1. Evaluating an Opportunity Chapter 6 Section 2 continued

2. Evaluating an Opportunity Once you have gather ideas... ●Use critical thinking to logically evaluate ●Look for the feasibility of each idea Feasibility - refers to how possible or worth-while it is to pursue your idea

3. Evaluating an Opportunity Three practical methods for determining the feasibility of a business idea Cost/benefit analysis Opportunity-cost analysis SWOT analysis

4. Evaluating an Opportunity Calculated Risk - carefully considering the potential costs and benefits Cost/Benefit Analysis - is the process of adding up all the expected benefits of an opportunity and subtracting all the expected costs.

5. Evaluating an Opportunity ●Costs can be one-time payment or on going ●Benefits are most over a period of time Ex: computer Intangible - non material things C/B Analysis is usually be based on personal values C/B Analysis you have to think in general terms

6. Evaluating an Opportunity Opportunity Cost - value of what you will give up to get something. Opportunity Cost/Analysis - examines the potential benefits that you forfeit when you choose one course of action over others. Ex: Internship

7. Evaluating an Opportunity SWOT Analysis - is a business evaluation method that draws its name from the four areas it evaluates (strengths, weaknesses, opportunities, and threats)

8. Evaluating an Opportunity Strengths: What do you have? Skills Resources Unique Knowledge

9. Evaluating an Opportunity Weaknesses: What do you not have? Skills Resources Forethought Thinking not as a business owner but a customer

10. Evaluating an Opportunity Opportunities: Does this idea fill an unmet need or want? Trends Betterment

11. Evaluating an Opportunity Threats: What obstacles stand in the way Trends Competition Short window of opportunity

12. SWOT ANALYSIS