RecognizingOpportunityRecognizingOpportunity
Back to Table of Contents
Recognizing OpportunityRecognizing Opportunity
2
Chapter 3
RecognizingRecognizingOpportunityOpportunity
Understanding Understanding Entrepreneurial TrendsEntrepreneurial Trends
Starting Versus Buying a BusinessStarting Versus Buying a Business
3.1
3.2
Recognizing OpportunityRecognizing Opportunity
3
Identify the importance of personal values and goals in choosing an entrepreneurial pursuit.
Describe the challenges and rewards of entering a family business.
List the benefits and drawbacks of buying a business.
Describe how you can evaluate a business opportunity.
Compare the advantages and disadvantages of starting your own business.
Section 3.1 Understanding Entrepreneurial Trends
3.1
Recognizing OpportunityRecognizing Opportunity
4
The ability to recognize new opportunities and to think creatively is essential for success in today’s market.
Section 3.1 Understanding Entrepreneurial Trends
3.1
Recognizing OpportunityRecognizing Opportunity
5
Current Entrepreneurial Trends
One way to identify business opportunities is to study current trends that provide opportunities for entrepreneurs.
Section 3.1 Understanding Entrepreneurial Trends
Current Entrepreneurial Trends
Section 3.1 Understanding Entrepreneurial Trends 6
Internet businesses
service businesses
home-based businesses
socially-responsible non-profit businesses
corporate ventures
strategic alliances
technology
outsourcing
Recognizing OpportunityRecognizing Opportunity
7
Internet Businesses
The Internet has transformed the way business is conducted.
An online business can reach customers around the world.
online business a company that conducts business by means of the Internet
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
8
Service Businesses
Service businesses dominate the American economy.
Business services account for the largest part of U.S. economic growth.
services intangible things that businesses do for consumers that enhance their lives
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
9
Outsourcing
Outsourcing is hiring people and other companies to handle tasks that a business can not do or chooses not to do itself.
outsourcing contracting with other companies for services
Section 3.1 Understanding Entrepreneurial Trends
Outsourcing
Section 3.1 Understanding Entrepreneurial Trends 10
Benefits of Outsourcing
more efficientmore efficient
saves timesaves time
saves moneysaves money
lowers regulatory burden
lowers regulatory burden
speeds up projectsspeeds up projects
attracts investorsattracts investors
Recognizing OpportunityRecognizing Opportunity
11
Strategic Alliances
A strategic alliance is a partnership among companies.
strategic alliance a partnership formed with another company for the purpose of supplying a product or service
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
12
Corporate Ventures
A corporate venture is formed within a company.
corporate venture a new venture started inside a larger company
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
13
Learning to Recognize Opportunity
Entrepreneurial thinking is about generating ideas and recognizing opportunities.
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
14
Creativity and Innovation
Creativity is the activity that results in innovation.
innovation a new way of doing things
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
15
Idea Versus Opportunity
You generate ideas by thinking creatively.
Opportunities are ideas that have commercial potential.
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
16
Idea Versus Opportunity
You can find a good business opportunity by recognizing an unfilled market niche.
niche a small specialized market
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
17
Finding Opportunities by Understanding Industries
If you understand an industry, you can identify opportunities within that industry.
Section 3.1 Understanding Entrepreneurial Trends
Thinking Creatively About Opportunity
Section 3.1 Understanding Entrepreneurial Trends 18
Practice brainstorming. Practice brainstorming.
Find creative solutions to common problems.
Find creative solutions to common problems.
Look at ordinary items in new ways.
Look at ordinary items in new ways.
Connect unrelated items.Connect unrelated items.
Recognizing OpportunityRecognizing Opportunity
19
Thinking Creatively About Opportunity
During brainstorming, ideas are not judged as good or bad.
brainstorming to think freely in order to generate ideas
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
20
Challenges to Creativity
Entrepreneurs can stimulate and encourage creativity in many ways.
The most difficult challenges to creativity are the challenges you bring upon yourself.
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
21
Creative Sources of Ideas
To identify creative ideas:
Section 3.1 Understanding Entrepreneurial Trends
Observe the world around you.
Watch for demographic changes.
Be an avid reader.
Consider your interests, hobbies, and work experiences.
Consult outside sources of information.
Recognizing OpportunityRecognizing Opportunity
22
Watch for Demographic Changes
It is important for entrepreneurs to understand demographics and demographic trends.
demographics personal characteristics that describe a population by age, gender, income, ethnic background, education, and occupation, among others
Section 3.1 Understanding Entrepreneurial Trends
Sources of Information
23
Sources of
Information
trade magazines
specialty magazines
trade shows
exhibitions
newspapers
the Internet
government agencies
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
24
Consult Outside Sources
A trade magazine offers current, industry-specific news.
trade magazine a periodical published for a specific type of business or industry
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
25
Consult Outside Sources
A specialty magazine offers information about specific topics.
specialty magazine a periodical published for people with special interests, such as sports, camping, or fashion
Section 3.1 Understanding Entrepreneurial Trends
You can use specialty magazines to identify the interests and needs of potential consumers.
Recognizing OpportunityRecognizing Opportunity
26
Consult Outside Sources
At a trade show, you can learn about new goods and services in a field.
trade show a gathering or exhibition where vendors and manufacturers introduce new items and promote established products and services
Section 3.1 Understanding Entrepreneurial Trends
Recognizing OpportunityRecognizing Opportunity
27
Identify the importance of personal values and goals in choosing an entrepreneurial pursuit.
Describe the challenges and rewards of entering a family business.
List the benefits and drawbacks of buying a business.
Describe how you can evaluate a business opportunity.
Compare the advantages and disadvantages of starting your own business.
Section 3.2 Starting Versus Buying a Business
3.2
Recognizing OpportunityRecognizing Opportunity
28
Whether you start a business from scratch or buy an existing business and make it better, owning a business that is compatible with your personal values and goals is critical.
Section 3.2 Starting Versus Buying a Business
3.2
Recognizing OpportunityRecognizing Opportunity
29
Personal Values and Goals
Personal values and goals should be used as a guide when choosing entrepreneurial pursuits.
values the beliefs and principles by which you choose to live that define who you are, shape your attitudes and choices, and help you identify your priorities
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
30
Entering the Family Business
The greatest advantage of a family business is the trust and togetherness that family members often share.
Families that work well together have great potential for success in a family business.
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
31
Buying an Existing Business
In many ways, buying an existing business is less risky than starting one from scratch.
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
32
Buying an Existing Business
When you buy an existing business, you often gain the goodwill of loyal customers.
goodwill the favor and loyalty a business acquires by its good reputation
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
33
Buying a Franchise
When you buy a franchise, you buy the right to set up a new business patterned on an existing model.
franchise a legal agreement to begin a new business in the name of a recognized company
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
34
Buying a Franchise
The franchisee is the buyer of a franchise.
The franchisor is the seller of a franchise.
franchisee the buyer of a franchise who is given the right to the franchisor’s product, process, or service
Section 3.2 Starting Versus Buying a Business
franchisor the seller of a franchise who is giving the buyer planning and management expertise
Recognizing OpportunityRecognizing Opportunity
35
Evaluating a Business Opportunity
To evaluate a business opportunity:
Section 3.2 Starting Versus Buying a Business
Investigate the company.
Investigate the industry.
Talk to customers, employees, and suppliers.
Hire an accountant to advise you.
Hire an attorney to advise you.
Where to Find a Business
36
FindingBusiness
Opportunities
newspapers businesspublications
networkingbusinessbrokers
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
37
Where to Find a Business
You can find a business broker in the telephone book or online.
business broker someone whose job it is to bring buyers and sellers of businesses together for a fee
Section 3.2 Starting Versus Buying a Business
Recognizing OpportunityRecognizing Opportunity
38
Starting Your Own Business
When you start your own business from scratch, you can do things your own way.
You can build the company with fresh ideas and enthusiasm.
Section 3.2 Starting Versus Buying a Business
RecognizingOpportunityRecognizingOpportunity
Back to Table of Contents
End ofEnd of