FINDING BUSINESS

OPPORTUNITIES
Business Enterprise Simulation
 WHAT IS AN OPPORTUNITY?
An opportunity is a favorable set of circumstances that
creates a need for a new product, service or business.

An opportunity has four

essential qualities:
• In this module, you will learn how to find a strategic and
systematized way of finding the right business. This module will
help you choose the right business. You will start by observing the
environment of the business that you will choose. Then you will
identify your internal strengths, or the factors inherent to an
entrepreneur such as his or her resources, talents, skills, attitude,
and leadership. You will also use a systematized Opportunities
Attractiveness Matrix (OAM) to help you in choosing the right
business. Initially, you will be required to identify five business
opportunities. Thereafter, you will have to select the one which
you think is best. Next, you will choose the appropriate research
methodology in determining the demand and market
acceptability of your chosen product or service. Your ultimate
goal will be to finalize the most feasible business to venture in.
 SCANNING THE MARKET
• The entrepreneurial process - or simply, the process of venturing into
business - formally begins with a scan of the market to find business
opportunities from macro environmental sources and within the realms
of the entrepreneur's community or locality. The first step is for the new
entrepreneur to list down, ideally, five business opportunities which he
or she can possibly venture into. Then the entrepreneur, using a
systematized criteria to be discussed later in this module, must reduce
these five opportunities to one only. The entrepreneur must focus on a
business idea that he or she thinks is most viable and with the least
number of risks. Thereafter, the entrepreneur must devote his or her
time establishing, growing, and managing this chosen business.
“Entrepreneurs are those that find and recognize good business opportunities. The question is, how do you train
yourself to identify opportunities that will earn you money?
The reality of the matter is that this is tricky even for the most experienced entrepreneurs. Even if you do your due
diligence, there is still the chance that things won’t work out for you and you’ll have to move onto new ventures.

How To Recognize Good Business Opportunities

When it comes to online business, there are really only a few things you need to be thinking about. With a physical
brick-and-mortar store, you have to be thinking about location. With online business, location is online. With a retail
location, you have to be thinking about pricing and competitiveness. With online business, price is a mere triviality if
you do your research and offer a product that people are gung-ho for. But there are still some things you should be
taking a look at. A good online business opportunity is one where:

• The product or the service solves a problem. It’s important to build a business around real pain points that people
are experiencing.
• You have the resources you need to get started. With online business, you don’t necessarily have to spend a lot of
money to get up and running, but it’s still a good idea to take a look at the assets available to you, including
finances, resources, and connections. Obviously, the more you have to leverage, the faster and easier it will be to
legitimize your business.
• There is an opportunity to work with others. Finding a partner isn’t easy, but it is worthwhile. If you have the
opportunity to work with someone that complements your skills and experience, it is far more likely to be a
worthwhile pursuit.
• The timing is right. When it comes right down to it, this is an ineffable quality of a good business opportunity. For
things to work out, a lot of things have to line up, including how much time you can dedicate to your business,
what the market is asking for, and so on.”
 EXTERNAL SOURCES OF BUSINESS
OPPORTUNITIES
There are numerous external sources of business opportunities. These external
sources are the external forces in the budding entrepreneur's environment.
Among them are the following:
• sociocultural factors
• technological advancements
• economic growth or decline
• politics and legal factors
• industry trends
• new discovery or new knowledge
• futuristic or unexpected opportunities
• consumer preferences, including preferences of digital customers
• competitors
• societal problems or irritants in the marketplace
• physical location of the entrepreneur
 The entrepreneur must not be overwhelmed by these external
factors, instead, he or she must choose only the most viable or
compelling business opportunities present in the environment. In
scanning the external market, the entrepreneur must look closely at
the immediate environment-specifically, the locality or community
where he or she intends to conduct the business. Focusing on one
locality only will help simplify the process of external scanning as
opposed to doing an extensive scan of the surrounding locations
right away. However, in today's digital age, the entrepreneur can
also perform an external scan on a national or international scale,
including the digital behavior of potential customers. A scan of such
scope is made possible by technology, particularly, laptops and
netbooks, the Internet, and cellular phones or smartphones.
 CASE 1
• Mr. Antonio Castañeda is a graduate of information technology (IT) who is
currently living in Makati City. He worked at an IT company for five years. Mr.
Castañeda has no prior entrepreneurial experience, but he strongly believes
that he can venture into business and succeed.
• Recently, he read from a 2015 international magazine that Makati City is the
selfie capital of the world. The magazine mentioned that 70 percent of the
Internet traffic from Makati City originates from mobile devices such as
tablets and smartphones. Mr. Castañeda also found out that nearly every
resident in Makati City owns a smartphone, and that on average, a
smartphone owner spends at least three hours per day using his or her
gadget.
• In addition, Mr. Castañeda learned that by 2020, Makati City will have
more than 1 000 000 smartphone users who will use their devices not only
to take and post selfies on social networking accounts, but also to
access mobile banking, shop online, listen to music, watch videos, and
read news and other texts. Additionally, Mr. Castañeda's research
revealed that smartphones after approximately two years need some
form of repair or enhancement already.
• Mr. Castañeda is now interested to explore business opportunities in
Makati City considering all the details he has learned. His initial idea is to
establish a business in a mall in the Central Business District of Makati.
While Mr. Castañeda believes that he can be a successful entrepreneur,
he remains wary of the risks of putting up a business, particularly for a first
timer like him.
 External Source of Business
Opportunity
• Sociocultural factors
• Technological
advancement
• Industry trends
• Physical location of the
entrepreneur
• Consumer preferences,
including preferences of
digital customers
• Irritant in the marketplace
Specific External Source of Potential Business Opportunity
Business Opportunity
In Makati City, smartphones • Smartphone/tablet
are used to take selfies, distribution business
access mobile banking, shop • Smartphone/tablet
online, listen to music, watch accessories business
videos, and read news and
other texts. A smartphone
owner in Makati City spends
an average of three hours per
day using his or her gadget.
Smartphones work fine for Smartphone/tablet repair
approximately two years. business (service)
Thereafter, they need some
form of repair or
enhancement.
 CASE 2

• Mrs. Maritess Bonifacio had been a banker for five years. But she
resigned from work after she got married and had her first child. She
resigned so she could focus on raising her son. One day, while her son
was sleeping, Mrs. Bonifacio was channel surfing when she chanced
upon a news feature being shown. The news feature was about virtual
assistants, or freelancers or home-based online employees.
• While watching the program, Mrs. Bonifacio discovered that virtual
assistants work at home using a computer connected to the Internet
to serve the needs of foreign employers. According to the program,
foreign employers prefer this setup because it is cheaper for them to
operate rather than to hire regular employees.
• Mrs. Bonifacio also found out from the program that the
Philippines is currently one of the major sources of virtual assistants
in the world, with over 1 000 000 Filipinos serving various foreign
markets worldwide. After watching the news feature, Mrs.
Bonifacio did more research and she found out that virtual
assistants in the Philippines earn an average of $5 per hour and
that most of the jobs were related to accounting, finance,
marketing, and sales. She also discovered that this trend of hiring
virtual assistants is expected to continue for the next 5 to 10 years,
thus giving opportunities for Filipinos to work online instead of
going abroad or working in office-based jobs.
 External Source of Business
Opportunity
• Economic growth
• Unexpected opportunity
• Consumer preference
(including digital customers) continue in the next 5 to 10
• Industry trend
Specific External Source of Potential Business Opportunity
Business Opportunity
A virtual assistant in the Virtual assistant
Philippines earns an average
of $5 per hour.
This trend is expected to Online freelancer training
agency
years, giving opportunities for
Filipinos to work online instead
of going abroad or working in
office-based jobs.
 INTERNAL SOURCES OF BUSINESS
OPPORTUNITIES
There are also various internal sources—the entrepreneur's strengths or
assets that drive him or her to pursue a potential business of business
opportunities. These internal sources are the following:
• Talents, hobbies, skills, expertise, or academic background
• Financial capacity
• Processes/operational capacity
• Leadership and people management skills
• Entrepreneurial attitude/character
• Vision and strategy
• Identifying business opportunities from internal sources is easier to accomplish
because at the onset, the entrepreneur already knows his or her strengths, so
he or she can list these down without devoting too much time.
CASE 3
Mr. Carl Aquino has a degree in literature and has been into poetry
ever since he was a kid. He is a tremendously talented poet who
specializes in composing love poems for couples. Last Valentine's Day,
he and his friends set up a poem booth during the college fair. In their
booth were a netbook, specialty paper, envelopes, and a printer. He
was pleasantly surprised when several couples proceeded to their
booth and asked him to compose love poems. He charged P100 for
each love poem. He typed each poem on his netbook using a free
desktop publishing software. He added designs and graphics--
sometimes pictures of the couples themselves passed on through a
flash drive or via Bluetooth to the poem before printing it on specialty
paper. Carl felt appreciated every time a couple came by their booth
to ask for a poem.
 Internal Source of Business
Opportunity
• Hobbies and skills
• Processes or operational
capacity
Specific Internal Source of Potential Business Opportunity
Business Opportunity
• Carl Aquino has been into • Poem store (in parks,
poetry ever since he was a schools, offices)
kid. He is a talented poet • Alternative business: digital
who specializes in poem store
composing love poems.
• He has a netbook, a printer,
and specialty paper.
 CHOOSING THE RIGHT PRODUCT
OR SERVICE FOR THE MARKET
After scanning the external and internal markets for business opportunities, the
next step is to validate if, indeed, the initial business opportunities you have
listed are really feasible or doable. As you have learned in your
entrepreneurship course, a compelling business opportunity must contain four
important elements:
1. Market potential - The business presents superior value to customers.
2. Financial feasibility - The business is a potential cash cow.
3. Competitive advantage - The business solves a compelling problem, issue,
need or want.
4. Entrepreneur's resources - The business matches the entrepreneur's skills,
resources, and risk appetite.
• To find out if your potential business venture satisfies the four
elements, you can make an OAM. The OAM, as its title suggests,
details the “attractiveness,” feasibility, or viability of an
opportunity in terms of market potential, financial feasibility,
competitive advantage, and entrepreneur's resources. The term
attractiveness is synonymous with business feasibility or business
viability. It is at this stage when you, the would-be entrepreneur
together with a partner checker (a person who will objectively
assess your data and eventual OAM), must research on the
attractiveness of each element. The data must be derived from
reliable sources such as, among others, government Web sites,
scholarly research journals, news articles, and credible
documentaries or magazines. Data can also come from an
astute observation.
• As mentioned previously, there should be another person-the
checker-aside fro the budding entrepreneur who will check this
OAM to determine the real attractiveness opportunity. There are
times when the would-be entrepreneur gets too excited,
especially if he or she already has a decision in his or her mind, in
such a case, the OAM becomes prome to, among others, biased
analysis, unreasonable expectations, and rushed assessments.
When this happens, the resulting OAM will likely be unreliable.
• In preparing the OAM, all the important components must be
listed and weighed accordingly by the entrepreneur (and then
checked and reassessed later on by the designated checker).
The components of the OAM differ from one type of business to
another, nevertheless, the high level opportunity attractiveness
factors remain the same: market potential, financial feasibility,
competitive advantage, and entrepreneurial resources.
• The components must be graded based on the degree of its
attractiveness as follows:
5 - Highest Potential
4 - High Potential
3 - Neutral
2 - Low Potential
1 - Lowest Potential
• Refer to Case 1. Try to verify if, indeed, the initial business
opportunities listed are really worth the while of the budding
entrepreneur.
• The four elements of OAM have equal weights of 25 percent
each, but since competitive advantage and
entrepreneurial resources are linked to each other, these
must be combined, thus giving them a shared weight of 50
percent. These weights will be multiplied to the degree of
attractiveness specified in the previous paragraph to arrive
at the potential score per element. Then to arrive at the
total attractiveness of the opportunity, just add the results
per element.
 TESTING THE MARKET

• The next valuable step is to test the target market. Marketing

research plays a vital role in this step because, as the saying
goes, “The devil is in the details." If an entrepreneur misses
important details, these missed details could pose potential risks
and could be a major cause of the business's downfall.
Therefore, the entrepreneur must understand comprehensively
the customers' demand and the market acceptability of the
product or service he or she will offer.
• Since marketing research is a difficult undertaking that requires
an ample amount of resources, the entrepreneur must choose
the most effective and efficient research methodology,
including research sampling and data processing.
 MARKET RESEARCH

1. Come up with a clear marketing research objective.

This objective should include how to get the

marketing data and how to interpret these data.
Objectives should always follow the S M A R T – Specific,
Measurable, Attainable, Realistic, and Time-bound – rule.
Having a broad objective will mean more resources,
more time, and more wastage; therefore, an objective
should research effective and efficient.
2. Choose the research design.

This step is essentially selecting the most effective and

efficient type of research design that will help the entrepreneur
meet his or her research objectives. The following are some
research designs commonly used in marketing research:
• Exploratory - This research design is qualitative research that aims
to explore undefined or vague research subjects. Examples
under exploratory research include focus group discussion or
FGD and interview
• Descriptive - This research design is a quantitative research that
aims to acquire data or specific interest through quantitative
means. A survey is an example under descriptive research.
• Causal - This research design aims to understand causal
relationships between variables. It is the most specific research
design. Experiment is an example under causal research.
3. Design and prepare the research tool.
• IF FGD will be used, the questions to be asked by the moderator should
be carefully prepared and the participants should also be briefed on
how to answer the questions. Make sure, too, that proper decorum is
observed all throughout the interview or discussion. If doing a survey,
each question should be directly related to the research objectives. The
questions should also be easily understood by the respondents. Most
importantly, ask questions because you need to know the answers, not
because the answers are just nice to know. If interview will be used, set
an appointment with the interviewee and prepare the questions
diligently.
• Before using the actual research tool, it is advisable to first perform a
user acceptance test (UAT) in which you will ask a select number of
people to participate, for instance, in the survey, FGD, or interview. That
way, you will be able to assess and make the necessary adjustments, if
necessary-first the effectivity of the research tool you have prepared
before implementing it to the target audience (production).
4. Collect the data from the research participants.
• This step is the heart of any research project as it is in this part
where the entrepreneur gathers all the answers to the questions
he or she asked during the implementation of the research tool.
Therefore, data collected must be handled with care.
5. Interpret the gathered data.
• This is the result stage where the entrepreneur converts the data
gathered into useful reports that can be easily interpreted or
read by a research stakeholder depending on their research
output requirements.