Identifying Business Opportunities

From the given picture think of a problem/need

and a possible business opportunity in the
community.

URBAN COMMUNITY
RURAL COMMUNITY
Environmental Scanning-
Environmental Scanning is the process of obtaining information in a certain place that can
offer business opportunity or able to monitor threats for current or future plans. This can be
done through:

 Interview, a conversation between two people where questions are asked by the interviewer to obtain
information.
 Sharing ideas with others
 Reading, a complex cognitive process of decoding symbols for the attention of constructing or deriving
meaning.
 Observation of a living being, such as a human being. This consists of receiving knowledge of the outside
world through the senses.
 Advertisements any form of media that draws good attention.
 There are many factors in the general environment that will affect the decisions
of the managers of any organization. Tax changes, new laws, trade barriers,
demographic change, and government policy changes are all examples of general
change. To help analyze these factors managers can categorize them using
PESTEL model. This classification is defined as follows:
PESTEL ANALYSIS

 Political factors refer to the government policy such as the degree of intervention in the economy.
 Economic factors. These include interest rates, taxation changes, economic growth, inflation, and exchange
rates.
 Social factors. Changes in social trends can impact on the demand for a firm's products and the availability
and willingness of individuals to work, for example, some countries’ population has been ageing.
 Technological factors. New technologies create new products and new processes.
 Environmental factors. Environmental factors include the weather and climate change.
 Legal factors: these are related to the legal environment in which firms operate.
Selecting Appropriate Business Opportunities
In discovering business opportunities, the following factors/resources have to be evaluated:

 Markets. The number of prospective buyers, the present competitors, and the prices and quality of goods
and services are to be analyzed.
 Individual interest. Business interest of individuals varies. Interest should match business opportunities.
Your interest and know -how is, in itself, an opportunity.
 Capital. Money is very important in putting up a business enterprise. The type of the business that you are
going to put up is dependent upon the availability of the fund that you have.
 Skills. It is not advisable for an entrepreneur to depend completely on the services of her/his assistants.
He/she should have also enough knowledge and skills to the kind of business that they are going to put up.
 Suppliers of inputs. It is not enough that there are sufficient buyers of goods and services. It is equally
important that there are steady supplies of raw materials and other inputs of the business.
 Manpower. The success of any business enterprise primarily depends on the efficiency of its employees.
 Technology. Taste and preferences of consumers are not permanent. These are heavily influenced by
innovations, and innovations are the products of technology. New products and new services represent
improvement which is intended to improve consumer satisfaction. An entrepreneur should be aware of the
presence of technology, particularly new technology. This is an opportunity for them to avail of such
technology to improve their products or services, or introduce new ones in the market.
SWOT Analysis

 SWOT analysis is a planning tool used of an entrepreneur to succeed

in the business. It can be used to guide entrepreneurs in overcoming
their weaknesses and protecting their business against threats. It can
also help entrepreneurs capitalize on their strengths and seize
opportunities. SWOT is an acronym for Strength, Weaknesses,
Opportunities, and Threats,
Strengths are the strong points of the
products/services

 Cheap and abundant raw materials

 Sufficient funds
 Availability of technology
 Presence of the skilled workers
 Management and technical expertise of the entrepreneur
 Good quality/service
 Ease of production
 Small capital
Weaknesses refer to the traits that keep one from meeting his/her targets. These may include one’s
apparent resistance to change or fear of the unknown.

 
 High price
 Poor quality service
 Weak management
 Lack of skilled workers
 Irregular supply
 Unattractive design
 High cost of production
Opportunities refer to the outside factors that one can take advantage of to achieve his/her business goal. These may
come in the form of great demand for the product or services, the absence of competition, or the expected large profit.

 Big demand for the products/services

 Favorable government policy/support
 Scarcity of the product or services
 Poor quality of existing product
 Absence of product/services
 Possibilities of good profits
Threats refer to the external factors that may work against the business such as purchasing power,
increased production cost, and higher taxes and license fees.
 

 Shortage of raw materials at a given time

 Entry of many competitors
 Reduced increasing cost of0\production
 Expectation of unfavorable government laws such as taxes
 Deteriorating peace and order
 Emergence of unfair demands of workers through labor union activities
Identifying Business Planning Concepts
Why do you need to prepare a business plan?