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Introduction
Opportunities can exist on paper or in the form of ideas. Opportunities usually related to the entrepreneurs work experience,hobbies, or social environment. Opportunities can be found in many ways and in many places. Many people see opportunities but only entrepreneur acts upon them.
business idea is a business concept that results in profits if it is turned into a tangible product or service. opportunity also defined as the potential to create something new that involves change in knowledge, technology, economy, politics, social, and demographic conditions.
Observation ~ data is gathered by observing and recording the respondents actions in activity.
Interviews
- field research covers interviews with customers, suppliers, competitors, and industry experts. - interviews conducted in two ways : ~ personal interview ~ telephone interview
Surveys
- refers to the development of a short questionnaire with respect to the targeted product. - the questions should be very specific.
b) Secondary source involved gathering data that have already been compiled and are available. it is initially conducted for one purpose using existing data which is :~ reliable ~ available references ~ mass media and electronic media although secondary source relatively inexpensive, they often become outdated and outmoded, given that they are used for a purpose other than for which was intended.
Reliable existing data - cab be used by entrepreneur is existing data which is reliable. - example : information obtained from annual report of companies.
Reference - an entrepreneur can use reference such as publish information from then library, internet and so on.
Mass media and electronic media - advertisement and information in the newspaper, magazines and internet. Information on raw materials can be a business opportunity for an entrepreneur.
c) Performing self-assessment
Industrial linkage
Competition Legality Fixed capital requirement, working, capital and growth opportunities Business risk, financial risk such as credit, cash liquidy, loan and currency exchange
Technological breakthrough
Networking
Demographics
Are the characteristics of people in a population. If entrepreneur studies the demographic of his customer, he/she will be in a better position to predict the product or servis that they will buy. Needs and wants are based on the structure, income, and taste of population.
Local Resources
Still an abundance of local resources that are untapped and have the potential to become investment opportunities. Fountains and natural attractions at certain location can be turned into business ideas
Industrial linkage
An entrepreneur can identify the industry that requires input from other industries. This will develop linkage among industries of the same sector or different sectors.
Technological breakthrough
New technological breakthrough can create new markets and opportunities for business
Performing Self-evaluation
Self-evaluation must be made before making a commitment. Should be based on the ~ individuals experience ~ knowledge ~ skills ~ financial ability ~ interest ~ networking ability
Experience
An entreperneur runs a business thats suit his experience in the profession. The intelligence to find an opportunity from past experience can be a way to gain success in business.
Knowledge
Entreperneur has to be equipped with the knowledge on a operating a business.
Skills
Entreperneur must have the necessary skills in carrying out his job. Skills usually born from experience and knowledge. Advantages that is difficult to obtain.
Financial ability
Business must be parallel with the financial ability of the entrepreneur. Capital is the most basic aspect to think about before opening up a business. Start a small business with entrepreneur existing capital. Growing business will help the entrepreneur in securing financing for expansion.
Interest
Is an important aspect Must be taken seriously It can give self-confidence Entreperneur will be able to concentrate on his profession
Networking ability
Entreperneur needs to know how to reduce unnecessary procedures and bureucracy in the business. Should be mindful.
Competitors Those who are in the same business Have a potential to serve the entrepreneur s customers. Entrepreneur can identify competitors by asking customers from his existing business. Competitors are identify ~ the entrepreneur should identify the strength and weeknesses of his competitors in term of organizational terms.
Capital requirement Capital the amount invested in the company. Three types of capital : a) Fixed or permanent capital Fixed capital is the amount of the capital that been used to buy the asset of in the company.
b) Working capital Referred to as operating capital Also known as assets of business that can be used to supports business operations. Often used to pay bills and salaries, to buy inventories and others.
c) Plantation or growth capital Not related to current business situation. Used to help small business change its primary direction.
Risk Define as a period of uncertainly experienced by a business as a result of unforeseen events which lead to either poor earnings and resultant failure. Entrepreneur should be aware of the risks.
Risks face by entrepreneur based on the following aspect : The level of difficulties in entering the business field The size or amount of capital to be invested The amount of profit that can be gained from the revenue The ability and competency of existing workforce or human resources in managing the business Management of energy resources The products potential to penetrate the market
Two types of risk : i. Business risk ii. Financial risk i. Business risk The factors which have the tendency and potential of adversely affecting a business operation and ultimately its profitability. Two types of business risk : i. controllable ~ can be manage by entrepreneur ii. Uncontrollable ~ almost impossible to prevent
ii. Financial risk Risk associated with any form of financing Four categories : i. Credit risk ~ risk when clearing or settlement of payments are not made when due. ii. Liquidity risk ~ risk of insufficient liquid resources to make all payments on the due date. iii. Loan risk ~ a form of financing whereby entrepreneur borrows money as a source of capital to conduct his business. iv. Currency exchange risk ~ the high flexibility and changes in currency value impose a high risk.
Funding
Learn how to obtain funding from friends,family members financial institutions or the government