Opportunity identification skills are crucial for entrepreneurs as they form part of the stepping stones for starting an entrepreneurial journey. This is an area many struggle with unless one has been exposed to market research experiences-it is further compounded by the absence of well defined and easily accessible resources on opportunity identification. The starting point in opportunity identification is the mindset ‘is the glass half full or half empty?’ Some simply experience a light bulb moment and others use industry experience to spot opportunities before others do.
The characteristics of people who identify opportunities show that they are generally individuals with optimistic outlooks, inquisitive, commercial curiosity, enjoy questioning assumptions, embrace change, conscious about local environment, have a problem solving mindset, are innovative and enjoy researching. We can also take a leaf from Sir Richard Branson who has a mantra that runs through the DNA of Virgin companies- A-B-C-D. (Always Be Connecting the Dots).
We will explore some of the approaches you can use to identify opportunities;
Problem solving mind-set
The following are the top 10 risks out of the 20 released by the World Economic Forum;
- Unemployment or underemployment
- Fiscal crises
- Failure of national governance
- Energy price shock
- Profound social instability
- Failure of financial mechanism or institution
- Failure of critical infrastructure
- Cyber attacks
- Interstate conflict and
- Terrorist attacks
The above tie in to factors driving and shaping the future of the world such as technology and innovation, regulation and governance, global economy, trade and investment, natural resources and sustainability, human capital, and consumer expectations.
Zimbabweans can resonate with some of the risks above already playing out in our country. We are psychologically predisposed to view risks negatively and as such miss most often miss out on opportunities. It’s important to wear risk lenses in order to adequately prepare for risk mitigation but the second question should always be what sort of opportunities lay beyond the risks. Are you willing to take calculated risks and progress through discomfort to get to the finish line? For instance who has moved in to benefit from the 2019 drought season? The answer lies in companies supplying products and services such as irrigation systems, drought resistant crops, solar products and more.
National Budget Analysis
The national budget can be considered a ‘document of opportunities’ for entrepreneurs in any country as it points to the key priorities for the government and the direction it will be allocating resources. Where and how will the nation be spending its resources?
For entrepreneurs, they first look at the big picture of macro-economic analysis and outlook and then secondly place the budget under the microscope and zero in on the expenditure line items. Are there new infrastructure projects coming up in 2020? Construction and engineering companies follow the money and prepare for future tenders. In a stable economy, the salaries bill for civil servants attracts companies offering hire purchase facilities. The donor community usually chips in to plug the gaps in the budget by coming up with own strategies and budgets to complement government’s efforts-entrepreneurs also follow their budget line items. Keep the 2020 National budget and analyse it with ‘’opportunity lenses’
Technological Opportunities
The future is already here with The Fourth Industrial Revolution being topical. The Fourth Industrialisation is a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies. It is paving the way for transformative changes in the way we live and radically disrupting almost every business sector.
Africa unfortunately continues to lag behind in terms of technological advancement and this result in the continent being a recipient and consumer of technology. The huge gap between the developed world and Africa is pregnant with opportunities. Early adopters and implementers have a head-start on exploiting opportunities in this sector. Zimbabweans need not look any further when it comes to tech opportunities as this is the sector that produced our first billionaire-Dr Strive Masiyiwa!
Spending Pattern Review
Zimbabwe is going through challenging political and economic times characterised by skyrocketing prices, high cost of living and hyper inflation. This has prompted many to change their life styles and adapt to the difficult environment. New spending patterns do show the majority focusing on ‘Maslow Hierarchy of Needs’ such as food, accommodation, transport, education and health. Some entrepreneurs simply follow the money and target opportunities on what many are spending money on at a particular point in time.
Exports and Imports Opportunities
Another approach to look at opportunities in Zimbabwe is to analyse exports and imports and setting up businesses targeting these sectors. Zimbabwe is the 132nd largest export economy in the world according to the Economic Complexity Index (ECI). Zimbabwe’s main exports are tobacco and nickel, diamonds, platinum, ferrochrome, and gold. Zimbabwe main export partners are: South Africa, China, Congo and Botswana. Top fastest-growing exports include cotton, mineral fuels including oil led by coal coke or semi-coke and peat lignite.
Our main imports are motor vehicles and machinery, fertilizers, fuel and foodstuffs with main import partners being South Africa and China. The fastest growing imports include vehicles, miscellaneous chemical goods and plastics. Opportunities abound for new entrants in exports in producing goods or services or bringing disruptive forces. The same applies to imports particularly in the import support sector.
Changes Opportunities
According to Peter Drucker- ‘an entrepreneur always searches for change, responds to it, and exploits it as an opportunity. He viewed change as a vehicle for opportunities whether the change is good news such as unexpected success (good news) or an unexpected failure (bad news). Change in government, demographics, industry, products or government policies all present opportunities for those who can see the gaps and exploit them. Zimbabwe has experienced a record number of new statutory instruments in 2019 with some of them introducing new opportunities. The latest statutory instrument SI 2135 of 2019 which bans the installation of electric geysers on new properties has attracted the attention of companies supplying solar geysers!
Country or Geographical Areas Comparisons
Each country or region has got its own unique ecosystem of opportunities and this depends to a great extent on level of economic development. There are 3 broad stages of economic development starting with the resource based stage, investment driven stage being second and lastly the innovation driven stage. The higher the stage a country is, the easier it is to explore opportunities from countries or regions in the lower ranks.
For Zimbabweans in the diaspora some of the business models they are exposed to can be implemented back home. A lot of benchmarking can be employed in comparing countries or regions and plugging identified gaps.
Value Chain Analysis
Developed by Michael E. Porter, a value chain is a business model that describes the full range of activities needed to create a product or service. For companies that produce goods, a value chain comprises the steps that involve bringing a product from conception to distribution, and everything in between—such as procuring raw materials, manufacturing functions, and marketing activities
It involves various components from inbound logistics, operations, outbound logistics, marketing and service. When viewed from an entrepreneur’s point of view-the value chain provides an over view of opportunities for an individual’s company products and services or the entire market.
In conclusion, there are various ways of identifying opportunities and knowing them helps entrepreneurs to move in when others are fleeing. Opportunity identification is a mindset and what you focus on in your mind and heart is exactly what you will see and experience in the world outside. However be wary of the valley of death that lies between business opportunity identification and a successful business launch – as most business ideas perish before reaching the market place.
