Scribd Logo
Upload

Welcome to Scribd!

  • 117 views

    Identifying Business Opportunities

    Uploaded by

    Ruhul Islam
    To identify business opportunities, one must evaluate ideas to see if they address a valuable customer need. Successful entrepreneurship requires balancing technical knowledge with market knowledge - having a neat idea is not enough, one must determine if there is demand. When evaluating ideas, consider if the difference between what customers will pay and costs of production is greatest. Factors like market size/growth, economics like costs and cash flow, personal benefits, competitive advantages, and barriers to entry should be examined to identify the most promising opportunities. Preparation and knowing how to exploit opportunities is also important for achieving success.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Identifying Business Opportunities

    Uploaded by

    Ruhul Islam
    117 views10 pages
    To identify business opportunities, one must evaluate ideas to see if they address a valuable customer need. Successful entrepreneurship requires balancing technical knowledge with market knowledge - having a neat idea is not enough, one must determine if there is demand. When evaluating ideas, consider if the difference between what customers will pay and costs of production is greatest. Factors like market size/growth, economics like costs and cash flow, personal benefits, competitive advantages, and barriers to entry should be examined to identify the most promising opportunities. Preparation and knowing how to exploit opportunities is also important for achieving success.

    Original Title

    Identifying business opportunities

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    To identify business opportunities, one must evaluate ideas to see if they address a valuable customer need. Successful entrepreneurship requires balancing technical knowledge with market knowledge - having a neat idea is not enough, one must determine if there is demand. When evaluating ideas, consider if the difference between what customers will pay and costs of production is greatest. Factors like market size/growth, economics like costs and cash flow, personal benefits, competitive advantages, and barriers to entry should be examined to identify the most promising opportunities. Preparation and knowing how to exploit opportunities is also important for achieving success.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    117 views10 pages

    Identifying Business Opportunities

    Uploaded by

    Ruhul Islam
    To identify business opportunities, one must evaluate ideas to see if they address a valuable customer need. Successful entrepreneurship requires balancing technical knowledge with market knowledge - having a neat idea is not enough, one must determine if there is demand. When evaluating ideas, consider if the difference between what customers will pay and costs of production is greatest. Factors like market size/growth, economics like costs and cash flow, personal benefits, competitive advantages, and barriers to entry should be examined to identify the most promising opportunities. Preparation and knowing how to exploit opportunities is also important for achieving success.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 10

    Identifying business opportunities

    Idea to business
    What is an idea?
    • Idea -Content of cognition
    • Is every idea an opportunity?
    – Clearly needs to be valuable as well
    – Connotes exploitation of a customer need

    • Why should we evaluate an idea?


    – Entrepreneurship: Concerned with the discovery, evaluation and exploitation of
    profitable opportunities.
    • Successful entrepreneurship requires the ability to balance technical knowledge and
    market knowledge
    – Many people have technical knowledge and neat ideas based on their technical
    knowledge
    – BUT do they address an opportunity? Is the idea needed right now or later?
    • Is there a need for your cool technology? Question to be asked for every idea

    There may be many ideas for businesses and we need to think of these -
    – Of all the things that are possible, which are the ones where the difference
    between what customers will pay and what it will cost to make is the greatest!
    – The more unique the opportunity more is the pay-off, if it is implemented
    properly
    How to identify an opportunity?
    • How do we recognize or create an opportunity?
    • How do we know it’s valuable, and valuable for what?
    How do we exploit it?
    • Where? (e.g., what industry, market segment)
    • When? (e.g., in a market’s evolution)
    • How? (e.g., what exactly to produce; how to charge)
    • Tactics? (e.g., financing; exits; growth rate; appropriating rents)
    With what effect?
    Opportunity discovery needs some luck too.

    • The odds can be managed once it is discovered.

    • We need to remember to be prepared for the opportunity. Just luck will not
    enough to achieve success.

    • Also, once an opportunity is discovered (due to your prepared mind), then


    you need to know what to do with it.
    How to identify opportunities?

    • Markets grow at different rates


    – The idea is to identify a market that is structured and stable but is still
    growing and
    – It does not require a very large capital outlay
    Factors to consider when identifying opportunity?
    • Market
    – Large market size and growing
    – Identify a market niche that provides high value to customers
    – Customers are reachable and can be addressed
    – No major brand loyalties
    – The pay back to the customer can be identified and is repeatable
    – The benefit to the customer in monetary terms exceeds or at least covers your
    costs plus a reasonable profit
    – Potential for product expansion and being a market leader (20%+ share)
    – Industry should neither be highly concentrated or highly competitive
    • Economics
    – Time to positive cash flow
    • Cash flows simply put is the difference between the cash that flows in
    and cash that flows out
    – Upfront capital need to be low
    – R&D requirement both initial and ongoing needs to be “low”
    – High gross margins (difference between the selling price and the cost of
    manufacture)
    • Personal harvest – what is in it for you?
    – The venture should be high strategic value to a potential acquirer
    • Pharmaceutical firms acquire entrepreneurial firms for more than what it is
    worth because it of strategic value for them
    • Many times technology startups that have accumulated losses and modest
    sales get acquired for many times they are worth
    • Strategic value come from having important customers, distribution or a
    proprietary technology that has strategic value to an incumbent in an
    industry

    • Does it cover your opportunity costs


    – The money that you will make from your personal next best option + other
    non-monetary things that you will be giving up
    • Competitive advantage
    – Competing with incumbents
    • Can you compete with existing players if they enter
    – Can you produce at low costs – can you achieve economies of scale?
    – What are the entry barriers for your competitors?

    You might also like