Chapter 2 ..by Polimas

1. 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.

2. 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.

3. Primary sources of business ideas and
opportunities
Refer to information gathered directly

4. Primary source
Observation
Experiments
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.
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.

5. Primary source
 With customers, suppliers, competitors and
industry experts.
 Two types of interview:
-personal :need to be friendly and polite
 not to influence the interviewee’s
responses
-telephone: need to include alternative way to
make interviewee understand the question.
Interview
Surveys
 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.

6. Secondary source
References
Published information from library, internet and
paid data base services which provide information
of market growth, overall industry perspectives
and customer profile.
Mass media &
electronic
media
Advertisement & information in newspaper,
magazine & internet.
Reliable
Existing data which reliable
E.g.: information from annual report

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. Step 3
experience
knowledge
skill financial ability
interest
networking
Performing self evaluation

13. 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

14. 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
Plantation capital Used to help small business

15. 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 product’s 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

16. Approaches to seeking
business ideas
Fulfilling needs
and interest
Observing
changes
in the community
Diversifying
The usage of
goods
Analyzing life
problems
Using the
latest technology
Observing
and establishing
network

17. Guideline in choosing a business idea
and opportunity
Guideline in
choosing a
business idea
and opportunity
Data collection
and research
Hiring of a workforce
if necessary
Confidence and
good time
management
Funding
Establishment
of linkage
or networks
Preparation of a
complete business
plan