Entrepreneurial Opportunities and Small Business Development

The assignment requires the student to identify entrepreneurial opportunities for small businesses, considering factors such as market research, innovation, and competitive analysis. The student must also undertake effective market research and develop an entrepreneurial idea into real business operations. This document is suitable for students who need to understand how to analyze entrepreneurial opportunities and develop strategies for small business growth.

UNIT: 27 – Identifying
Entrepreneurial
Opportunities

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
P1. Presenting different sources of entrepreneurial ideas and innovations............................1
P2. Explaining the rationale and the market gap ...................................................................2
P3 Presenting data to support gap analysis in assessing specific entrepreneurial idea..........5
P4 Interpreting data to provide evidence of market potential................................................9
P5 Applying SWOT analysis to support objective of entrepreneurial idea..........................10
P6 Evaluating competitive and market environments in which business idea will be viable11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Entrepreneurial opportunities are required to be identified so that business may be able to
start new venture in effectual manner. Present report deals with starting up new venture by
analysing sources for innovative idea. In relation to this, Exotic restaurant is taken as business
idea and market research is conducted on it. Moreover, gap analysis is carried out along with
primary and secondary data are collected. Furthermore, competitive analysis and SWOT analysis
is conducted as well in effective way.
P1. Presenting different sources of entrepreneurial ideas and innovations.
Entrepreneurship plays a vital role in the field of business. The concept behind start up
business is to involving new product, services, process with latest technology. Entrepreneurship
is a study of how new businesses are created and the actual process of starting a new business
and an entrepreneur is a person who has many ideas and who works to create a product or
services that people will buy to support a sales (Seethamraju, 2015).
There are many different sources of entrepreneurial ideas and innovation which help
business man to set up new business, these are mention below:
Consumers: the consumers should be the final focal point of ideas for an entrepreneur. In
order to utilize the power of customers, innovation leaders place different methods for gathering
consumers ideas. Internet is the best place to begin, there are many online sources to provide
product review on product. Even, companies also want to invest in an online portal attached to
their website which allows customers to add, reviews, complaints and ideas. Proper evaluating
and implementing ideas and taking customer's feedback is one of the best method of staying
ahead in competition.
Competitors: Attending conferences, exhibitions, and trade shows are a good ways to
keep aware what competition is developing and researching. Business can also adapt this idea or
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modify them to create new products. For higher level, business leaders are stay connected and
networked with each others in the industry for gathering more ideas.
Existing Companies: with the help of existing formal methods potential entrepreneurs
and intrapreneurs can evaluate competitive products and services which leads to a result in new
or more product and services. Companies should not disregard old ideas and proposals for new
product, they must follow those for improvement. Existing patents may also be considered on the
internet and it is low cost method of gathering ideas (Spence, 2016).
Distribution Channels: members of this chain are quite familiar with the need of market
and hence they prove to be best source of new ideas. As these peoples help to know new ideas
related to product and advice what is wrong and fruitful for the company.
Government: it is also a source of new product and ideas in two different ways firstly,
response come from government to change the rules and regulation can become a source of new
ideas and secondly, patent office files contain various types of product possibilities that help a
entrepreneur to obtain product information.
Research and Development: Entrepreneur's own research and development is the largest
source of new ideas. A formal and well equipped department help to develop successful new
product ideas.
Internal Department: internal employees are the largest source for ideas. With
experience and exposure related to its products, they become most well informed idea source and
can provide detailed, structured proposals for new product and services. Encourage employee
ideas by providing them infrastructure to submit new proposals. This create relationship between
customers and internal departments.
P2. Explaining the rationale and the market gap
Being an entrepreneur is one of the best vocation in the world because it encourages the
view of thinking and creating new ideas such as starting a new business of restaurant in rural
area. The market gap can have more than one attributes but to identify the gap is the biggest task
without getting out there and meting people (Stewart and Gapp, 2014). Challenging doing new
things, exploring and being curious and meeting new people must be a habit of an entrepreneur.
There are some strategies which help to leverage gaps in the market, it may takes a bit of
time and efforts to explore, learn and research with discoveries. Trends and new technologies
are moving so quickly, in an restaurant the trend effect directly such as people wants new and
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different taste, and to complete the need owners take different initiates like hire new chefs in
order to make new recipes and attract customers. Recently people are so foodie and they search
many places for hang out and when starting a new restaurant, make sure have both place in
different zone- sitting area and dinner area. It helps customers to feel comfortable by
combination of these two zones. Make some new innovations and creative ideas to attract people
and find solutions that can make life easier or streamline business. Restaurant plan is not new but
to present it with new idea and innovations is recent trend. To add more opportunities in the
existing product will also help in making the business new, using hidden ideas and exploring
them into business can lead to the best future. To expand the business meet new people and take
help and examining the market is the best way to reduce the gap (Sahut and Peris-Ortiz, 2014).
There are many tools and techniques which help to reduce the market gap like while
establishes the business of restaurant, collect secondary data and analysis the strength and weak
point related to market and also check the environment which may cause harm to business or
not . Sometimes asking people is also useful tool. If the geographical area is strong it will help to
run the business but on the other case, its demographic zone is not good then it will be harmful
and cause financially loss. To analyses the market trend can use 7P's of McKinsey that will help
to examine the structure, strategy, system, shared values, skills, style and staff. Using Nadler-
Tushman model will also help to know how the whole company may work and it is also used in
start the business of restaurant as it analyses the gap that affect efficiency of entire system, also
looks at how inappropriate inputs can leads to gap. Computer spreadsheets are also suited for
reducing the gap in financial result. It help to know the effects of changes in value that are
control and see the result. It also uses for calculation the profit, and can determine the price of
those products which are offer in restaurant (Schaper, Volery, Weber and Gibson, 2014).
Porter's five forces model is useful one which can be highlighted to have enough of the
idea about the company's position in the market that may be affected because threats of market
forces up to a high extent. It is used to assess competition in the market in effective way. This
model is helpful in determining whether level of competitive forces will affect new business too
much extent or not. In relation to this, hospitality industry is one of the highest profitable
industry and new entrepreneurial idea is to start small restaurant to garner profits in the long run.
The new start-up will be named as Exotic restaurant and as such, Porter's five forces model can
be applied as new entrant in the market to analyse competitiveness. The forces are listed below-
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1. Threat of new entrants-
This is the threat of new entrants which is helpful to know as when more and more
entrants are there in the industry, profits get declined. Exotic restaurant will have to consider
such aspect because it is start-up venture and cannot take severe competition from established
hospitality firms in UK. This threat prevails as there are not much government regulation, lower
capital is needed etc.
2. Bargaining power of suppliers-
The suppliers in the market bargains regarding selling materials at higher prices or
degrading quality and providing raw materials to the business. This affects firm which buy
materials as they have to pay more than adequate amount and profits get reduced. It is taken into
account in order to avail materials at lower amount (Jurevicious. 2013).
3. Bargaining power of Buyers-
This is another threat to new entrant because when in an industry where buyers
bargaining power is high, it has dual effects on producers. This means that when they demand for
lower price, revenue is lowered as well. On the other hand, if superior quality products are
demanded by them, then cost of production increases.
4. Threat of Substitutes-
Substitute is termed as one customer can easily find another product which is a substitute
for that product at better prices in the best possible manner. This is required to taken into account
by new restaurant so that it may be able to carry out different food products that are not easily
substitutable (Yager and Kacprzyk, 2012).
Rivalry among competitors-
It is one of the main threat which is required to be effectively cope up with so that initial
profits may be attained quite effectually. It is needed that Exotic restaurant will have to compete
for gaining market share so that rivals may be outreached with much ease.
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P3 Presenting data to support gap analysis in assessing specific entrepreneurial idea
The gap analysis is important aspect in gaining new insight as it is qualitative and
quantitative comparison relating to current performance of the organisation with that of potential
performance (Provost and Fawcett, 2013). In simpler words, gap analysis is done to judge
present state with future state. In carrying out such analysis, there are basic two questions such as
performance- where we stand and potential- where we want to be stand. This is the main
principle which provides clarity to business regarding current deficiencies if any and solutions
regarding the same to improve in the future course of action. The gap analysis will be beneficial
for the restaurant so that it may be able to close gaps which prevails in the industry. One of the
main gap is that lack of healthy food in UK which has increased unnecessarily obesity in the
citizens up too much extent. It is required to eradicate the same because increased weight causes
serious repercussions and as such, it needs to be reduced for attaining healthy life in the best
possible manner (Mason, 2015).
Exotic restaurant will provide wagon food in the menu list to customers so that they may
be able to eat it and would be beneficial for them in reducing weights quite effectually.
Moreover, diet food will also be imparted to them as more of citizens are overweight and thus,
these types of foods would be helpful and gaps prevailing in the current state will be eradicated
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Illustration 1: Gap Analysis Source: shopify.com

up to a high extent. Hence, in the future, restaurant will be able to minimise such gap and
customers will be satisfied as well.
The market research is gathered by collecting primary and secondary data in effective
way. It can be said that primary data is collected by formulating questionnaires and respondents
are asked to fill up the same and report within stipulated time. Moreover, secondary data is
collected from published journals, books and articles from internet.
Questionnaire
Name
Demographic information
Age
Q1. Do you like to visit restaurant now and then?
 Yes
 No
Q2. How often do you visit restaurant for taking food?
 Once in a week
 Once in a month
 Rarely
 Others
Q3. From the following factors, which influences you to attract to the restaurant?
 Low cost
 High quality food
 Convenient location
 Discounts offered
Q4. Are you influenced by the positive atmosphere of the restaurant?
 Yes
 No
Q5. Which criteria is important for you to judge restaurant's viability?
 Concept of restaurant
 Food quality
 Fast service
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 Others
Q6. What type of food in restaurant do you prefer?
 Traditional
 Modern
 Mix of above two
 Others
Q7. Do you prefer to eat diet food for healthy practices?
 Yes
 No
Q8. Kindly provide any further suggestions to improve upon services...............
Primary data gathered from responses of questionnaire
Respondents
Prefer to eat diet food for
healthy practices
Factors which influences
you to attract to the
restaurant
1 1 1
2 1 3
3 1 2
4 1 1
5 1 1
6 1 2
7 1 1
8 1 1
9 1 1
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10 1 4
11 2 1
12 1 2
13 1 1
14 1 3
15 1 2
16 1 5
17 1 4
18 1 1
19 2 2
20 1 3
Mean value 1.1 2.05
Median value 1 2
Mode 1 1
Standard
deviation 0.31 1.23
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Secondary data gathered from journals about Restaurant industry of UK in past years and
market analysis
P4 Interpreting data to provide evidence of market potential
The primary and secondary data is attained in above paragraphs. The primary data is
collected through questionnaire and results are calculated by taking sample of 20 customers
visiting restaurants. The descriptive analysis is made by which mean, median, mode and standard
deviation is calculated in effective way. It shows that nearly all people think that they prefer diet
food while going to restaurant as mean is 1.1, median and mode are also 1. On the other hand,
high quality food influences them to attract to restaurant as mean and median are 2. While, mode
is 1 which means that low cost is also taken into account by them. Thus, it can be analysed that
Exotic restaurant can provide diet food to citizens and fill up the gap analysis in restaurant
industry and providing quality food and satisfying customers (Masutha and Rogerson, 2014).
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Illustration 2: Restaurant industry analysis Source: statista.com

Secondary data is taken which provides clarity that industry in which business is going to
start is much competitive. It is evident from the fact that turnover is increased in the past nine
years. It was 22452 in 2008, in next year turnover increased to 22658, 23017 in 2010. Moreover,
in 2011, it increased to 25690, maximised to 25934 in 2012. Furthermore, it increased to 28740
in 2013, 29571 in 2014, 32283 in next period and maximised to 34684 in 2016. Thus, it is
cleared from the fact that Exotic restaurant has to implement well-structured strategies in order to
beat competition. This is essentially required so that profits may be attained and competitive
forces can be handled in a better way.
P5 Applying SWOT analysis to support objective of entrepreneurial idea
SWOT analysis is required to be conducted so that internal strengths, weaknesses,
opportunities and threats can be highlighted with much ease. The SWOT analysis for Exotic
restaurant is described below-
1. Strengths (S)- The organisation is required to analyse its strengths before starting up venture.
It can be analysed that one of the main strength of Exotic restaurant is that it will provide new
variety of food to customers, thereby, imparting the highest level of satisfaction to customers
(Henrekson and Sanandaji, 2014).
2. Weaknesses (W)-
The weakness of business is that it has no experience in the field of hospitality industry
and as such, at initial stage, it might face repercussions. Moreover, profits will not be achieved
easily. Furthermore, faster delivery of meals are preferred by customers and thus, skilled staff
will be required which will increase costs.
3. Opportunities (O)-
The restaurant has the opportunity to become leading restaurant in the industry as it will
provide quality goods at lower prices. Moreover, it will provide wagon and diet food to
consumers which will be beneficial for firm to establish business in the market. Thus, Exotic
restaurant would be able to get its market share by providing variety of food to consumers
(Hillary, 2017).
4. Threats (T)-
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The main threat to company is that competition is severe in the industry which will
provide greater difficulties in attainment of goals in effective way. Moreover, firm will require
implementing well-mannered strategies to overcome the same and attain market share quite
effectually.
P6 Evaluating competitive and market environments in which business idea will be viable
Profit maximisation is an important aspect of every business and the ultimate goal which
has to be achieved in order to earn great profitability. Profit maximisation provides various
opportunity to every business like expanding it successfully or investing in more revenue
generating concepts which are beneficial for them. There are various strategies which the
restaurant business adopts in order to maximise their profit (Abebe, 2014).
1. Promotional Strategies
They can provide various offers to the customer who are availing the services for the first
time such as proving them special complementary services along with the normal ones. These
promotional strategies would lead to attract the potential customers in the market which would
increase the base thus leading towards more revenue generation.
2. Branding
Branding provides an identity to the business which creates a long term impact on the
consumer which leads to retain customer and can act as a word of mouth which is very effective
for promising the brand as the potential customers believes on the real experiences and trust the
personal advices or suggestions given to them which provides them the opportunity to gain more
customer which leads to increase their market share in the particular market of the restaurant
industry (Barber, Metcalfe and Porteous, 2016). Thus, Exotic restaurant will be able to perform
well and attain good market share by providing quality food to customers.
CONCLUSION
Hereby it can be concluded that starting up a new business is one of the crucial aspect as
organisation should take various factors such as competitive analysis, target market and related
factors. Moreover, proper market research needs to be undertaken in effectual way. Furthermore,
innovation should be there so that business may develop entrepreneurial idea into real business
operations. Thus, identifying opportunities of entrepreneurial is crucial task.
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REFERENCES
Books and Journals
Abebe, M., 2014. Electronic commerce adoption, entrepreneurial orientation and small-and
medium-sized enterprise (SME) performance. Journal of small business and enterprise
development. 21(1). pp.100-116.
Barber, J., Metcalfe, S. and Porteous, M. eds., 2016. Barriers to growth in small firms.
Routledge.
Henrekson, M. and Sanandaji, T., 2014. Small business activity does not measure
entrepreneurship. Proceedings of the National Academy of Sciences. 111(5). pp.1760-
1765.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Mason, C. M., 2015. Spatial variations in enterprise: the geography of new firm
formation. Deciphering the Enterprise Culture: Entrepreneurship, Petty Capitalism, and
the Restructuring of Britain.–1991,–Р, pp.74-107.
Masutha, M. and Rogerson, C.M., 2014. Small enterprise development in South Africa: The role
of business incubators.Bulletin of Geography. Socio-economic Series. 26(26). pp.141-155.
Provost, F. and Fawcett, T., 2013. Data science and its relationship to big data and data-driven
decision making. Big data. 1(1). pp.51-59.
Sahut, J. M. and Peris-Ortiz, M., 2014. Small business, innovation, and entrepreneurship. Small
Business Economics.42(4). pp.663-668.
Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014.Entrepreneurship and small
business.
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Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium sized enterprises (SMEs). Information systems
frontiers. 17(3). pp.475-492.
Spence, L. J., 2016. Small business social responsibility: Expanding core CSR theory. Business
& Society. 55(1). pp.23-55.
Stewart, H. and Gapp, R., 2014. Achieving effective sustainable management: A small‐medium
enterprise case study. Corporate Social Responsibility and Environmental
Management. 21(1). pp.52-64.
Yager, R. R. and Kacprzyk, J. eds., 2012. The ordered weighted averaging operators: theory and
applications. Springer Science & Business Media.
Online
Jurevicious. 2013 Porter's five forces [Online] Available Through:
<https://www.strategicmanagementinsight.com/tools/porters-five-forces.html>
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