22 Opportunities for Entrepreneurand Identifying & Selecting the Best Opportunity

Shivani Mahajan

1. Learning Outcome

After completing this module students will be able to:

i. Understand the concept of Opportunity.

ii. Understand the Need for Opportunity Identification & Selection

iii. Know the various business opportunities

iv. Understands the Opportunity Identification and Selection

An entrepreneur has innumerable opportunities available to him but he has to identify the best opportunities out of the existing opportunities. One can have a large list of the available opportunities from the magazines, Internet, Government, Friends, relatives and so on. To select the best business opportunity, one needs creativity, skills and vision to analyse the available information. It is also important for an entrepreneur to identify the opportunities and also to select the best opportunity. At times, entrepreneur may be in dilemma and may find one opportunity more lucrative and the other time can also find other opportunity more profitable. Therefore, entrepreneur has to choose the best opportunity by applying his mind and soul so that he/she can make profits.

3. Concept of an opportunity

In general, the word opportunity means a favourable situation or a circumstance provided to do something for the advancement or progress. Therefore, business opportunity is a favourable chance available for an entrepreneur to run the business and earn profits at a given point of time in particular environment. For an entrepreneur opportunity means a product or a project. Therefore, identification of opportunity, product or a project is similar.

An entrepreneur may come across a large number of profitable opportunities but he has to select the most possible and hopeful project. Therefore, Project identification and selection are the important phases for an entrepreneur.

Peter Drucker has explained the three types of opportunities in this context, as following:

a. Additive Opportunities: these are the opportunities which are realted to the use of the available resources without making any changes. Therefore, there is very less risk in such opportunities.

b. Complementary Opportunities: These are related to the introduction of the new ideas which directs the change in the available arrangement. There is a greater risk in such opportunities.

c. Breakthrough Opportunities: These are related to the huge change in the existing arrangements which thus involve huge risk.

A good opportunity has two characteristics:

1. A good and wide market scope i.e. easy demand and supply of the product.

2. Heavy return on investment i.e good profits.

A business opportunity must be evaluated from the view point of production, technology, demand, profits, society etc.

4. Need for Opportunity Identification and Selection

Enterprise and entrepreneur are complimentary to each other. Therefore, the success of an entrepreneur depends on his suitability of the enterprise and at the same time the successful enterprise can be started if the entrepreneur has the characteristics and skills to handle that enterprise. Therefore, there is a need for the opportunity identification and selection because if opportunity is not selected on the basis of the skills and there is non- suitability between the entrepreneurs and the enterprise then there will be business failure.

5. Business Opportunities in various sectors

There are innumerable opportunities exists in the business environment but one requires a vision to identify the available opportunities. Various business opportunities available are like following:

Textiles: India is famous for its textiles from the very beginning and every region has its own unique style of dressing which thus offers a wide and diversified market. Moreover, India has a huge potential to grow as a market leader in the textile sector. Surat, Ludhiana etc. has emerged as an export hub of the textiles. Therefore, a better understanding of the textile industry and the customer needs helps in discovering the potential it holds.
Software: India is having large number of the software engineers with leading business in software. With growing business in the software industry and the increasing business outsourcing from the foreign companies is providing tremendous opportunities for the entrepreneurs to invest in this sector.
Tourism: It is one of the most promising and fastest growing industries as India has the potential for tourism development. India covers 15% of the world population and shares only 0.40% in the world tourism. It is not because of the lack of tourism in the country but because of the undiscovered tourism opportunities. Therefore, entrepreneurs has the opportunity to helps in discovering the tourism potential as it is being estimated that India can become the number one tourist destination of the world.
Engineering Goods: India is one of the largest exporters of the engineering goods. Therefore, entrepreneurs can earn by meeting the increasing demand of the engineering goods.
Automobile: India has become a hub of producing low cost automobile parts and is very rapidly becoming hot spot for the automobile industry. India is manufacturing large number of cars with strong engineering know-how but still there is some undiscovered segments which offers the wide opportunities to the entrepreneurs.
Ayurveda and Traditional medicines: India is known for its ayurveda and herbal products. With the increasing demand of the ayurvedic products, it is offering a unique business to the entrepreneurs.
Packaging: Indian business is growing in every field like agriculture, consumer goods, infrastructure etc. So, there is a huge demand of the packaging material like plastics. So there is a big opportunity for the entrepreneurs in this sector also.
Healthcare sector: Indian healthcare sector is at the growing stage and with the growth in the medical tourism this sector will offer wide prospects for the entrepreneurs as there will be cost-effective treatments.
Media: The media industry is offering a wide scope to the entrepreneurs. There is a boom in television, print media, advertising, radio etc from the past few years. Therefore, this particular sector is the most promising sector as it is about to grow at a double rate. According to the report of FICCI (Federation of Indian chamber of Commerce and Industry), innovation, marketing, Distribution, competition, digitisation etc will give boost to the media and entertainment sector in the coming years.
Floriculture: With the growing demand for the fresh flowers, this sector is opening up a new opportunity for the entrepreneurs. Although Indian Floriculture segment is small and unorganised, but as it has a huge potential and with the increasing demand one can think of business in this sector.
Toys: this industry is the evergreen industry. India has the potential to make safe and cost effective toys. Although china is giving a tough competition in this sector, but the Chinese toys contains toxics where India has an advantage to produce safe and durable toys.
Biotechnology: After the software industry, biotechnology sector has the highest potential and offers opportunity for the entrepreneurs. It has been proved that agricultural biotechnology ahs a huge impact on the productivity. Therefore, huge importance is being given to the research and development to produce crops which are resistant to heat, cold, insects etc. It also helped in producing improved quality food products. With the increasing importance of the agro-biotechnology, it is providing various options to the entrepreneur to start a business in the field of horticulture, poultry, dairy, agriculture and production of fruits and vegetables.
Recycling Business: E-waste is rising at an unmanageable speed with the development in the technology. According to the UN report, computer waste will grow about 500 % from 2007 to 2020, alone in India. Therefore, this alarming problem opening up new business opportunity for the young entrepreneurs to manage e-waste and develop techniques to dispose the e-waste.
Energy Solutions: India has a huge population and so are the consumption needs of the populated country. It is difficult for the nation to generate power with the limited resources. Therefore, in the power starved nation like ours, there is a need of the cost-effective and power saving methods. Government has already initiated steps to use cost effective methods by implementing the national Solar Mission. Therefore, solar engineering is a big opportunity for the entrepreneurs.
Organic Farming: This sector is prevalent in India since long but with the increasing demands of the organic products especially in foreign is opening up wide opportunity for the Indian entrepreneurs. Although farmers in India are focusing on the organic farming, but still are not able to meet the increasing demand. Therefore, there is a huge scope for the entrepreneurs rto invest in this sector and thus earning large benefits.
Corporate demands: As large companies are opening up their offices in India, therefore, there is a huge demand of the formal clothes. Moreover, there is an increasing trend of the corporate gifting, so one can try his luck in this sector also.
Social Ventures: India is a hub of social problems. Social entrepreneurs are the persons who provide solutions to the social problems. Therefore, to provide solutions to the social problems, entrepreneurs have started their social ventures. For e.g: SEWA, Lizzat pappad etc. though it is one of the challenging tasks but is offering opportunity to the young entrepreneurs to step in.
Franchising: After the Liberalisation, Privatisation and Globalisation in 1991, India is opened economy. Franchising helps in spreading brands all over the world. So, it is a good opportunity for the entrepreneurs to invest in franchisee business as it has well maintained image and low risk.
Education and Training: Competition in the education is increasing. There is a good scope in the education sector and training sector with the increasing demand and competition. Students prepare endlessly for the competitive exams be it for the government exams or training courses. Therefore, entrepreneurs has the scope to provide the training and education facilities at the competitive rates. Moreover, India has the potential to attract students from the abroad which can open up large opportunities for the Indian entrepreneurs in this sector.

6. Identifying a Business Opportunity

An entrepreneur should be the opportunity seeker and his most important task is to Identify, discover and to select the best business opportunity. A good opportunity must be capable of converting into a feasible project. An entrepreneur may come across multiple opportunities but he has to select the most promising and possible opportunity because the success of the enterprise depends on the proper identification and selection of the project.

Project Identification is the foremost step for starting a new business but is one of the most difficult tasks. Therefore, project identification is the process of selecting the few possible projects out of the several opportunities available.

To identify the possible projects, one has to go through the following steps:

6.1. Idea Generation:

This is the first and most important stage in project identification. It is an intellectual process that requires vision, initiative, scheme and inquisitiveness. The Project idea can come out from one or more following sources:

a. Trade fairs and trade journals.

b. through experience of others in the particular business,

c. success stories of friends, relatives.

d. Surveys, reports, newspapers, periodicals.

e. detailed analysis of demand and supply

f. Government policies and support for the development of the various sectors.

e. Increasing demand of certain goods and services in the domestic market as well as foreign market.

f. Easy Availability of raw material, skilled labour

g. invention of new technology.

Idea can be generated with the help of the following methods:

a. Brainstorming

b. Focus Groups

c. Problem inventory analysis.

a. Brainstorming: This technique was originally used by Alex Osborn in 1938 in an American company to persuade innovative thinking in a group of six to eight people. Through this method a large number of ideas are generated without any criticism. In this method, people are encouraged to produce as many ideas they can generate without any criticism and evaluation. It works on the principle of no criticism and quantity raises quality.

b. Focus Groups: This group consists of 6-12 members belonging to different socio-economic backgrounds to focus on the particular matter. The group has a moderator to have the detailed discussion. Ideas are generated and detailed discussions are carried on to identify the excellent ideas.

c. Problem Inventory analysis: This method is more like a focused group method but in this method along with generating ideas, it also considers the problem a product faces. In this method, focus group is provided with the list of the problems in a general product category and then identifying and discussing the problems of the products in that category.

Idea generation phase helps in opportunity scanning and opportunity identification and thus helps in identifying and idea and thus converting it into an opportunity. At the idea stage, there is a just an Idea of what to do but at the opportunity stage, entrepreneur actually converts his idea into opportunity by gaining insight into what actually to do. For e.g: Arjun and Raman are friends. Raman is working a company and Arjun is still searching for the job. Raman suggested Arjun to start a business, this is called an Idea. Later on after analyzing the various businesses, when Arjun has decided to go to start a transport business, then it is an opportunity. Therefore, this phase helps in identifying the opportunity.

6.2. Choosing the right line of business:

Once the idea is conceived then prospective entrepreneur has to go through the detailed analysis to choose the right type of business and has to input his cost and time to examine the potential of his ideas. To analyse, he has to:

a. study the environment of the product

b. future prospects of the demand of the product.

c. availability of technology.

d. access to technical know-how

e. access to the market.

f. availability of raw material and skilled labour

g. availability of customers

h. complexity of legal provisions

Identifying a business opportunity is complex and very risky task. Therefore, prospective entrepreneur has to go through various analysis. Before selecting the best opportunity, an entrepreneur explore and analyse all business opportunities. For analyzing the available business opportunities, following explorations can be done:

a. Environment exploration: This means the study of the environment factors that has an impact on the business. This includes the study of the economic factors like gross domestic product, national income, per capita income, social factors like demographic features, lifestyle, values, beliefs etc. technological factors like, labour intensive technology, capital intensive technology etc. political environment like, political parties, stability of the government, personal interest of the politicians etc and the legal environment i.e. laws and regulations.,

b. Present business exploration: this exploration is related to the present scenario of the business like the consumption pattern, demand pattern, income pattern etc.

7. Opportunity Selection

As soon as the project identification ends, project selection starts. In the project identification phase, an entrepreneur may have identified different opportunities which he considers good for him. In this phase, he/she has to select the best opportunity out of the identified ones which is most promising and most profitable under the given conditions. Project selection refers to the balanced choice of a project where the cost ratio is low and profits are more. This is the most important phase as the whole project depends on this phase only.

The prospective entrepreneur should conduct SWOT analysis to select the best opportunity. He/she should anaylse the strengths, weaknesses, competitive advantages (opportunities) and challenges (threats) offered by each of the idea. On the basis of this analysis, the most suitable project opportunity is selected. The prospective entrepreneur should select the best opportunity with the help of the following criteria:

a. Investment Size: It means the cost of the project. In terms of Investment, an entrepreneurs should choose between the small scale, medium-scale and large-scale business on the basis of the funds he can raise from the various sources and the amount he is investing. Entrepreneur should choose the project which suits best of his investment.

b. Location: The location of the project should be such that which provides advantages. It should be such that is near to the market, transport facility is easily available. It should be at the places where there are the facilities of Industrial Development Corporation and other agencies. The proposed location should have variety of skilled and cheap human resources.

c. Technology: Entrepreneur should give due consideration to the technology required for the project. He/She should select the project which requires the verified and easily available technology.

d. Equipment: An entrepreneur should choose the best equipments for the project and should take the advice of the experienced consultant. The cost and quality of the equipments should be within the budget.

e. Marketing: An entrepreneur should choose the project which has wide scope to enter into the market and can help in making good market share and profits. He should not go for the projects which are having cutthroat competition and are difficult to enter as a beginner.

f. Selection of the product

An entrepreneur should select the product which he/she thinks will earn profits. He/she should take into account the government policies, present market size, demand etc.

8. Summary

An entrepreneur should give proper time and effort to identify and select the opportunity. Project Identification and Selection is half done in establishing enterprises. Most enterprises fail because of choosing the non-suitable opportunity or do not give due importance to the project identification and selection. Project Identification involves sources and methods of idea generation and Project Selection includes analysis of the identified projects with the help of SWOT analysis. Therefore,, most suitable opportunity is selected to set up a new venture.

Learn More

Few important sources to learn more about Rural Entrepreneurship:

Khankha, S. S. (2013). Entrepreneurial Development. Delhi: S.chand & comapny.
S.Anil Kapoor, S. P. (2003). Entreprteneurship Development. New Delhi: New Age International Publisher.
http://www.yourarticlelibrary.com/business/identification-of-business-opportunity-idea-generation-and-opportunity/40732/
http://www.gdeepak.com/presentations/Business%20opportunity%20Identification%20and%20select
ion.pdf
http://www.slideshare.net/bleongcw/entrepreneurship-1-introduction-identifying-ides-business-opportunities
http://www.ediindia.org/doc/SpecialPDF/chp-6.pdf