CHAPTER 2

ENTREPRENEURIAL
IDEAS
& OPPORTUNITIES
CLO 1
Explain clearly the concept of entrepreneurship, business ownership and procedures in setting up a business in case
study given.

Definition of business idea and

opportunities
Business concept that result in profits if it is
turned into tangible product or service.
Opportunity is the potential to create
something new that involve changes in
knowledge, technology, economy, politics,
social and demographic.
A successful entrepreneur is one who capture
opportunities.

Primary sources of business ideas and

opportunities
Refer to information gathered directly

interview

observation

Primary
sources

survey

experiment

Primary source
Observation

Data is gathered by observing & recording

Observation method-what is happening
E.g.: individual sitting at focus location every day for
a week and counting the numbers of people.

Experiments

Make a number of sample products and provide

them to a small group of customer.
The result of this experiment can be used to
determine how well the product.

Primary source

Interview

Surveys

With customers, suppliers, competitors and

industry experts.
Two types of interview:
-personal :need to be friendly and polite

not to influence the interviewees

responses
-telephone: need to include alternative way to
make interviewee understand the question.
Develop questionnaire wit respect of target
market.
The question should be specified limited and
straight word answer like yes or no, excellent, good
and poor.

Secondary source
Reliable

Existing data which reliable

E.g.: information from annual report

Published information from library, internet and

paid data base services which provide information
References
of market growth, overall industry perspectives
and customer profile.
Mass media &
electronic
media

Advertisement & information in newspaper,

magazine & internet.

Process of recognizing, analyzing and

choosing a business opportunity
There are six major steps in recognizing, analyzing and
choosing a business opportunity.
Step 1
Recognizing customer needs and wants
-entrepreneur has to be sensitive to identify.
customer need and wants.
-a need is something basic in life. e.g. food, clothing, house.
-wants are something that is more than basic need. e.g.
radio, laundry service.

Step 2
Scanning the business environment
Demographic such as population structure, income
and taste.
-demographic is a study of characteristic people in
population .
-predicts the product or service that might bought from
them.
-based on the structure, income and taste of population
-e.g the needs and wants of children will not be same as
adults.
-e.g Malaysia community prefer to buy their meals and
not cook at home. So it increase demand of instant
food.

 Local resources
-there are still abundance of local resources that
are untapped and have potential to be
investment opportunities.
e.g clay that can be used to create vase,
ceramic and others.
New government policies and regulation
-can identify business opportunity by refering to
the existing law and government regulation.
e.g rules and regulation for speed trap, the black
box for express busses.

 Data on import export

-continuous increase in the value and quantity of
imported and exported products and services.
-e.g the pattern of import and export can provide
information pertaining to business opportunities. There is
a chances to offer new product.
Industrial linkages
-identify the industry that requires input from other
industries.
-develop an interaction or linkage among industries.
-e.g. education industry in Malaysia will develop of new
products and services such as stationary, tuition centre
and bus/van service.

 Development projects
-developmental programmed by government or firm
opened up business opportunities.
-e.g. Putrajaya. The government complex created a market
need of product and service.

Technological breakthrough
-create new markets and opportunities for business.
-e.g. hand phone technology
Mass media and electronic media
-advertisement and information in newspaper, internet etc.

Step 3
knowledge
experience

networking

Performing self evaluation

skill

interest
financial ability

Step 4
Assessing society values, community response and
society acceptance.
Step 5
Choosing business opportunities
Legality
-business idea must be approved by the law.
e.g. cigarette business
Competitors
-must really analyze his competitors in industry.
Capital requirement
-any form of employed to produce more wealth firm

 Capital requirement
-any form of employed to produce more wealth firm.
-types of capital:
Permanent capital

Use to buy asset

e.g., building, machine, land

Working capital

Use to support business operation in

short time.
e.g, raw material, pay bill, salaries
Used to help small business

Plantation capital

 Risk
-should be aware of the risk that will be face in the venture.
-risk faced by entrepreneur:
* difficulties in entering the business field
* danger the amount of capital invested
* amount of profit that can be gained
* management of energy resources
* the products potential in market
-two types of risk
* business risk-beyond the control of entrepreneur
* financial risk-credit, level of cash liquidity, loan,
currency exchange
Step 6
Construct the business plan

Fulfilling needs
and interest
Analyzing life
problems
Diversifying
The usage of
goods
Approaches to seeking
business ideas

Observing
changes
in the community
Using the
latest technology
Observing
and establishing
network

Guideline in choosing a business idea

and opportunity
Guideline in
choosing a
business idea
and opportunity

Data collection
and research

Preparation of a
complete business
plan

Establishment
of linkage
or networks

Funding

Hiring of a workforce
if necessary

Confidence and
good time
management