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Opportunity

Seeking,
Screening
and Seizing
Opportunity Seeking

 Entrepreneurs are innovative opportunity seekers. They have


an insatiable curiosity to discover new or different ideas that
will work in the marketplace. This curious streak is what
separates them from the ordinary businessman whose
obsession is, simply, to make a profit from producing, buying
and selling goods. A lot of wannabe businessmen set up shop
to repeat what everybody else is doing but this is not really
entrepreneurship. It is just doing “business as usual.”
 They create value by introducing new products/services or
finding better ways of making them
Entrepreneurial
Mind Frame,
Heart Flame,
and Gut Game
seeing things in a very
positive and optimistic light in
the midst of crisis or difficult
situations
Entrepreneurial
Mind Frame
not discouraged; using
problematic situations as an
inspiration in creating
something innovative

Crisis, in Chinese writing


has two characters – 1st
char.-danger & 2nd char-
opportunity
commonality between an
investor & entrepreneur is their
surging passion, a great desire to
attain a vision or fulfill a mission
Entrepreneurial
Heart Flame about wanting something so
much that a person would
be willing to totally devote
one's self to the quest

not easily disheartened


by the setbacks
Entrepreneurial
Heart Flame is
Entrepreneurial about Emotional
Heart Flame - Intelligence or EQ
EQ
entrepreneur's
efforts to nurture
relationships with
customers,
employees, and
suppliers
ability of the
entrepreneur to sense
without using the five
Entrepreneurial senses

Gut Game
INTUITION

whether something will


work that is not
necessarily logical,
systematic, and
sequentially thought of
Macro
Environmental
Sources
Sources of
Opportunities Industry Sources
Market Sources
Macro Environmental Sources

 "big/ macro forces“


affect the area, the industry, and the market,
which the enterprise belongs to
Influence how business should be conducted,
how consumers behave, how supply &
demand will move, how different
competitions would position themselves, and
the cost of doing business
Five categories: Social, Political, Economic,
Ecological, and Technological
Social
Five categories of Political
Macro Environmental Economic
Forces Ecological
Technological
Includes demographics
and cultural dimensions
that govern the relevant
entrepreneurial endeavor
Socio-
Cultural Helps entrepreneurs assess the
Environment trends and dynamics of the bigger
consumer population, their beliefs.
Tastes, customs, and traditions

Looks at social structure and


shifts in social status behavior
defines the governance system of the
country or the local area of the business
Political
Includes all the law, rules and regulations
Environment that the govern business practices

Permits, approvals, and licenses


necessary to operate business

Regulates the use of natural resources; the disposal of wastes;


taxation of income; importation of goods/services;
accounting and reporting of business financial statements ;
public & private education; health programs; use of public
funds, etc.
Mainly driven by the
supply/demand forces

Economic
Environment Same factors that drives the
interest and foreign exchange
that fluctuate with the
movement of the market forces

The income levels and


purchasing powers and the
competitiveness of its industries
are sources of opportunities
Includes all the natural
resources and the
ecosystem, habitat of men,
animals, plants and minerals
Ecological
Environment Threats of ecological
degradation have
generated countless
opportunities

Opportunities abound for


greener, cleaner, and
heathier products whose
objectives are to save the
planet and prolong lives
New scientific discoveries, which
often lead to the launch and
commercialization of new products
with superior attributes or to render
Technological the old ones obsolete, are the
Environment entrepreneur’s nightmares
Left with no choice but to invest in
new technologies in order to keep
up

Technology may also be in the form


of new systems, new processes, or
new products
Industry Sources

Proper classification of what industry the


enterprise is competing in is important if the
entrepreneur’s intention is to define who are
the relevant customers, who are the direct
and indirect competitors, and what are the
critical characteristics of the market as to the
quality of the products/services to be
delivered
Participants in an Industry

Rivals or competitors in a particular type of business


Suppliers of input to rivals as well as suppliers of machinery and
equipment, suppliers of manpower and expertise, and suppliers
of merchandise
Consumer market segments being served by rivals or
competitors
Substitute products/services, which consumer shift or turn to

All other support and enabling industries


According to product
types or according to the
functions of the
product/service
Ways of
Defining an Tracing the industry from its
most basic raw material down
Industry to its various consumer
applications or PRODUCT OR
VALUE-ADDED CHAIN

Defining an industry on a
narrower scope presents a
threat because of its limiting
effect
Product Or Value-Added Chain

Product chain focuses Value-added chain


on the volume focuses on the
produced or economic rather than
converted at each link the volume aspect of
of the chain the chain
Market Sources

Can be discovered from the


increased or decreased demand
as well as higher or lower supply
Refers to the specific
target market segment of
a particular enterprise

Micromarket These are the target


customers that represent the
immediate customers of an
enterprise
Pertains to a clearly defined
location or specific
customer group that an
enterprise wishes to serve
Need for segmentation would
be crucial because the
definition of value for money
differs from group to group
Consumer Preference
refers to the tastes of a
particular groups of
people
Consumer
Preference,
Entrepreneur can explore
Piques, and opportunities brought by
Perceptions consumer preferences or
dislikes

Sometimes, a products is not


changed by the industry but
what changed is the
consumer perception in the
way they see the product
Generate customer’s awareness on the new
product

Then arouse the customer’s interest to buy,


going to the evaluation of the product

Finally, the decision to buy

There is a need to build brand loyalty and retain


the customer for a long time
Other Sources Opportunities

Unexpected Potential source of New knowledge or


successes (or opportunity is the new technology
failures) can lead entrepreneur’s can also be a
to good own set of skills or source of
opportunities hobby opportunity
Other Sources Opportunities

1. Consumer preference change over time


2. People’s taste in clothes, music, shoes, entertainment, dance, sports,
hobbies, and even careers have evolved over the years
3. What piques customers are great source of opportunities
4. Before the customer is won over, there is first a battle for the mind.
Next, there is a battle for the heart. Finally, there is a battle for the
wallet
5. . The longer the customer wants to use the product , the greater the
chances of creating a lasting loyalty
Other Sources Opportunities (Cont’n.)

6. Opportunities abound in shaping consumer perceptions or


occupying spaces in their minds or places in their hearts that
have not yet been filled
7. New inventions, new systems and work processes, new insights
about the human psyche, new applications for old knowledge,
new revelations about how the physical world works, new
interpretations, new combinations based on the convergence
of previous technologies, new outlooks about how life should be
led, and a host of other new things are tremendous sources of
opportunities
Other Sources Opportunities

7.Determining personal preferences and competencies


lay the foundation for a new business venture
8.Unexpected occurrences in both the external and
internal environment of the enterprise indicate that
significant changes are happening, and opportunities
are spouting
Opportunity Screening

Because of many possible opportunities


for the entrepreneur, it is important to
come up with a short list of a few very
promising opportunities that can be
described in detail.
Personal Screen

Will I sacrifice my
Will I spend all my time, existing lifestyle, endure
Do I have the drive to
effort, and money to emotional hardship,
pursue this business
make the business and forego my usual
opportunity to the end?
opportunity to work? comforts to succeed in
this business?

If YES then you can begin your pursuit on the opportunity


12Rs of Opportunity Screening

1.Relevance to vision, mission, and objectives of the


entrepreneur.
2.Resonance to values.
3.Reinforcement of Entrepreneurial Interests
4.Revenues
5.Responsiveness to customer needs and wants.
6.Reach
12Rs of Opportunity Screening

7.Range
8.Revolutionary Impact
9.Returns
10.Relative Ease of Implementation
11.Resource Required
12.Risks
To ascertain the
viability of the
Pre- opportunity
Feasibility
Study
Focusing on a few
key items that could
make or break the
concept
Market potential and
prospects

Factors that Availability and


appropriateness of the
are in the technology
pre-feasibility
study: Project investment and
detailed cost estimates

Financial forecasts and


determination of financial
feasibility
Based on the estimated number of
possible customers who might avail of
the product/service

Market
It would help to narrow down your
Potential estimation to the relevant population
or target customers in the area where
and you want to operate your business
Prospects
Market estimation is the most difficult
task because of the many ways that
the customers can be divided and
segmented
Factors that Affect Customer’s Purchase

1.Purchasing power or disposable income


2.Proximity or accessibility to goods/services
3.Individual desires and preferences
4.Age or generational grouping
5.Social, cultural or ethnic background
6.Peer group preferences
7.Gender
8.The season of the year
9.Personal identification with trend setters
10.Educational attainment
11.Technical proficiency and product expertise
12.Motivational impetus
13.Lifestyle preferences
14.Susceptibility to certain advertising and promotional
appeals, etc.
Assessing Competition

Market potential is also affected by


the number of establishments
supplying and serving your target
customers
Would determine how saturated the
market is in the given coverage
More suppliers and competitors in the
area= greater level of saturation
Quantify the market potential
in a systematic way

Estimating Should define the coverage or


Market reach he/she wants to serve
Share and
Then, determine the broad market
Sales segments within this area or total
targeted population

In the assessment of market potential, they


should evaluate the relative strength of the
various suppliers or competitors in the
marketplace
Estimating Market Share and Sales

 Determine what slice or share of the targeted


segment he/she wants to carve out
 Given the market share threshold, the
entrepreneur could assess whether his goal
would be achievable based on the study of the
market potential
 Having determined the forecast or the derived
market share, it should get the estimate
potential sales
 Sales Forecast = estimated sales volume x
estimated price
Technology Assessment and Operations Viability

 Quantities demanded. Determine the needed capacity operations


 Quality specifications demanded. Would dictate the quality of (1) input
materials, (2) assurance process of transforming input to output, (3) output
that meet operations, standard set, and outcomes for customers who will
be looking for specific results.
 Delivery expectations. Knowing how much, how frequent, and when to
deliver to customers
 Price expectations. Selling price of the product/service would be
evaluated by the customers according to the value they would receive,
and this value added should be matched against competitors
Pre-Operating Costs. Costs
related to the preparation for
the launch of the business.
Investment
Requirements Production/Service Facilities Investment.
and Long-term investment for the actual
business establishment, including
Production/ investment on land, buildings, machinery,
Servicing equipment, computers, software, furniture,
vehicles, etc.
Cost
Working Capital Investment.
Investment needed to
operationalize the business,
composed of cash, accounts
receivable, and inventories.
Refers to monetary transactions
Financial that the business is expected to
Forecasts and engage in
Determination
of Financial
Stability Creation of four critical
financial statements: income
statement, balance sheet,
cash flow statement, and funds
flow statement
Financial statement that
Income measures an enterprise’s
performance in terms of
Statement revenue and expenses
over a certain period

REVENUE – EXPENSES =
INCOME/PROFIT (LOSS)
Gross sales P750,600

Less: Cost of goods sold 468,487


Gross Profit/Margin 282,113

Income Less: Operating Expenses 166,145

Statement Operating Profit/Margin 115,968

Less: Taxes 21,392


Net Profit after taxes P94,576

*Cost of goods refer to the materials, labor


costs and overhead of making a product. For
service establishments, the cost of servicing the
customers can be computed directly as cost
of services rendered
Assets. All the investments in the
enterprise including the initial
investments

Balance Liabilities. Represents the enterprise’s


debts to suppliers, to banks, to
Sheet government, to employees and other
financiers

Stockholder’s equities. Represents


the investors’ investments in the
stock (or shares) of the business

ASSETS= LIABILITIES+EQUITY
Balance Sheet
Assets Liabilities
Current Assets Current Liabilities
Cash P100,500 Accounts Payable P150,00
Accounts Receivable 370,200 Income Taxes Payable 20,500
Inventory 405,350 Wages Payable 75,000
Fixed assets Short Term Debt 125,000
Lands 422,100 Long Term Liabilities
Building 200,000 Long Term Debt 777,650
Vehicles 150,000 STOCKHOLDER’S EQUITY
Capital 350,000
Retained Earnings 150,000

Total assets P1,648,150 Total Liabilities & Equity P1,648,150


𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 =
𝐴𝑛𝑛𝑢𝑎𝑙 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥𝑒𝑠 Financial
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝑆𝑎𝑙𝑒𝑠 =
𝑆𝑎𝑙𝑒𝑠 Ratios &
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 𝑜𝑟 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 = Measurements
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 𝑜𝑟 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
More
Feasibility comprehensive and
Study detailed than pre-
feasibility study

Prepared to
convince bankers
and investors to put
money into business
opportunity
Opportunity Seizing

Will I be able to manage, to my advantage, the


critical success factors and avoid the critical failure
factors?
Must be able to determine the critical success
factors that enable other players in the same
industry to succeed while, at the same time, be
vigilant about the factors that cause other
businesses to fail.
Advised to look at other competitors
in the marketplace
What are the main customer
segments?
Crafting a What are the different product
Positioning attributes and features of each of
the competitors?
Statement What are the existing marketing
practices of the various
competitors?
What are the market preferences of
the consumers when it comes to the
products being offered?
An entrepreneur must
conceptualize his/her
own products
Conceptualizing
the
Concept – idealized
Product/Service abstraction of the
Offering product/service to be
offered

Must be compelling
and unique to the
customers targeted
Designing – rendering the
concept and translating it
into its very physical and
Designing, very real dimensions
Prototyping (measurement)
& Testing Entails building a
the Product prototype that will be
ready for testing and will
later be tested on
potential customers
Implementing, Organizing and Financing

Choose
• Choose the correct technology

• Choose the right people who can perform the technical and the
Choose managerial functions

Design
• Design the operating workflow

Specify
• Specify the systems and procedures

Design
• Design the organizational architecture
End.