1. Recognizing Opportunity
Chapter 3
Recognizing Opportunity

2. The Main Idea
The ability to recognize new opportunities and to think creatively is essential for success in today’s global market.

3. Current Entrepreneurial Trends
One way to identify business opportunities is to study current trends that provide opportunities for entrepreneurs.

4. Current Entrepreneurial Trends
Internet businesses
social entrepreneurship
service businesses
focus on technology
home-based businesses
outsourcing and strategic alliances
green businesses
corporate ventures 4

5. The Internet has transformed the way business is conducted.
Internet Businesses
The Internet has transformed the way business is conducted.
An online business can reach customers around the world.
online business
a company that conducts business by means of the Internet

6. Service businesses dominate the American economy.
Business services account for the largest part of U.S. economic growth.
services
intangible things that businesses do for consumers that enhance their lives

7. Outsourcing
Outsourcing is hiring people and other companies to handle tasks that a business cannot do or chooses not to do itself.
outsourcing
contracting with other companies for services

8. Benefits of Outsourcing lowers regulatory burden
more efficient
lowers regulatory burden
saves time
speeds up projects
saves money
attracts investors 8

9. A strategic alliance is a partnership among companies.
Strategic Alliances
A strategic alliance is a partnership among companies.
strategic alliance
a partnership formed with another company for the purpose of supplying a product or service

10. A corporate venture is formed within a company.
Corporate Ventures
A corporate venture is formed within a company.
corporate venture
a new venture started inside a larger company

11. Creativity is the activity that results in innovation.
Creativity and Innovation
Creativity is the activity that results in innovation.
innovation
a new way of doing things

12. You generate ideas by thinking creatively.
Idea vs. Opportunity
You generate ideas by thinking creatively.
Opportunities are ideas that have commercial potential.
You can find a good business opportunity by recognizing an unfilled market niche.
niche
a small specialized market
Section 3.1 Understanding Entrepreneurial Trends

13. During brainstorming, ideas are not judged as good or bad.
Thinking Creatively About Opportunity
During brainstorming, ideas are not judged as good or bad.
brainstorming
to think freely in order to generate ideas

14. Watch for Demographic Changes
It is important for entrepreneurs to understand demographics and demographic trends.
demographics
personal characteristics that describe a population by age, gender, income, ethnic background, education, and occupation, among others

15. Sources of Information
trade magazines
specialty magazines
government agencies
trade
shows
Sources
of Information
The
Internet
exhibitions
newspapers 15

16. A trade magazine offers current, industry-specific news.
Consult Outside Sources
specialty magazine
a periodical published for people with special interests, such as sports, camping, or fashion
A trade magazine offers current, industry-specific news.
A specialty magazine offers information about specific topics.
You can use specialty magazines to identify the interests and needs of potential consumers.
trade magazine
a periodical published for a specific type of business or industry

17. Consult Outside Sources
At a trade show, you can learn about new goods and services in a field.
trade show
a gathering or exhibition where vendors and manufacturers introduce new items and promote established products and services

18. The Main Idea
Whether you start a business or buy an existing one, make sure it is compatible with your personal values and goals.

19. Personal Values and Goals
Personal values and goals should be used as a guide when choosing entrepreneurial pursuits.
values
the beliefs and principles by which you choose to live that define who you are, shape your attitudes and choices, and help you identify your priorities

20. Entering the Family Business
The greatest advantage of a family business is the trust and togetherness that family members often share.
Families that work well together have great potential for success in a family business.

21. Buying an Existing Business
In many ways, buying an existing business is less risky than starting one from scratch.
When you buy an existing business, you often gain the goodwill of loyal customers.
goodwill
the favor and loyalty a business acquires by its good reputation

22. The franchisee is the buyer of a franchise.
Buying a Franchise
When you buy a franchise, you buy the right to set up a new business patterned on an existing model.
franchisor
the seller of a franchise who is giving the buyer planning and management expertise
The franchisee is the buyer of a franchise.
franchise
a legal agreement to begin a new business in the name of a recognized company
The franchisor is the seller of a franchise.
franchisee
the buyer of a franchise who is given the right to the franchisor’s product, process, or service

23. To evaluate a business opportunity:
Evaluating a Business Opportunity
To evaluate a business opportunity:
Investigate the company.
Investigate the industry.
Talk to customers, employees, and suppliers.
Hire an accountant to advise you.
Hire an attorney to advise you.

24. Finding Business Opportunities
Where to Find a Business
business publications
newspapers
Finding Business Opportunities
business brokers
networking 24

25. You can build the company with fresh ideas and enthusiasm.
Starting Your Own Business
When you start your own business from scratch, you can do things your own way.
You can build the company with fresh ideas and enthusiasm.