BUSINESS IDEA/OPPORTUNITY

BUSINESS IDEA/OPPORTUNITY

BUSINESS IDEA/OPPORTUNITY

Business idea is an identified situation that can be changed into a real and profitable activity or business.

It is a concept that can be used for financial gain that is usually centered on a product or service that can be offered for money.

Coming up with a business idea for start‐up

 

Every business starts with an idea. That idea is further developed using a five step Process illustrated in the diagram below.

idea

You can decide to take on a business idea because of the following considerations:

  • You have a great idea for a small business and you want to learn how to go about its implementation in order to create a successful small business.
  • You are already running your own small business and you want to learn about how you could make your business more successful.

Indicators of a viable business Ideas/Opportunities

  1. Rate of Return on Investment: The business idea should have the potential to yield high profits, motivating entrepreneurs to pursue it.
  2. Availability of Market: A viable business idea should have a ready market for its products or services.
  3. Availability of Resources: The necessary resources, such as capital, equipment, and skilled labor, should be available to establish and operate the business.
  4. Technical Skills: The entrepreneur should possess or have access to the technical skills required to produce the product or deliver the service.
  5. Legality: The business idea should comply with all applicable laws and regulations. Some ideas are condemned by the laws of the land for instance operating a clinic targeting aborting girls or women is illegal.

Importance of Coming Up with Business Ideas/Opportunities:

  • You need an idea for a successful business venture, both to start a business and also to stay competitive afterwards
  • They respond to market needs, markets are always composed of customers with different needs to be satisfied.
  • They respond to natural threats and scarcities that would affect the businesses and communities as a whole for example lack of water, fuel, pollution, pests, diseases etc
  • They also help in responding to changing fashions and requirements. For example, NOKIA responded by changing buttoned and small screened phones to smartphones that support research and other computer support services.
  • They help businesses in staying ahead of competition. Innovative business ideas can give businesses a competitive edge and help them differentiate themselves from competitors.
  • It helps in exploiting technology to do better things in an effective and efficient manner.
  • Spreading Risk and Allowing for Failure: Generating multiple business ideas allows businesses to spread risk and mitigate the impact of potential failures.
  • Catering to Specific Groups: Business ideas can be developed to cater to the needs of specific groups, such as the elderly, individuals with disabilities, or niche markets. 

Examples of Business Ideas/Opportunities

  • − Setting up a grocery
  • − Setting up a school, hospital, medical center, clinic.
  • − Selling sweet bananas
  • − Starting a poultry farm
  • − Starting a fumigation service business
  • − Opening up a saloon
  • − Starting a restaurant
  • − Starting up a textile workshop

Sources of Business Ideas/Opportunities:

Entrepreneurs generate business ideas from various sources, and out of the many ideas, they select the most promising business opportunity to pursue. Here are some common sources of business ideas:

  1. Emerging New Technology and Scientific Knowledge: The development of artificial intelligence (AI) has led to new business ideas in fields such as autonomous vehicles, facial recognition software, and AI-powered customer service chatbots.
  2. Changes in Consumption Patterns: The growing demand for healthy and organic food products has created opportunities for businesses specializing in these products.
  3. Trade Fairs, Journals, Press, Magazines: Attending trade fairs and reading industry publications can expose entrepreneurs to new products, trends, and business ideas.
  4. Social and Economic Trends: The aging population has led to increased demand for products and services tailored to seniors, such as assisted living facilities and home healthcare services.
  5. Observing the Market Critically: Identifying gaps in the market or unmet customer needs can lead to innovative business ideas. For instance, a lack of convenient and affordable childcare options could inspire an entrepreneur to start a daycare center.
  6. Market Surveys and Discussions with Entrepreneurs: Conducting market research and engaging in discussions with fellow entrepreneurs can provide insights into customer preferences, industry challenges, and potential business opportunities.
  7. Creative Mind and Innovative Skills:  Entrepreneurs with creative thinking and innovative abilities can come up with unique product or service concepts that appeal to customers.
  8. Identifying Businesses That Do Not Meet Customer Expectations:  Recognizing businesses that fail to satisfy customer needs or provide poor service can inspire entrepreneurs to develop improved offerings in the same market.
  9. Newspapers, Magazines:  Reading business and industry publications can keep entrepreneurs informed about new trends, emerging technologies, and potential business opportunities.
  10. Hobbies: Turning a hobby or passion into a business can be a rewarding and profitable venture. For instance, a person who enjoys baking could start a home-based bakery.
  11. Brainstorming:  Conducting brainstorming sessions with a team of creative individuals can generate a multitude of business ideas that can be further refined and evaluated.

Reasons for starting a business

  1. Earning Potential: Business owners have the chance to earn more money compared to traditional jobs, based on their drive, luck, commitment, and ideas.
  2. Autonomy: Entrepreneurs have the freedom to make their own decisions, set their own schedule, and choose who they work with.
  3. Team Building: Business owners can select like-minded individuals to complement their skills and contribute to the success of the venture.
  4. Achievement: Creating a successful business can bring a sense of accomplishment and fulfillment, especially when an idea comes to fruition.
  5. Innovation: Entrepreneurs have the opportunity to implement their ideas, make changes, and profit from those changes if successful.
  6. Learning Experience: Starting a business can lead to valuable knowledge and experience, even if it fails initially. Failures provide opportunities for growth and improvement in future endeavors.

Protecting Your Idea

1. Intellectual Property: Business ideas, inventions, logos, and unique product names can be considered intellectual property if recorded in written, audio, or video format.

2. Legal Forms of Protection:

  • Patents: Exclusive rights granted for a fixed period to inventors of new and useful products or processes.
  • Trademarks: Names or symbols used in trade that are subject to government regulation.
  • Copyright: Exclusive rights regulating the use of original creations, including text, video, audio, and multimedia formats.

3. Importance of Secrecy: Be cautious about disclosing your idea to others, especially those you don’t trust.

4. Written Documentation: Place your idea in writing, including a detailed description and sketches if applicable.

5. Registering Patents and Trademarks:

  • Patents: File a patent application with the appropriate government agency.
  • Trademarks: Register your trademark in the relevant country or region.

6. Applying Copyright: Copyright protection is automatic in most countries and does not require registration. However, adding the copyright symbol (©) to your work is recommended.

7. Notarization: Consider having your written description of your idea notarized for added legal protection. Notarization is the official act of verifying the authenticity of a signature on a document and confirming the identity of the signer.

EVALUATING BUSINESS OPPORTUNITY

The process of evaluating a business opportunity is what is referred to as feasibility study analysis. 

Feasibility study analysis is therefore referred to as a process aimed at assessing the profitability and feasibility of the business opportunity.

Profitability of the business refers to the ability of the business to generate reasonable returns of investment.

Feasibility of the business refers to the ability, applicability and possibility of carrying out the business idea as intended and planned.

Steps in Evaluating Business Opportunities

There are several steps or stages to be considered while evaluating the business opportunity and these include the following;

  1. Objective analysis: This requires the entrepreneur to find out reasons as to why someone chose that business line. This helps in identifying the benefit ability of the business to the operator or the other stakeholders.
  2. Market feasibility: This deals with how the products are being priced, branded or packed, how promotion is being handled, the customer’s perception about products. Ask questions on future market prospects, distribution channels among others.
  3. Technical feasibility: This deals with the production or operations department. Ask questions relating to skills and experience required to perform duty, tools and machinery required, the plant layout, technology, raw materials, storage among others.
  4. Financial feasibility: This deals with finance analysis and questions expected are; how did you finance this business, how much revenue do you get from sales, how much did you spend on fixed sales, how much working capital is required etc.
  5.  Personnel feasibility: Deals with human resource related issues, for example ask question relating to how many workers do you have, how do you motivate them, how much do you pay them, how did you train them etc

Steps in Starting a Business

  1. Deciding on the type of business: After a thorough feasibility study research, one can ably come up with one feasible and profitable business.
  2. Choosing a location: This is very important because a poorly run business can often survive in a good location but even the finest business will fail in a poor location.
  3. Forecasting your sales: Sales forecasting means the size of your market, ie how much your products or services you can expect to sell in the future.
  4. Estimate your costs: After determining the sales forecast for a given period, you have to go ahead and determine the costs of running the business e.g purchase and freight, wages, advertisement, taxes, power, rent, repayments etc
  5. Estimate your profits: After estimating your sales and costs, you will have to calculate your likely profits to be i.e by deducting all the trading and operating expenses from the forecasted sales.
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1 thought on “BUSINESS IDEA/OPPORTUNITY”

  1. Please Nurses revision, update for us the notes here, others are not yet highlighted to be opened. I shall appreciate.
    Thanks a lot for your endless effort to make us learn.God bless you big

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