One distinguishing characteristic of entrepreneurs is their ability to identify opportunities faster than others. They have the knack for recognizing gaps in the market and filling them with innovative products and services. Every gap an entrepreneur identifies usually represent business opportunities worth exploring and expanding to them. So, whenever they discover the opportunities, they’ll employ every available resource to turn them into profitable businesses.
But the question now is, how do entrepreneurs identify business opportunities so easily.
It’s not rocket science at all.
You, too, can do it by following the information in this article.
We’ll show you how to identify business opportunities in your industry and others as entrepreneurs do.
So, if you’re ready, keep reading!
Ways to Identify an opportunity:
If you want to identify an opportunity worth investing your time and effort, there’re certain actions to take.
1. Observe the trend in your industry
The first step to identifying an opportunity is to observe what’s going on with products in the market.
Your focus should be on a particular industry where your skills and knowledge can be useful.
Study the way customers interact with the products available and check if there’re ways to scale the products up.
For instance, we all know that online shopping is now the new normal for people worldwide.
If you come up with a system or service that can reduce shipping cost, delivery time failed deliveries, or product defects, etc., you’re sure to succeed.
This is because any solution or idea focused on improving customer’s online shopping experience will be widely accepted.
But how do you observe the trend?
Just utilize the statistical reports from different institutions and companies who study trends and publish the results online.
Some of these reports are free, while some are not.
But a little investment to get what you want is worth it at the end of the day.
2. Focus on solving a particular problem
This is another approach to identify an opportunity easily.
You have to recognize that a problem exists and then, you come up with a solution for it.
Your solution might be in for of a product or service that’ll solve the identified problem.
For instance, due to the growing need to protect humans and their environment from air pollutants and greenhouse emissions, car companies shift their resources towards electric cars.
They’ve discovered that diesel and petrol cars are problematic.
So, they’re trying to provide a solution to the problems.
That’s an example of focusing on a problem as an approach to identifying an opportunity.
So, if you identify the problem, you create a solution for it.
3. Identifying gaps in the market
Whether you believe it or not, there’re many products and services that customers are searching for but can’t find in the marketplace.
Many top companies may be ignoring some market segments just because their customers are not as large as they want.
Since you’re trying to identify a viable opportunity, you can create products or services for those customers that no one notices.
Apart from creating new products, you can offer a variation of what other companies offer to target specific customer groups.
All you have to do is carry out an analysis of your industry to identify the existing products and services.
Then, check if there are limitations to what the big companies are offering or if they are not suitable for a particular market segment.
Once you’ve seen that there’s room for innovation, focus on that and provide the solution.
Filling the gaps in the marketplace is not just for new startups.
If you already own a business, you can expand it by identifying these gaps and creating products for them.
How to identify potential marketing opportunities?
Every forward-thinking business owner continually strives for sustainable growth & profitability.
But it’s never easy to achieve them due to the volatile business environment where they operate.
There’re many challenges in the business environment, such as cut-throat competition, technological advances, and scientific discoveries that shorten product & service life circles.
Apart from the above, business models keep changing, and as a result, what works this year may not work the next year.
So, if you want to stay ahead in your industry, you must develop actionable strategies on how to identify potential market opportunities to explore.
One of those strategies will be to analyze the business environment from time to time.
But before you these analyses that can help you identify a market opportunity.
You must first understand the direction, resources, strengths, capabilities, and goals of your company.
After that, you can now take the following actions.
1. Consumer segmentation
This is a process of dividing consumers based on different variables like occupation, gender, age, residence, attitude, educational level, lifestyle, purchasing motivators, values, etc.
With these variables, you can easily estimate the total number of consumers you can serve and what motivates or influence their purchasing decisions, such as design, price, convenience, and prestige.
Once you’ve categorized consumers based on demographics, you can identify the areas where your company product is lacking based on the consumers’ needs.
Afterward, you can channel your resources into a solution that’ll meet the new opportunity by improving what you have or creating a new product or service.
2. Carry out a buying situation analysis
Analyzing purchase situations helps a company to identify expansion opportunities.
The aspects to concentrate on in your analysis include the payment methods, distribution channels, and every other situation that facilitates consumer purchase decisions.
With the result you get, you can improve the way you offer your products and services in terms of access and availability.
For instance, if you improve your distribution channels and your payment collection methods, you can attract new customers to your business.
The truth is that many consumers may decide to buy from a particular company because their distribution channels and payment processing methods are easy for them to use.
3. Engaging in in-depth competition analysis
Every business has both direct and indirect competition.
The direct competition has to do with other companies offering the same products and services, while the indirect competition covers all the substitutes for your products.
When analyzing your direct competitors, you need to find out the brands and the products in your industry that are growing more than others.
Try to uncover the reasons behind their success and also find out the value they provide to the consumers.
Afterward, try to identify the competitive advantage you have over them.
As for your indirect competition, you need to analyze them to identify their weaknesses too.
That way, you can easily develop strategies for convincing the consumers to choose what you offer over the substitutes.
For instance, if your company is in honey production, you already know that your indirect competitor is a company producing sugar.
So, an in-depth analysis of such a company will equip you with the weapons to market and attract the consumers to use honey instead of sugar.
4. Carry out analysis of foreign markets
You don’t need to dwell in an already saturated market as an entrepreneur.
Instead, think outside the border and consider expanding your reach to other countries.
Do you know that you can discover lots of market opportunities by analyzing foreign markets?
If you enter a foreign market where your products and services are lacking or in high demand, you’ll grow faster than remaining in a highly competitive market.
So, all you need is to carry out an in-depth analysis of foreign markets that interests you.
In your analysis, focus on discovering the consumption habits, economic development, the market size for your product, per capita consumption of your target product, competitors in the foreign market, etc.
All this information will help you to determine the viability of your business in foreign markets.
5. Analyze other industries
Being in one industry doesn’t mean you can’t explore and branch out to others.
Many companies today diversify to other industries as an expansion strategy.
So, you can do the same and utilize the business opportunities in those other industries.
But before you venture into a new industry, you need to analyze it to identify the competition, market shares, market sizes, unit prices, growth rates, brand positioning, per capita, etc.
It’s not advisable to invest in an industry you don’t understand.
This is why you need an in-depth analysis of the industry to equip yourself with what’s working and what’s not.
6. Environment Analysis
Another approach to identifying business opportunities is to analyze the changes that occur in the environment from time to time.
For instance, scientific and technological developments are constantly changing the way we work and live.
For instance, the widespread usage of the internet gave rise to many business opportunities.
Now, companies are opening up shops online to reach millions of consumers in every corner of the world.
Also, the introduction and adoption of smartphones plus the internet gave rise to mobile apps’ continual development.
Now, millions of people use a smartphone, and as a result, companies now invest in mobile apps to be available to their consumers on the go.
Apart from the internet and smartphones, other fields creating opportunities in this era include robotics, renewable energy sources, artificial intelligence, biotechnology, the internet of things, etc.
Other changes that can create business opportunities include climatic changes, financial market changes, and changes in the regulatory framework.
Some changes in business regulations sometimes affect certain companies negatively but create opportunities for other companies.
So, if you take your time to conduct an in-depth environmental analysis, you can identify these opportunities and explore them.
Business Opportunity Example
We mentioned earlier in this article that change and technology create new business opportunities every day.
So, if you’re still wondering about the viable ones to consider this year, check the following:
- Freelance writer
- Career coach
- Event or wedding planner
- Golf coach
- Interior decorator
- Food truck business
- Professional organizer
- Mobile pet grooming services
- Personal trainer
- Social media consultant/manager
- Virtual assistant
- Vending services
- Lyft or Uber driver
- Website developer
- Personal shopper
- IT contractor
- Print on demand
- Digital products
- Publish books
Every entrepreneur knows how to identify business opportunities where others overlook.
But they don’t just wake up and say, ha!
I have found a viable business to explore for profits.
Entrepreneurs pay attention to what’s happening around them all the time.
They follow the trends, technological advancements, and even environmental changes in the bid to know the products that are lacking in the market.
If you can’t identify opportunities, there’s no way to create products for millions of customers in the market.
Even if you’re already in business, you need to keep your customers loyal by providing innovative solutions to their problems.
That’s why we’ve shared the details on how you can identify business opportunities like entrepreneurs.
One interesting thing to know about entrepreneurs and business opportunities is that they sometimes think outside the box when necessary.
They look beyond their industries and even across the borders to explore opportunities in foreign markets.
When an entrepreneur wants to expand, they usually consider branching out even to other industries as well.
So, in your journey to identifying viable business opportunities, try not to enclose yourself in a box and run out of ideas.
Expand your search, study the market, analyze the customers, extend your search and analysis to foreign markets and also consider other industries.
If you do all that, you will always uncover many business ideas to explore.
With many changes happening all over the world due to technology and environmental changes, there’re lots of businesses now at your fingertips.