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 Success isn’t all about money…..

 It’s about life…


 And the choices you make every day……
PB201
ENTREPRENEURSHIP

BUSINESS OPPORTUNITIES; IDENTIFICATION,


EVALUATION AND SELECTION

COMMERCE DEPARTMENT
2.1 DETERMINE ENTREPRENEURIAL
IDEAS AND OPPORTUNITIES
2.1.1 BUSINESS IDEA SOURCE
- Boleh didapati dari pelbagai sumber dan boleh lahir pada
bila-bila masa.
- Ada orang mendapat idea semasa melakukan hobi (idea
from hobby)
- Idea perniagaan boleh didapati melalui usaha-usaha yang
sistematik seperti mendapat maklumat daripada sumber
Primer dan sumber sekunder. (Business idea can be accessed
through systematic efforts like gettinginformation from
Primer source and secondary resource.)
(a) Sumber Primer (Primary Source)

- Maklumat yang diperolehi melalui tinjauan untuk


sesuatu tujuan tertentu. (survey)
- Suatu tinjauan dibuat dengan menggumpul maklumat
daripada sejumlah responden yang dipilih dan
kemudian merumuskan jawapan yang diterima
daripada responden ini. (collect information and make
conclusion)
- Tinjauan boleh dijalankan secara formal dan tidak
formal contohnya menemubual penduduk di sesuatu
kawasan. (survey have two way, formal and informal)
- Tinjauan tak formal diperolehi dengan lebih mudah jika
dibandingkan dengan tinjauan formal, contohnya tinjauan
tak formal idea perniagaan boleh ditinjau melalui
perbualan dengan rakan dan ahli keluarga. (Informal
survey obtained with easier relatively for example business idea can be
surveyed through conversation with friend andfamily member).
- Dua kaedah untuk mendapat idea perniagaan melalui
sumber primer iaitu kaedah pemerhatian dan kaedah
soalselidik. (Two methodologies to get business idea through primary
source namely observation method and investigate method).
- Soalselidik diberi kepada responden secara bertulis atau
lisan iaitu temubual telefon atau temubual secara
bersemuka.
(b) Sumber Sekunder (secondary data)

- Terdiri daripada maklumat yang diperolehi daripada


sumber yang sedia ada akibat daripada lain-lain
tinjauan atau rekod yang telah dibuat untuk kegunaan
pihak lain.
- Idea perniagaan daripada sumber ini boleh diperolehi
dengan merujuk rekod-rekod dalaman syarikat,
badan-badan kerajaan dan lain-lain sumber luar
seperti kajian perpustakaan,internet dan sebagainya.
2.1.2 THE PROCESS OF IDENTIFYING, EVALUATING
AND SELECTING A BUSINESS OPPORTUNITY
 THERE ARE FOUR MAJOR STEPS TO BE TAKEN BY AN
ENTREPRENEURSHIP IN IDENTIFYING, EVALUATING
AND SELECTING A BUSINESS OPPORTUNITY. THESE
CAN BE CATEGORISED AS FOLLOWS:
 STEP I : Identifying the needs and wants of customers
 STEP II: Scanning the environment and evaluating of self and
the community
 STEP III: Screening of business opportunities
 STEP IV: Selecting a business opportunity and preparing a
business plan.
FOOD, CLOTHING, SECURITY, EDUCATION, HEALTH, TRANSPORTATION, RECREATION, ENTERTAIMENT,
INFORMATION, TECHNOLOGY, CONSTRUCTION, CLEANING SERVICE, ETC.

INDENTIFYINGTHE NEEDS AND WANTS OF CUSTOMERS

PRODUCT SERVICE

SCANNING THE ENVIRONMENT AND EVALUATING OF SELF AND THE COMMUNITY


ENVIRONMENT ONESELF COMMUNITY
-POPULATION STRUCTURE
-INCOME AND TASTE
-EXPERIENCE
-KNOWLEDGE AND SKILL
-VALUES/NORMS
-IMPORT AND EXPORT DATA
-LOCAL RESOURCES AND -FINANCIAL -PERCEPTION
TECHNOLOGY -INTEREST
-INDUSTRIAL LINKAGES
-NETWORKING
-DEVELOPMENT PROJECTS BY THE
PULIC AND PRIVATE SECTORS
-NEW GOVERNMENT RULING
-SOCIAL PROBLEM
-MEDIA AND THE INTERNET
ENVIRONMENT

SELECTING A BUSINESS
SCREENING OF BUSINESS OPPORTUNITY AND PREPARING A
OPPORTUNITIES
BUSINESS PLAN
-ADMINISTRATIVE/ ORGANISATION PLAN
-LEGAL -MARKETING PLAN
-MONOPOLISTIC POWER/ -OPERATIONS/ PRDUCTION PLAN
LEVEL OF COMPETITION
-FINANCIAL PLAN
-CAPITLA REQUIREMENT
IMPLEMENTATION
-RISK
STEP 1: IDENTIFYING THE NEEDS AND
WANTS OF CUSTOMERS
 Every business opportunity begins with the existence of
various customers’ NEEDS and WANTS for particular
product or service.
 A NEED is something that is basic in life; we need food,
clothing and shelter.
 Human needs and wants are unlimited.
 This will translate into more business opportunities that can
be grabbed by entrepreneurs in offering product and
services.
 An entrepreneur must be sensitive to changes in customers’
needs and wants in order to identify business opportunities.
STEP 2: ENVIRONMENTAL SCANNING
AND EVALUATION OF SELF AND
THE COMMUNITY
 So far we have looked at the existence of business
opportunities arising out of the needs and wants of
customers that need to be fulfilled through the offering of the
right product and services.
 In an effort to identify business opportunities, there are three
important element that need to be taken into consideration;
A. Environmental scanning
B. Self –assessment
C. Community assessment
A) ENVIRONMENTAL SCANNING
 Lead to an idea that can be converted into a business
opportunity
 There are two approaches in scanning the environment:
 Macro
 Micro

AGRICULTURAL SECTOR

FORESTRY FISHING POULTRY


-Veneer Plywood -Fishing equipment
-Poultry farming
-Logging -Deep-sea fishing
-Processing
-Furniture -Fish processing
-Wholesales/
Sawn timber -Wholesales/
Supplies
Distribution
Continue……
 From the macro perspective, the agricultural sector can offer
business opportunities in the forestry, fishing and poultry
industries.
 However, from the micro perspective, every industry can
offer specific business opportunities;
 For example, in the forestry industry, an entrepreneur can be
involved in logging activities, manufacturer of veneer plywood,
processing of sawn timber, furniture making or the manufacture
of wooden doors and frames.
Another approach to scanning tne
environment is by taking into
consideration the following factors
I. Structure of the population, income and tastes
II. Study on import and export data
III. Study on local resources and technological breakthrough
IV. Industrial linkages
V. Development project by the public and private sectors
VI. Media mass and electronic
VII. Local social problem
VIII. New government policies and regulations
I. Structure of the population,
income and tastes
 Information about the population, income and tastes can create
business opportunities
 The population assuming that the percentage of teenagers is higher
than the percentage of the elderly and children, this will create
more business opportunities related to the wants and needs of
teenagers;
 Example: entertainment industry- cyber café, Cineplex's, recording,
studio, etc
• An increase in disposable income can lead to higher purchasing
power and customer affordability.
• Changes in the tastes of customers will result in the creation of
business opportunities. Such as tastes to Fast food-KFC, McD.
II. Study on import and export data
 Increase in the value and quantity of a product or service
being imported and exported reflects a potential market,
both local and international.
 The same goes for policies on import substitution industries,
and export promotion can be seen as an opportunity that is
profitable.
III. Study on local resources and
technological breakthrough
 There is still an abundance of local resources that are
untapped and have the potential to be develop as investment
opportunities.
 New technological breakthrough can develop these local
resources and open up opportunities for entrepreneurs to set
up small or large scale business.
 This has been reflected in the success of the handicraft and
agricultural related industries.
IV. Industrial linkages
 Prospective entrepreneurs can refer to existing industries to
identify a business to find out the need inputs from other
industry or similar to the output.
 This creates a chain interactions or industry
 For example, the tourism industry, some products or
services can be used as inputand complementary to the
industry such as hospitality, transportation and restaurants.
V. Development projects by public
and private sector
 Offers many business opportunities for entrepreneurs.
 Entrepreneur may seek business opportunities from the
development program.
 For example: the NORTH-SOUTH Highway Project, KLIA,
SEPANG F1, PUTRAJAYA, PROTON Industrial township in
Tanjung Malim.
VI. Media mass and electronic

 By reading local and foreign newspapers and magazines as


well as surfing the internet, entrepreneurs can identify
business opportunities in various fields.
 For example; business opportunity that can be identified
include distribution representative for gas, Kodak Express
outlet and agent for Singer products.
 Besides that, local newspaper also advertise tenders and bids
issued by both the private and public sectors for
entrepreneurs to participate.
VII. Local social Problem
 There are various social problem that can actually lead to
business opportunities for entrepreneurs.
 Problem pertaining to security, child care, loafing,
transportation, drug addiction and so on can create profitable
business opportunities.
 for instance, the problem of house break-ins has led to the
growth of the grille business, and the installation of alarm,
sensor and security systems.
VIII. Government policies and
regulation
 Rules and regulation enforced by the government indirectly
lead to business opportunities for entrepreneurs.
 Rules and regulations pertaining to the emission of smoke
control, speed traps, black box for express buses, the
installation of a third brake light, the use of helmets and
safety belt, the use of plastic containers and plastic beg and
the use of dustbins in residential areas should be perceived as
business opportunities and not problems.
B) SELF EVALUATION
 Besides scanning the environment, part and parcel of identifying
business opportunities is to see what is available in oneself.
 This is important to balance the availability of business
opportunities before they are further developed.
 The factors that need to be considered are as follows;
I. Experience
II. Knowledge and skill
III. Financial situation
IV. Interest
V. Networking
I. Experience
 Many entrepreneurs are involved in business that are suited
to their own experience, especially in relation to their
former career.
 For example; an engineer who has worked for the Public
Works Department has the possibility to become a
contractor when exposed to contract opportunities that are
wide open.
 The same applies to a fashion design lecturer who could quit
her job because of her eagerness to concentrate full-time on a
boutique business.
II. Knowledge and skill
 Knowledge and skill are related to one’s experience.
 Knowledge and skill are important to establish whether that
someone really knows what to do with the business he or she is
involved in.
 For example; a contractor must not only be knowledgeable in
managing his business but must also know how to construct a
building.
 Although in the real business world, an entrepreneur can always
engage somebody else or look for a business partner who is skilled
in this field, it is better that he himself possesses the skill so as to
strengthen his confidence and not be easily fooled by others.
III. Financial situation
 Capability of an entrepreneur to determine how
big business can be conducted.
 Capital resources of the individual, family, investors and
banks
 Capital is the basic things to consider before proceeding
with the idea to open a business.
 An individual may open a small business by using existing
capital resources.
 The business that is planned for implementation must be
appropriate to the financial ability that can be provided.
IV. Interest
 The business field to be selected must be based on the
entrepreneur’s interest.
 Interest can give more confidence and a sense of
responsibility to the business to be develop.
 The business field can be considered a profession that
requires discipline and observance of rules.
V. Networking
 An entrepreneur will face difficulties developing a business
opportunity if his networking with others is limited.
 For example; a contractor needs to know many people
including politicians, top ranking government officials, bank
and insurance officers, supplies of raw materials, other
contractors and many other to expedite the process of
getting a contract or project.
C) Values/ Norm of the Community
 After scanning the environment and evaluating oneself, the
next consideration is the values or norm of the community.
 The values or norms of the community refer to what is
perceived as useful and beneficial to the community.
 It is important to ensure that a potential business does not go
against the values or norm of the local community.
 For example; 4D business is outlet is considered a profitable
business opportunity and legal. However, it is against the
values of the Malay community who are muslims.
Step 3: Screening of Business
Opportunities
 The process of screening business opportunities will help the
entrepreneur to select a business opportunity that he can
focus on wholeheartedly.
 This process involves four factors as follows:
I. Legality
II. Monopolistic power and Level of competition
III. Capital Requirements
IV. Risk
I. Legality
 The entrepreneur has to make sure that is going to be
developed is legal
 For example; a business which involves the buying and selling
of imitation VCD or stolen product is illegal
 Illegal business cannot be registered
 Not qualified to apply for a loan from any financial institution
 Can be charged in court
II. Monopolistic power and Level of
competition
 An entrepreneur must also consider the level of competition in
deciding the type of business he is going to be involved in.
 It is best not to be involved in a business that is overcrowded and
in which the competition is very stiff unless the entrepreneur has
the ability to secure cheap raw materials or a unique production
formula that others are not privy to.
 In selecting a business opportunity, an entrepreneur has to rank
the level of competition of that business from high to low.
 An entrepreneur must select a business which has a low level of
competition so that he can sell his product or service with ease.
III. CAPITAL REQUIREMENT
 Capital required to start a transaction is high
risk capital for investors in a transaction not
sure conditions are encountered.
 Investors may experience a loss or capital loss if the
business failure.
 If the business succeeds, they will receive great rewards.
 There are three types of original capital required in
the transaction of fixed capital, working capital
and growth capital.
a) fixed capital
• Fixed capital is capital used to purchase fixed
assets. These assets are used for the production of goods and
services.

b) Operation capital
Working capital is a temporary fund the
transaction. It is capital that will be used to
finance short-term normal operation.
c) Growth capital
 Capital growth is different from working capital. It is not
related to the volatility of the transaction.This capital is
required when a transaction is to expand or change the
direction forward.
IV. Risk

 Entrepreneurs need to make detailed studies and identify the


risks faced by taking into account the percentage of success and failure.
 Risks faced by an entrepreneur is based on several factors, namely:
 Difficult or easy to enter into a business venture
 Large or small capital to be invested.
 Much or little the rate of profit to be derived.
 Can do this with existing resources.
 Does it have the potential to penetrate the market.
In general, there are two major types of
risk
A. Business risk B. Financial risk
 Risk can be  The liquidity of the cash
transferred to other  Loan. If entrepreneurs want
parties such to make a loan then it must be
as insurers. willing and able to pay
 Risks can be the debt with interest as well.
controlled by  Credit. If the customer or the
the entrepreneur but debtor does not pay credit has
not 100%. been given then it is bad for
 Risk that can not business expenses.
be controlled by  Foreign exchange.The risk is
the entrepreneur. high because the currency is not
fixed and may change at any
time. (Import and
export business)
IMPORTANT!!!!!!!!!!!!!!!!!!!!!
 Business ideas to suit themselves and the community
 Entrepreneurs need to evaluate ideas in terms
of law, competition, capital requirements and risk.