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Spotting Trends and Opportunities. 2. chapter. Prepared by Ron Knowles Algonquin College. Business Plan Building Block. A business plan begins with the “big picture ”— the industry or market overview. Chapter 2 will:

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  1. Spotting Trends and Opportunities 2 chapter Prepared by Ron Knowles Algonquin College Chapter 2

  2. Business Plan Building Block A business plan begins with the “big picture”— the industry or market overview. Chapter 2 will: • Help you describe the industry and market trends—to see the big picture—for your business. • Show you how to expand your knowledge of customer needs and your market niche. • Help you begin writing the description of your business. 2 chapter Chapter 2

  3. Learning Opportunities • Use mind mapping and brainstorming to discover business opportunities. • Identify trends and market signals that will create opportunities. • Discover market forces that underlie the trends. • Understand how to analyze the potential for small business success by applying the life-cycle yardstick to industries, products, services, and locations. • Use diagrams and mind maps to explore market segmentation. • Determine what business you are really in. • Begin describing your business. Chapter 2

  4. Recognizing Opportunities • Welcome to the entrepreneurial age • A new craft economy distinguished by quality, small customized quantities, technology, and service. • Where change creates opportunities for fast, flexible, and focused firms. • To be successful you will need to conduct market research and constantly respond to the changing needs of the marketplace. • The best business ventures to pursue are those which: • You enjoy • Make use of your unique experiences, skills and aptitudes • Serve a market need Chapter 2

  5. Idea Generator—Brainstorming • Brainstorming is: • A free and open exchange of ideas. • A powerful technique used to help identify market trends and opportunities. • Used by many entrepreneurs who often record their brainstorming ideas using mind maps. • Successful when generated through an open, non-threatening environment that stimulates the creative juices. Chapter 2

  6. Be a Trend Watcher • Trends help identify growth opportunities • Five major trends small business must embrace are: • Globalization. Winning companies export. What are your plans? • Technology. How will technology give you a competitive edge? • Internet and E-commerce —How will you profit from this connectivity? • The Boomers. It’s a wave you can’t ignore • Splintering of the Mass Market. How will you customize your product or service? Chapter 2

  7. The Splintering of the Mass Market • Today’s consumers are informed, individualistic, and demanding. • 5 key factors have splintered the mass market: • Shrinking middle class • Shifting sizes of age groups • New living arrangements • Ethnic groups are shifting and growing • Improved information access Chapter 2

  8. Trends Create Opportunities—Six Major Environmental Categories Chapter 2

  9. Trends Create Opportunities—Examples TRENDS OPPORTUNITY Child care, private education, and home security systems Home security Teleconferences, fast-foods, and easy-to-fix meals On-line shopping Helping schools and business integrate Attractive sports clothes Helping people start their own business Continued increase in dual-income families Cocooning Both adults working Internet Rapid expansion of ethnic diversity Exercising for fitness Corporate downsizing Chapter 2

  10. Life Cycle Stages Life-Cycle StageExample Embryo (birth) Senior-Adult Day Care Growth Internet Maturity Microwave Ovens Decline Tobacco Products Chapter 2

  11. Market Segmentation • Market segmentation involves: • Breaking down potential markets into as many similar sub-segments as possible. • Identifying opportunity gaps and seeing combinations of gaps that may constitute markets. • A good example is shown in Figure 2.5. Chapter 2

  12. Know Your Real Business If you’re in... Try saying... _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ Software sales Small business teaching Auto manufacturing Mattresses Cameras Gourmet cookware Coffeehouse owner Chapter 2

  13. Develop Your Pitch Begin to formulate your elevator pitch. • What is the market? • How does your business satisfy this market need? • How do you, the business and the target market benefit from this venture? Chapter 2

  14. Checklist and Actions to Develop Your Business Plan • What trends will influence your small business idea? • What business are you really in? • What segment of the market will be your niche? • What gaps will you fill within that segment? • Is it a growth segment in a growth market? • Initially define your target market and determine how large that customer base is. • Identify the secondary sources you will use as part of your market research. • Does this business fit your vision and values? • Other than making money, what are the goals of your proposed venture? (You should be able to establish four to six over the next three years.) • For your business, what objectives do you wish to achieve in the next year? Chapter 2

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