Recognizing Opportunity Chapter 3 Recognizing Opportunity

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

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.

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

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.