Opportunity Recognition

Chapter 3

Identify the importance of personal values and goals in choosing an entrepreneurial pursuit.

Describe the challenges and rewards of entering a family business.

List the benefits and drawbacks of buying a business.

Describe how you can evaluate a business opportunity.

Compare the advantages and disadvantages of starting your own business.

Section 3.1 Understanding Entrepreneurial Trends

3.1

The ability to recognize new opportunities and to think creatively is essential for success in today’s market.

Section 3.1 Understanding Entrepreneurial Trends

3.1

Opportunity- based on what consumers want- not what you want

What would I like to buy that I can’t find?

What product or service would improve my life?

What really annoys me? What product or service would help?

Opportunity

Use your Imagination What is one thing you would

like to have more than anything else?

What does it look like?

What does it taste like?

What does it do?

The Six Roots of Opportunity

Problems that your business could solve

Changes in laws, situations or trends

The Six Roots of Opportunity

Inventions of totally new products or services

The Six Roots of Opportunity

Competition- If you can find a way to beat the competition based on price, location, quality, reputation, reliability, or hours, you can operate a very successful business

The Six Roots of Opportunity

Technological Advances- Scientists may invent new technology, but entrepreneurs must figure out how to market it.

The Six Roots of Opportunity

Unique Knowledge- You have unique knowledge of your neighborhood, your friends and your community.

The Six Roots of Opportunity

One way to identify business opportunities is to study current trends that provide opportunities for entrepreneurs.

Current Entrepreneurial Trends

Section 3.1 Understanding Entrepreneurial Trends

Current Entrepreneurial Trends

Section 3.1 Understanding Entrepreneurial Trends 13

Internet businesses

service businesses

home-based businesses

socially-responsible non-profit businesses

corporate ventures

strategic alliances

technology

outsourcing

Entrepreneurial thinking is about generating ideas and recognizing opportunities.

Learning to Recognize Opportunity

Section 3.1 Understanding Entrepreneurial Trends

Creativity is the activity that results in innovation.

Creativity and Innovation

innovation a new way of doing things

Section 3.1 Understanding Entrepreneurial Trends

You generate ideas by thinking creatively. Opportunities are ideas that have commercial potential.

Idea Versus Opportunity

Section 3.1 Understanding Entrepreneurial Trends

Before making any investment, look carefully at two factors:

Costs- money and time you will have to invest, and

Benefits- the rate of return on your money or the advancement of your business or career.

Cost/Benefit Analysis

The value of what must be given up in order to obtain something else

Opportunity Cost

To identify creative ideas:

Creative Sources of Ideas

Section 3.1 Understanding Entrepreneurial Trends

Observe the world around you.

Watch for demographic changes.

Be an avid reader.

Consider your interests, hobbies, and work experiences.

Consult outside sources of information.

To identify creative ideas:

Creative Sources of Ideas

Section 3.1 Understanding Entrepreneurial Trends

Observe the world around you.

Watch for demographic changes.

Be an avid reader.

Consider your interests, hobbies, and work experiences.

Consult outside sources of information.

A way to evaluate a business opportunity is to explore its:

Strengths- Your entrepreneurial ability and contacts

Weaknesses- What you will face, from lack of money or training to lack of time or experience

Opportunities- Lucky breaks or creative advantages you can use to get ahead of the competition

Threats- Anything that might be bad for business, form competitors to legal problems.

SWOT Analysis