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Tuesday, 19 November 2013

HOW TO DISCOVER ENTREPRENEURIAL OPPORTUNITIES - Part 1

how to discover entrepreneurial opportunities

An all-too-common question one hears from would-be inventors and entrepreneurs is how to find real problems to solve. There are an incredible number of exceptionally-talented individuals scurrying around this region looking for an "opportunity" niche. The problem is that most don't know how to look. Maybe some of the following can help.
First, if you're looking for an easy way, forget it. There is no easy way to success, security, independence, and money -- whatever it is you're looking for. Any entrepreneurial venture requires a great deal of hard work, patience, dedication, etc. Looking for an easy way is just setting yourself up to be taken. There are a lot of vultures out there looking for you. (That's their opportunity niche).
Second, go get a copy of Peter Drucker's Innovation and Entrepreneurship for how to look for opportunities.  Written in the mid '80s, this is an under-recognized, under-utilized classic. In it, he maps out where to look, what to look for, and even suggests appropriate strategies for taking advantage of what you find.
Third, recognize that business -- all business -- starts with a customer -- not with know-how, not with the "bright" idea. For inventor-entrepreneurs, your best approach into business is to find someone who'll pay you to develop something they need -- and let you keep the rights to sell to others. It's done all the time. The problem is most don't know to ask -- or are embarrassed to ask. .
If you can't find someone to pay you to do what you want to do -- and for God's sake don't give up until you've brainstormed the subject thoroughly and exhausted all possibilities -- then your next best approach is to find someone with a need (or at least a very strong interest), develop something on your own, and sell it to them.
The key to this approach is qualifying the need. The better you qualify the need, the more likely you won't be wasting your time. The way to qualify the need is to go talk to potential customers. "If I had something that would do such and such, would you be interested? How interested? At what price are you willing to pay for it?"
You've proposed a problem statement, and you're looking for interest. (And note that this works just as well with the owner of a retail store, or a cataloger, as it does with an industrial buyer.) If you get some serious interest, give the problem some serious attention. But keep going back to those potential customers! Let them be a part of the "solution". The better job you do of making them feel "involved", the more ready they'll be to "buy" -- and the less you'll have to "sell".
Common objections from would-be entrepreneurs to pursuing this approach:
"If I give them my idea (translation -"problem statement"), they'll just go and develop it themselves."
Answer: Most people -- not developing ideas -- are incapable of developing ideas. Besides, they're too busy with their own interests. And even if they are capable of developing ideas -- and have the time and resources -- why would they spend their time and resources doing so when they have you offering to do it for free -- or at least a much lower end-cost?
"I don't have the time to get out and talk to prospects."
Answer: Then give it up now. If you can't find time to talk to prospects before you have a product, what are you going to do after you have it?
 "I don't feel ethical trying to sell something before I've got it. What happens if I can't deliver it?"
Answer: Ethics is in the eyes of the beholder. There's nothing unethical about going out and trying to find potentially-profitable problems to solve. And more than a few entrepreneurs have taken up-front money to solve problems they hadn't the slightest idea how to solve. Somehow, they always get solved. (Necessity is the mother of invention so they say.) And, if you can't solve it, what's the worst thing that could happen -- (ethically) you'd have to give back the money -- certainly not the end of the world.
Another objection -- seldom spoken:
 "I like spending time in the lab. I don't like making cold calls."
Answer: Either learn to like it, or find a partner who does -- because that's the essence of business. Commercially speaking, nothing counts 'til it sells. It's just as difficult -- maybe more difficult -- to sell something as it is to develop it. And ignoring, or rejecting, that fact is a sure path to failure.

Don't underestimate the need for partnering. It's one thing to find opportunities. It's quite another to take advantage of them. That requires preparation -- understanding what's needed to succeed in business -- and developing, arranging, lining up relationships and resources that allow you to act when the time comes. And -- surprise -- that preparation turns up many more opportunities. (The opportunities were always there, but most people -- for reasons one can't explain -- don't "see" them until they're prepared to act on them.)
The essential resources for exploiting opportunities are the fundamental business skills. Given these skills, all else flows. Without them -- all of them -- any attempted venture is doomed to fail. And recognize that these skills come in the form of people. Whatever it is that you're really good at; you need "partners" who are equally good in the other skills.
There are four skills necessary to successful business.
Development - the skill to invent and develop new products (or services).
Deployment - the skill to deliver them, consistently and reliably, with quality, service, and price.
Selling - the skill to sell them.
Business - the skill to make a profit doing the other three.
The skills necessary to start a business are Development and Selling. The skills of Deployment and Business determine how long the business lasts. The level of quality needed in these skills is determined by the level at which one wishes to compete. If you wish to compete in a local or small niche market, e.g., crafts, you need to be very good in one, and at least passable in the others.
Now, if these skills are independent, i.e., there is little reason to expect that one with strong Deployment skills will also have strong Selling skills, and vice versa, the odds of one person having both the necessary Development and Selling skills is actually quite small. Factor in the needed Development and Business skills, and the need for "partnering” with individuals or in the form of joint ventures, strategic alliances, etc., becomes very clear (know this is difficult for most Nigerians who love total OWNERSHIP).
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