How to Recognize and Seize Opportunity

Everyone knows a few people who always seem to be at the right place at the right time. They take on projects, start new jobs, begin businesses just as a market gets hot. When asked how things are going, they spout out success after success, achievement after achievement. They are the people who leave all the regular folks thinking, “Man, are they lucky. How do I get myself some of that luck?”

By Jim H. Houtz with Kathy Heasley American Venture Magazine

Well, for most of these people, save the few who hit the jackpot by winning the lottery, luck has had little or nothing to do with their success. It’s not even their knack for being at the right place at the right time. What separates the successful few from the rest of the world is that these people know how to make the most out of any situation that presents itself to them. Are they at the right place at the right time? Of course they are, but so is everyone else. The difference is they are at the right place at the right time, prepared to seize an opportunity.

Clearly, opportunity is as much about circumstance as it is about preparedness. Our ability to recognize opportunities comes from five important sources: education, work experience, industry knowledge, curiosity and intuition. Each of these, to a varying degree, defines our ability to recognize and be prepared to capitalize on opportunities. So as a ready, willing and able entrepreneur, how do you find, evaluate and select an opportunity? Well, there is no one answer to this question, but there are guidelines that will help you in your pursuit. Best of all, they are practical and actionable right now.

There Is No Perfect Opportunity

When you are prepared you realize that there are countless opportunities presented to us continually. What may not be as obvious, however, is that there is no perfect opportunity. Being an entrepreneur means selecting the best opportunity available at the moment and making it a success. Wavering back and forth between several opportunities or waiting for the perfect one to present itself is a fruitless effort. Select the best opportunity and make it happen.

Knowing the Right Opportunity

There is a great deal of discussion about this topic both from an entrepreneurial perspective and from a career perspective. Current thought is that you should follow your passion and you will be successful. This is partly true, but when it comes to embarking upon an entrepreneurial venture, there are some important elements to consider right up-front—even before passion. They are as follows:

Avoid Big Competition

If your passion is developing computer operating systems, then you might want to see if you are passionate about something else. Who wants to go head-to-head against Microsoft in a battle for its core business? Not a smart entrepreneur. Look at the competition first, then choose a niche opportunity that doesn’t compete with the industry gorilla.

Evaluate the Market

Before you get too excited about an opportunity, research the market and the potential market for the product or service you are thinking about offering. The market is defined as the total amount of money currently spent for a product or service. The potential market is the amount of money that would be spent if everyone in your target group bought the product or service you are offering. If the market or potential market is too small for you to operate your company and make a profit, choose another opportunity.

Entrepreneurs often assess vertical markets when exploring opportunities. Vertical markets are a targeted industry segment such as healthcare, banking and insurance. These markets may contain several niches, for example, the healthcare vertical market may contain hospitals, group practices, and teaching institutions. The banking vertical markets may include, consumer lending, commercial lending, and investment banking. There are many more niches in these vertical markets, but you get the idea. Underserved vertical markets can be great opportunities.

Markets have life cycles. There are new markets, emerging markets and mature markets. Emerging markets are surer bets than new markets for a couple of important reasons. First, emerging markets are easier to evaluate for market viability because data on them already exists. Second, emerging markets require less education of the consuming public to gain acceptance. A conceptual sale, which is the sales task in new markets, is always more difficult than a competitive sell, which is the sales task in emerging markets. The competitive sale is a “slam-dunk” if your costs, and therefore your pricing, are lower than those of your competitors.

When evaluating the viability of a market, look beyond just the market’s life-cycle stage. Ask yourself about its longevity. How long will this market remain in any one of its phases? How long before it becomes mature and dying? Will I be able to establish a lasting company given this market? Can I build a product or provide a service that has real value over the long haul.

Be Unique

Why do what everyone else is doing? Do something different, or at the very least, improve on what someone else is doing in a very meaningful way. Avoid the hype of the “next big wave.” Often the next big wave never hits, or when it does, it is nothing more than a ripple. Why? Because the real entrepreneurs who weren’t buying into the hype were busy developing the products and services that invariably end up usurping the predicted wave.

Consider the multimedia hype of the early 90s. The newspapers told us daily that in the future all our entertainment and our information were going to be on CD-ROM. Video game and content providers were popping up everywhere. Then, out of nowhere came the Internet and its online technology. It all but killed the emerging multimedia industry.

Know Your Passion

A person with a cause is hard to beat. If you have a passion, follow it, but in a way that allows you to fulfill all the other criteria on this list. That means your passion must be tempered with the reality of investors, customers and profit. If fulfilling your passion doesn’t seem possible with your current idea—particularly in light of competitive issues, market viability, etc.—get creative and discover a new way to fulfill your passion and still satisfy investors, customers and make a profit.

Talk to Customers

This is scary, actually talking to people you consider potential customers in the early stages of an idea. But if your primary concern is that the people with whom you share your idea will steal it from you, you can rest easier. This seldom, if ever, really happens. The bigger risk involves your ego more than the idea itself. You will need a thick skin. There are generally a lot more people who will tell you why something won’t work than will ever tell you that your idea is a winner. In fact, you could come up with a way to mass produce the Holy Grail and people will line up to tell you why it’s a bad idea.

Keep in mind that the first person you share your idea with is the hardest, and that it is in your best interest to get over this hurdle. Every entrepreneur needs to discuss the proposed product or service with potential customers, not friends or relatives, in the early stages of development. Here’s why. First, prospective customers will often supply real improvements to your idea. They understand the problems your product or service is trying to solve better than anyone. Their honest feedback is invaluable as you hone your product or service offering.

Second, it is always a benefit to have some customers lined up who are willing to try the product or service upon its release. The goal is to find an early adopter who will take an interest in the project and provide you with a proving ground for your concept. It also helps if these early customers will agree to talk freely about the product or service with other prospective customers.

Finally, talking to potential customers provides clues for product or service enhancements in the future. An entrepreneur, as stated earlier, looks for opportunities that offer long-term benefits. Talking with potential customers is an important way to gain perspective on the long-term direction and opportunities for your company.

Discover Your Motivation

Finally, answer the question “why,” and you’ll understand your entrepreneurial motivation. Is yours a burning passion to build widgets? Is yours a burning passion to start a company? Whatever your reason, this will give you clues regarding the type of venture that is right for you. Be honest and it will help you weed out opportunities that don’t measure up.

Through this insight, the world of opportunities will begin to appear. Take time to evaluate each opportunity using this criteria, and you’ll soon be ready for the next important step in the entrepreneurial process: Developing the business plan. But that’s the next thing you’ll need to read.

####

This is excerpted from the new book, Seize the American Dream: 10 Entrepreneurial Success Strategies, by Jim H. Houtz with Kathy Heasley. This book dispels the myth that entrepreneurs are good only at starting companies and are terrible at running them. It provides the strategies, inspiration and tools that people need to act on their passion, build solid and effective organizations, realize financial freedom in the process and leave their marks on the world. For more information or to order: http://www.seizetheamericandream.com

http://www.avce.com/main.php?load=displayMatch&newsid=137