There’s a big reason why it’s important to define what’s a business opportunity.
That’s because one of the critical indicators of your future success in business is your ability to find new opportunities.
This article has the most practical definition of an opportunity in business.
Here, I don’t want to play the role of a dictionary. Instead, I want to help you understand the full meaning so you can get better at spotting new opportunities.
Let’s get into it!
A definition of business opportunity
First, I need to quickly explain what an opportunity means :
An opportunity is a set of circumstances that opens the door for you to make something that will create value for others, so that you may get a profitable return in exchange.
In drier terms:
It’s about finding a market that needs something and finding a way to deliver that thing so you help your customers achieve what they want and make money in exchange.
A business opportunity is about creating value
An opportunity exists when you’re in a position to create value for your customers, and get value in exchange.
Two things to understand here:
- To make something that will create value for others, you’ll need to invest your money, time, attention, and effort. If you do so, you will expect to make some money in return—at least at some point.
- To make a profitable return, you must therefore find ways to deliver value to your potential customers at a cost that is less than what they are willing to pay in exchange for the value you’re creating for them.
“Make something people want”, and for that: “buy low and sell high”.
Now, let’s make the definition of a “business opportunity” more tangible by breaking it down into three elements.
The three elements of a business opportunity
To have an opportunity, you must be clear on three points:
- The need or desire of a group of people or companies (audience)
- A product or service to fulfil this need or desire better than what’s already available (value proposition)
- A way to deliver the proposition profitably (route to market and operating model)
It always starts with having an insight on the needs/desires of a group of people or companies. Once you’ve identified that, you can start stress-testing to see if you can do something for them. So, you think about possible solutions that could help them, while trying to figure out how to deliver this profitably.
It’s quite a fluid process.
You’re often going back and forth between trying to understand the audience’s goal and testing the value proposition.
How to create new propositions: If you’re in the process of creating a new product or service, I recommend you have a look at The Value Mix. In this books, you’ll learn techniques to better understand what your customers want, and how you can create value for them.
Is a business opportunity synonym of an idea?
There’s a lot of confusion between the concepts of “business opportunity” and “business idea”…
An opportunity isn’t a product or an idea. It is a set of circumstances that opens the door to the success of potential ideas.
- The idea is what you’d like to do.
- The opportunity is the reason why this could be a good idea.
Here’s an example of a business opportunity:
Over the last sixty years, more and more people have moved to cities. This has dramatically changed how they live. People who live in cities naturally adopt a more sedentary lifestyle. But at the same time, they still have a big appetite to exercise and move around.
Some entrepreneurs spotted the opportunity and went for it.
It led to some pretty cool ideas: Nike (running in the 60s), Patagonia (rock climbing in the 70s), and Lululemon (yoga in the 90s).
How to check if you are seeing an opportunity
Let me share with you four questions that can help you to see if you have a business opportunity in front of you:
- Is there a group of customers with a problem or a need or desire for something?
- Can you envision a possible solution that would help them better than what’s already available?
- Is there a channel that you could use to easily reach your target customers?
- Can you deliver your solution profitably in a way that scales to the extent of your expectations?
I use these questions whenever I coach an entrepreneur or work with a larger organisation. I have found them helpful to clarify as to whether you’ve identified a new opportunity or not.
It works for big business opportunities, as well as product opportunities
If you’re searching for new business opportunities, you should have a look at The Opportunity Lenses.
In this new book, you’ll learn new tools to help you identify future opportunities for your business and set yourself up for success.