Identifying Entrepreneurial Opportunities

This document provides insights on identifying entrepreneurial opportunities and setting up a new business. It covers sources of inspiration, competitive analysis, and gap analysis. The subject is entrepreneurship and the document type is a report.

IDENTIFYING
ENTREPRENEURIAL
OPPORTUNITIES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Background information of sources which inspired and motivates to set up a new business 3
2. Introduction to business idea, what it is and potential and target customers.....................4
3. Competitive analysis of setting up new business...............................................................5
4. Evaluation of Gap analysis to look at the close gaps for present and future......................7
5. Evaluation of market research which support Viability and identification of market
potential .................................................................................................................................9
6. Explanation of viability and feasibility of business idea with its strength and weakness 12
7. Measures to overcome with risk of competitions and recommendation to achieve business
growth...................................................................................................................................14
8. Evaluating and determining several sources of the entrepreneurial innovation and the ideas
..............................................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The term opportunities clarify a chance or a certain situation which inspired to do
something (Hansen, Monllor and Shrader, 2016). Business opportunity means a favourable
situation which is available for running specific business in positive period of time. This is the
assessment which provides information which relates to market opportunities in setting up a new
business. Further, study will be emphasis on introduction of business and sources which inspired
idea of starting a new business. Moreover, in this report competitor and gap analysis will be
discussed in order to support viability and feasibility of new business. Lastly, information will be
provided on factors which helps to overcome with risk of competitions.
MAIN BODY
1. Background information of sources which inspired and motivates to set up a new business
In order to set up a new business, individual must need to sound financial capability. It
also varies in accordance with type and size of business. Therefore, debt and equity considered
as two major sources of financing (Park, Sung and Im, 2017). Further, government grant is the
another aspect for starting a new business. For increasing employment level, UK government has
developed an initiative where it has decided to focus on start-up of new businesses by young
graduates entrepreneurs. But the problem among young generation is regarding sourcing of

finance. To overcome with this problem there are some strategies by which support from
financing will get developed.
Owner’s Capital: this is the way in which invested by the founder. For starting a new
business with the project value of £150000, individual may able to invest 10000 in form of share
capital helps in starting-up a financing of new business. In this way owner will able to retain
100% control over the business.
Bank Loan: this is the major aspect from where an individual seeks financial support.
This is the method by which owner will able to gain longer- term finance for setting a new
business in fixed period on which loan is generated. In return bank will require some kind of
security which comes in the form of personal guarantee. Therefore, to start a project value of
150000, individual may able to take loan of £90000 with low rate of interest that is 1.5% over 10
years (George and et.al., 2016).
Government Grant: This is the type of policies which is supported through government
and provided to individual who wants to start-up a new business. It is the type of financial
support which is given by local or state government to an eligible grantee. To start-up a new
business in UK, person will able to take grant of £50000 for a project value of £150000.
Authorities in return will require stringent compliance and reporting measures in order to ensure
that given amount is spending well.
Equity financing: It is the another form of financing where portion of ownership get
exchanged to financial investor. In return, such investor will be allowed to share profits of the
company (Sadgrove, 2016).
Debt financing: it is the another option which involves borrowing from creditors with the
guarantee of repaying the funds plus interest at a specific time period in the future. It may be in
the form of short term or long term but it majorly used for the shorter period in order to operate
day to day operations.
Different sources of entrepreneurial ideas and innovation
Market research: It is one of the best way through which entrepreneurial idea are gather.
Generally entrepreneur used to go through the market to find out the different opportunity
present in the market and on the basis of the same used to identify the different opportunity

available in the market, entrepreneur generally used to look at the preference and need of
different customer in the market.
Current issue: It is another reason which used to force the entrepreneur in having good
entrepreneurial idea. As with the help of the same entrepreneur used to innovate the product of
the company in a way that customer in the market find the changes which are made very useful.
Entrepreneurial role in adopting opportunities and translating it into the business idea-
Interest and the hobbies- It is the most important and the primary source for developing
a business idea. In fact, it has been founded that most of the successful businesses has ben
developed by pursuing the hobbies.
Customer surveys- The beginning point for the starting up of any of the new business
requires an appropriate survey where the desires of customers are known before generating the
business idea for bringing any innovation in the market. By understanding the needs and the
wants of the consumers, an entrepreneur can bring gain success in his new innovation or
business.
Brainstorming- It refers to the method that aims for solving problems and is counted as
the major sources for bringing a business idea as Apple away restaurant by using this method
could focus on facilitating the solutions towards the problem that are faced by the customers.
Franchises- It is the situation where the sole trader or the manufacturer of the product
facilitates an exclusive right to the independent retailer for the purpose of local distribution. In
today's world, it is becoming the major source for coming up with a new business in market.
There are many different type of scope of converting different innovation in the
organization, as it used to help the entrepreneur in opening up variety of opportunity of
increasing customer base and market area. At the same time it also used to open up variety of
threat such as increases the risk of financial requirement also ask the organization in resisting
different change in the enterprise.
2. Introduction to business idea, what it is and potential and target customers
In this present era, people enjoy spending their time in a good restaurant. Therefore, in
order to start-up a new business, idea of opening restaurant finds suitable. Idea of doing business
in services of food and beverage industry is generated because it is considered as one of the most

popular food business idea which is low on investment and risk. This is a business which
generates higher profits (Fleisher and Bensoussan, 2015).
With this idea, an individual end up saving its cost on furniture, seating space and for
crockery. A good and skilful chef with few staff member is required in order to provide quick
and good service. This form of business also does not require too much brainstorming for getting
license. Individual will only require to generate license for shop establishment, police eating
house and permission of local municipal authority.
What it is:
'AppleAway Restaurant' is opening in order to provide quick and effective services to
local and tourist restaurant seeker people. This name is generated with the meaning that 'an apple
a day, keeps doctor away'. Through these services, a good food will be provided to people which
have desire and want fascinating atmosphere. It will be established on the famous areas of
London where tourists and people likes to spend their time (Grant, 2016). Fine atmosphere with
excellent food and friendly environment is developed for providing effective services.
Potential customer and target audience:
'AppleAway restaurant' focuses on providing services to large group of people who likes
to enjoy food with elegant atmosphere. Such potential and target audience may be the business
man who wants to relax so that money they are making get used. These are the type of people
which spend their time most on food and drinks. Another type of target audience are happy
couples who spend their time mostly by visiting new places and destinations where they will able
to develop a good network of communication with each other. Tourists will be another group of
target audience because where an attractive atmosphere with international menu will be provided
to them.
These are the target and potential audience for setting up new business so that such
customers will get attracted. With this market segmentation, restaurant will able to develop a
loyal customer base with good amount of revenue.
3. Competitive analysis of setting up new business
In order to evaluate competitive analysis of restaurant business, Porter's Five forces will
be used. This is the valuable tool which understand dynamics with market research of industries.

Bargaining power of suppliers: for opening new restaurant in business market of UK, it
is necessary to analyse influence of suppliers about price in the market. It will be completely
depend on how unique services are provided to customers, number of suppliers and cost if
switching to another supplier (Malhotra, 2015). Suppliers which deal in this type of industry
have direct influence on partners and their bargaining power depends upon the prices which keep
shifting by owners. Therefore, bargaining power of supplier in this sector is high.
Bargaining power of buyers: It is the another important which needs to consider while
setting a new business. Buyers' are the one which hold position of influencing price decision for
any type of company. For restaurant business, they also hold high power in order to affect prices.
For setting-up new business, over prices items will not be offered to customers because of which
newly established owners must have to face their bargaining power.
Threat of new entrant: while setting new business in restaurant it requires moderate level
of investment in business which makes easy for business to enter in this sector. Another threat
for new entrant in this market is regarding economies of scale which only be achieved when
production and other efficiency in business operations will get achieved. New entrant of market
Illustration 1: Porter's Five Forces Analysis
(source: Using Porter's Five Forces when creating your marketing plan, 2019)

must have to consider their fixed and operating cost in order to achieve cost advantage.
Therefore, it can be analysed that threat of new entrant is moderate in this sector of the business.
Threat of substitute products: this is the factor which majorly affect restaurant business
at marketplace. This types of industry have various entities which provides an easy option to
customers to switch from one restaurant to another (Hair Jr and et.al., 2015). Therefore, for
achieving loyal customer base, newly established restaurant have to focused on quality and
amazing dine for customer which looking for more economical choices.
Competitive Rivalry: in this sector of business both existing and new established
company have to face high number of competitive rivalry. There are many restaurants in market
which have established their brand image and because of this it is more difficult for newly
established restaurant to achieve good amount of profit. In order to achieve growth in this area,
newly established AppleAway restaurant have to develop services and menu which attract
customers with its uniqueness.
4. Evaluation of Gap analysis to look at the close gaps for present and future
Gap analysis used in organisation to evaluate present performance of business and where
it would like to be. This analysis helps in identifying gap between these two factors and will end
with appropriate action plan. Objective of AppleAway restaurant is to provide the best valuable
services with quality of food to customers. But there are some loopholes by which might affect
the growth of the business. This will be analysed as below-
Illustration 2: Gap analysis
(source: 5 Gap Analysis Tools to Identify and Close the Gaps in your business,
2018)

 Step 1: Pick up of area to focus on: in order to evaluate gap analysis, newly established
needs to focus on area which needs to improved. Such may include finance, quality of
services, marketing etc. For AppleAway restaurant major problem is regarding marketing
of business because of which selected area will be social media marketing.
 Step 2: with this step, business owner needs to develop effective target and goals of
business and to achieve certain goals appropriate time must be selected. For AppleAway
restaurant target is to achieve support of customers with 6 months of starting a business
through effective marketing (Bell, Bryman and Harley, 2018).
 Step 3: Determination of current state of things: in order to determine current state of
business, owner of the business needs to develop market research with appropriate
methods so that accurate evaluation of performance get generated. AppleAway restaurant
will recognise its performance through reports or by process documentation. This will be
analysed by face to face interview, through social marketing etc. current state is business
is that it does not have effective marketing with which consumers are not aware of new
opened restaurant in market.
 Step 4: Determination of future state of things: in order to achieve customer support,
ABC organisation will develop effective market strategy where appropriate promotion of
the restaurant will be provided among customers. By using social media marketing, direct
communication with customer take place which help owners to promote their services
among them (Hillson and Murray-Webster, 2017).
 Step 5: Identification of gap between its two states: by identifying current and future
status, it will be easier for ABC organisation to reach their goals with appropriate
strategies.
After analysis of gaps, AppleAway restaurant will look into factor because of which loopholes
get exist. Therefore, in order to analyse such gaps tools like SWOT, Fishbone, McKinsey 7S,
will be used.
SWOT analysis will help in determining internal environment of industry. Fishbone method
helps in understanding causes of problems and their effect on business operations (Sekaran and
Bougie, 2016). Further, McKinsey 7S model helps in understanding gaps which appear in
business.

5. Evaluation of market research which support Viability and identification of market potential
Market condition is known as systematic approach where methods like collection,
analysis and interpretation of data measured in order to evaluate market conditions. It is
generally used by 'AppleAway restaurant' to find factors which change customer behaviour
because of change in elements like product, price, promotion and place. Therefore, in order to
evaluate market potential for setting-up business idea to methods of market research will be used
which are as follows-
Primary market research:
It is the type of research which provides information that comes directly from source.
Information in this method collected with potential customers and with new data which is not
been used yet. The goal of doing this research for entrepreneurs is to achieve reliable source
which helps into target market (Davidsson, 2015). There are three ways of doing this research
which includes:
 Direct mail: with this method, questionnaire is directly provided to respondent in their
personal mail where feature questions are provided which is sort and to the point.
 Phone surveys: as compared to direct mail, telephone survey is known to be best cost
effective method. One of the best advantage of this method is that it provides information
in speed with efficiency. Face-to-face interviews: this method is known as one of the most effective form where
thoughts and ideas of respondent will easily get carried out either with one-to-one
interview or with focus group survey.
Secondary market research:
It is the type of research study in which information and data conducted with already
established sources. In this method, source which is organised and easily available in market is
analysed in order to conduct effective research. In doing this market research, generally three
methods are used which includes:
 Public sources: this is method in which researcher generally conduct research which is
either free from government department or with public libraries. Sources is been
generated through books and journals of leading publishers.

 Commercial sources: this method is also considered as valuable method in which
commercial data has been used to conduct research which involves huge cost factor. This
method involves good overview of the marketplace.
 Educational institutions: in this method, researcher conduct their research with
educational institution which includes colleges, universities and technical institutes
(Hatak, Harms and Fink, 2015).
With the combination of both primary and secondary data, market research is conduct with the
best valuable and effective way which provide whole view of market with the viewpoint of
potential customers. Henceforth, in order to setting-up new business, 'AppleAway restaurant' will
able to develop services in accordance with consumer expectations.
A questionnaire sample is as follows-
Questionnaire
1. How often do you visit a restaurant each month?
 Rarely, 0-1 times
 Sometimes, 2-4 times
 Fairly occasionally, 5-9 times
 Very occasionally, 10+
2. How much money do you spend on an average in a month dining out?
 Less than 2000
 2000-3000
 4000-5000
 or more 9000
3. What style of restaurant would you prefer?
 Traditional
 Homey
 Modern
 Mixed traditional and modern
 I don't have a preference
4. Please rank your main reason for selecting a restaurant in order of importance where 8
is most preferred and 1 is least.
 Service & employee friendliness ----

 Ambience---
 Quality of food---
 Menu variety---
 Value of money--
 other---
 Theme 1: rank main reason of selecting a restaurant according to preference
Particulars Participants
Service & employee friendliness 1
Ambience 1
Quality of food 12
Menu variety 3
Value of money 2
other 1

Main emphasis will be given on quality of food as out of 20 respondent, majority of them
preferred with quality of food.
6. Explanation of viability and feasibility of business idea with its strength and weakness
Viability of business idea:
Viability of the business idea will get through effective market research. For setting up a
new restaurant business, AppleAway restaurant has conducted effective research under which
through both primary and secondary. Business idea of opening restaurant business is viable
because research has been conducted through search of internet, by visiting libraries, by
analysing financial statements of other industries in same line of business for comparing cost and
competition with size and viability of target market. Analysis also obtained through blogs,
magazines and with trade journals for aiming at potential customers (Vogel, 2017).
Feasibility of business idea:
Estimated cash flow statement
particulars initial
investme
nt
Janua
ry
Februar
y
ma
rch
Ap
ril
ma
y
Jun
e
July aug
ust
Septe
mber
Oct
ober
Nov
emb
er
Dec
emb
er
sales of
beverages
Number of
consumers
32000 35200 387
20
425
92
468
51
515
36
5669
0
6235
9
6859
5
7545
4
8300
0
913
00
average cost 38 38 38 38 38 38 38 38 38 38 38 38
Total
revenue
from food
12173
33
1339067 147
297
3
162
027
1
178
229
8
196
052
8
2156
580
2372
238
2609
462
2870
408
3157
449
347
319
4
sale of food
Number of
consumers
36000 40000 420
00
441
00
463
05
4862
0.25
5105
1.262
5
5360
3.82
563
56284
.0169
1
5909
8.21
775
6205
3.128
64
6515
5.78
507
average cost 14 14 14 14 14 14 14 14 14 14 14 14
Total 49536 550400 577 606 637 669 7024 7375 7744 8131 8538 896

revenue
from
beverages
0 920 816 157 015 65 89 68 91 51 544
Total
revenue
(cash
inflow)
17126
93
1889467 205
089
3
222
708
7
241
945
5
262
954
2
2859
046
3109
827
3383
930
3683
600
4011
300
436
973
8
Expense
accommodat
ion
15000 0 0 0 100
0
0 0 0 200 0 0 700 0
machineries 700 0 500 0 0 900 0 700 0 600 0 250 0
kitchen
equipment’s
500 400 250 200 350 400 100 200 150 750 500 400 300
salaries to
staff
2000 2000 200
0
200
0
200
0
2000 2000 2000 2000 2000 2000 2000
supplier
commission
3000 2500 220
0
450
0
400
0
300
0
2500 2600 3200 3500 4000 420
0
advertiseme
nt
400 400 400 400 400 400 400 400 400 400 400 400
Other
expenses
1200 1400 140
0
100
0
800 700 1200 1300 1400 600 700 800
Total
expenses
(cash
outflow)
16200 7000 7050 620
0
925
0
850
0
620
0
7000 6650 8350 7000 8450 770
0
Net cash
flow
16200 17056
93
1882417 204
469
3
221
783
7
241
095
5
262
334
2
2852
046
3103
177
3375
580
3676
600
4002
850
436
203
8

loan 90000
grant 50000
owner's
capital
10000
Opening
balance of
cash
150000 16620
0
1871893 375
431
0
579
900
3
801
684
0
104
277
95
1305
1137
1590
3182
1900
6359
2238
1939
2605
8539
300
613
89
Closing
balance of
cash
166200 18718
93
3754310 579
900
3
801
684
0
104
277
95
130
511
37
1590
3182
1900
6359
2238
1939
2605
8539
3006
1389
344
234
27
Strength:
 Good test with international cuisine
 Better pricing structure which have low pricing structure with great offers. Valuable service quality.
Weaknesses:
 Insufficient appropriate employee training.
 Consistent supplies that result in not availability of food items in restaurant menu.
7. Measures to overcome with risk of competitions and recommendation to achieve
business growth
Opportunities Threats
Higher demand for quality in food which
provide nutritional and healthy items will be an
opportunity for setting-up new business
(Ezrachi and Stucke, 2016).
Heavy competition in market is the major
threat of setting-up new business.
Analysing ways which create more traffic in
slow times such as afternoon will be another
opportunity.
Another threat is regarding potential rise in
prices of certain food items.
Recommendations:

In order to set-up new restaurant business, 'AppleAway restaurant' needs to develop menu
which is unique in nature as well with the best quality of service. For competing with other
business competitor’s effective advertisement will help in capturing customers. It will be done by
holding events in shopping centres, malls, road streets where promotion with fun needs to be
created. By lowering prices of foods which have demand in market also helps in developing
customer base.
8. Evaluating and determining several sources of the entrepreneurial innovation and the ideas
Interest and the hobbies- It is considered as the foremost source of generating the entrepreneurial
ideas and the innovation. Through this the entrepreneur can enjoy with his work as it is the field of his
interest and this helps in leading its business towards success across the world.
Customer surveys- For starting up the new business with new idea and innovation, it is important
for the entrepreneur to assess the needs and the wants of the customers through the survey. Under the
survey is important to frame the questions and made it filled by the customers that include friends, family
and the other individual.
Brainstorming- It is the method that is used by the organization in solving problems and is one of
the major source of the business idea as every company emphasize on offering the solution towards the
customers who are facing the problems. This technique generates as many ideas as possible because it
begins with the question and each of the design will be resulting in more and more ideas that leads to
develop various opportunities for the entrepreneur in bringing innovation.
Mass media- It includes the television, internet, radio, magazines and the newspaper that are the
major sources of idea generation and the innovation. An entrepreneur can run its business successfully by
taking the overlook at advertisements and the commercials through the media. It reports about the fashion
trends and the needs of the customers so that accordingly the entrepreneur can start its business.
CONCLUSION
From the above report it is concluded that for setting-up a new business, it is important to
conduct market research which helps to find ways for establishing own idea of business. This
report is evaluating business factor which needs to consider by entrepreneurs if order achieving

business growth and development. Further, for supporting business idea, appropriate feasible
study is provided where through cash flow statement business proposal has been generated.

REFERENCES
Books and Journals
Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.
Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: A re-
conceptualization. Journal of Business Venturing. 30(5). pp.674-695.
Ezrachi, A. and Stucke, M.E., 2016. Virtual competition.
Fleisher, C.S. and Bensoussan, B.E., 2015. Business and competitive analysis: effective
application of new and classic methods. FT Press.
George, N.M and et.al., 2016. A systematic literature review of entrepreneurial opportunity
recognition: insights on influencing factors. International Entrepreneurship and
Management Journal. 12(2). pp.309-350.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hair Jr, J.F and et.al., 2015. Essentials of business research methods. Routledge.
Hansen, D.J., Monllor, J. and Shrader, R.C., 2016. Identifying the elements of entrepreneurial
opportunity constructs: Recognizing what scholars are really examining. The International
Journal of Entrepreneurship and Innovation. 17(4). pp.240-255.
Hatak, I., Harms, R. and Fink, M., 2015. Age, job identification, and entrepreneurial
intention. Journal of Managerial Psychology. 30(1). pp.38-53.
Hillson, D. and Murray-Webster, R., 2017. Understanding and managing risk attitude.
Routledge.
Malhotra, N.K., 2015. Essentials of marketing research: A hands-on orientation. Essex: Pearson.
Park, J.Y., Sung, C.S. and Im, I., 2017. Does Social Media Use Influence Entrepreneurial
Opportunity? A Review of its Moderating Role. Sustainability. 9(9). p.1593.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Vogel, P., 2017. From venture idea to venture opportunity. Entrepreneurship Theory and
Practice. 41(6). pp.943-971.
Online
5 Gap Analysis Tools to Identify and Close the Gaps in your businesses. 2018. [Online].
Available through <https://creately.com/blog/diagrams/gap-analysis-tools/>

Berry, T., 2019. Using Porter's Five Forces when creating your marketing plan. [Online].
Available through <https://www.mplans.com/articles/using-porters-five-forces-when-
creating-your-marketing-plan/>