BUSINESS OPPORTUNITY IDENTIFICATION AND SELECTION ENTREPRENUERS BACKGROUND AND

BUSINESS OPPORTUNITY IDENTIFICATION AND SELECTION

ENTREPRENUER’S BACKGROUND AND INVESTMENT EDUCATIONAL QUALIFICATIONS AND EXPERIENCE POLLUTION CONTROL LAWS LOCATION AVAILABILITY OF SKILLED MANPOWER OPPORTUNITY IDENTIFICATION AVAILABILITY OF RAW MATERIALS GOVERNMENT POLICY INFRASTRUCTURAL REQUIREMENTS TECHNOLOGY AND EQUIPMENT MARKET POTENTIAL 2

Steps in Arriving at Business Opportunity ØGenerating Ideas Ø Screening Process Ø Formulating the Concept of the Business

Generating Business Ideas

Generation of Business Ideas Focus on …. ü Is there any natural resource which you can commercialize (Natural Resources)? ü Are there any existing enterprises you can supply goods or services to (Existing/ Expected Enterprises) ? ü Are there any existing enterprises doing so well that it would be worthwhile to do the same (competition) ? ü Are there any products/ services for which the market demand will continue to expand(market driven/ Market-Extension)? ü Does the present work suggest any business opportunity (Creative Effort)?

Generation of Business Enterprise Idea contd. Natural Resources and Business Opportunities q. Forest o Major forest produces like Timber, Wood, Bamboo, Rubber etc. o Minor forest produces like Honey, Medicinal and Aromatic plants (vis-à-vis Ramdev), Natural Fibers, Minor Oil Seeds, Tree leaves and bark

Generation of Business Enterprise Idea contd. q. Forest o Bamboo works

Generation of Business Enterprise Idea contd. q. Forest o Bamboo works

Generation of Business Enterprise Idea contd. q. Forest o Bamboo works

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities contd. q. Agriculture üAgriculture produces like paddy, wheat, oil seeds, sugarcane, cotton, pulses etc. offers huge opportunity in primary and secondary processing, storage, transportation, etc. New Opportunities: Mushrooms, ü Inputs like certified seeds, fertilizer, pesticides, irrigation facilities, agricultural implements, consultancy and services like soil and water testing, agronomy, hydrology, etc) o New Opportunity : Dip Irrigation, Herbal/organic pesticides, manures

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities contd. q. Horticulture o Inputs like nutrients, insecticides, nursery plants, irrigation facility, tools and equipments. o Outputs like fruits, vegetables, wastes and by- products o Processing of fruits, vegetables and by-products

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities contd. q. Agro-waste o processing and converting Agro waste such as paddy husk, straw, wheat straw, sugarcane bagasse, cotton stalk, groundnut husk into commercial and industrial products o New Opportunity: organic fertilizer for gardening

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities contd. Paddy husk

Paddy straw Generation of Business Enterprise Idea contd.

Agro-waste: SUGAR PLANTATION – OPPORTUNITIES AND BY-PRODUCTS Generation of Business Enterprise Idea contd. Sugarcane Plant Sugarcane: Not Available For Processing Prime Sugarcane: Available For Processing Thrust, Leaf & Inflorescence Consumer Market Gur Making Sugar Making Molasses Bagasse Alcohol & Chemical Fuel, Paper, Cattle Feed, particle board Khandsari Making Press Mud Wax, Polish, Manure Note: Molasses: Thick dark syrup produced by boiling down juice from sugar cane; especially during sugar refining Bagasse : The dry dusty pulp that remains after juice is extracted from sugar cane or similar plants.

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities Contd. q. Marine or Aqua o Products such as salt, gypsum, marine chemicals, sea weeds, fish and marine animals offer vast industrial opportunities. o Tourism related business opportunities such as water sports, diving, surfing, boating, etc. are commercially exploited.

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities Contd. q. Desert and arid land o Tourism related business opportunities such as festivals, lodging, foods etc e. g. Kutch festivals

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities Contd. q. Mineral (clay, iron and steel) o minerals resources such as coal, iron ore, bauxite, mica, lime stone, marble and granite stone, soap, stone, graphite, mineral oil and gas etc. o Mining, processing, transportation and other logistics o Mining equipments, tools, testing laboratory, safety equipments and gadgets, prospecting services

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities contd. q. Live stocks o Live stocks includes poultry, cow, buffalo, goat, sheep etc. o Poultry Farms, Dairy Farms, raising other animals, slaughter house, animal feeds etc. o By-products such as bones, leather, horns and huffs, animal hair, blood etc. also are of commercial importance.

Natural resources and Business Opportunities contd. Generation of Business Enterprise Idea contd. Live-stocks Cattle Sheep/Goats Poultry Piggery Horse Farm Fishiculture BUSINESS OPPORTUNITIES → Cow/Buffalo/Feed → Veterinary drugs/medicine → Milk & Milk Products e. g. Cottage cheese etc. → Hides & Skins → Horns & Huffs → DCP/Bone Meat/Fish & Poultry Feed → Ossein/ Gelatine → Feed → Broilers, Layers → Egg Powder → Semen Emu/Ostrich/ Rabbit/ turkey

Generation of Business Enterprise Idea contd. Natural resources and Business Opportunities contd. q. Wind/ Sun o Renewable sources of energy are very important for green environment. o Wind power generation is possible where sufficient wind velocity is available to run wind mill. o Solar energy offers opportunities to generate electricity and run gadgets such as PV Cells based water pumps, lighting, battery chargers, roof top power generation, lantern, solar hot water systems and dryers etc. o Opportunities in construction, erection, installation, repairs and maintenance of wind mills.

Generation of Business Enterprise Idea contd. Existing/ Expected Enterprises and Business Opportunities o Similar Business o Raw Materials o Parts and Components o Further Processing o Packing Material o By-product use o Problem-solving products o Service Needs o Growth products and services o Scarcity of products/ Services o Other markets o Export

Generation of Business Enterprise Idea contd. Existing/ Expected Enterprises and Business Opportunities contd. BUSINESS OPPORTUNITIES BASED ON EXISTING INDUSTRIES Inputs Required - Raw materials - Hardware/software - Repairs & Maintenance Services Required - Training of Manpower - Transport - Laundry - Canteen - Schools/ - Entertainment - Event Management - House keeping Output based B. O. (Downstream products) Waste-By-Products Based B. O. e. g. Readymade Garments from cloth produced By Textile mill - Iron turning from lathe machines - Fly-ash from coal Based Power Plant - Catalyst waste from Petrochemicals/ Fertilizer plant - Wood dust from Saw Mills e. g. Paper Mill to paper conversion products such as notes books, paper bags, corrugated boxes, etc.

Existing/ Expected Enterprises and Business Opportunities contd. Generation of Business Enterprise Idea contd. Industrial development-based opportunities : A Checklist üIs there any established industry in your area? industry? What is the performance rate of this üCan you pursue any business ventures in your area, which though uncommon, are yet very successful? üWhat kind of raw materials, packing materials, components and services the local industries require? Are any of these procured from outside your area? ü Do any of these pose problems in terms of availability quality, delivery schedule, etc. ?

Existing/ Expected Enterprises and Business Opportunities contd. Generation of Business Enterprise Idea contd. Industrial development-based opportunities : A Checklist üDo the local industries generate any waste or by-products? What are these used for? Who buys these? üAre there non-local suppliers to a given industry with whom the industry is quite happy? üAre there any new and important industries being established in your area? What are they likely to buy or manufacture? • Are there any infrastructure projects coming up? What are they likely to require?

Existing/ Expected Enterprises and Business Opportunities contd Waste Management Generation of Business Enterprise Idea contd.

Existing/ Expected Enterprises and Business Opportunities contd Generation of Business Enterprise Idea contd. Waste Management (Contd. . ) METAL WORKER IN JAPAN LOADS DISPOSED CELLULAR PHONES ONTO A CONVEYER BELT WHICH SENDS THEM TO CRUSH AND RECYCLE. WORKSHOP SALVAGED 50 KG GOLD AND 1000 KG SILVER FROM 3. 5 MILLION DISPOSED CELLULAR PHONES AND ALSO RECOVERED 20 M. T. OF BRONZE.

Generation of Business Enterprise Idea contd. DEMAND/MARKET DRIVEN BUSINESS OPPORTUNITIES q TRADE-FLOWS ü Industrial / services / consumer products e. g. ü Kerala: coconut , rubber products ü Gujarat: Diamond, jewelry, cloths q IMPORT SUBSTITUTION ü Import data, toys, consumer goods, mosquito racket / glass beads q GROWTH PRODUCTS ü Healthcare Products & Services, Processed Foods, Entertainment Products And Innovative Products Like; Courier Services, Plastic Water Tank, Sachets, Water Ro Plants

Generation of Business Enterprise Idea contd. DEMAND/MARKET DRIVEN OPPORTUNITIES contd. q. PRODUCT POSITIONING/DIFFERENTIATION ü Product features / applications / price & quality e. g. groundnut – roasted, coated detergent powder, coconut hair-oil loose to bottle, napkins, vicks vaporub, mosquito spray q EXPORTS ü‘Others’ Ready-made Garments, Diamond, Leather Products and so on üBasis For Exports: Pollution, Not-grown / Manufactured, Low Labour Cost, Overseas Market Details (Www. Cbi. Nl, Trade Fairs) q. COMPETITITIVE ADVANTAGE, NOT JUST POTENTIAL ü Cost of production, freight, subsidies, plastic products efficiency, glass beads, ceramic products, paper & 29

q SERVICE SECTOR ü Low investment ü Low risk ü Highly localized ü High employment generation ü IT services such as BPO engineering services and R&D, and software products ü Telecom sector q. Tourism ü Medical tourism, rural tourism are some new streams fuelling the growth of tourism. ü Hotels and restaurants sector

Generation of Business Enterprise Idea contd. CREATIVE EFFORTS q Development Of Problem-solving Products/Services Flour Mill e. g. Aqua Guard, Domestic q Exploitation of New Technology Or Material To Meet A Widely Felt Need e. g. Vending Machines, Footwear, Soya Milk q Creating a Demand for a spiritual Product q Technical Extension of an established product concept e. g. Mosquito mat, courier service, mobile

Generation of Business Enterprise Idea contd. CREATIVE EFFORTS contd. q. Creating a demand implicit in emerging life style e. g. farm house, time-sharing, recreation clubs, q. Introducing products/services alien to a region/ country e. g credit cards, prefabricated houses, diapers, malls q. Value-addition through technical or managerial innovation e. g. pan masala sachet packing, instant tea/coffee, q Group entrepreneurship e. g. LIJJAT PAPAD, AMUL q. VISION- Tata Steel, Nirma, 32

Generation of Business Enterprise Idea contd. EXTENSION/MODIFICATION OF PRESENT WORK-CONTENT ü ü ü Skill-based self-employment Carpenter, electrician etc. Marketing to production Traders, salesmen Managing or working in a similar Supervisor, chemist, engineer enterprise 33

Screening Process

Screening Process Personal-Level Screening Firm-Level Screening

Personal-Level Screening ü Personal Preference (committed) ü Educational & Training Background ü Work experience (degree of expertise & knowledge) ü Business Network & Contacts (buyers, suppliers or creditors) ü Family Support ü Personal Values (non-monetary)

Firm-Level Screening ü Market ü Technology ü Availability of Skills ü Availability of Raw Materials ü Financial/Capital Requirement ü Profitability ü Government Support ü Information

Formulating the Concept of the Business

Formulating the Concept of the Business 1. Resource Analysis : The Resource Analysis where strengths and weaknesses are identified, indicates what the firm is capable of doing at the start of the business. Resources o o o o Money Materials Machines Methods Manpower Management Moment (time) Strengths Weakness

Formulating the Concept of the Business contd. 2. Environmental Analysis: The Environmental Analysis gives an indication whether the business can survive or not. Environment Strengths Weakness o Socio-cultural o Technological & technical o Economic o Legal o Natural o Political o Peace & order o Population trends o Government program e. g. MSMEs (Finance, Technical, and Marketing) o Global environment

Formulating the Concept of the Business contd. Business Opportunities need to be filtered through a Five-layer Sieve o Researching your industry – how can you learn more about your chosen industry and about the resources that are available to help you? o Market assessment – is there a market for your product or service? If so, how much income can you expect to derive from it?

Formulating the Concept of the Business contd. Business Opportunities need to be filtered through a Five-layer Sieve contd. o Profitability assessment – how much will starting a new business cost you? Can you afford a lengthy “red link” period following start-up, as well as periodic gaps in cash flow? Can you afford to fail? o Financing assessment – will you be able to obtain the necessary financing for your business? If so, from where? o Legal assessment – what potential legal liabilities are you exposing yourself to by starting a new business? Are the costs of protecting yourself worth the trouble?

Formulating the Concept of the Business contd. Before Starting your Own Business üDoes the idea fire your motivation and is it adequate enough to keep you going for next one to two years? üIs it a viable business proposition in your area? üDoes it match the needs of your customers - local or otherwise? üCheck it out with basic market research üTest it out in the market üConsult with experts üLook out for competition in the field üIS IT A SUNRISE INDUSTRY? üEvaluate your business opportunity üProject conceptualization

Acknowledgement: This penetration was made on a FDP (Jan. 2014) at EDI, Ahemdabad. Certain editing (addition and deletion) have been done on the same.