14 Ways to Identify Business Opportunities

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By: Site Engineer, Staff

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The starting point of a new business creation process is an idea of a product or service which can be used to satisfy an identified need of individuals, families or organizations.

An aspiring entrepreneur can have an idea which he/she believes is a great idea that would be an instant success in the market. Not all such ideas can translate into viable business opportunities. For a business idea to transform into a business opportunity the idea must offer a viable solution to a problem experienced by potential consumers and for which they are willing to pay. A business idea, no matter how novel, cannot be a business opportunity if customers cannot see the added value of it and therefore unwilling to pay for it. The job of the entrepreneur is to find a way (or a better way) to solve problems that people encounter at home, at work and at play using a product or service.

Business opportunities are continually being generated in an economy. Changes in the demographic structure, lifestyle, social, economic, and technological environment and public policy continuously give rise to new needs and to new business opportunities. Business opportunities have to be sought out as they do not present themselves for anyone to pick. Ability to spot these business opportunities is what distinguishes an entrepreneur from all others. Whoever, one can enhance the chance of spotting business opportunities by examining various sources from which useful ideas can be generated.

1. Copy of Existing Successful Business Forms

This is the most popular source of business ideas. It is a viable source especially if there are no entry barriers. The existing business is a model that can be copied or modified significantly by making the product or service more convenient, less expensive, faster and easier to handle.

2. Personal or other People’s Human Experience

This may be pleasant or unpleasant human experience which stimulates a creative response or solution to the problem. For example, an effort to remove drudgery from work may result in new product/service development. It is not always that people are aware of the problem that they face or can find a solution to the problem they are conscious of. For example, many people who buy street food may not be aware of the health hazards of their action. But the fact that there is such a risk can enable an enterprising person to come up with the idea of producing a product that does not entail such health risk and promoting it in such a way that consumers will perceive the advantage of the new product over the existing ones.

3. Work Experience

This is a fertile source of the business idea. Through work experience, aspiring entrepreneurs become aware of the deficiencies of existing products, neglected segments in the market, difficulties experienced by customers, limitations of suppliers etc. Potential entrepreneurs may also be aware of the complaints of customers which are overlooked. Knowledge of this nature can be the basis of innovative solutions to problems in the industry. However, care must be taken to ensure that the proprietary rights of former employers or their trade secrets are not abused.

4. A Hobby

The scope of a hobby can be expanded to become a commercial venture.

5. Vocation

Possession of vocational skills or professional skills suggests ideas of services that can be rendered.

6. Invention

New products or processes invented can be commercialized by the investor or by an entrepreneur who has obtained the license to use the patent right acquired by the investor. A problem that is often overlooked by inventors is that the invention must be developed beyond the stage of a laboratory prototype to the stage that it can be produced and tested commercially. Without bridging this gap, the invention would remain just a fascinating invention.

7. Franchise

Opportunity may exist to operate a franchise in a different territory that is currently not being served.

8. Spin-off

New business ideas, new products or new processes are usually generated by employees in existing organizations especially those in R&D departments. Some such ideas may be unattractive to the organization for various reasons. Business ideas of this nature can be the basis of new business creation by employees who can commercialize them.

9. Research Institutes, Universities, and Polytechnics

Many products and processes have been developed in research institutes, universities, and polytechnics which are awaiting commercialization by willing entrepreneurs. Researchers have developed new products from agricultural raw materials such as soya beans, shea-butter, cocoa, palm oil, coconut cashew etc.

10. Consultants

The vast experience and knowledge gained by consultants in the course of seeking solutions to the problems encountered by organizations is a major source of the business idea.

11. Banks, Venture Capitalists, Finance Houses

Managers in these organizations are usually aware of businesses that up for sale, unsatisfied needs of their clients and customers or problems that they need to solve. Aspiring entrepreneurs can tap on these sources for good business ideas.

12. Government Agencies

As part of their effort to encourage investment in their locality, government agencies often identify available business opportunities and mount promotional programmes directed at entrepreneurs and investors. Trade-fairs, conferences and special trade exhibitions are the usual media of this type of promotion from which business ideas can be obtained.

13. Trade Magazines, Journals, and Business Newspapers

These carry information on new products, new process, and technology. Sometimes opportunities for distributorship, contracts etc are advertised in the media.

14. Survey of Natural Resources

The nature of the natural resources available in a given area suggests certain types of businesses that can be profitably operated. The natural resources may need to be processed, refined or transformed in some other way to enhance its utility to man.

 

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