RECOGNIZING THE

POTENTIAL MARKET
THE ENTREPRENEURIAL PROCESS
The entrepreneurial process is a step-by-step
procedure in establishing any kind of
business that an entrepreneur has to
undergo. It is composed of four aspects.

1. Opportunity spotting and assessment.

2. Developing a business plan.
3. Determining the capital needed.
4. Running the business.
SEEKING, SCREENING, AND SEIZING
The 3S of opportunity spotting and
assessment is the framework that most
of the promising entrepreneurs use to
finally come up with the ultimate
product or service for a specific
opportunity.
An opportunity is an entrepreneur’s
business idea that can potentially
become a commercial product or
service in the future.
S1: SEEKING THE OPPORTUNITY
Opportunity seeking is the first step and is the
most difficult process of all due to the
number of options that the entrepreneur will
have to choose from. It involves the
development of new ideas from various
source as follows:
1. Macroenvironmental Sources
a. STEEPLED (sociocultural, technological,
economic, environmental, political, legal,
ethical, and demographic factors)
Socio-cultural factors
* health consciousness
* education level
* attitude toward imported goods and
services
* attitude toward product quality and
customer service
* attitude toward saving and investing
* emphasis on safety
* buying habits
* religion and beliefs
Technological factors
* basic infrastructure level
* rate of technological change
* spending on research and development
* technology incentives
* legislation regarding technology
* communication infrastructure
* access to newest technology
* internet infrastructure and penetration
Economic factors
* growth rates * price fluctuations
* inflation rates * stock market trends
* interest rates
* exchange rates
* unemployment trends
* labor costs
* stages of business cycle
* trade flows and patterns
* level of consumers’ disposable income
* monetary policies
* fiscal policies
Environmental or ecological factors
* weather
* climate change
* laws regulating environment pollution
* air and water pollution
* recycling
* waste management
* attitudes toward green or ecological
products
* endangered species
* attitudes toward and support for renewable
energy
Political factors
* government stability and likely changes
* bureaucracy
* corruption level
* tax policy (Rates and incentives)
* freedom of press
* rule of law
* government effectiveness
* political rights
Legal factors
* Anti-trust law
* Discrimination law
* Copyright, patents/intellectual property
rights
* consumer protection
* employment law
* health and safety law
* data protection law
Ethical factors
* Ethical advertising and sales practices
* Accepted accounting, management, and
marketing standards
* Attitude toward counterfeiting and
breaking patents
* Attitude toward development and well-
being of employees
Demographic factors
* Population growth rate
* Age distribution and life expectancy rates
* Gender distribution * Minorities
* Social classes
* Family size and structure
 b. Industry
c. New discovery or knowledge
d. futuristic opportunities

2. Micromarket
a. Consumer preferences, interests, and
perception.
b. Competitors
c. Unexpected opportunities from customers
d. Talents, hobbies, skills, and expertise
e. Irritants in the marketplace such as
deterrents, problems, complaints, and delays
f. Location
 METHODS OF GENERATING IDEAS
Either one or a combination of the methods
given can be employed by the entrepreneur in
generating new ideas.
1. Focused group discussion (FGD)
2. Brainstorming
3. Brainwriting or Internet brainstorming
4. Problem inventory analysis
 S2 SCREENING THE OPPORTUNITY
Opportunity screening is the process of cautiously
selecting the best opportunity. The selection will
depend on the entrepreneur’s internal intent (the
main objective that the business will accomplish in
the entrepreneur’s life) and the external intent
(which will address the compelling needs of the
target market).
The crafting of a business plan starts only when
entrepreneurs already said no to many
opportunities and said yes to one forceful
opportunity, to which they will devote their time
and resources.
The entrepreneur should say no to an opportunity if it
does not contain any of these business opportunity
elements:
1. Has superior value to customers
2. Solves a compelling problem, issue, a need, or a
want
3. Is a potential cash cow
4. Matches with the entrepreneur’s skills, resources,
and risk appetite
 THE OPPORTUNITY
ATTRACTIVENESS TEST
The Opportunity Attractiveness Test (OAT) aims to
assist entrepreneurs in ensuring that the
opportunity that they will venture into is an
attractive and feasible prospect.
This test is designed to detail each entrepreneurial
aspect into small chunks to come up with a sound
entrepreneurial decision.
The entrepreneur must answer this test realistically
and avoid overestimation or underestimation.
TOTAL ATTRACTIVENESS SCORE
At the end of the test, the entrepreneur should
first compute for the total scores per factor.
The entrepreneur should also establish a
tiered scale and description on the total
attractiveness score:
Sample Tiered Scale:
4.00 - 5.00 Very attractive
3.00 – 3.99 Attractive
2.00 – 2.99 Tolerable but must take caution
and due diligence of the risks
1.00 – 1.99 Not attractive or too risky
 S3 SEIZING THE OPPORTUNITY
Opportunity seizing is the last step in opportunity
spotting and assessment. This is the “pushing
through” with the chosen opportunity. The
entrepreneur’s idea can be any type of
innovations listed here.
Innovation is the process of positively improving an
existing product or service. There are three types
of innovations according to the degree of
distinctiveness.
1. Breakthrough innovation
2. Technological innovation
3. Ordinary innovation
PRODUCT OR SERVICE PLANNING
AND DEVELOPMENT PROCESS
The last process, called the seizing process
involves refining and developing the
opportunity. The refining process is called
product or service planning and
development process. It has five key stages.
1. Idea stage
2. Concept stage
3. Product development stage
4. Test marketing stage