Investigate business opportunities
About the Unit
Identify potential business opportunities for your business idea.
Investigate the market needs and factors that affect your market and conduct a feasibility study to conclude your business idea is viable.
Start with our Study guide BSBESB301.
What is it like to be an entrepreneur?
Learning Outcomes
BSBESB301- Investigate Business Opportunities
- Recognise a variety of research methods to help determine the feasibility of your business ideas.
- Collect, investigate and analyse market information to identify opportunities and risks associated with business.
- Prepare a Business Feasibility Study to establish the viability of your proposed business.
Click on Tabs for Learning Content
Introduction
A promising venture starts with a brilliant business idea. To be successful in business you need to be an innovative problem solver. Successful entrepreneurs find the gaps that need filling in the market. They find alternative solutions to problems that no-one else has thought of. Finding your niche or unique selling point will put you ahead of your competitors and improve your chances of having a viable business.
What is a business idea?
Answer
An idea is a hunch-
Maybe you have a hobby or a special skill.
Maybe you have spotted an improvement you think would be a good idea.
What crazy business ideas have you thought about?
Activity- Try “The Business Idea Builder “to help you clarify your Business Idea. Click on the link below:
What is an opportunity?
An opportunity is an idea that can make you money. You can find these opportunities from many different sources. You may recognise a problem that needs solving that people would be prepared to pay money for.
You may have a passion that you want to share and see there is an opportunity that others would pay you money to share this.
Checking out your competitor’s and trends could highlight some areas that could be improved and make you money.
These are all opportunities.
The following activities provide more examples to consider:
This video shows how Margaret has an idea to open a coffee shop. Her competitor analysis highlights the business opportunities.
Can you identify what her business opportunities are?
Key Takeaways
- Margarets Competitor Analysis highlighted the opportunities for offering more specialised coffee, more student friendly atmosphere and better service.
What opportunities did you find for your business?
What is Margarets Business Idea? What opportunities did she identify?
Business Idea- To open a cafe for students
Business Opportunities:
Provide better quality beans, provide WIFI, create a student friendly atmosphere
➡️Review Knowledge Question 1a
Know your Products & Services
Once you have established what your business opportunities are. You need to clarify exactly what your product or service is.
Product knowledge is key. Your ability to describe and fully understand what the product or service is you are selling will help you build credibility and confidence with your customers and stakeholders.
Consider the products features and benefits when communicating your message.
➡️Review Knowledge Question 1b & 1c
This unit requires you to refer to:
- Executive Summary
- Management Plan
- Marketing Plan
- Operational Plan
- Financial Plan
It is recommended that you work through the tabs in order, use all learning content and your Small Business Plan to respond to the questions and tasks.
If you have any questions you can contact your Trainer on assessments@mypathway.com.au
Researching your Business idea
When conducting research it is important the information gathered is reliable, current, valid and non-biased. You can do this by using a combination of primary and secondary resources. The more sources you use, will validate the authenticity of your findings.
Market Research
Market research is a valuable tool that can help you understand if your business idea is feasible.
This video explains the difference between primary and secondary resources.
➡Review Knowledge Questions 1c & 1d
SWOT and Competitor Analysis
Analysing what your competitors are doing and completing a SWOT analysis will help you identify areas of opportunity or points of difference that your product or service can offer. You need to find your niche.
➡Review Knowledge Question 2 d.
What is Primary Research?
Information from the source
examples include customer surveys, questionnaires, interviews, observation, personal experience.
What is Secondary Research?
Desk research- any information open to the public
Examples include: internet search, reports, books, journals, government organisations.
Where to find out about Legal Requirements
Legislation and regulatory requirements will also need to be researched so you understand your industry compliance requirements.
The links below will give you more information on your legal requirements as a new business.
Trend Analysis
Analysing past, current and future trends will help your business survive. Staying informed about changing trends can help you reduce the potential impact to your business. Trends can be based on the economy, consumer behaviour or even technological changes.
If you regularly listen to the news or read business articles, you may see a trend that inflation is rising and consumer spending is reducing. This could mean that discretionary spending on luxuries reduces as consumers’ have to spend more on their vital needs.
How is this going to affect your business? What plans can you put in place to reduce the impact?
If you fail to stay informed, you may either miss an opportunity to grow your business or miss a risk that could destroy your business.
The links below discusses the advantages of staying informed and studying trends to grow your business.
➡Review Knowledge Question 2- Part 2
Analysing your data collected
Once you have gathered the relevant information, you can summarise your findings and make some conclusions. Quantitative and Qualitative data analysis is useful for this.
Quantitative = quantities, facts and figures.
You may place all of your data into a spreadsheet and form a graph that shows you how many people are in your age bracket, how many people responded “yes” etc.
You may look at Google analytics to gain some facts and figures.
Qualitative- is quality, feelings, why people buy.
You may ask questions, interview people and find out their reasons for buying. This gives you more of an insight into how to provide good customer service.
➡ Review Question 5
Software to Collate Data
➡Review Knowledge Question 6
Digital technology to use in business
Digital technology can assist most businesses in some area. One area could be the point of sale or stock control, you may need to manage tasks and bookings more efficiently or need a financial record keeping system. Others with online businesses can’t do without it.
Check out the link below for examples and uses of the latest digital tools to save you time.
➡Review Knowledge Question 2-Part 1- a,b.
Benefits & Challenges of using digital technology
In this fast paced world, one thing is a fact and that is CHANGE. Technology is one aspect of life that changes at “the speed of light”. We all have different levels of expertise in this field. When deciding on what digital technology is best for our business, we need to determine if the benefits outweigh the challenges.
Some benefits of Digital technology, could be that it:
- increases your market share and allows you to communicate to more people across a wider geographical and demographic area.
- provides speed and versatility to communication and work tasks.
- provides flexibility and accessibility as digital devices are portable, so you can be reached anywhere, anytime….(Benefit or challenge?).
- can enhance efficiency and productivity
- can reduce costs and boost profits
- improve security when managed well.
Some challenges could be:
- lack of knowledge or experience in digital literacy.
- data security and the risk of being hacked.
- choosing the right technology for your business
- poor internet connection
Can you think of any others that impact you?
➡Review Knowledge Question 7
Marketing & Promotional Activities
Promotion is all about communicating your message to your potential customers. It can include a combination of techniques or activities.
- Advertising – is usually paid.
- Selling – is face to face.
- Direct marketing – is now mainly email marketing directed to your customers.
- Sales Promotions – could be discount codes or sales.
- Public relations – is free publicity – such as reviews, free advertorials in the local paper.
The links below provide information on these marketing activities to help you determine the most effective ones for your business.
➡Review Knowledge Question 2
What are Business Resources?
Business resources are any supply, support or aid that can be drawn upon when needed to make your business happen. These can include raw materials, property, equipment, technology, cash, labour. Even time and intellectual property are considered “Resources”.
When starting your business you need to list the resources you require to get started. The link below explains what resources are in business.
➡Review your Establishment Costs from your Financial Plan and Answer Knowledge Q2e & h.
What Resources can you contribute to your business?
Let’s do a Self Analysis. As a sole trader , there are often skill areas where you need help. This may come from specialists, such as lawyers or accountants or you may need to do extra study or join an industry group to stay informed.
Identifying skill gaps (where you are now versus where you want to be), will help you plan and budget for any possible assistance you may require to keep your business moving forward.
Knowledge question 3 splits the skills into
- Technical- (What existing knowledge and experience you currently have to complete your role)
- Managerial (This is split into 5 subtitles)
- Personal (This is split into 5 subtitles)
In order to conduct a self-analysis of your current skill and knowledge levels, you need to honestly rate yourself . No-one is judging you. We are establishing your strengths and what areas you may need support in.***rate yourself on all 5 subtitles ***
Example for Managerial Skills (just 2 subtitles but you need to rate all 5);
Column 2: Rate Yourself and acknowledge gaps (column 3)
Planning – 4 (I have good time management skills, I deliver on time, I have contingency plans in place, reminders set up in calendars)
Administration skills – 2 ( I am slow to type, disorganised when it comes to filing, limited knowledge)
Column 4- Impact on Business
Poor administration skills could mean my business suffers because I am disorganised, look unprofessional, cannot answer queries quickly, lose money because I have poor record keeping skills, more open to theft and failing an audit.
Column 5- How can I improve?
Possibly hire a bookkeeper to get me organised, find some software to help me, learn from you tube videos.
➡Review Knowledge Question 3- Self-Analysis.
The links below outline skills required for running a business. Check them out and highlight what areas you could do with some help and research specialists or organisations who could help you.
Skills required for business
Business Specialists to help you.
➡Refer to Assessment 2- Task 1a
Research your Ethical & Legal requirements
Following legal and ethical obligations when selling will protect you and your business from the risk of fines, penalties, trading restrictions and other actions by regulators, plus it keeps your reputation in tact and your customers returning.
Check out the links below to research your legal requirements.
Australian Consumer Law
How must your business comply with Consumer Law?
Workplace Health & Safety Legislation
What are your WHS obligations?
Taxation Legislation
What are the key tax obligations you must consider for your business?
Anti-discrimination legislation
What qualities is it against the law to treat someone unfavourably?
Privacy Legislation
Is your business liable for the Privacy Act?
What information do you need to protect?
Test your knowledge
Click on the boxes below
➡Review Question 4
Is Price fixing ethical?
NO
It is not ethical or legal to conduct ant-competitive behaviour by controlling demand and supply through price fixing.
Is it legal or ethical to NOT discriminate against others?
Yes it is legal
Under the Anti-Discrimination Act you cannot discriminate or harrass others .
Is it legal or ethical to breach confidentiality?
NO
Illegal under The Privacy Act.
Is it legal and ethical to pay people the award wage.
Yes
Fairwork.gov.au outlines the award rates for all workers to ensure everyone is paid fairly.
Is it ethical or legal to offer unsafe products or services?
No
Australian Product Safety standards must be followed.
Is it ethical to test products on animals or humans?
No
Is false advertising ethical or legal?
NO & NO
It is not ethical to lie.
It is illegal under Australian Consumer Law to misrepresent your products and services.
Is it legal to use personal information for unintended purposes?
No
Illegal under the Privacy Act.
➡️Refer to Task 1b -Research
How to Research
How did you collect your information?
Discuss the primary and secondary sources you used to find information about your business.
Primary research is any information you gather directly from the source. Primary resources could be observation, surveys, asking industry specialists, going to networking events.
Secondary research is any information available to the general public. Secondary resources could include internet searches, industry magazines, Facebook reviews.
How did you investigate and analyse your results?
The process for research has a number of steps:
- Identify the research goal.
- Develop clear research questions.
- Identify the most effective methods you will use to gather your research.
- Collect information from a variety of sources to ensure responses are valid.
- Choose a reasonable sample size to ensure accurate results.
- Document the research responses into a spreadsheet to analyse the quantitative and qualitative data.
- Make conclusions and recommendations based on the research.
You may find this research plan template useful.
Why do I need a Business Feasibility study?
A feasibility study is important in business because it helps to:
- Determine the viability of a project.
- Consider legalities, personnel, and resources needed.
- Evaluate market trends, customer preferences, and competition.
- Identify potential hurdles and develop strategies to overcome them.
- Save time and money by making informed business decisions.
Who is your customer?
Identify who your target market is. Your market is not everyone! You need to break the population down into subgroups of people who would be interested in buying your product.
If I was selling walking frames, the market would not be everyone.
Think about demographics like age, gender, income, geographic location, why they buy, what are their values and motivations for buying.
The more you know about your customer, the more efficient your marketing will be and the happier your customers will be. You are solving their problems!
We sell benefits NOT features.
How to calculate Market Size
Market size = number of target users X purchases expected in a given time
Check out the example below:
- You know your target market. Research statistics to find out how many people are in your location, in your age group, who want to buy your product or service. How many people would like to buy your product?
- Research how many competitors are there who are vying for these same customers? Estimate a realistic percentage of these that you can hope to attract. Example: you might have 5000 people in your target market. You know there are 2 competitors vying for the same customers. You estimate to get 20% of the 5000 customers = 1000 target users.
- Purchases expected in a set time could be you expect your customers to visit 3 times a year at $300 total spend. 1000 target users x $300 = $300 000 market size for 1 year.
Who are your Competitors?
Your competitors can be direct or indirect. It is rare that a business does not have any competitors.
Look at your market, who is selling the same product as you? For example if you are a Beautician, how many Beauticians are there in your local area? These are your Direct Competitors.
Indirect Competitors sell a similar service. Indirect competitors could be hairdressers, masseuse, nail artists, brow specialists.
What is your Pricing Strategy?
Phrases like Price skimming, Value Pricing, Cost-plus pricing, Competitor pricing- do you know what they mean? How can you use these strategies to sell more of your product/ service to your target market?
This video and link explain the pricing strategies and tactics to consider.
Check out this video on how to create your buyer avatar or profile.
Market Research
How do your customers want to buy from you? What time do they want to access your business? What are their behaviours? How much are they prepared to pay?
Digital Marketing
The most effective form of promotion is choosing the correct platform to communicate on. You need to communicate your message where your customers are looking. Understanding your customer’s buyer behaviour as well as researching the statistical data available online, will help you make this very important decision.
Digital platforms include Facebook, Instagram, Tiktok, Snapchat, Reels, email marketing even texting or podcasts.
The following links offer you the statistical facts on which digital platforms are preferred by which demographic.
How to write Findings and Recommendations for your Business Feasibility study.
Findings are the results of your research. A brief sentence on each section of the study, summarising your conclusions based on the facts you collected from numerous sources. Language needs to be objective and specific and written in sentences. Consider who the business feasibility study is written for and what you want to achieve.
For example, if the study was to be presented to a Bank Manager for a loan, you may write: “ABS reports indicate that population growth is to increase by 20% over the next 5 years. This is due to immigration and skill shortages in the industry. This data shows 70% of this increase will be in my target market and therefore there is an opportunity to increase my market share over this time”.
Recommendations should be specific, supported by a clear rationale and directly connected to your research.
” Recommendations include promotional marketing activities such as Facebook posts and Google business because statistics show 70% of 35-40 year olds use these digital platforms every day of the week.”
or
“Market research has indicated that customers prefer to shop on weekends, therefore, the business will alter its operating hours to suit the customer demand to include Saturdays 11am – 7pm.”
Ethical, Cultural and Legal considerations when Promoting your business
PESTLE Analysis
A PESTLE Analysis will allow you to consider any external risk factors that may effect your business
➡Review Assessment 2- TASK 3
Document 4 – Assessment 3 – Business Plan Instructions
- Write your full name on the top of the first page “Participant name:”
- Attach a completed copy of your Operational Plan to be marked.
- Attach the completed parts of your Financial Plan that are requested.
Check off the Assessment Submission Checklist
This will ensure you have completed all tasks and paperwork correctly and we won’t need to return anything before marking.
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