ITFT - Business Opportunity

Business Opportunity

ITFT College, Chandigarh 14/26/2014

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Business Opportunity

• When there is a possibility of offering a new product or service in a particular market.

Need to offer new product and service

• Due to change in Environmental Factor

• Political and Legal • Economic • Economic • Social • Technological

Process of Business Opportunity identification and evaluation

Identify the needs and wants of customers.

Scanning (examining) the environment and evaluating of self (entrepreneur) and the evaluating of self (entrepreneur) and the

community.

Screening (Process of evaluating) of business opportunities.

Selecting a business opportunity Preparing a Business Plan.

Identify the needs and wants of customers

Scanning the environment and evaluating of self and the community.

Two Approaches

• Micro perspective For example in the case of forestryan entrepreneur can be involved in: LoggingManufacturing of veneer plywood Processing of sawntimber Manufacturing of furniture. Making woodendoors and frames.doors and frames.

• Macro perspective for example the agricultural sectorcan offer business opportunity in forestry, fishing,plantation, and livestock breeding.

Screening of business opportunities

Screening should be based on following factors

• Legal within the law of the country. • Monopolistic Power and Level of Competition. • Capital Requirements must be adequate to

business undertaking • Risk factor • Risk factor • Liquidity Level• Loans • Credit facilities for customers. • Foreign Exchange Rate – volatile or stable

currency rate. Business Opportunities

Selecting a business opportunity Preparing a Business Plan

5 Steps to Business OpportunityOpportunity

Self Analysis

Financial Components

Market Research

Risk Assessment

Support

Industrial PolicyIndustrial Policy

Major issues related to MSME’s:

• Lack of availability ofadequate and timelycredit

• High cost of credit

• Limited access to equity capital

• Lack of access to global market

• Low technology levels and lack of access tomodern technology;

• Lack of skilled manpower for manufacturing,• Lack of skilled manpower for manufacturing,services, marketing, etc.;

• Issues relating to taxation, both direct andindirect, and procedures thereof.

Policies and Programmes for promoting SSI:

• Government’s price preference policy formarketing SSI products;

• Technical assistance;• Technical assistance;

• Financial assistance.

Financial Institutes in India:

• Industrial finance corporation of India (IFCI) • Industrial credit and investment corporation of India

(ICICI) • Industrial development bank of India (IDBI) Industrial development bank of India (IDBI) • Small industries development bank of India (SIDBI)• Industrial investment bank of India. National Bank of

Agricultural and Rural Development of India (NABARD)

• State industrial development corporations.

Industrial policy 2010-2015

• Investment limit of mega projects from Rs.100 toRs.250crore

• The policy provides a 25 percent VAT reimbursement• The policy provides a 25 percent VAT reimbursementfor five years for large and medium enterprises, 50percent for small enterprises.

• For micro and small industries the investment subsidyhas been increased from Rs.15lakhs to Rs.20lakhs.

• In case of women entrepreneurs, not only ten percent• In case of women entrepreneurs, not only ten percentof the plots in an industrial area but also offering 5percent additional subsidy subject to a maximum ofRs.5lakhs.

• Attract investments in the industry and service sectorby developing quality infrastructure.

• Maximize employment opportunities, Implement self-employment schemes effectively, and provides jobsMaximize employment opportunities, Implement self-employment schemes effectively, and provides jobsto local people in the upcoming industrial units in thestates.(Pradhan mantri employment generationprogramme launched by the government of India.)

• Promote agro-based and food processing industry tomake agriculture a most profitable proposition.

• In order to ensure productive uses of land, multi-stored complexes for micro and smallenterprises/industries will be constructed eitherthrough department’s corporations or through orprivate sector participation at potential sites.through department’s corporations or through orprivate sector participation at potential sites.

• Trade Related Intellectual Property Rights (TRIPR)under WTO will be widely publicized so that thesecould be used to generate more employment andtrade opportunities.

Business Environment

Features of Business Environment

Totality of external forces

Specific and general forces

Dynamic natureDynamic nature

Uncertainty

Relativity

Multi-faceted

Types of Business Environment

Internal External

Micro-environment

Macro-environment

Internal Environment:6 M’s6 M’s

Man (Human Resources)

Money (Financial Factors)

Marketing Resources

Machinery (Physical Assets and Facilities

Management Structure and Nature

Internal Environment

• Micro-environment• Macro-environment

Micro-environment• Customer

• Employees

• Suppliers

• Shareholders

• Media

• Competitors

Macro-environment

• Socio-cultural and Demographic

Technology

Economic Conditions

Ecology and Physical Environment

Political and Legal

Market SurveyMarket Survey

Market Survey

• Through a market survey we can obtain information in the following areas:

• size of market• pattern of demand• buying habits and motives• past and present trends for this or other products

Process of Market Survey

Step1: Define objectives and specify information to be collected

• Identifying sources of information• Assessing time and costs required for the

survey• Selecting methodology• Selecting methodology• Preparing an action plan

Step 2: Select a sample

• Determining where to conduct the survey

• Determining when to conduct the survey

Prepare a questionnaire for the survey

Collect data and analyze the information obtained

Step 5: Prepare a report based on data analyzed

• Following ten broad areas are discussed:• Market• Buyers/ customers• Raw materials• Machinery, equipment• Machinery, equipment• Competitors• Furniture• Manpower• Capital and risks• Rules and regulations• Marketing

Market Assessment

Study of feasibility and viability of a project

• Feasibility studies aim to objectively and rationallyuncover the

• strengths and weaknesses of an existing business orproposed venture,

• opportunities and threats as presented by the• opportunities and threats as presented by theenvironment,

• the resources required to carry through, and

• ultimately the prospects for success.

Market Analysis

Consumption trend

Past and present supply Position

Production possibilities and

Production possibilities and constraints

Imports and Export

Competition

Cost structure

Financial Analysis

• Investment outlay and cost ofproject

• Means of financing• Projected profitability• Break- even point• Break- even point• Cash flows of the project• Investment worthiness judged

in terms of various criteria ofmerit

• Projected financial position

Technical Analysis

• Input Analysis

• Output Analysis• Output Analysis

• Throughput Analysis

Economic Analysis

Ecological Analysis

Risk Assessment• Identify the hazards• Decide who might

be harmed and how• Evaluate the risks

and decide onprecautionprecaution

• Record your findingsand implementthem

• Review yourassessment andupdate if necessary

Questions

Q 1 What is the process of business opportunity identification and evaluation?

Q 2 What are the various industrial policies related to enterprise?related to enterprise?

Q 3 Explain the detail the internal and external environment of business.

Q 4 What is market survey? Explain the process of market survey.

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