanning
- help identify business opportunities
2 types of approaches:
1) Macro Scanning
e.g. population, ethnics, average income
2) Micro Scanning
e.g. family size, delicacies, and individual income

2) Self Evaluation
- to see what is available in oneself
1) Experience
- match business with experience
e.g. engineer work with Public Work Dept (JKR) will become a civil engineer
2) Knowledge and Skill
- do business on what he really knows what to do
e.g. Contractor must not only knows how to manage his business but also how to construct the buildings
3) Financial Situation
- business that is planned to be implemented must match with financial ability
e.g. land owner can do housing business
4) Interest
- select business based on his interest
e.g. a person with gardening hobby can open nursery
5) Networking
- good networking generate business opportunity
e.g trading

3) Values/Norms of the Community

- business opportunities need to be coordinated with religious’ and society’s values or norms\
- Values & Norms-- what is perceived as useful and beneficial to the community
Example: Nuclear-powered electricity generator, poultry farm nearby residential areas

Example of environment changes and business opportunity

* Good economic condition
- demand luxury cars, homes
* Increase in number of working couples/parents
- demand maids, babysitter
* Introduction of ICT
- demand computer, repairs, knowledge, spare parts, etc.

Selecting a Business Opportunity and Preparing a Business Plan

- after fulfilling step 1 to 3, it is the time for the entrepreneur to select a business opportunity
- then to prepare the business plan

In creating or searching for business opportunities, one must consider the following factors:

1) The needs of the community

What products are in demand?
2) Available resources
Do you have money for capital? Do you have equipment and facilities?
3) Skills and interests
Does the particular business activity meet your interest?
4) Market
Where will you sell your products? Who will buy your products?