Transcript Opportunity Recognition and Assessment

Opportunity Recognition and
Assessment
STAGE THREE
Exploring New Business Ideas and Opportunities
Search for a product or service idea
From your
previous
employment
From
hobbies
From
casual
observation
Magazines
and other
publications
From a
deliberate
search
Trade shows
and
conventions
Evaluate the possible alternatives
Determine your preferences
Product
licensing
information
services
Government
agencies and
departments
Use
creative
thinking
Ideas vs. Opportunities
Ideas Become Opportunities Only If
They Have a Chance to Succeed
Long-Term Expectations for
Your Business
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Lifestyle Ventures
Small, Profitable Ventures
High-Growth Ventures
Why Lower Failure Rates with HPV’s?
• 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:
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able to retain key
personnel
possess
 higher gross margins
 superior
product/service
quality
 faster responses to
opportunity
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innovation
niche
favored purchasing
agreements
greater marketing
expenditures
extensive experience
with suppliers
are in fast growing
industry
Where Do Entrepreneurs Get Their Ideas?
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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%)
5% 4%
20%
71%
Replicated or
modified an idea
encountered through
previous employment
Source: 100 founders of the 1989 Inc. *500* fastest growing private companies.
Sources of Ideas for a New Business
Your Job
Your Hobbies
Personal Observation
Casual Observation
Deliberate Search
Publications
Inventor’s Shows, Trade Shows and
Conventions
Patent Brokers and Product Licensing
Information Services
Friends, Acquaintances, and Other Social
Contacts
Federal 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
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Brainstorming
Attribute Listing
Brainstorming
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A process of detaching the analysis of ideas from
the actual development of ideas
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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
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Changing the way you look at something in
order to find new uses for it.
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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
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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
•CClanning
AtmosFEAR
Egonomics
Be Alive
Anchoring
EVEolution
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Shirley Robert’s Best Businesses
for Beyond the Year 2000
1. Self-diagnostic medical tools
2. Affordable organic foods
3. Educational books, videos, and CD-ROMs
4. Technology-training centres
5. Customized information services
6. Anti-aging cosmetics
7. Pet-related products and services
8. Financial services tailored to women
9. Activewear for aging adults
10. Home-safety devices
Copyright © 2000, McGraw-Hill Ryerson Limited
How to Select the Right Opportunity for You
Step 1: Identify Your Business and Personal
Goals
Step 2: Research Your Favourite Industries
Step 3: Identify Promising Industry Segments
Step 4: Identify Problem Areas and Brainstorm
Solutions
Step 5: Compare Possible Solutions with Your
Objectives and Opportunities in the
Marketplace
Step 6: Focus on the Most Promising
Opportunities
Copyright © 2000, McGraw-Hill Ryerson Limited
Characteristics of the “IDEAL” Business
Requires no investment
Has a recognized, measurable market
A perceived need for the product or service
A dependable source of supply for the
required inputs
No government regulation
Requires no labour force
Provides 100% gross margin
Buyers purchase frequently
Continued
Copyright © 2000, McGraw-Hill Ryerson Limited
Characteristics of the “IDEAL” Business
(Continued)
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
Copyright © 2000, McGraw-Hill Ryerson Limited