This chapter discusses business planning and opportunity identification. It begins by outlining the chapter objectives, which are to understand how to identify opportunities in the environment, evaluate business ideas, explain the concept of business planning, identify business plan components, and develop a business plan. The chapter then covers opportunity identification and evaluation processes. It describes how to scan the environment, identify and develop opportunities, and evaluate them. It also discusses assessing the entrepreneurial team. Next, the chapter defines business ideas and describes methods for generating and screening ideas. It concludes by explaining the business planning process and identifying the essential components of a business plan.

1. ATLAS COLLEGE OF HEALTH SCIENCE
ENTREPRENEURSHIP
CHAPTER TWO
BUSINESS PLANNING
By: Tesfaye Tilahun (MBA)

2. Chapter Objectives
After completing this chapter, students will
be able to:
Identify opportunity in the environment,
Evaluate the opportunities in the
environment,
Generate business idea,
Explain the concept of business planning,
Identify components of business plan,
Develop business plan

3. Opportunity Identification and Evaluation
 is the initial stage in the entrepreneurial process.
can be divided into five main steps.
A. Scanning the Environment/ Getting the Idea
 Idea is a thought or suggestion about a possible
course of action.
 opportunity is a favorable time or set of
circumstances for doing something.
 Business opportunities are distinguished from
ideas.
 Therefore, entrepreneurs should develop idea that
can help then to use the opportunities.

4. B. Opportunity Identification
is ability to see, to discover and exploit
opportunities that others miss.
is also the process of seeking out better ways of
competing.
It includes:
scanning the informational environment,
being able to capture,
recognize and make effective use of abstract,
changing information from the changing external
environments.

5. C. Opportunity Development
is the process of combining resources to pursue a
market opportunity identified.
This involves systematic research to refine the idea
to the most promising high potential opportunity
that can be transformed into marketable items.
D. Opportunity Evaluation
is a critical element of the entrepreneurial
process.
it allows the entrepreneur to assess whether the
specific product or service has the returns needed
for the resources required.

6. E. Assessment of the Entrepreneurial Team
Regardless of how right the opportunity
may seem to be, it will not make a
successful business unless it is developed
by a team with strong skills.
once the opportunity has been evaluated,
the next step is to ask pertinent questions
about the people who would run the
company.

7. Business Idea Development
A business idea is a short and precise description
of the basic operation of an intended business.
There are three types of business ideas. They are:
1. Old Idea – Here an individual copies an existing
business idea from someone.
2. Old Idea with Modification –the person accepts
an old idea and then modifies it in some way to
fit a potential customer’s demand.
3. A New Idea – This one involves the invention of
something new for the first time

8. Business Idea Identification
In this area, what we have to consider is that, all
business ideas are not equally worth.
To identify the best idea, it is better to answer the
following questions.
1. Which need will your business fulfill for the customers
and what kind of customers will you attract?
2. What good or service will your business sell?
3. Who will your business sell to?
4. How is your business going to sell its goods or
services?
5. How much will your business depend upon and impact
the environment?

9. Methods for Generating Business Ideas
 In order to generate business ideas, we have to examine
the following approaches.
A. Learn from successful business owners
B. Draw From Experience
C. Survey Your Local Business Area
D. Scanning Your Environment
E. Brainstorming
F. Structured Brainstorming
G. Focus Group
H. Problem Inventory Analysis
I. Free Association
J. Forced Relationships
K. Attribute Listing

10. Business Idea Screening
 Idea screening is the process to spot good ideas and eliminate poor
one.
 To screen ideas, we have 3 basic approach:
A. Macro screening: is aimed screening down ideas to 10.
The common criteria are:
 Are my own competencies sufficient?
 Can I finance it to a large extent with my own equity?
 Will people buy my product/service?
B. Micro Screening: is aimed screening down ideas into 3.
The common criteria used for screening are:
 Solvent demand, availability of raw materials,
 availability of personal skills, and
 availability of financial resources.
C. Scoring the Suitability of Business Idea: is most appropriate when
 deciding on starting a business
 there are more than one possible business ideas and
 one needs to decide which one to follow

11. Developing a Business Plan
Business Planning Process
The 1st process is Preliminary Investigation
Review available business plans (if any).
Draw key business assumptions on which the
plans will be based
Scan the external environment and internal
environment to assess the strengths, weakness,
opportunities and threats.
Seek professional advice from a friend/relative
or a person who is already into similar business
(if any).

12. The 2nd step is Opportunity Identification and
Idea Generation
Opportunity identification and business idea
generation is the first stage of business
planning process.
It involves generation of new concepts,
ideas, products or services to satisfy demand.
The 3rd step is Environmental Scanning
is carried out to analyze the prospective
strengths, weakness, opportunities and threats
of the business enterprise.

13. The 4th step is Feasibility Analysis
is done to find whether the proposed
project would be feasible or not.
The 5th step is Report Preparation
Is a written document that describes step-
by- step, the strategies involved in starting
and running a business.

14. Essential Components of Business Plan
 Cover Sheet: It mentions the name of the project, address of the headquarters (if
any) and name and address of the promoters.
 Executive Summary: is the first impression about the business proposal.
 The Business: will give details about the business concept.
 Funding Requirement: the primary objectives of preparing the business plan
report, a careful, well-planned funding requirement should be documented.
 The Product or Services: A brief description of product/services is given in this
subsection.
 The Plan: Now the functional plans for marketing, finance, human resources and
operations are to be drawn.
 Critical Risks: The investors are interested in knowing the tentative risks to
evaluate the viability of the business and to measure the risks involved in the
business.
 Exit Strategy: would provide details about how the organization would be
dissolved, what would be the share of each stakeholder etc
 Appendix: can provide information about the Curriculum Vitae of the
 owners, Ownership Agreement and the like.

15. THE END
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EMAIL tesfayetilahun873@gmail.com or
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