IDENTIFICATION PROCESS FOR A GOOD BUSINESS OPPORTUNITY

 Going into business is deceptively simple but staying in business and making a success of it is not. Success or failure are not the chance results of a toss of a coin.

Being in the right place at the right time is partly luck but more so to do with good planning.

Therefore setting up a business for the first time or expanding an existing business can be the road to riches and personal fulfillment.

It can also be the road to financial ruin and personal misery. Successful businesses are a result of careful research, planning, enthusiasm, self confidence and commitment.

If an entrepreneur identifies a business opportunity, it is ideal to carry out a feasibility study in order to ascertain whether the opportunity is viable/profitable.

It also acts as a basis upon which financial assistance can be sought from the financial system. It can be broken into 3 categories, i.e market feasibility study, technical feasibility study and financial feasibility study.

1. Market feasibility study

(i) Market study. This focuses on the overall market demand.

(ii) Product description. This involves understanding in detail the product one wishes to produce, identification of users and the standards that it will fulfill.

2. Technical feasibility study

This determines the adequacy of the manufacturing process, plant and machinery to be used for production of a given product within the framework of predetermined quality, raw materials and time used without long or expense breakdown problems.

3. Financial feasibility study

This part reveals how attractive or hopeless the business idea is from the financial point of view. The financial feasibility is divided into six major components, i.e;

- Project costs

- Means of finance

- Capacity utilizations and income estimation

- Expenditure estimates

- Profitability estimates

- Risk analysis

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