Finding a business opportunity

In this second article in the series on entrepreneurship, we look at the process of coming up with a good business idea.

If you feel you have what it takes to be an entrepreneur, your next step is to identify opportunities and match them with innovative solutions. Perhaps the most difficult thing to learn is how to become sensitive to opportunities.

The first thing to recognize is that identifying opportunities takes a commitment to practice in order to gain any measurable proficiency. You should be prepared to practice opportunity identification regularly if you want to master the ability.

Second, this is an activity we often have not been trained for anywhere in our educational experience. In fact, our education has probably contributed to our inability to recognize opportunities.

In the spring of 1990, I taught entrepreneurship to high school teachers at the University of Toronto. That summer, as part of a conference sponsored by the Innovation Centre in Waterloo, I presented workshops in North Bay and Toronto to other groups of high school teachers. A topic of prime consideration at each of these "train the trainers" sessions was understanding the nature and process of opportunity identification and how to teach it to others.

This course is recognized to be very different from the usual business course given in Ontario's schools. A key aspect is the emphasis given to identifying opportunities and developing creative solutions. This is clearly a first and I relate the situation to provide some background and credibility to the approach presented in this article.

How do you start? Start by becoming sensitive to your environment! Typically, the entrepreneur can look at situations where most of us see nothing but chaos and identify an opportunity. This is a unique ability that is cultivated over time through practice. The question for you, therefore, becomes twofold: How can I become sensitive to my environment? How can I discern opportunities?

To develop an appreciation of the entrepreneur's ability to identify opportunities, I asked workshop participants to consider our location as their entrepreneurial environment. Their task was, in about 20 minutes, to identify 15 or 20 problems or shortcomings with their immediate environment.

It is often not difficult for anyone to perform such an exercise and come up with a lengthy list of issues. The effort must be a conscious one, however, as most of us are so familiar with our everyday environment that we become oblivious to it. But if our environment changes, we are forced to be more conscious of it.

When everyone in the workshop had completed their list, we gathered together to look at all the problems and identify the best for further analysis. The next step was to consider the problem as defined and determine if it was the "real" problem or a symptom. If it was a symptom, through discussion, the problem was determined and articulated.

Once we are sure about the problem, the next question is: "What opportunity is created by this problem?" It is often said the entrepreneur sees the glass as half full rather than half empty--opportunities rather than problems. An objective of the exercise was to allow individuals to experience the process of identifying opportunities by first noting and becoming comfortable with problems.

A problem I became acutely aware of shortly after moving to Florida, for example, was the difficulty in obtaining any Canadian news! With more than half a million Canadians living in the Clearwater area permanently or temporarily, this "problem" is really an opportunity. Perhaps there are others who would like to receive Canadian news regularly and pay for this service.

Another example is the complete absence of rust on automobiles in the south. Cars as old as ten years were still in showroom condition and did not require major body and paint work. The problem of rust in Canada creates an opportunity for the entrepreneur who establishes an auto body and paint shop. More recently, it has also created an opportunity for the entrepreneur to import used "salt-free" Florida automobiles to southern Ontario. Under the Free Trade Agreement, automobiles six years old or older can be imported into Canada. You should consult with legal counsel for specific details before pursuing this potential opportunity further.

Once the opportunity is identified and articulated, a brainstorming exercise should be undertaken to generate a number of solutions. This idea stage should be void of any judgment or evaluation. Remember, the worst thing that can happen at this stage is that you come up with only one idea! Recall the statistics quoted in the first article--your chances of coming up with the "right" idea the first time are about 1 or 2%.