Factors to consider when evaluating a business opportunity
Evaluating a business opportunity.Factors to consider when evaluating a business opportunitya) Personal consideration-These are the abilities and expectations of an entrepreneur. They include the following;-Objectives-The entrepreneur should evaluatethe 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;-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.-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 technologyb. -The cost of the technologyc. -The possibility of the business suffering in case the technology becomes outdated/obsolete.-Availability of raw materials and other resources-The raw materials and resources required should be withinthe reach and affordable to the entrepreneur.-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.-Amount of capital required-The capitalrequired to run and maintain the business should be considered i.e the source of capital.-Profitability of the business-Within a certain duration of time.-Level of competition-This will help determine whether the business will survive or not.