ENTREPRENEUR

SHIP
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 CHAPTER 1
INTRODUCTION TO ENTREPRENEURSHIP
(OPPORTUNITY SEEKING)

1. Concept of Opportunity Seeking

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 TOPIC: INTRODUCTION
Course Outcomes:
OPPORTUNITY SEEKING
Course Objectives:
1. To Identify, describe and analyze a business
opportunity 1. To know the concept of business opportunity

2. To Examine technical, economic and financial 2. Examine technical, economic and financial
feasibility of their future business feasibility of their future business

3. Analyzes the key factors of success and the risks

3. To apply business opportunity into venture of a business.

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DEFINITION OF BUSINESS IDEA AND
OPPORTUNITY
 Business idea is a business concept that results in profits
if it is turned into a tangible product or service.
 Opportunity also defined as the potential to create
something new that involves change in knowledge,
technology, economy, politics, social, and demographic
conditions.
SOURCES OF BUSINESS IDEAS AND
OPPORTUNITIES CAN BE OBTAINED THROUGH:

Primary sources
Secondary sources
 PRIMARY SOURCES
 Observation~ data is gathered by observing and recording
the respondent’s actions in activity.
 Experiments- experiments or product sampling is another
option.
 Interviews- field research covers interviews with customers,
suppliers, competitors, and industry experts.- interviews
conducted in two ways : ~ personal interview ~ telephone
interview
 Surveys- refers to the development of a short questionnaire
with respect to the targeted product.- the questions should be
very specific.
SECONDARY SOURCES
 involved gathering data that have already been compiled and
are available.
 It is initially conducted for one purpose using existing date
which is
 Reliable
 Available references
 Mass media and electronic media
SECONDARY SOURCES

Reliable existing data

 It is an existing data that can be used by
entrepreneur
 Example: Information obtained from annual report
of companies
SECONDARY SOURCES

 Reference
 an entrepreneur can use reference such as publish
information from then library, internet and so on.
 Mass media and electronic media
 Advertisement and information in the newspaper,
magazines and internet.
PROCESSING OF REORGANIZING, ANALYSING
AND CHOOSING A BUSINESS OPPORTUNITY

 Identifying, analysing, and choosing business opportunities are

essential to determine if the venture can make profits and sustains
its competitiveness.
 The opportunity is identify through input from consumers,
business associates, channel members, or technical people
 Each opportunity must be carefully screened and evaluated.
RECOGNIZING CUSTOMER
NEEDS AND WANTS
An entrepreneur has to be sensitive in identifying
the needs and wants of customers.
A need is something basic in life.
Wants are something that is more than a basic
need.
SCANNING THE BUSINESS
ENVIRONMENT
 The business environment should be analyzed in terms of :

 demographics

 local resources

 new government policies and regulations

 data on import and export

 industrial linkage

 development projects by public and private sectors

 technological breakthrough

 sources from mass media and electronic media

DEMOGRAPHICS
 Are the characteristics of people in a population
 If entrepreneur studies the demographic of his customer, he/she
will be in a better position to predict the product or services that
they will buy.
 Needs and wants are based on the structure, income, and taste
of population.
LOCAL RESOURCES

Still an abundance of local resources that are

untapped and have the potential to become
investment opportunities.
Fountains and natural attractions at certain
location can be turned into business ideas
NEW GOVERNMENT POLICIES AND
REGULATIONS
An entrepreneur can identify business
opportunities by referring to the existing law and
government regulations.
 DATA ON IMPORT AND
EXPORT
 The continuous increase in the value and quantity of imported and
exported products or services reflect a potential market at the local and
international level.
 The same goes for policies on import substitution industries and export
promotion
 These issues can be seen as profitable opportunities
INDUSTRIAL LINKAGE

An entrepreneur can identify the industry that

requires input from other industries.
This will develop linkage among industries of the
same sector or different sectors.
 DEVELOPMENT PROJECTS BY
PUBLIC AND PRIVATE SECTORS

 There are various developmental programs by the government

and firms that have directly or indirectly opened up business
opportunities for entrepreneurs.
TECHNOLOGICAL
BREAKTHROUGH
New technological breakthrough can create new markets
and opportunities for business
 MASS MEDIA AND
ELECTRONIC MEDIA
 Can be sources for generating business ideas.
 Example : a job advertisement posted by a company for the
vacancy of sales executive can be considered as business idea to
the entrepreneur.
PERFORMING SELF-
EVALUATION
 Self-evaluation must be made before making a commitment.
 Should be based on :

 individual’s experience

 knowledge

 skills

 financial ability

 interest

 networking ability
 EXPERIENCE

An entrepreneur runs a business that’s suit his

experience in the profession.
The intelligence to find an opportunity from past
experience can be a way to gain success in business.
 KNOWLEDGE

Entrepreneur has to be equipped with the knowledge on

a operating a business.
SKILLS

 Entrepreneur must have the necessary skills in carrying

out his job.
 Skills usually born from experience and knowledge.
 Advantages that is difficult to obtain.
FINANCIAL ABILITY

 Business must be parallel with the financial ability of the

entrepreneur.
 Capital is the most basic aspect to think about before
opening up a business.
 Start a small business with entrepreneur existing capital.
 Growing business will help the entrepreneur in securing
financing for expansion.
INTEREST

 Is an important aspect
 Must be taken seriously
 It can give self-confidence
 Entrepreneur will be able to concentrate on his
profession
NETWORKING ABILITY

 Entrepreneur needs to know how to reduce unnecessary

procedures and bureaucracy in the business.
 Should be mindful.
ASSESSING SOCIETY’S VALUES, COMMUNITY’S
RESPONSE, OR SOCIETY’S ACCEPTANCE

Chemistry between a business ideas and the

society is an important aspect that must taken
before starting a business.
CHOOSING A BUSINESS
OPPORTUNITY
 Criteria that must be choose by entrepreneur in business
opportunity are
 Legality

 Competitors

 Capital requirement

 Risk
LEGALITY

The suggestion of business ideas must be prove

by the law.
COMPETITORS
 Those who are in the same business
 Have a potential to serve the entrepreneur ‘s customers.
 Entrepreneur can identify competitors by asking customers
from his existing business.
 Competitors are identify ~ the entrepreneur should identify the
strength and weaknesses of his competitors in term of
organizational terms.
CAPITAL REQUIREMENT

Capital – the amount invested in the company.

THREE TYPES OF CAPITAL :

Fixed or permanent capital

 It is the amount of the capital that been used to buy
the asset of in the company.
THREE TYPES OF CAPITAL :

Working capital
 Referred to as operating capital

 Also known as assets of business that can be used to

supports business operations.

 Often used to pay bills and salaries, to buy inventories and

others.
THREE TYPES OF CAPITAL :

Plantation or growth capital

 Not related to current business situation.

 Used to help small business change its primary

direction.
RISK

 Define as a period of uncertainly experienced by a

business as a result of unforeseen events which lead to
either poor earnings and resultant failure.
 Entrepreneur should be aware of the risks.
TWO TYPES OF RISK :

Business risk
Financial risk
BUSINESS RISK
 The factors which have the tendency and potential of adversely
affecting a business operation and ultimately its profitability
 Two types of business risk :
 Controllable ~ can be manage by entrepreneur

 Uncontrollable ~ almost impossible to prevent

 FINANCIAL RISK
-Risk associated with any form of financing
 Four categories :
 Credit risk ~ risk when clearing or settlement of payments are not made
when due.

 Liquidity risk ~ risk of insufficient liquid resources to make all payments on

the due date.

 Loan risk ~ a form of financing whereby entrepreneur borrows money as a

source of capital to conduct his business.

 Currency exchange risk ~ the high flexibility and changes in currency value
impose a high risk.
THANK YOU!!!

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