ITFT - Business Opportunity

Business
Opportunity
ITFT College, Chandigarh 1
4/26/2014
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Business Opportunity
• When there is a possibility of offering a new
product or service in a particular market.
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Need to offer new product and
service
• Due to change in Environmental Factor
• Political and Legal
• Economic• Economic
• Social
• Technological
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Process of Business Opportunity
identification and evaluation
Identify the needs and wants of customers.
Scanning (examining) the environment and
evaluating of self (entrepreneur) and theevaluating of self (entrepreneur) and the
community.
Screening (Process of evaluating) of business
opportunities.
Selecting a business opportunity Preparing a
Business Plan.
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Identify the needs and wants of
customers
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Scanning the environment and
evaluating of self and the community.
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Two Approaches
• Micro perspective For example in the case of forestry
an entrepreneur can be involved in: Logging
Manufacturing of veneer plywood Processing of sawn
timber Manufacturing of furniture. Making wooden
doors and frames.doors and frames.
• Macro perspective for example the agricultural sector
can offer business opportunity in forestry, fishing,
plantation, and livestock breeding.
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Screening of business opportunities
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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
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Selecting a business opportunity
Preparing a Business Plan
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5 Steps to Business
OpportunityOpportunity
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Self Analysis
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Financial Components
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Market Research
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Risk Assessment
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Support
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Industrial PolicyIndustrial Policy
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MSME
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Major issues related to MSME’s:
• Lack of availability of
adequate and timely
credit
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• High cost of credit

• Limited access
to equity capital
•Lack of access to
global market
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• Low technology levels and lack of access to
modern technology;
• Lack of skilled manpower for manufacturing,• Lack of skilled manpower for manufacturing,
services, marketing, etc.;
• Issues relating to taxation, both direct and
indirect, and procedures thereof.
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Policies and Programmes for
promoting SSI:
• Government’s price preference policy for
marketing SSI products;
• Technical assistance;• Technical assistance;
• Financial assistance.
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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.
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Industrial policy 2010-2015
• Investment limit of mega projects from Rs.100 to
Rs.250crore
• The policy provides a 25 percent VAT reimbursement• The policy provides a 25 percent VAT reimbursement
for five years for large and medium enterprises, 50
percent for small enterprises.
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• For micro and small industries the investment subsidy
has 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 percent
of the plots in an industrial area but also offering 5
percent additional subsidy subject to a maximum of
Rs.5lakhs.
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• Attract investments in the industry and service sector
by developing quality infrastructure.
• Maximize employment opportunities, Implement self-
employment schemes effectively, and provides jobs
Maximize employment opportunities, Implement self-
employment schemes effectively, and provides jobs
to local people in the upcoming industrial units in the
states.(Pradhan mantri employment generation
programme launched by the government of India.)
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• Promote agro-based and food processing industry to
make agriculture a most profitable proposition.
• In order to ensure productive uses of land, multi-
stored complexes for micro and small
enterprises/industries will be constructed either
through department’s corporations or through or
private sector participation at potential sites.
through department’s corporations or through or
private sector participation at potential sites.
• Trade Related Intellectual Property Rights (TRIPR)
under WTO will be widely publicized so that these
could be used to generate more employment and
trade opportunities.
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Business Environment
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Features of Business Environment
Totality of external forces
Specific and general forces
Dynamic natureDynamic nature
Uncertainty
Relativity
Multi-faceted
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Types of Business Environment
Internal External
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Micro-
environment
Macro-
environment

Internal Environment:
6 M’s6 M’s
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Man (Human Resources)
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Money (Financial Factors)
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Marketing Resources
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Machinery (Physical Assets and
Facilities
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Management Structure and Nature
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Internal Environment
• Micro-environment
• Macro-environment
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Micro-environment
• Customer
• Employees
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• Suppliers
• Shareholders
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• Media
• Competitors
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Macro-environment
• Socio-cultural and Demographic
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Technology
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Economic Conditions
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Ecology and Physical Environment
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Political and Legal
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Market SurveyMarket Survey
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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
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Process of Market Survey
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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
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Step 2: Select a sample
• Determining where to conduct the survey
• Determining when to conduct the survey
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Prepare a questionnaire for the
survey
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Collect data and analyze the
information obtained
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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
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Market Assessment
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Study of feasibility and viability of a
project
• Feasibility studies aim to objectively and rationally
uncover the
• strengths and weaknesses of an existing business or
proposed venture,
• opportunities and threats as presented by the• opportunities and threats as presented by the
environment,
• the resources required to carry through, and
• ultimately the prospects for success.
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Market Analysis
Consumption trend
Past and present supply
Position
Production possibilities and
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Production possibilities and
constraints
Imports and Export
Competition
Cost structure

Financial Analysis
• Investment outlay and cost of
project
• Means of financing
• Projected profitability
• Break- even point• Break- even point
• Cash flows of the project
• Investment worthiness judged
in terms of various criteria of
merit
• Projected financial position
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Technical Analysis
• Input Analysis
• Output Analysis• Output Analysis
• Throughput Analysis
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Economic Analysis
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Ecological Analysis
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Risk Assessment
• Identify the hazards
• Decide who might
be harmed and how
• Evaluate the risks
and decide on
precautionprecaution
• Record your findings
and implement
them
• Review your
assessment and
update if necessary
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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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4/26/2014

ITFT - Business Opportunity

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