Opportunites vs Ideas
What is opportunity identification?
This is the process entrepreneurs use to figure out whether their idea can actually succeed
in the real world. Just having an idea isn’t enough—it must be backed by a real opportunity.
What is the business concept?
The Business Concept is the bridge between a raw idea and a full Business Plan.
What are resources?
These are all the lucrative factors that the organization needs to function. These consist of raw
materials, capital, staff, knowledge and expertise, services, energy, fixed assets, etc., which are
combined to produce a tangible/intangible product for consumption, for which they are expected to
provide financial returns to the Entrepreneur.
What are the advantages of acquiring resources?
No repayment is required
Investors share in profits
May bring advice and support
Less expensive than some other methods
What are the sources of supplier financing?
Partnerships, outsourcing, leasing, contract labour, temporary staff
What are the different things that can affect opportunity?
Changing Demographics, emerging markets, new technologies, regulatory and social changes and , market issues
What should the business concept include?
What is being offered?
What benefits does it provide?
Who are the customers?
How will they buy it?
What distribution channels will be used?
What are the three main resources?
Human Resources, Financial Resources, Physical Resources.
What are the disadvantages of acquiring resources?
Risk of loss if the business fails
Investors may gain influence over decisions
Control may be reduced as more funds are raised
Family and Friends
Entrepreneurs often begin with their own savings.
When this is not enough, they may turn to relatives
or friends for assistance.
What is leasing?
Leasing allows a business to obtain use of a fixed assets such as machinery, equipment and motor vehicles without purchasing. The lease is legally binded and outlines the terms of the contract including payments to be made by the leasee.
How does changing demographics affect opportunity?
Population size
Age groups
Ethnic backgrounds
Birth and death rates
Employment levels
Benefits of the business concepts?
Helps shape key parts of the Business Plan
Highlights areas for research
Makes it easier to explain the idea to customers, suppliers, and investors
Helps spot challenges early and plan for them
What are human resources?
These include people’s skills, talents, knowledge, and expertise, which are used both during the production
process and in the operations of other areas in the business. Hiring skilled staff is very beneficial to the
success of any organization, even when resources are limited. The recruiting process is very costly and time-
consuming. However, the benefits that result from attracting and retaining highly skilled workers go far
beyond a ‘pay cheque’. They must be properly supervised/evaluated to ensure the entity’s goals are being
met.
What are external sources?
Debt capital, leveraging and angel funding
What is outsouring
When an Entrepreneur allows other businesses to carry out specific functions on their behalf, instead of carrying out these activities internally, it's engaged in outsourcing. Most businesses transfer some of their non-core activities to other businesses in order to sever costs. Some activities include Accounting and Janitorial Servies.
How does new technologies affect entrepreneurial opportunities?
When new technologies are developed, they create opportunities for entrepreneurs to:
Upgrade how they produce goods or services
Improve what they already offer
These changes help entrepreneurs stay relevant and competitive in the market. Plus, new technologies can open doors
to entering new markets that weren’t accessible before
What are the sources of Business concepts?
New products or services
New processes or markets
New organizational structures
New sales/distribution channels
New development approaches (e.g., tech-savvy solutions like online textbooks)
What are the expertise needed for human resources?
General Management Expertise, marketing expertise, sales expertise, technical expertise, financial expertise
Why are these external sources of business finance important?
External sources of business finance are critical for entrepreneurs and organizations that need funding
beyond their internal resources. These sources provide capital from outside the business and each carries its
own advantages and disadvantages. Debt capital is one of the most common forms. It involves borrowing
money from financial institutions or lenders, usually with a fixed interest rate. The benefit is that the
entrepreneur retains ownership of the business, but repayment must be made regardless of performance.
Smaller businesses often face higher interest rates because of the risks involved, and loans may be secured
or unsecured. If repayment fails, lenders can seize assets, making debt capital both useful and risky.
How can the Barter system be beneficial to a firm experiencing a poor Cash Flow position, and what is one other key advantage of engaging in bartering?
The Barter system is beneficial when a firm's Cash Flow position is not good because it allows the company to exchange goods and services for other necessary items without the use of money. This helps operations continue without spending limited cash reserves. Another key advantage is that firms get the chance to get rid of excess assets, such as old equipment and machinery, by trading them for things they need.
How do regulatory and social changes affect opportunities?
—like offering tax breaks, creating new tax systems, or introducing new rules—these shifts
can open up opportunities for entrepreneurs.
Smart entrepreneurs watch for these changes and move quickly to take advantage of anything that could benefit their business.
shifts in how society normally works—whether in institutions (like schools or families) or in everyday behaviors.
When these changes happen, people start wanting different goods and services that support the new way of living. That shift in
demand creates opportunities for entrepreneurs to meet those new needs.
What are the steps in developing a business concept from an idea?
Screening of ideas
choosing the desired idea
considering sources of business concept
developing business concept
carrying out feasibility study and preparing business model
develop market research and planning
What is the distribution channel and how does it help in the entrepreneurial process?
Distribution channels are the paths a product takes to reach the consumer. A direct channel is when
the customer buys straight from the producer, which removes middlemen and usually lowers the
cost. An indirect channel involves middlemen such as wholesalers and retailers. Each middleman adds
their own profit, which increases the final price.
What is angel funding?
Angel funding is another external source. Angels are wealthy individuals who invest in start-up ventures in
exchange for equity or convertible bonds. They often fill the gap between the entrepreneur’s own funds and
larger institutional financing. Angel investors are willing to take high risks because start-ups are at an early
stage of development, but they usually demand involvement in decision-making to protect their investment.
This makes angel funding both supportive and demanding, depending on the entrepreneur’s perspective.
Identify and describe two potential problems or challenges that may arise when two or more businesses enter into a Joint Venture arrangement.
Two potential challenges in a Joint Venture arrangement are:
Equity Ownership, Control, and Distribution Issues: Problems may arise concerning equity ownership, operational control, and the distribution of profits or losses between the participating parties.
Organizational Culture Change: Building the right relationship requires significant time and effort from management, leading to a necessary change of Organizational Culture that must be carefully managed to prevent a decline in productivity.