opportunity recognition and assessment. stage three exploring new business ideas and opportunities...
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Opportunity Recognition and Assessment
STAGE THREE Exploring New Business Ideas and Opportunities
Search for a product or service idea
Evaluate the possible alternatives
Determine your preferences
From yourprevious
employment
Fromhobbies
Fromcasual
observation
From adeliberate
search
Magazinesand other
publications
Trade showsand
conventions
Product licensing
informationservices
Governmentagencies anddepartments
Usecreativethinking
Ideas vs. Opportunities
Ideas Become Opportunities Only If They Have a Chance to Succeed
Long-Term Expectations for Your Business
Lifestyle Ventures Small, Profitable Ventures High-Growth Ventures
Why Lower Failure Rates with HPV’s?
able to retain key personnel
possess higher gross margins superior
product/service quality
faster responses to opportunity
innovation niche favored purchasing
agreements greater marketing
expenditures extensive experience
with suppliers are in fast growing
industry
• High potential ventures (HPV) must be distinguished from the “mom and pop” variety
• HPV’s are defined as having sales of at least $500,000 to $1 million and grow at a rate of at least 10% per year. They are:
Where Do Entrepreneurs Get Their Ideas?
71%
20%
5% 4%
Discovered through
systematic research for
opportunities Swept into the PC revolution Discovered serendipitously:
Built temporary or casual job into a business (7%)
Wanted as an individual consumer (6%)
Happened to read about the industry (4%)
Developed family member’s idea (2%)
Thought up during honeymoon in Italy (1%)
Replicated ormodified an ideaencountered throughprevious employment
Source: 100 founders of the 1989 Inc. *500* fastest growing private companies.
Sources of Ideas for a New Business
Your JobYour HobbiesPersonal Observation
Casual ObservationDeliberate Search
PublicationsInventor’s Shows, Trade Shows and
ConventionsPatent Brokers and Product Licensing
Information ServicesFriends, Acquaintances, and Other
Social ContactsFederal and Provincial Government
Agencies and Departments
Using Creative Thinking
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Expand Your Creativity
Expand Your Creativity
Expand Your Creativity
Expand Your Creativity
Creative Methods
Brainstorming Attribute Listing
Brainstorming
A process of detaching the analysis of ideas from the actual development of ideas Usually done in a group No criticism during idea generation Don’t try to sell or explain an idea Free-flowing, seeking a large quantity of ideas “weird” and “silly” ideas are encouraged and may lead to
new and better ideas After a list has been generated, analysis of each idea can
take place
Attribute Listing
Changing the way you look at something in order to find new uses for it. Does its shape, weight, colour, textures, or
properties suggest other uses? What could you do if you reversed it,
combined it with something else, multiplied it, shrunk it, enlarged it, rearranged it?
Recognizing Trends
Anticipate needs and develop a clear vision of the future which may help you anticipate successful products, services or directions to take and get a jump on the competition
Faith Popcorn’s Predictions for the Future
•CClanningAtmosFEAREgonomicsBe AliveAnchoringEVEolution
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Shirley Robert’s Best Businesses for Beyond the Year 2000
1. Self-diagnostic medical tools2. Affordable organic foods3. Educational books, videos, and CD-ROMs4. Technology-training centres5. Customized information services6. Anti-aging cosmetics7. Pet-related products and services8. Financial services tailored to women9. Activewear for aging adults10. Home-safety devices
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How to Select the Right Opportunity for You
Step 1: Identify Your Business and Personal Goals
Step 2: Research Your Favourite IndustriesStep 3: Identify Promising Industry SegmentsStep 4: Identify Problem Areas and Brainstorm
SolutionsStep 5: Compare Possible Solutions with Your
Objectives and Opportunities in the MarketplaceStep 6: Focus on the Most Promising Opportunities
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Characteristics of the “IDEAL” Business
Requires no investmentHas a recognized, measurable marketA perceived need for the product or serviceA dependable source of supply for the required inputsNo government regulationRequires no labour forceProvides 100% gross marginBuyers purchase frequently
Continued
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Receives favourable tax treatment Has a receptive, established distribution system Has great publicity value Customers pay in advance No risk of product liability No technical obsolescence No physical perishability Impervious to weather conditions Possesses some proprietary rights
Characteristics of the “IDEAL” Business(Continued)
Copyright © 2000, McGraw-Hill Ryerson Limited