IDENTIFICATION OF MARKET
&DEMAND DRIVEN BUSINESS
PRESENTED BY
NWOKO OKEZIEM CHUKWUMA
AT BUILDING SUSTAINABLE GROWTH &
DEVELOPMENT IN OUR COMMUNITIES
YOUTH ACCESS AND PARTICIPATION .
October 12-14, 2007
STORY LINE
• Most micro & small scale business are not well
planned from conceptualization to
implementation, this can be attributed to lack of
knowledge on what a business requires to make
profit and remain sustainable.
• Other reason are that most of these businesses
are other people’s ideas that are copied with out
understanding the basic rudiments of such
businesses, as such they are bound to fail once
the challenges come up.
Business Idea Development.
• Identify a gap/opportunity
• Identify Clients that has this
gap/opportunity as a priority.
• Develop a solution to fill this gap.
• Charge a fee for this product/services.
GAP SCREENING
•
•
•
•
•
Availability of Market
Availability of Raw Materials
Availability of Technology
Availability of Skills
Government Priority
GAP SCREENINGCONTD
•
•
•
•
•
Strategic fit
Ease of Implementation
Risk Exposure
Profitability
Cost/Benefit
Availability of Market
• If there is no assurance of an adequate
market, there is no sense going to
business. The market must be large
enough to enable the entrepreneur to
capture a market share and in the
process, make an attractive profit from the
transaction after deducting his costs from
sales. Indication of availability of market
includes, among others:
–
–
–
–
–
–
–
Existing demand is not at present adequately served by
existing suppliers;
Existing demand is presently served by imports;
Existing demand is presently not served at all;
The project’s product has significant uniqueness or unique
selling features- (in case of a product) or unique selling
proposition- (in case of a service) such as more desirable
features, better quality, more durable, better taste, superior
after sales service, free delivery, etc.,
Supply of the product/service is not reliable
Demand for the product/service is expected to increase
significantly or substantially in the future;
Supply of the product is presently served through smuggling;
Availability of Raw Materials
•
•
•
•
•
Raw materials are available in adequate
quantity locally
There is reliability of supply- whether local or
imported source;
Seasonality; perish ability, quality and
variability of raw materials have been
considered and found to be satisfactory;
Price of raw materials is reasonable;
Increase in the price of raw materials in the
future is perceived to be reasonable and
predictable;
Availability of Technology
•
•
•
•
The technology or technologies to be used
have been proven;
Reasonably priced technologies are available
to produce the product;
Technology is appropriate for the level of
production, level of investment and desired
product quality;
The product will not suffer from technology
obsolescence which will render the business
not viable;
Availability of Skills
•
•
•
Different skills (conceptual, managerial,
technical and manual) needed by the business
are available
Supply of skills is relatively steady and stable
so as not to jeopardize the business in case of
sudden or unforeseen labor changes, unusual
turnover, or unexpected problems;
Cost of labor is projected to be fairly steady
and predictable
Government Priority/Policy
•
•
•
The business is listed under the government’s list of
priorities for promotion investment;
The business receives government incentives whether
fiscal (e.g. tax exemption or reduction, tariff protection,
import privileges, etc.) monetary (priority lending
status, reduced interest rate), or other support
assistance (e.g., marketing, technical or consultancy
services);
The business falls under the government’s priorities of
imported substitution, export promotion, employment
generation, rural industrialization programs, technology
development/transfer, etc
Strategic Fit
•
•
•
Proposed business fits well within the
competence and expertise of the entrepreneur
or key staff;
Proposed business fits well within the existing
product line, technology, marketing set up,
production system, facilities and resources of
the entrepreneur, anchoring business or
community ;
Business complements and enhances the
existing set up, viability or growth of the
community through a positive synergy;
Ease of Implementation
•
•
Business can easily be implemented
because the inputs are readily available;
Business can be implemented within a
short gestation period or reasonable
preparatory period (e.g., 3 months to one
year);
Risk Exposure
•
•
•
•
•
The product or service can readily be copied or
imitated if the business is found very profitable by
others;
Competitors who have more resources and expertise
may effectively fight back if threatened by the
business;
Changes in customers’ or consumers’ lifestyle, buying
habits, consumption and spending pattern, etc may
take place anytime before the business can service the
market;
The business may suffer from unforeseen factors
such as weather condition, availability of raw materials,
technology obsolescence, changes in government
policies, priorities or programs;
Dependency of the business on imported inputs
whether raw materials, technology, skills or other
resources;
Profitability
• At what cost did the service/product reach
the client?
• What is the prevailing market price of the
same service/product?
• What the demand for the service/product?
• At what profit margin can I break even and
make sustainable profit
Cost/Benefit
•
•
•
Whether the benefits of the business in terms of
profitability, risk, investment requirement, availability of
inputs, etc. are worth all the efforts in conceptualizing,
organizing, and implementing the business;
The business provides sufficient (tangible and visible)
benefits to the community – either through
employment generation, backward or forward linkages
with other industries or other economic activities;
availability of needed products and services, etc.;
The business is economically viable through its own
merits and not through artificial government
interventions;
Critical Success Factor
• Critically analyze the various factors that
might affect the gap, identify your
strengths and weaknesses .
• Evolve strategies to overcome the
weakness and enhance your strengths.
• If after this screening & analysis, you can
not overcome some of the challenges
poses by the new business, it could be a
good indication that the business is not
viable and sustainable.
Conclusion
• This will provide a guide of how you can
screen and analyze business ideas.
• Show you the steps to must follow to
start and manage a profitable business
• So lets go and be productive.
THANK YOU