Lesson eight

8.1       EXPLORING THE ENVIRONMENT FOR BUSINESS OPPORTUNITIES 

All types of businesses are important to entrepreneurs therefore they can be done as long as entrepreneurs have the ability to carry out such businesses. However, the entrepreneur cannot do all the types of businesses at the same time. 

This means that there is need to make choice of what type of business to be first and this can be done possibly by identifying the business opportunity. 

A business opportunity is an identified situation that can be turned into a real or profitable business. 

A business opportunity always starts as an idea generated by an entrepreneur and supported by his or her ability as well as the available resources. 

It is important that the entrepreneur first considers the viability and feasibility of the business opportunity before getting into the business. 

Note:  Viability of a business refers to the ability of the business to be successful and profitable in a given area. 

Feasibility refers to the ability of the business to be totally acceptable in a given community depending of customs, norms, beliefs etc. of a given society. 

A viable business: they are businesses which are capable of growing and expanding by providing goods and services to customers as well as generating profits to the owner (entrepreneur). 

A feasible business:  It refers to a business socially acceptable depending on the norms, beliefs etc in a certain society. 

8.2       INDICATORS OF A VIABLE BUSINESSES 

  • Availability of adequate market. These are people or groups or companies or other businesses that are willing to buy the products. Existence of such people in a given community makes the business viable.
  • Returns or profits expected: A business is said to be viable when the profits expected from the businesses are above the expenses expected to incur while setting up a business.
  • Availability of adequate resources: These include; capital, labour, power, raw-materials etc. which are needed in the process of producing goods and services. A business is said to be viable when such resources needed to operate it are adequate available.
  • Technical skills: These should be available and affordable in order for the business to be considered as a viable business.
  • Acceptability of the business in the community. A business is considered to be viable if it is accepted in the community where it is to be set. 

8.3       Questions 

  1. Distinguish between, viability of the business and a viable business.
  2. Feasibility of the business and a feasible business
  3. Explain the indicators of a viable business 

8.4       AREAS THAT PROVIDE BUSINESS OPPORTUNITIES TO ENTREPRENUERS.

House-holds:  Here the business opportunities are intended to provide house hold goods and services e.g. plates, clothes, cups etc. the business opportunities that can provide such goods and services include carpentry, farming, security, tailoring for clothes, clinics for medicine and services like medication, tailoring, boreholes for safe drinking water. 

Factors:  Here the business opportunities include metal fabrications, providing utilities like power, water etc. 

8.5       SOURCES OF BUSINESS IDEAS 

Business ideas are the starting point in starting a business. Entrepreneurs can therefore develop business ideas from the following sources; 

  • Contacts from friends and family members. Friend and family members always contact one another in case of any business opportunity available.
  • Technical skills possessed by the entrepreneur: Such skills give them an opportunity to think deep or beyond about situations and ideas and they are able to generate business opportunities.
  • Observations: This is done through observing developments and changes taking place in an area so as to identify the needs that can be turned into business opportunities
  • Market surveys: business ideas can be generated from market research carried out to find out changes in tastes and preferences in terms of colour, size, design, quality etc. these enable an entrepreneur to come up with other business opportunities.
  • Discussions and interactions form other entrepreneurs. The views and ideas of other successful entrepreneurs enables an entrepreneur to come up with other business opportunities.
  • Business Associations: These guide entrepreneurs about to exploit business opportunities, sources of finance and possible market opportunities. 

8.6       Questions 

(a) Explain the sources of business ideas