The two most indispensable traits of successful entrepreneurs are discerning observation and readiness for being fully aware of environmental trends. I am a firm believer that predicting trends and offering creative solutions to cater to the emerging demands always have a higher chance of success in the ever-competing market.
Entrepreneurs need to be cautious when observing environmental trends in order to differentiate between trends that are here to stay and fads that are short-lived. New startups should steer clear of capitalizing on fads as they do not have sufficient resources for it. Never make the mistake of considering a trend in vacuum for inventing new business ideas as trends are usually inter-related affecting each other to some extent.
Three different ways that entrepreneurs can adopt to identify opportunities in the marketplace are mentioned below:
- Trends observation
Trends prevailing in the marketplace or industries generate opportunities that entrepreneurs can pursue to generate business ideas.
Four primary Environmental trends that can propose opportunity gaps for products and services and require constant awareness regarding any changes are:
a) Economic Forces:
This trend entails the analysis of the state of the economy, discretionary income of various groups in the economy and patterns of how consumers spend money. The study of these forces will highlight the areas that are promising in terms of new business ideas and the areas which are absolutely not.
When the economy is in weak state or deteriorating, people have less disposable income to spend and are more reluctant to spend that fearing future unemployment. On the contrary, when economy is strong and flourishing, disposable income is also on the rise which translates into increase demand of non-essential (Luxury) items. Emphasis is on the spendable income of consumers because they are the future customers of your business.
b) Social Forces:
Comprehending the impact that social forces have on social and cultural trends and how these trends influence the development of new business ideas is a an essential piece of the opportunity-recognition puzzle. The proliferation of certain businesses is due to the fact that the product or service its offering satisfies a social need of people which is not as obvious as the transparent need the product or service is fulfilling.
Shift in social trends alter the behaviour of people in the society and how they will redefine their priorities. These changes will determine what the new businesses will offer in form of products and services. These trends provide stimulus for new business ideas.
c) Advances in Technology
Technological advancement is usually interlocked with changes in economic activities and social trends. New and emerging technologies bring positive change in the economy and offer efficient ways for the social order of the society. Technological advances presents new opportunities for people to execute daily tasks with more ease.
Technology itself is not always crucial for recognizing new business opportunities. But, the fundamental part is to recognize how these technologies can be harness to cater to the changing needs and new demand of customers. Whole industries have been created owing it to the technological advancements like Bio-tech and Internet industries.
Entrepreneurs can create new devices that further advance the technology if they have targeted the Tech industry. Or incorporate the new technology into existing products or services in other industries to fully utilize what the new trend has to offer.
d) Political Action and Regulatory Changes:
Opportunities for new business ideas arise under this trend when political arena goes through some new changes and when new laws and regulation are passed by the Government.
Political changes like increase political insecurity or safety threats give rise to the need of new products and services that provide the solutions for security gap in marketplace. More and more firms have generated demand of products and services that will protect the tangible and intangible assets. Entrepreneurs can take initiative and offer creative security devices and reliable human resource for security departments.
New laws create opportunity for development of entrepreneurial firms that facilitate other firms, individuals and Government agencies to adhere to the laws. Government can also introduce change in its regulations which resonate yet another opportunity. Entrepreneurs can make their businesses stand out by exceptionally adopting the new standard outlined by changed regulations in their products and services. They can even exceed the new regulations by going a step forward than what they are obliged to do and adding more value for the customers.
- Trying Problem Solving:
Second approach for recognizing opportunities is by identifying the problems that exist in the market and then providing solutions for them. As Lee Iacocca quoted, “We are continually faced by great opportunities brilliantly disguised as insoluble problems.”
The problems can easily be detected when an entrepreneur keenly observe emerging trends in the surroundings or an opportunity can even be discovered by chance. Sometimes, Entrepreneurs can identify issues all thanks to their sixth-sense**.**
In some cases, identification of problem is easy but finding the perfect solution isn’t. One useful technique when you have exhausted all the possible options for solutions but have not found a suitable solution, is to find the solution of a similar problem and applying it with all possible modifications.
- Discovering Gaps in the marketplace
Last approach is findings gaps that exist in the marketplace which is the perfect source for identifying business opportunities that have an existing demand and fulfilling customer needs. This gap in the marketplace is usually created when a certain product or service is demanded by a group of customers but they don’t represent a large enough share of market that will make orthodox manufacturers interested in catering to their demand.
One way to pinpoint these gaps is to observe the product or service which need among customers is increasing but is not available in the marketplace resulting in abundance of disappointed customers.
Creating business opportunities does not always have to be about creating a new product or service from scratch. Entrepreneurs can fill the gap in another target market by creating a new category of existing product or service.