Entrep 2.2

OPPORTUNITY SCREENING
CHAPTER 2.2
The Personal Screen
• Do I have the drive to pursue this business
opportunity to the end?
• Will I spend all my time, effort, and money to
make the business opportunity work?
• Will I sacrifice my existing lifestyle, endure
emotional hardship, and forego my usual
comforts to succeed in this business
opportunity?
If YES
The 12 Rs of Opportunity
Screening
• Relevance to vision, mission, objectives of the
entrepreneur. The opportunity must be aligned
with what you have as your personal vision,
mission and objectives for the enterprise you
want to set up.
• Resonance to values. Other than vision,
mission and objectives, the opportunity must
match the values and desired virtues that you
have or wish to impart.
• Reinforcement of Entrepreneurial Interests.
How does the opportunity resonate with the
entrepreneur’s personal interests, talent and
skills?
• Revenues. In any enterpreneurila endeavor, it
is important to determine the sales potential
of the products and sercices you want to offer,
Is there a big enough market out there to grab
and nurture for growth?
• Reponsiveness to customer needs and wants. If
the opportunity that you want to pursue
addresses the unfulfilled or underserved needs
and wants of customers, then you have a better
chance of succeeding.
• Reach. Opportunities that have good chances of
expanding through branches, distributorships,
dealerships or franchise outlets in order to
attain rapid growth are better opportunities.
• Range. The opportunity can potentially lead to
a wide range of possible product or service
offerings, thus, tapping many market segments
of the industry.
• Revolutionary Impact. If you thing that the
opportunity will most likely be the “Next big
thing” or even a game-changer that will
revolutionize the industry, then there is a big
potential for the chosen opportunity.
• Returns. It is a fact products with low costs of
production and operations but are sold at
higher prices will definitely yield the highest
returns of investments. Returns can also be
intangible; meaning, they come in the form of
high profile recognition or image projection.
• Relative Ease of Implementations. Will the
opportunity be relatively easy to implement
for the entrepreneur or will there be a lot of
obstacles and competency gaps to overcome?
• Resources Required. Opportunities requiring
fewer resources from the entrepreneur may
be more favored that those requiring more
resources.
• Risks . In an entrepreneurial endeavor, there
will always be risks. However, some
opportunities carry more risks that others,
such as those with high technological, market,
financial and people risks.
The Pre-Feasibility Study
• According to Business Dictionary – FEASIBILITY
STUDY is an analysis and evaluation of a proposed
project to determine if it (1) is technically feasible,
(2) is feasible within the estimated cost, and (3)
will be profitable. Feasibility studies are almost
always conducted where large sums are at stake.
Also called feasibility analysis.
• Feasible means - Capable of being done with
means at hand and circumstances as they are
• The ultimate goal of doing the opportunity
screening matrix is to narrow down the many
opportunities into one or two most attracives
ones. This next step is to conduct a pre-
feasibility study to ascertain the viability of the
opportunity. The idea is to focus on a few key
items that could make a break the business
concept.
Factors contained in a Pre-Feasibility Study
• Market Potential and Prospects

• Availability and appropriateness of technology
• Project investment and detailed cost estimates
• Financial forecast and determination of
financial feasibility
Market Potential and Prospect
• Market potential is based on the estimated
number of possible customers who might avail
of the product or service. For a more realistic
number, it would help to narrow down your
estimation to the relevant population or target
customers in the are where you want to
operate you business (micromarket).
Segmenting the Market
• Using a set of demographics (e.g. gender, age,
place of residence, income class, etc..) will be
the most basic approach in determining the
target segment. Keep in mind that some
general statistics for these demographics can
be found online
Assessing Competition
• Market potentials is also affected by the
number of establishments supplying and
serving your target customers. This process
would deterring how saturated the market is
in the given area of coverage. The more
suppliers and competitors there are within a
confined are, the greater the level of
saturation.
Estimating Market Share and Sales
• After estimating the number of potential
target market or segment, the next thing that
the entrepreneur should assess is the
potential market share he or she can attract.
Conservatively, the entrepreneur can go for a
small market share unless the entrepreneur
has a very superior product or service that can
immediately command a large market share.
Strength of the various suppliers or
competitors
• In the assessment of market potential, the
entrepreneur should evaluate the relative strength
of the various suppliers or competitors in the
marketplace by asking the following questions:
1. Who has dominance?
2. Who has greater bargaining power?
3. Which segments of the total market are saturated and over
served and which ones are relatively underserved?
4. Are there market segments which are more attractive that others
for entrepreneur, either because of past expertise in the
segments or weaker competition in the segments?
Technology Assessment and Operations
Vialibility
• The entrepreneur must go through the
intricacies of detailing the operations that
would be required by the business, which also
includes technology assessment. By going
though this process, the entrepreneurs would
be able to determine whether the product or
service offering will meet customer demand or
not.
4 target customer expectations affecting the sale
and complexity of an enterprise’s operation
• 1. Quantities demanded – this would
determine the needed capacity of operations.
• 2. Quality specifications demanded – this would
dictate the following: (a) quality of input or raw
materials; (b) quality assurance process in
transforming input to output; (c) quality output
that meet the operations, standards set; and
(d) quality outcomes for the customers who will
be looking for specific results.
• 3. Delivery Expectations – knowing how much,
how frequent, and when to deliver to
customers.
• 4. Price Expectations – the selling price of the
product or service would be evaluated by the
customers according to the value they would
receive (in terms of quality, delivery, and
quantity) and this value added should be
matched against competitors.
Three (3) Investment that need to tbe
funded:
• 1. Pre-Operating Cost – these are the costs related to the
preparation for the launch of the business. These include the
pre-feasibility study, in-depth feasibility study, market
research, product development, organizational development,
and initial promotional costs.
• 2. Production/Service Facilities Investment – this refers of he
long-term investment for the actual business establishment,
including investment in land, buildings, machinery, equipment,
computers, software, furniture, vehicles, In the business
would be renting or leasing space, the leasehold improvement
(or renovation) would also be part of the facilities investment.
• 3. Working Capital Investment – this includes the
investment needed to operationalize the business,
composed of cash, accounts receivables, and
inventories, (raw materials, work-in-process, and
finished good). The entrepreneur must see to it
that he or she has enough cash to cover the
inventories to be purchased (or manufactured), the
accounts receivable to accommodate customers
and the operating expenses to be incurred.
These operation expenses would include the
following.
• A. Employee salaries, wages, and benefits
• B. Rent and Lease Expenses
• C. Utilities
• D. Transportation
• E. Fees and Licenses
• F. Commissions
• G. Office Supplies, ect..

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OPPORTUNITY SCREENING

• Market Potential and Prospects

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