MODULE 5.

IDENTIFYING
ENTREPRENEURIAL
OPPORTUNITY
G E 11 - T H E E N T R E P R E N E U R I A L M I N D
LEARNING OBJECTIVES:
• Define entrepreneurial opportunity
• Identify key drivers of opportunity
• Describe opportunity screening and identify common sources of research data
• Explain how to research and verify business opportunities and competitive
analysis
• Describe tools you can use to refine and focus your planning (three circles,
SWOT, PEST)
• Recognize social media’s role in saving time and money on research
• Understand how a business model helps determine the feasibility of an
opportunity
 ENTREPRENEURIAL OPPORTUNITY
Theories of Opportunity
In the twentieth century, economist
Joseph Schumpeter, stated that
entrepreneurs create value “by exploiting
a new invention or, more generally, an
untried technological possibility for
producing a new commodity or
producing an old one in a new way, by
opening up a new source of supply of
materials or a new outlet for products, by
reorganizing an industry” or similar
means.
To him, the goal was to progress, and progression starts with finding
new ideas. He identified these methods for finding new business
opportunities:

1.Develop a new market for an existing product.

2.Find a new supply of resources that would enable the entrepreneur
to produce the product for less money.
3.Use existing technology to produce an old product in a new way.
4.Use an existing technology to produce a new product.
5.Finally, use new technology to produce a new product.
Supply is the amount of a product or service
produced. 

Demand is the consumer or user desire for the

outputs, the products, or services produced.
“Feasibility” in this definition includes identifying a sizable
target market interested in the product or service that has
sufficient profitability for the venture’s financial success.
IDENTIFYING
OPPORTUNITY
DRIVERS OF OPPORTUNITY

 New funding options

 Technological advancements
Globalization and
 Industry-specific economics.
 RESEARCHING POTENTIAL BUSINESS OPPORTUNITIES

Opportunity screening is the process by which entrepreneurs evaluate innovative

product ideas, strategies, and marketing trends.

Small business marketers can use several no-cost or low-cost methods, including
surveys, questionnaires, focus groups, and in-depth interviews.

You will likely begin with secondary research—that is, data that are already
available through some published source. There may be articles, research reports,
or reliable Internet sources where you can research information about your
industry, products, and customers.

Primary research gathers data that do not yet exist. The information is specific to
the business, product, or consumer.
RESEARCHING AND VERIFYING THE
ENTREPRENEURIAL OPPORTUNITY
After confirming that a business idea is an entrepreneurial opportunity, the entrepreneur should ask
more detailed questions in the next phase of screening the business. Here are some examples:

•Would other people value your product or service?

•Does your product or service solve a significant problem?
•Is the market for the product definable/specific?
•Does the market have unique needs or expectations that align with your entrepreneurial opportunity?
•Is the timing right to start the venture?
•Are there infrastructure or supporting resources that need to be commercialized or created prior to
your launch of the venture?
•What resources are needed to start the venture?
•What is the competitive advantage your venture offers within the industry and is this competitive
advantage sustainable?
•What is the timeline between starting the venture and the first sale?
•How long before the venture becomes profitable and do you have the resources to support this
timeline?
Demographics are
statistical factors of
a population, such
as race, age, and
gender.
 Industry Sources of Opportunity

Industry sources reveal knowledge about a specific industry

from the perspective of identifying unmet needs or areas for
improvement within that industry. For
 COMPETITIVE ANALYSIS

A competitive analysis should provide the

entrepreneur with information about how
competitors market their business and ways
to penetrate the market by entry through
product or service gaps in areas that your
competitors do not serve or do not serve
well.
Key Sid’s Cycle City Cycle SpokeMasters Target
Characteristics
Strengths Product knowledge, Repair service High quality, Top Price, hours (open seven days per
Repair service brands week and online)
Weaknesses Limited selection Poor customer service Pricing, no entry- Low-end quality, no repair facilities
level products
Product Quality Low-middle Middle-high High-end Entry-level
Level
Price Point Middle Middle-high High price Lowest price
Location of the Suburban strip-mall on Outskirts of town on Downtown side Branson Mall
business busy highway route 280 street
Promotion Weekly ad in local Advertising in local Sponsors major Advertises online and in Sunday
newspaper, some radio paper during season, bike race in area, newspaper (seasonally), Internet)
and Internet/social Internet/social media Internet, social
media media

C O M P E T I T I V E A N A LY S I S G R I D F O R S I D ’ S
CYCLE SHOP IN BRANSON, MISSOURI
 SWOT
ANALYSIS
 PEST
ANALYSIS
 THREE
CIRCLES
TOOL
 SOCIAL
MEDIA’S
ROLE IN
RESEARCH
B U S IN E SS MO D EL S
A N D FE A SI B IL IT Y

A business model is a
plan for how the venture
will be funded; how the
venture creates value for
its stakeholders, including
customers; how the
venture’s offerings are
made and distributed to
the end users; and how
income will be generated
through this process.