Exploring Business Opportunities Assignment

-Ramachandran T, Section A, PGBE Batch 17, EDI

1. How will you identify viable business opportunities? Describe in detail steps involved in the
process.
The existing business opportunities can be identified through the following steps:
Step 1: Preparation of personal profile
Step 2: Development of Opportunity selection(OS) Framework
Step3: Generation of ideas
Step 4: Snap investigation of ideas
Step 5: Evaluating in terms of OS framework and shortlisting of ideas
Step 6: Pre-feasibility studies
Step 7: Opportunity Selection
Preparation of personal profile:
Personal profile describes the basic details of the person such as his education, work experience, his
area of interest and personality. It is also necessary that the individual highlights his objectives of
establishing the enterprise, his current investment preparedness, level of risk taking attitude and his
personal considerations.
Development of OS Framework:
The development of OS framework mentions the following:
Investment
Technological Sophistication
Managerial / Organizational Needs
Market and competition
Sector Preference
Govt. Intervention/ dependence
Implementation time
Profitability
Degree of risk and its form
Location
Personal Considerations
Taboos/Religious sentiments
Life Style Trader in Agra
Relative Importance of Money Restaurant in Ahmedabad
Amenability to takeover by children
Speculative Orientation Eye on land & building
Generation of Ideas:
The ideas can be generated from the following sources:
Natural resources
Existing/anticipated industries
Market-driven
Service sector scanning
Extension/modification of present work content
Creative effort and
Other ways

Snap Investigation of Ideas:
Reading material and journals relevant to the opportunity must be read. The investigation should
answer what exactly is the product or services, its application, possible scales of production/operation,
project cost corresponding to a given scale of production/operation, market, unit sale price, degree of
technological complexity, expected annual turnover and expected profit margin.
An information sheet on a given idea should be arrived and that should have the estimates of the above
mentioned.

Evaluation in terms of OS framework and short listing of ideas
Evaluation can be done after the snap investigation of ideas. The viability can be assessed in terms of
the OS framework done. But however, it is not an ideal evaluation as there is always a room for intuitive
judgment and gut feeling.
There can also be some answers found for the questions like whether there can be learning and grip
over the business; what are the key determinants of success and risk factors.
At this stage, one can, often, ill-afford the cost of a comprehensive project-investigation. So, you attach
considerable importance to well-meaning judgment of persons supposedly knowledgeable about a
given opportunity. You should, of course, cross check such judgment.

Pre-Feasibility Study
The purpose of this study is to satisfy regarding the viability of the project, without incurring too
much cost/effort on the exercise. This is an optional stage because, in the course of initial evaluation or
shortlisting,that collected enough information or carried out sufficient/enthusiastic about the shot-listed
idea that you go in for a full-scale feasibility study. It depends on the circumstances
Opportunity Selection
This is the most critical point in the whole OIS process the culminating point. Until now, it
was exploration, elimination, information-gathering and analysis. But after this it is upon investigation
and the opportunity is selected.
2. a) What are the Sources of Business Ideas?

The various sources of Business ideas are as follows:
1) Natural Resources
It is logical to look for ways of converting natural resources into profitable enterprises. Following
are gamut of natural resources:
Forest
Horticulture
Agriculture
Agro-Waste
Marine Or Aqua
Mineral
Live Stock
Wind
Sun
Human
So, while identifying opportunities based on natural resources, it would be beneficial for you to
pay attention to the following:
(i) Exploitation- Feasibility
(ii) Resources-quantification and life
(iii) Resource specification
(iv) Resource stability
(v) Critical infrastructure
(vi) Commodity/Trading dimension
(vii) Legal dimension
(viii) Other dimension

2) Existing/Anticipated industries
The existing industries might give ideas of the following:
Similar project
Raw material for existing industry
Further processing of output of existing industry
Capital goods for existing industry
Project based on waste or by-product of existing industry
Packaging material for existing industry
Project based on skills/technology developed
While identifying opportunities based on existing industry, one is advised to keep the
following in view:
Outlook For Existing Industry
Ancillary-Parent Industry Syndrome
Captive Arrangements
Nature Of Decision-Making
Projects In The Pipeline
Motivated Feed-Back
Look Beyond Local Industries For Market
Well-Entrenched Non-Local Supply Industries
3) Demand-driven or Market-driven Opportunities
Technological advancement, constant upgradation of transport and communication facilities
and growing globalization, all these combine to make opportunity identification, a market-
centred process. Under the market-driven approach, market itself becomes the basis for
opportunity identification. The following methods are popular:
Trade-flows
- Industrial / services / consumer products
- Kerala coconut / rubber products

import substitution
- Import data, particle boards / toys, consumer
Goods, mosquito racket / glass beads
growth products
- healthcare products & services, processed foods, entertainment products and
innovative products like; courier services, plastic water tank, sachets, ro plants, rte
vegetables

Product positioning/differentiation
- Product features / applications / price & quality
- Groundnut - roasted / vacuum packed, coated
(detergent powder), coconut hair-oil loose to
Bottle, namkins, vicks vaporub, mosquito spray /
Vapouriser
exports
- Follow others ready-made garments, diamond, leather products
- Limitations of Indian sources: gn aflatoxin, spirits, mango, sugar, large diamond, basis
for imports: pollution, not-grown / manufactured, low labour cost, overseas market
details (www.cbi.nl, trade fairs)
4) Service sector Scanning
Service needs of an existing industry present an excellence avenue for local entrepreneurs.
These are the needs for which one prefers a local arrangement. The list of the needs is truly long
and includes fabrication, paint, insulation work, lift and shift transport and so on. There is a
prevailing trend in the large scale sector to farm out service contracts rather than make
permanent investment in physical facilities and/or manpower. The demand-supply statistics on
service enterprises are woefully inadequate.

5) Extension/modification of present work-content
Thus is a popular and natural approach for identification, particularly in the context of small
ventures. It assumes the following forms:
Skill-based self-employment such as Carpenter, electrician etc.
Marketing to production such as traders, salesmen
Managing or working in a similar enterprise such as supervisor, chemist, engineer (atul-dyes
and intermediates)

6) Creative effort

The following are some patterns of creative opportunity identification:
Development of problem-solving through products/service like aqua guard, domestic flour mill
Exploitation of new technology or material to meet a widely felt need like vending machines,
PVC footwear, soya milk
Creating a demand for a psychological product like mood ring, cease fire
2. b) List out the errors commonly made by entrepreneurs in identification of opportunities
The errors commonly made by entrepreneurs in identification of opportunities are :
Lack of ownership
Catch the first bus
Inaccurate information
Ahead of times
Unwillingness to step back
2. c) What information sources you will use to make a market survey of your consumer
product?
The sources of information can be any of the following:
Market related
Technical analysis
Financial feasibility
Business opportunity identification
Govt. policy & procedure
It is useful to refer to a ready list of
Over 700 industries reserved for small scale sector
Opportunities in the nature of low-technology/low-investment ideas
Over 300 ideas for mini/micro enterprises
Nearly 200 service-enterprise ideas

3. a) Expand the following:
ONGC Oil and Natural Gas Corporation
CAGR Compound Annual Growth Rate
DRDO Defense Research and Development Organization
CII Confederation of Indian Industry
FICCI Federation of Indian Chamber of Commerce and Industry
MSME Micro Small and Medium Enterprises
MOFPI Ministry Of Food Processing Industries
UNIDO United Nations Industrial Development Organization
KVIC Khadi and Village Industries Commission
CFTRI Central Food Technological Research Institute
IREDA Indian Renewable Energy Development Agency
CSIR Council of Scientific and Industrial Research
NHAI National Highway Authority of India
WTO World Trade Organization
BARC Baba Atomic Research Centre

3. b) List out natural resources used to identify business opportunities and give three
business ideas on each natural resource.
Forest Resources
Major forest produces like Timber, Wood, Bamboo, Rubber etc.
Minor forest produces like Honey, Medicinal and Aromatic plants, Natural Fibers, Minor Oil
Seeds, Tree leaves and bark
Opportunity: Designer furniture; Herbal cosmetics and Forest tourism
Horticulture
Business Opportunities based on inputs, outputs and waste/ by-products.
Inputs like nutrients, insecticides, nursery plants, irrigation facility, tools and equipments.
Outputs like fruits, vegetables, wastes and by- products
Business Opportunities in processing of fruits, vegetables and by-products; Floriculture and
value-added products like dry flowers, extraction of oils, flower based pharma and nutra
compounds, natural dyes and pot porri (a mixture of dried, scented flowers, leaves, seeds, stems
& roots of flowering plants)
Agriculture
70% population depends on wide variety of agriculture operations
Agriculture produces like paddy, wheat, oil seeds, sugarcane, cotton, pulses etc. offers huge
opportunity in primary and secondary processing, storage, transportation, etc.
Inputs like certified seeds, fertilizer, pesticides, irrigation facilities, agricultural implements,
consultancy and services like soil and water testing, agronomy, hydrology, etc
Agro Waste
Agro waste such as paddy husk, straw, wheat straw, sugarcane bagasse, cotton stalk, groundnut
husk etc. offer vast opportunities for processing and converting into commercial and industrial
products
Business opportunities depend on the availability and quality of agro waste in a given location

Marine and Aqua
Long coastal line offers wide and varied business opportunities based on marine coastal line
Products such as salt, gypsum, marine chemicals, sea weeds, fish and marine animals offer vast
industrial opportunities.
Tourism related business opportunities such as water sports, diving, surfing, boating, etc. are
commercially exploited.
Mineral
India has vast resources of minerals such as coal, iron ore, bauxite, mica, lime stone, marble and
granite stone, soap stone, graphite, mineral oil and gas etc.
Each mineral depending on available quantity and quality offers business opportunities in
mining, processing, transportation and other logistics
Mining equipments, tools, testing laboratory, safety equipments and gadgets, prospecting
services etc offer huge opportunities
Live Stock
Livestock includes poultry, cow, buffalo, goat, sheep etc.
Poultry Farms, Dairy Farms, Raising other animals, Slaughter house, animal feeds etc. offer huge
opportunities as it is always in short supply.
By-products such as bones, leather, horns and huffs, animal hair, blood etc. also are of
commercial importance
Wind/solar Renewable Energy
Renewable sources of energy are very important for green environment.
Wind power generation is possible where sufficient wind velocity is available to run wind mill.
Opportunities are in construction, erection, installation, repairs and maintenance of wind mills.
Solar energy offers opportunities to generate electricity and run gadgets such as PV Cells based
water pumps, lighting, battery chargers, roof top power generation, lantern, solar hot water
systems and dryers etc
4. a) Draft out your personal profile with justification. How it is useful to identify
opportunity?
1. Name : Ramachandran T
2. Education : B. Tech (Electrical and Electronics Engineering)
3. Work experience Shift Team Leader in Coated Glass
Manufacturing Plant at Saint-Gobain Glass India
Limited (25 months)
4. Other Academic / Practical Interests Manufacturing and Tourism
5. Personality Hard-working. Dynamic. An upper middle-class
background. Parents and close relatives are either
job-holders or professionals. Initial financial
assistance and moral support assured by parents.
But cannot expect support either in terms of term-
loan tie-up, market- entry or emergency financial
assistance.
6. Objectives for establishing an
enterprise
To earn a lot of money. There is optimism that if
he works hard and makes sacrifices now, he will
reap a good harvest in a few years.
7. Investment Preparedness Own fund of Rs.15 lacs can be committed to
business
8. Attitude to Risk-taking Low risk attitude
9. Personal Considerations Wants to set it up in / around the city where he
lives
- Partnership based on the skills of the partner

4 b) List three names of

[i]Export Promotion Councils
Electronic & Computer Software Export Promotion Council
Gems & Jewellery Export Promotion Council
Handloom Export Promotion Council
[ii]Financial Daily
The Economic Times
The Financial express
Business Line
[iii]Journals on Trade and Industry
Business Today
Fortune India
India today
[iv]Industries Associations
Internet Service Providers Association Of India
Indian Small Scale Paint Association
Silk Association Of India
[v]Chambers of Commerce
The Cochin Chamber Of Commerce & Industry
Indian Merchants Chamber
Gujarat Chamber Of Commerce And Industry
[vi]Institutions/organizations helping entrepreneurs
City and Industrial Development of Maharashtra Ltd. Mumbai (CIDCO)
Pondichery Industrial Promotion Development and Investment Corp. Ltd.
Madras Export Processing Zone
[vii]Trade Fairs
Emat International
Electronica India
IITF India International Trade Fair

5. a) Explain the following terms:
Breakeven Point:
Break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or
gain, and one has "broken even." A profit or a loss has not been made, although opportunity costs have been
"paid," and capital has received the risk-adjusted, expected return.

Payback period:
Payback period in capital budgeting refers to the period of time required to recoup the funds expended
in an investment, or to reach the break-even point.

Scalability:
Scalability is the ability of the business to grow and accommodate that growth.

5. b) Would you prefer to use Primary information or Secondary information in preparing a
Project Profile? Why?
The information universe contains many different types of information. Some of this information is
characterized as primary information, whilst some is characterized as secondary information.
Primary Information is first-level literature such as journal articles, conference papers, and theses.
It also includes direct data, theories, or artifacts.
Secondary Information reflects upon, analyses, criticizes or reports upon the primary literature. It
includes review articles, textbooks, and some databases
For our project profile to be of a good standard, we should ensure that we strike an effective
balance between primary and secondary sources. Relying too much on one type of resource may
create problem in our business.

5. c) Indicate whether the following items are:
(a) Cost of Project
(b) Means of Finance
(c) Fixed Cost
(d) Variable Cost
(e) None of these.

You may write your answer against each item as a, b, c, d or e.

Sr.
No.
Item Answer (a, b, c, d or e)
1 Promoter Funds B
2 Land A
3 Telephone expenses D
4 Tuition fees paid for brothers
education
E
5 Business Inauguration expenses A
6 Loss of stock due to rain water
damage
E
7 Security deposit to landlord A
8 Raw Materials D
9 Trade mark renewal fees C
10 Packing material consumed D