BAEB510 Chapter 2: Business Opportunities
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Transcript of BAEB510 Chapter 2: Business Opportunities
BAEB501 : ENTREPRENEURSHIP
CHAPTER 2:BUSINESS OPPORTUNITIES
© 2010 Cosmopoint
Slide 2 of [11]
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
Slide 3 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
Slide 4 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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?
Slide 7 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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.
Slide 8 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
Slide 11 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
2.9 Selecting a Business Opportunity and Preparing a Business Plan
Administrative/Organization Plan
Marketing Plan
Operations/Production Plan
Financial Plan
Implementation
Topics
Slide 14 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
2.10 Environmental Scanning
Scanning the environment from the macro and micro perspectives.
Topics
Slide 15 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
Slide 19 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
Slide 20 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
Slide 21 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
Slide 23 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
© 2010 Cosmopoint
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
Slide 27 of [11]
Chapter 2: Business Opportunity
© 2010 Cosmopoint
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