Explain the first five steps involved in idea and opportunity assessment.

Question

Accepted Answer

The first five steps involved in idea and opportunity assessment are:

1. **Product identification** — An idea should lead the entrepreneur to a definite product or service which he can sell. The first step is to obtain a concept of the product or service suggested by the idea. We should also see whether the product is already available in the market; if it is, the reason for introducing the same product or service must be identified.

2. **Application and use** — Ideas are examined for their real life use and application. If the product already exists in the market, its present use is found out, and it may be modified for better use.

3. **Level of operation** — This is a crucial test for product or service identification. Depending on the use of the product or service, the entrepreneur will produce it in a cottage industry, a small scale industry or a large scale industry.

4. **Cost** — The per unit cost of the product at the particular level of operation is worked out and compared with that of competitive products; this will ultimately decide the sale price.

5. **Competition** — Any product or service will face market competition at some stage. Competition is assessed through a study of the trends in demand and supply.