Explain the steps for idea and opportunity assessment after the product identification has been done by the entrepreneur.

Question

Accepted Answer

The steps involved in idea and opportunity assessment after product identification are:

1. **Application and use** — Ideas should be examined for their real life use and application. If it already exists in the market, we will have to find out its present use, then we may think of modifying it for better use.

2. **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 or a small scale industry or a large-scale industry.

3. **Cost** — What is the per unit cost of the product at particular level of operation? Whether this cost is comparable with that of other competitive products? These are some of the questions that have to be answered. This will ultimately decide the sale price.

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

5. **Technical complexity** — What type of technology is required to produce the product? Whether training and application of such technology will be locally available or will it have to be supported from other places? What would be the position of supply of plant and machinery for such a technology?

6. **Annual turnover and profit margin** — Ideas should also have to be examined on the basis of expected annual turnover. This will also indicate the market share of the product or service.