There are five factors that influence identification of opportunities. These are:
a. Entrepreneurial Alertness b. Prior Knowledge
c. Discovery versus Purposeful Search
d. Networking versus Solo Entrepreneur e. Creativity
iv.a. Entrepreneurial Alertness Factor
This is a predisposition to observe and be responsive to information about objects, incidents, and patterns of behavior in the environment, with special sensitivity to maker and user problems, unmet needs and interests, and novel combinations of resources. This is usually preceded by a position of enthusiastic awareness of information. Entrepreneurs constantly search about for opportunities that have been overlooked before then but unfortunately not all that have entrepreneurial alertness become successful entrepreneurs. Opportunity identification is only an indispensable stage of a process in initiating a new successful business.
There are two types of alertness. These are the potentially worthwhile goal s that have remained unnoticed and the unnoticed but potentially valuable resources. The alert entrepreneur is said to be alert to the receipt of information rather than already being in possession of it. Entrepreneurial alertness is of major importance in opportunity identification. Alertness for a venture is built upon the three ideas of personality traits, social networks and prior knowledge.
People’s self-perception of creativity, high intelligence and a supportive family environment that encourages creative thinking contributes highly to execution of entrepreneurial plans. The optimism acquired from these builds up a self confidence attitude and eventually success in recognizing entrepreneurial opportunities when it comes. It is the belief by many people that they are very good experts in decision making, thereby detect opportunities and take risks.
iv.b. Prior Knowledge Factor
People tend to discover opportunities from the information that is related to the information they already know. Prior knowledge and experience are the primary source of searching for opportunities. Entrepreneurs narrowed their search to areas where they had specific prior knowledge. Prior knowledge triggers identification of the value of new information. There are two main areas of prior knowledge relevant to the identification process. The first one is the knowledge that is of special fascinating interest to the entrepreneur. The second area is the knowledge accumulated over the years and eventually got familiar with customer problems and issues involved. The fascinating interest compels the entrepreneur to intensify his or her competences that eventually result in an insightful knowledge of the subject matter.
iv.c. Discovery versus Purposeful Search Factor
Some entrepreneurs absolutely believe that opportunity identification has to be through a purposeful search for opportunities while others believe that opportunity is something that had been readily available and overlooked but now discovered accidentally. Businesses established on accidentally discovered venture ideas and which had not been subjected to prescribed screening achieved break-even sales faster than those businesses that had undergone purposeful searches.
iv.d. Networking versus Solo Entrepreneurship Factor
Entrepreneurs’ network is vital in opportunity identification. The main contribution of network to identifying potential venture opportunities is from information gathered from social exchange of ideas. The common sources for such opportunity are from friends, relatives, businessmen, lawyers, bankers, participation in professional seminars, workshops and conferences, newspapers, books, periodicals and manuals. It is the belief that an individual’s strong-tie network within the family and friends set up are fragile information sources compared with weak ties that are casual acquaintances. People with widespread networks discover more pungent opportunities than those businessmen who do not have social networks.
iv.e. Creativity Factor
There is a link between creativity and entrepreneurship and are sometimes refer to be same. The nature of creativity is about innovation leading to the creation of new ventures while entrepreneurship itself is a form of creativity or can even be referred to as business creativity and in most cases new businesses are creatively original and functional. Most successful entrepreneurs identify opportunities that others do not see due to the special creativity attribute they possess. These creative attributes has a lot to do in business decision making and therefore very significant in opportunity- identification process. To entrepreneurs, the more innovative the idea the better the idea This makes creativity a fundamental component in the entrepreneurial process. Hence creative entrepreneurship is described as the accomplishment of original useful ideas to start a new business to product and service delivery level.
