BAEB501 : ENTREPRENEURSHIP

CHAPTER 2:BUSINESS OPPORTUNITIES

© 2010 Cosmopoint

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Chapter 2: Business Opportunity

© 2010 Cosmopoint

Topic Outlines

2.1 Introduction2.2 Definition2.3 Tasks in Business Opportunities2.4 Process of Identifying, Evaluating and Selecting 2.5 What is your business?2.6 Identifying the needs and wants of customers2.7 Scanning the Environment and Evaluating of Self and the Community2.8 Screening of Business Opportunities2.9 Selecting a Business Opportunity and Preparing a Business Plan2.10 Environmental Scanning2.11 Self Evaluation2.12 Values/Norms of the Community2.13 Screening of Business Opportunities

© 2010 Cosmopoint

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Chapter 2: Business Opportunity

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Learning Outcomes

At the end of this chapter, students should be able to: Define of entrepreneurship State the different outcomes of entrepreneurship Explain the role of entrepreneurship in economic growth Explain the aspects of the entrepreneurial process

Topics© 2010 Cosmopoint

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Chapter 2: Business Opportunity

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2.1 Introduction

Topics

What is opportunity?

How do you relate

it to yourself as a

student?

What do you

understand about Business opportunities?

How can you

find business

opportunities?

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Chapter 2: Business Opportunity

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2.2 Definition

Topics

demands and preferences.Business opportunities is said to exist when there is a room to offer a product or services in a particular market which fulfills customers’

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Chapter 2: Business Opportunity

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2.3 Tasks in Business Opportunities

Topics

There are 3 major tasks involve in seeking business opportunities such as:

1) IDENTIFYING

for example: Product? Business? Customer?

2) EVALUATING

for example: Choices? Environment?

3) SELECTING

for example: what product? Target customer?

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Chapter 2: Business Opportunity

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2.4 Process of Identifying, Evaluating and Selecting

Topics

There are 4 major steps to be taken by an entrepreneur

in identifying, evaluating and selecting a business

opportunity. These can be categorized as:

Step 1: Identifying the needs and wants of customers

Step 2: Scanning

environment and

evaluating

Step 3: Screening of

Business opportunities

Step 4: Selecting a business opportunity preparing business plan.

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Chapter 2: Business Opportunity

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Which field have you decided for your business? For example: Food, Clothing, Security, Education, Health, Transportation,

Recreation, Entertainment, Information Technology, Construction, Cleaning Services, Etc.

2.5 What is your business?

Topics

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Chapter 2: Business Opportunity

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After decided which field you want to involve in, then you have to identify your customer wants and needs.

Are you going to produce a PRODUCT or SERVICES?

2.6 Identifying the needs and wants of customers

Topics

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Chapter 2: Business Opportunity

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Environment Population Structure, Income and Taste, Import Export Data, Local

Resource and Technology Industrial Linkages, Development Projects by the Public and

Private Sector, New Government Ruling, Social Problems, Media and the Internet.

2.7 Scanning the Environment and Evaluating of Self and the Community

Topics

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Chapter 2: Business Opportunity

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2.8 Screening of Business Opportunities

Topics

Oneself Experiences, Knowledge and Skills,

Financial, Interest, Networking

Community Values/Norms Perception

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Chapter 2: Business Opportunity

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2.8 Screening of Business Opportunities

Legal Getting to know whether

your product is legal

Monopolistic Power/ Level

of Competition e.g. Mandarin Oranges during

Chinese New Year

Capital Requirement –

e.g money/assets

Risks

– Business risks

- Financial risks

Topics

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Chapter 2: Business Opportunity

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2.9 Selecting a Business Opportunity and Preparing a Business Plan

Administrative/Organization Plan

Marketing Plan

Operations/Production Plan

Financial Plan

Implementation

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

Scanning the environment from the macro and micro perspectives.

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

Structure of the population, income and tastes. Considering the higher population of your target customers. E.g.:

Teenagers

Considering of your target customer income. E.g.: high income person? Medium income? Low income?

Changes in the taste of customers will result in creation of business opportunities.

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

Study on import and export data

The continuous increase in value and quantity of a product or service being imported and exported reflects a potential market, both local and international.

The same goes for policies on import substitution industries, and export promotion can be seen as an opportunity that is profitable.

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

Study on local resources and technological breakthrough. Can help to set up small or large

scale of business.

Industrial Linkages PROTON Cars for example can

create other business opportunities such as supplier or spare parts, car rental service, taxi company, component industry, tyres.

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

Development projects by the public and private sectors For example: the North South

Highway Project, Kuala Lumpur International Airport Project, Government Complex of Putrajaya, PROTON Township, can create a lot of business opportunities.

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

Searching for business opportunities in local and foreign newspapers, and magazines as well as on the internet. For examples: Google the

business opportunities at search engines or through any business/government website, Magazine like Times, BusinessWeek, Personal Money, Newspapers like the Edge, NST, New York Times.

Topics

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Chapter 2: Business Opportunity

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2.10 Environmental Scanning

The study of local social problems Problems pertaining to security, child

care, loafing, transportation, drug addiction and so on can create profitable business opportunities.

New Government Policies and Regulations Rules and regulations pertaining to the

emission of smoke control, speed traps, black box for express buses, helmets and seat belt will create business opportunity.

Topics

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Chapter 2: Business Opportunity

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2.11 Self Evaluation

A successful entrepreneur should have the following: Experience

E.g structural engineer turn to be a contractor. So he got experiences in construction field.

Knowledge and skills Contractor should have

considerable knowledge and skills from technical side and managerial side of the business.

Topics

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Chapter 2: Business Opportunity

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2.11 Self Evaluation

Financial Situation Entrepreneur should analyze his financial situation in order to

run a suitable business and applying for loan purposes.

Interest Entrepreneur should identify his interest field before

proceeding to run a business. E.g machine, cosmetic, IT, photography, etc.

Networking Entrepreneur should have good relationship with politician, top

ranking management, bank/insurance officer, suppliers.

Topics

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Chapter 2: Business Opportunity

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2.12 Values/Norms of the Community

Product 4D. This business is a profitable

opportunity and legal but it is against the values of the Malays community and the Muslims.

Poultry Farm Located at residential will

definitely be rejected because of hygiene concern, smelly.

Topics

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Chapter 2: Business Opportunity

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2.12 Values/Norms of the Community

Legality Imitation VCD is illegal. So you have to

make sure your product/service is legal.

Monopolistic Power and Level of Competition Understand whether it is a monopoly

product.

Capital Requirement Whether your capital is sufficient enough or

need you apply for loan

Topics

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Chapter 2: Business Opportunity

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2.13 Screening of Business Opportunities

Risks

Business Risks Risks that transferred to another party

E.g Insurance for your business/shop

Risk that can be controlled E.g product quality, Labor turnover

Risk that can not be controlled E.g Natural disaster like flood, earthquake

Economic downturn

Topics

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Chapter 2: Business Opportunity

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2.13 Screening of Business Opportunities

Risks Financial Risks

Liquidity Level Mean cash in hand.

Loans Plans to borrow money, you must also be

willing to pay back the loan, even though profit is always volatile.

Credit Giving credit to customer will cause

entrepreneur to face risk of not getting back his money.

Foreign Exchange Entrepreneur has to face the risk of a fall and

rise in exchange rate. E.g. Today exchange of RM3.15 = AUD 1 may not the same rate as tomorrow.

Topics

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Chapter 2: Business Opportunity

© 2010 Cosmopoint

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