The starting point for sourcing an opportunity is to look for a gap in a market. You need to find a set of customers who are under-served and looking for a particular product or service to fill a need. By becoming aware of people’s under-served needs, you can develop an opportunity-oriented mindset.
In order to foster this mindset, it is useful to engage in these practices:
1. Observe. Whether you’re driving in your car, walking down the street or sitting in a café, look for people who are under-served.
2. Write. Keep an “ideas”notebook. Write down business thoughts and ideas as they come to you throughout the day. Then every once in a while, take some time out reflect on what you have jotted down. Eliminate bad ideas, link ideas with potential and build on good ideas.
3. Discuss. Engage in exploratory chats with other people. Talk to your grandparents, the cleaning lady or whoever else will open up to share with you about where they are frustrated and have an under-served need.
4. Explore. Explore trends and concepts in overseas markets and take time to examine what’s happening in industries with which you’re unfamiliar. Raymond Ackerman gleaned his ideas for Pick ‘n Pay from the retail trends abroad, while the Kulula.com concept was based on the model of Southwest Airlines (USA)and EasyJet (Europe).
Effectively combining these practices will provide you with a diverse set of ideas. These ideas must be refined and researched. In your initial research you should attempt to gauge:
- The size of the market. How big is the market and is there room for another competitor?
- The likely competitors in the market. Who are the competitors and how are my ideas different from what they do?
- Is it possible to reach the customer. Can I get to the customer to sell and distribute the product or service?
This quick market research will give you a base off which to make more informed judgments about where there is and isn’t a gap in the market.
Building a business around an activity or a product about which you are passionate can give you a huge advantage. Firstly, being passionate about your product or service increases your ability and confidence to sell it to others.
Secondly, passion for the product or service makes it easier to endure the tough times of building a business. If you’re doing something that has meaning and purpose, you are far more likely to persevere when others would give up.
Thirdly, being passionate about your product or service means you’ll be more inclined to build your skills, expertise and understanding of the particular product or service you’re selling. It is easier to build and sustain the energy required to grow a business if you have a passion for what you’re doing. Link the potential business ideas to your personal passions for the most positive results.
Most people have a unique skill or skills they’ve developed during their lifetime. Using it can give you a competitive advantage insetting up your business. Write down the things you are good at and consider how you could use any of those skills to develop any of the business ideas you’ve generated. After all, Bill Gates used his skill in programming in the early days of Microsoft and Paul Simon used his training in clothing design when creating YDE.
As you review ideas, think about what resources you have at your disposal that will give you a head start when implementing that idea.Effective entrepreneurs leverage the opportunities that arise from the resources they have access to. They use their network of connections to source appropriate resources and always think of alternatives, asking”what else can we do?” when they encounter obstacles due to lack of resources.
Finding an entrepreneurial opportunity can be exciting. It is inspiring and motivating to imagine what could be as you consider the possibilities of turning the right opportunity into a sustainable business. Central to finding the right opportunity is the market demand- and the market demand should be exploited by an entrepreneur with the right passion, skills and resources.
Key questions to sourcing the right opportunity:
- What do people need?
- Who will buy it?
- Why do they want it?
- How can I reach them?
- What am I deeply passionate about?
- How can I leverage my unique skills?
- Where can I get the resources to make it happen?