Entrepreneurial Opportunities and the Selection of an Enterprise

An entrepreneurial opportunity is a favourable set of circumstances that lets an entrepreneur offer a product or service, meet a real need in the market and earn a profit by doing so. Opportunities arise constantly — from changes in customer tastes, new technology, rising incomes, government policies, or gaps that existing businesses have left unfilled. The entrepreneur's job is to sense such an opportunity and then decide which enterprise to build around it. This decision is called the selection of enterprise.

Selecting the right enterprise is one of the most important decisions an entrepreneur makes, because a well-chosen venture has a much better chance of success. The choice depends on weighing several factors:

• Demand for the product/service. Is there a genuine and lasting market? A large, growing and steady demand makes an enterprise attractive.
• Availability of resources. Can the entrepreneur arrange the capital, raw materials, skilled labour, power, water and a suitable location the enterprise needs?
• Capital required and expected profit. Does the entrepreneur have (or can arrange) the necessary funds, and does the venture promise a reasonable return for the risk taken?
• Own interest, skill and experience. An entrepreneur does best in a line of business that matches their knowledge, aptitude and liking.
• Degree of competition and risk. How many rivals already exist, and how strong are they? The entrepreneur should be able to face the competition and bear the risks involved.
• Government policy and support. Are there incentives, subsidies, licences or restrictions that make a particular line more or less attractive?
• Technology and its ease of adoption. Is the required technology available, affordable and manageable at the intended scale?
• Location and infrastructure. Nearness to raw materials, markets, transport and utilities can decide whether an enterprise is viable. …