Entrepreneurial people by nature tend to see opportunities in the market or environment.
They are constantly on the lookout for “gaps” in the market that they can fill. Those possible “gaps” occur when the prices of certain products or services are too high or too low.
Another common gap is when the businessman or businesswoman in question has some knowledge that is not readily available on the market.
The fact that an individual act on the market opportunities presented to participate in business depends on business decisions that are related to the market and the economy. These decisions are based on his individual ability, his personality traits, and his preferences.
However, a sure way to assess whether an opportunity is worth venturing into is to carry out a market needs assessment.
The best company is the one that responds to a need. Similarly, your business must solve a problem that your potential customers are facing. What is the easiest way to find out what they need?
The answer is simple, ask! It is possible to do a home market study.
You want your company to emerge from the needs expressed by people, and not from your assumptions about what they need. Talk to as many people as possible to gauge what they need.
Make sure that those people you are talking to represent all demographic groups: women, men, girls, boys, the elderly, people with disabilities, etc.
Avoid asking closed questions where people can only answer yes or no. Good opening words are: What? When? Where? Who? Because? As?
The needs assessment should be an ongoing process as needs also change, and other people may enter your community with different needs. Remember that you should always be on the lookout for new products and services that people need, want, and are willing to pay for.
It’s also easier to convince the bank manager to provide financing for your business if you can confidently and confidently tell her how many people need (want and can afford) what your business intends to provide.
The needs assessment should be followed by an assessment to see what strengths your business concept has in addressing the identified problems. Your goal should be to try to reinforce weak points.
The Evaluation Involves Considering The Following Assets:
.Human: include your skills, knowledge, work ethic, etc.
.Social: These are based on your business and social network and include other entrepreneurs, and groups in your community. Informal networks are also important: friends, interest groups, etc.
.Natural: This includes what is available to you in your environment.
.Physical: corresponds to the built physical environment: buildings, transportation, water supply, electricity, and telecommunications.
.Economic: cash and savings.
Risk can be defined as the possibility of unwanted things happening. All activity involves risk and some risks affect your business more than others.
Risk assessment helps identify business threats and considers the probability of their occurrence, as well as their potential impact.
Risks can be managed by adjusting the business plan to ensure that risks are minimized.
Although we know that entrepreneurs are risk-takers, they actually take calculated risks.
To Consider Whether A Venture Is Going To Be Too Risky, Ask The Following Questions:
.Is there enough demand for the product/service I want to offer?
.What are the possible risks that can hinder the success of my business?
.What is the probability that they will occur?
.What will be the impact of each of these risks on my business?
.What measures can I implement in my business in order to minimize the occurrence of these risks?
.If the risk of it happening cannot be minimized, what steps can I take to minimize the effect on my business?
Remember that it is important to take all possible measures to reduce the risk to a minimum. Another not-so-scientific mechanism is to trust your gut. Don’t invest in things you feel uncomfortable with. Read and study the market as thoroughly as possible.
That’s what taking calculated risks is all about. Your research will give you an advantage over competitors who start a business without evaluating the risks.
All entrepreneurs face the fear of failure, especially those who have ventured into business before without success. Different people have different ways of handling that fear.
Some immerse themselves in the tasks at hand in order to keep their minds off any doubts that may creep into their minds.
However, if you feel that doubt and fear are advancing, remember that you have the following factors in your favor:
.That your venture responds to a need that you know first-hand. Yes, necessity is the mother of invention…and of business!
.That you have the necessary skills and experience, or you know people who have the necessary skills and experience that you could bring to the team.
.That your market research and risk analysis have shown that the market potential far outweighs the negative factors.