Entrepreneurship

OPPORTUNITY SEEKING, SCREENING, AND SEIZING

Lesson 2

A. OPPORTUNITY SEEKING

Entrepreneurs are innovative opportunity seekers. They have endless curiosity to

discover new or different ideas and see whether these ideas will work in the
marketplace. A good opportunity seeker has the following three main ingredients:

1. Entrepreneurial Mind Frame – allows the entrepreneur to see things in a very

positive and optimistic light in the midst of crisis or difficult situations. Instead of being
discouraged, the entrepreneur is able to use these problematic situations as inspiration
in creating something innovative. In fact, in Chinese writing, the word crisis is composed
of two characters, the first means danger while the other means opportunity.

2. Entrepreneurial Heart Flame – it is an entrepreneur driven by passion, they are

drawn to find fulfillment in the act and process of discovery. It is also about the
emotional intelligence of EQ which is often manifested in the entrepreneurs efforts to
nurture relationships with customers, employees and suppliers. It also looks after the
interests of his or her people by motivating and encouraging them to be the best they
can become. This creates a caring culture within the organization that brings about
synergy among the people working toward a common vision.

3. Entrepreneurial Gut Game – refers to the ability of the entrepreneur to sense

without using the five senses. This is also known as intuition. The gut game also
connotes courage, or in the local dialect, “lakas ng loob”. It is simply confidence in one’s
self and the firm belief that everything is within reach so long as you aspire for it.

DIFFERENT SOURCES OF OPPORTUNITIES:

1. Macro Environmental Sources

- this source of opportunities is divided into five categories known as SPEET

a. Socio- Cultural Environment – includes the demographic and cultural

dimensions that govern the relevant endeavor like population, beliefs,
tastes, customs, and traditions.

b. Political Environement – defines the governance system of the country or the

local area of business. It includes all the laws, rules and regulations that
govern business practices as well as the permits, approvals and licenses
necessary to operate the business.

c. Economic Environment – supply and demand forces mainly drive the macro
economic environment. They are the same factors that drive the interest
and foreign exchange rates that fluctuate with the movement of the
market forces.

d. Ecological Environment - includes all natural resources and the ecosystem,

habitat of men, animals, plants and minerals. There is a growing
awareness in the world today that will make this factor more and more
important for countries, industries, and business.

e. Technological Environment – new scientific and technological discoveries,

which often lead to the launch and commercialization of new products
 with superior attributes or to rendering the old ones obsolete , are the
entrepreneurs nightmare. In such case, the entrepreneur is left with no
choice but to invest in new technologies in order to keep up with
competition.

2. Industry Sources
- the next biggest source of opportunities are the industry and the market. One
of the most difficult aspects about industry analysis is defining what constitutes
an industry in the first place. The proper classification of what industry the
enterprise is competing in is important if the entrepreneurs intention is to
define who are the relevant customers, who are the direct and indirect
competitors, and what are the critical characteristics of the market as to the
quality of products or services to be delivered. Participants include:

a. Rivals or competitors
b. Suppliers of input
c. Consumer market segment
d. Substitute product or service
e. All other support and enabling industries

3. Market Sources
- can be discovered from increased or decreased demand as well as higher or
lower supply. Market trend analysis is also conducted by determining the
critical variables, which would most
likely affect the future directions of the industry. An example of this is the battle
of the value,combo meals, otherwise known as “more-or-less” strategy in the
fast food restaurant industry.

4. Consumer Preferences, Piques and Perceptions

- Consumer preferences refer to the tastes of particular groups of people. The
consumer’s age, culture, and status affect their preferences. In contrast,
consumer dislikes refer to the things that irritate customers. Either way, the
entrepreneur can explore opportunities brought about by consumer preferences
or dislikes.

5. Other Sources
- another potential source of opportunity is the entrepreneur’s own set of skills
or expertise or hobby. Here are the list of other sources of opportunities
1. Customer preferences change over time.
2. People’s taste that have evolved over the years
3. What piques customers is great source of opportunities
4. Battle of the mind, battle of the heart, battle for the wallet
5. The longer the customer wants to use the product, the greater the chances of
acreating loyalty
6. Opportunities abound in shaping consumer perceptions or occupying spaces in
their minds or places in their hearts that have not yet been filled
7. New inventions, new systems and work processes, new insights about the
human psyche, new applications for old knowledge, new revelations
about how the physical world works, new interpretations, new
combinations based on the convergence of previous technologies.
8. Determining personal preferences and competencies lay the foundation for a
new business venture
9. Unexpected occurrences in both the external and internal environment of the
Enterprise. Indicate the significant changes are happening and
Opportunities are sprouting.

B. OPPORTUNITY SCREENING
 - in this opportunities, entrepreneur has to first consider his or her preferences and
capabilities by asking three basic questions:
1. Do I have the drive the pursue this business opportunity to the end?
2. Will I spend all my time, effort, and money to make the business opportunity work?
3. Will I sacrifice my existing lifestyle, endure emotional hardship, and forego my usual
comforts to succeed in this business opportunity?

Twelve Criteria for Screening Opportunities:

The 12 Rs of Opportunity Screening

1. Relevance to vision, mission and objectives of the entrepreneur.

2. Resonance to values.
3. Reinforcement of Entrepreneurial Interest.
4. Revenues
5. Responsiveness to customer needs and wants.
6. Reach
7. Range
8. Revolutionary Impact
9. Returns
10. Relative Ease of Implemetations
11. Resources Required
12. Risks

The Pre- Feasibility Study

- the idea is to focus on a few key items that could make or break the business
concept. The entrepreneur must go down to the details and take time to consider
the following factors that are contained in a pre-feasibility study.

A. Market potential and prospects

B. Availability and appropriateness of technology
C. Project investment and detailed cost estimates
D. Financial forecast and determination of financial feasibility

Four Critical Financial Statements:

1. Income Statement- a financial statement that measures an enterprise’s
performance in terms of revenue and expenses over a certain period.
Revenues – Expenses = Income or Profit (Loss)

2. Balance Sheet – it identifies and looks for the assets, liabilities and equities. The
resources invested into the enterprise in the form of liabilities and stockholder’s
equity must be equal to the total value of the assets or the enterprise itself.
Assets = Liabilities + Equity

3. Cash Flow Statement

4. Funds Flow Statement

C. OPPORTUNITY SEIZING
- the final stage after seeking and screening the opportunities. At this point of time,
the entrepreneur has an idea where he or she will locate the business and how he or
she will market the product or service. Thus, it is important for the entrepreneur to
establish the positioning of the business enterprise in the marketplace.