Highlight the factors to consider when evaluating a business opportunity

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The following are the factors to consider when evaluating a business opportunity.
a. Personal consideration-These are the abilities and expectations of an entrepreneur.
They include the following;
- Objectives-The entrepreneur should evaluate the business idea to find out whether
it is in line with his/her objectives.
- Skills-Where a business requires certain specialized skills and those skills are lacking
the idea may be dropped.
- Commitments-Where the business is likely to interfere with the entrepreneurs other
commitments it may fail.
- Interest-It is necessary to check whether the intended business will interest the
entrepreneur or not. If the entrepreneur will not enjoy running the business, the
idea should be dropped.

b. Business consideration-These are external factors that are likely to affect the operations
of the business and they include;
i. Availability of market for the product-An entrepreneur should assess the availability of
customers before starting a business. Customers exist where there is a gap/nich in the
market.
ii. Technology-The business should be evaluated in terms of whether there is an
appropriate technology that can be used in production. Factors to be looked into
include;
a. -Appropriateness of the technology
b. -The cost of the technology
c. -The possibility of the business suffering in case the technology becomes
outdated/obsolete.
iii. Availability of raw materials and other resources-The raw materials and resources
required should be within the reach and affordable to the entrepreneur.
iv. Government policy-An entrepreneur should consider the requirements of the
government before starting a business e.g. the government may require certain
businesses to be located in certain areas only.
v. Amount of capital required-The capital required to run and maintain the business
should be considered i.e the source of capital.
vi. Profitability of the business-Within a certain duration of time.
vii. The break-even period-How long the business can take to support itself.
viii. Possibility of expansion i.e. the potential for growth of the business.
ix. Impact of the business operations on the environments; some businesses lead to environmental degradation and should be located in appropriate places/effect on community and environmental health.
x. Security-Availability of security should be considered.
xi. Level of competition-This will help determine whether the business will survive or not.
xii. The risks that the business will face.

Titany answered the question on November 10, 2021 at 07:44

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Highlight the factors to consider when evaluating a business opportunity

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