IDENTIFICATION OF MARKET &DEMAND DRIVEN BUSINESS PRESENTED BY NWOKO OKEZIEM CHUKWUMA AT BUILDING SUSTAINABLE GROWTH & DEVELOPMENT IN OUR COMMUNITIES YOUTH ACCESS AND PARTICIPATION. October 12-14, 2007

STORY LINE Most micro & small scale business are not well planned from conceptualization to implementation, this can be attributed to lack of knowledge on what a business requires to make profit and remain sustainable. Other reason are that most of these businesses are other people’s ideas that are copied with out understanding the basic rudiments of such businesses, as such they are bound to fail once the challenges come up.

Business Idea Development. Identify a gap/opportunity Identify Clients that has this gap/opportunity as a priority. Develop a solution to fill this gap. Charge a fee for this product/services.

GAP SCREENING Availability of Market Availability of Raw Materials Availability of Technology Availability of Skills Government Priority

GAP SCREENINGCONTD Strategic fit Ease of Implementation Risk Exposure Profitability Cost/Benefit

Availability of Market If there is no assurance of an adequate market, there is no sense going to business. The market must be large enough to enable the entrepreneur to capture a market share and in the process, make an attractive profit from the transaction after deducting his costs from sales. Indication of availability of market includes, among others:

–Existing demand is not at present adequately served by existing suppliers; –Existing demand is presently served by imports; –Existing demand is presently not served at all; –The project’s product has significant uniqueness or unique selling features- (in case of a product) or unique selling proposition- (in case of a service) such as more desirable features, better quality, more durable, better taste, superior after sales service, free delivery, etc., –Supply of the product/service is not reliable –Demand for the product/service is expected to increase significantly or substantially in the future; –Supply of the product is presently served through smuggling;

Availability of Raw Materials Raw materials are available in adequate quantity locally There is reliability of supply- whether local or imported source; Seasonality; perish ability, quality and variability of raw materials have been considered and found to be satisfactory; Price of raw materials is reasonable; Increase in the price of raw materials in the future is perceived to be reasonable and predictable;

Availability of Technology The technology or technologies to be used have been proven; Reasonably priced technologies are available to produce the product; Technology is appropriate for the level of production, level of investment and desired product quality; The product will not suffer from technology obsolescence which will render the business not viable;

Availability of Skills Different skills (conceptual, managerial, technical and manual) needed by the business are available Supply of skills is relatively steady and stable so as not to jeopardize the business in case of sudden or unforeseen labor changes, unusual turnover, or unexpected problems; Cost of labor is projected to be fairly steady and predictable

Government Priority/Policy The business is listed under the government’s list of priorities for promotion investment; The business receives government incentives whether fiscal (e.g. tax exemption or reduction, tariff protection, import privileges, etc.) monetary (priority lending status, reduced interest rate), or other support assistance (e.g., marketing, technical or consultancy services); The business falls under the government’s priorities of imported substitution, export promotion, employment generation, rural industrialization programs, technology development/transfer, etc

Strategic Fit Proposed business fits well within the competence and expertise of the entrepreneur or key staff; Proposed business fits well within the existing product line, technology, marketing set up, production system, facilities and resources of the entrepreneur, anchoring business or community ; Business complements and enhances the existing set up, viability or growth of the community through a positive synergy;

Ease of Implementation Business can easily be implemented because the inputs are readily available; Business can be implemented within a short gestation period or reasonable preparatory period (e.g., 3 months to one year);

Risk Exposure The product or service can readily be copied or imitated if the business is found very profitable by others; Competitors who have more resources and expertise may effectively fight back if threatened by the business; Changes in customers’ or consumers’ lifestyle, buying habits, consumption and spending pattern, etc may take place anytime before the business can service the market; The business may suffer from unforeseen factors such as weather condition, availability of raw materials, technology obsolescence, changes in government policies, priorities or programs; Dependency of the business on imported inputs whether raw materials, technology, skills or other resources;

Profitability At what cost did the service/product reach the client? What is the prevailing market price of the same service/product? What the demand for the service/product? At what profit margin can I break even and make sustainable profit

Cost/Benefit Whether the benefits of the business in terms of profitability, risk, investment requirement, availability of inputs, etc. are worth all the efforts in conceptualizing, organizing, and implementing the business; The business provides sufficient (tangible and visible) benefits to the community – either through employment generation, backward or forward linkages with other industries or other economic activities; availability of needed products and services, etc.; The business is economically viable through its own merits and not through artificial government interventions;

Critical Success Factor Critically analyze the various factors that might affect the gap, identify your strengths and weaknesses. Evolve strategies to overcome the weakness and enhance your strengths. If after this screening & analysis, you can not overcome some of the challenges poses by the new business, it could be a good indication that the business is not viable and sustainable.

Conclusion This will provide a guide of how you can screen and analyze business ideas. Show you the steps to must follow to start and manage a profitable business So lets go and be productive.

THANK YOU