Topic 3: Business Opportunities and Entrepreneurship
1. Business Opportunities
A business opportunity is a gap or unmet need in the market that can be turned into a profitable business.
Sources of Business Ideas
- Unmet needs and problems in the community.
- Personal skills, hobbies and talents.
- Newspapers, the internet and trade fairs.
- Existing businesses (improving them).
- Imports and new technology.
- Government policy and trends.
Factors to Consider When Choosing a Business Opportunity
- Capital available
- Market demand
- Skills and experience
- Competition
- Location and infrastructure
- Legal requirements and licences
- Risks and profitability
2. Entrepreneurship
- Entrepreneur: a person who identifies opportunities, organises resources and takes risks to start and run a business.
- Entrepreneurship: the process of starting and running a business venture.
Qualities of a Good Entrepreneur
- Creativity and innovation
- Risk-taking
- Hardworking and self-motivated
- Good decision maker and planner
- Leadership and communication skills
- Honesty and integrity
- Perseverance
Importance of Entrepreneurship
- Creates employment.
- Promotes innovation and new products.
- Increases national income and tax revenue.
- Reduces poverty and dependence.
- Encourages use of local resources.
3. Starting a Business
The Business Plan
A written document that describes the business idea and how it will be run. It contains:
- Executive summary
- Description of the business and its products
- Market analysis and marketing plan
- Organisation and management
- Financial plan (capital needed, expected costs and revenue)
Sources of Start-up Capital
| Internal |
External |
| Personal savings |
Bank loans |
| Selling personal assets |
SACCO and microfinance loans |
| Retained profits |
Friends and relatives |
|
Shares from partners or investors |
|
Grants and government funds (e.g. youth funds) |
4. Challenges Facing Entrepreneurs
- Lack of capital
- Stiff competition
- Poor infrastructure
- Unfavourable policies and high taxes
- Lack of skills or market information
- Risk of loss or failure