Entrepreneurship Module1 Part2

Entrepreneurs:
Opportunity Evaluation
Chapter 1 Entrepreneurs Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 1
Course Objective:
1. Understand the concept of business and

entrepreneurship
2. Know the skills that contribute to entrepreneurship
and recognize them in oneself
3. Know the basic requirements for launching a small
business
4. Know how to translate a commercial idea into a
business plan
Where do entrepreneurship
opportunities begin?
 Opportunities begin with innovations
(ideas about new products and
services) or improvements (ideas
for changes tJLo existing
products, services, or processes).
 Look at your self
 Your hoppy, calls the opportunity
How to Spot Entrepreneurial
Opportunities
 Monitor problems and create their solutions
 Take a Different Approach to an existing market
 Put a New twist on an old idea
 Look for creative ways to use existing resources
 Realize that others have the same problem that you do
 Notice what is missing
DELIVERING
Opportunity Evaluation Table
BUSINESS CATEGORIES
COVER/
BUSINESSES PROBLEM/GAP IMPROVEMENTS
Restaurant yes , define, take action….
Tourist yes..
fitness yes,
agriculture yes
health care Yes

Opportunities and Risks
 Recognizing Risks
 The primary reasons that businesses started by
entrepreneurs close are:
 Lack of adequate capital
 Low sales
 Higher than expected expenses
 Competitive pressure
 An owner unprepared to manage a growing business
 Operations requiring more time than the owner is
willing to commit
Product or Service
Feasibility Analysis
 feasibility analysis addresses two
questions:
 Are customers willing to purchase our
goods and services?
 Can we provide the product or service
to customers at a profit?
Financial Feasibility
Analysis
 involves assessing the financial feasibility of
a proposed business venture.
 The major elements to be included in a
financial feasibility analysis include:
 The initial capital requirement
 Estimated earnings
 Resulting return on investment.
Risk & Uncertainty
 Uncertainty is a product of
Ignorance
 Types of Uncertainty
 State uncertainty
 Effect uncertainty
 Response uncertainty
 How are potential opportunities evaluated
 Personal Evaluation
 Feasibility Study
 As we overcome the three types of
uncertainty, we begin to recognize an
opportunity
 3rdPerson Opportunity
 As we overcome ignorance, we begin to
understand that an opportunity exists for
someone
 1stPerson Opportunity
 As we overcome doubt, we believe we’ve
found an opportunity for ourselves
 Once a 1stPerson Opportunity is identified,
it’s time for the Feasibility Study
Opportunities
 Creativity vs. Innovation

 Creativity – the ability to develop
new ideas and to discover new
ways of looking at problems and
opportunities
 Innovation – the ability to apply
creative solutions to problems and
opportunities to enhance or to
enrich people’s lives
Opportunities
 Monitor opportunities and exploit them early

on
 Take a different approach to an existing
market
 Put a new twist on an old idea
Opportunities
 Look for creative ways to use existing

resources
 Realize that others have the same problem
that you do
 Notice what is missing
Feeding the
Entrepreneurial Fire
 Entrepreneurs as heroes
 Entrepreneurial education
 Demographic and economic factors
 Shift to a service economy
 Technological advancements
 Independent lifestyles
 E-Commerce and the World Wide
Web
 International opportunities
The Cultural Diversity of
Entrepreneurship
 Home-based business owners
 Family business owners
 Copreneurs (traditional ”Mom& Pop”)
 Corporate castoffs
 Corporate dropouts
 Retired baby Boomers
Putting Failure into
Perspective
 Median age of U.S. companies = 12
years
 Entrepreneurs are not paralyzed by
the prospect of failure
 Failure – a natural part of the creative
process
 Successful entrepreneurs learn to fail
intelligently
Avoiding the Pitfalls of
Small Business Failure

 Know your business in depth
 Prepare a business plan
 Manage financial resources
 Understand financial statements
 Learn to manage people effectively
 Set your business apart from the
competition
 Maintain a positive attitude
Opportunities and Risks
 Recognizing Risks
 The primary reasons that businesses started by
entrepreneurs close are:
 Lack of adequate capital
 Low sales
 Higher than expected expenses
 Competitive pressure
 An owner unprepared to manage a growing business
 Operations requiring more time than the owner is
willing to commit
Risk & Uncertainty
 Uncertainty is a product of
Ignorance
 Types of Uncertainty
 State uncertainty
 Effect uncertainty
 Response uncertainty
 How are potential opportunities evaluated
 Personal Evaluation
 Feasibility Study
 As we overcome the three types of
uncertainty, we begin to recognize an
opportunity
 As we overcome ignorance, we begin to
understand that an opportunity exists for
someone
 1stPerson Opportunity
 As we overcome doubt, we believe we’ve
found an opportunity for ourselves
 Once a 1stPerson Opportunity is identified,
it’s time for the Feasibility Study
Questions

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Entrepreneurship Module1 Part2

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Entrepreneurs:

1. Understand the concept of business and

 Creativity vs. Innovation

 Monitor opportunities and exploit them early

 Look for creative ways to use existing

Small Business Failure

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