Running a Small Business in the Pacific Region: Start a business and stay in business

By Rex Kinder

It is not easy to start a successful business these days and far too many fail in the first year of trading. The problem lies largely in the lack of accessible and good information available to small business owners.
Running a Business in the Pacific Region offers simple step-by-step plans for starting and maintaining a small business as it grows. It takes you through all the stages, from how to decide if it’s worth starting the business, financial planning and management, to the day-to-day running of a successful business.
There is a wealth of information throughout the book for other kinds of readers as well. General management topics including; hiring employees, keeping bank accounts and avoiding scams, purchasing and using computers, business and the law, and ethics should be of interest to all kinds of managers.

• Language: English
• Publisher: Austin Macauley Publishers
• Release date: Feb 2, 2024
• ISBN: 9781398416390

Rex Kinder

David Burrowes was involved in training entrepreneurs and government business advisers and developing small businesses in Papua New Guinea for ten years. For a further 3 years, he managed a Pacific Regional Project for Small Enterprise Development funded by the United Nations Development Program. He has developed and managed a number of businesses himself and continues to work as a consultant. Rex Kinder similarly was involved in education and in developing instructional materials for small businesses for ten years in Papua New Guinea. He also has been involved in promoting and starting small businesses and has worked as a consultant in the Southeast Asia, South and Central Asia, Middle East, Eastern Europe, and the Pacific for the last thirty years. He has published a short story collection and a novel. Rex also continues to work as a consultant.

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About the Author

David Burrowes was involved in training entrepreneurs and government business advisers and developing small businesses in Papua New Guinea for ten years. For a further 3 years, he managed a Pacific Regional Project for Small Enterprise Development funded by the United Nations Development Program. He has developed and managed a number of businesses himself and continues to work as a consultant.

Rex Kinder similarly was involved in education and in developing instructional materials for small businesses for ten years in Papua New Guinea. He also has been involved in promoting and starting small businesses and has worked as a consultant in the Southeast Asia, South and Central Asia, Middle East, Eastern Europe, and the Pacific for the last thirty years. He has published a short story collection and a novel. Rex also continues to work as a consultant.

Copyright Information ©

Rex Kinder and David Burrowes 2024

The rights of Rex Kinder and David Burrowes to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the publishers.

Any person who commits any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

The story, experiences, and words are the author’s alone.

A CIP catalogue record for this title is available from the British Library.

ISBN 9781398416383 (Paperback)

ISBN 9781398416390 (ePub e-book)

www.austinmacauley.com

First Published 2024

Austin Macauley Publishers Ltd®

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E14 5AA

Acknowledgement

The authors appreciate the efforts and patience of:

Toni Kinder, who spent many hours at the keyboard preparing the drafts for the original book, and Kila Burrowes (nee Numa), who provided guidance on the level of expression and relevance of examples and illustrations used in the original book.

We acknowledge fondly the people of Papua New Guinea, some Australian Aboriginal communities, and peoples of the Pacific, who not only are the subjects of this book but also provided much of the information included in it.

Finally, we thank our illustrator, Noeline Cassettari, for applying her skills to our book, and for her patience in presenting sketches that so well match what the text describes.

Start a Business and Stay in Business

A text for self and group learning

Running a Small Business in the Pacific Region

Revised Edition 2020

David Burrowes and Rex Kinder

Map information based on Vaka Moana: Voyages of the Ancestors – The Discovery and Settlement of the Pacific, ed. Hove, K.R., 2008, p 57.

Foreword

This book was written to satisfy the needs of those thinking about starting a business, or who already are operating businesses of some kind. It mostly describes starting up and operating a retail business, but is suitable for other kinds of businesses like trucking, passenger vehicle operation, small construction, home-based businesses, fresh produce and so on. The Papua New Guinea (PNG) Department of Education has used the original version as a basic text in schools since its publication in 1989.

Retail businesses include small grocery shops, often known as mixed businesses and other business outlets selling pretty much any kind of item or product. The main thing in retailing is that business owners buy and resell something. This often is called ‘trading’. The retailer usually does not process or manufacture, except perhaps fast food. It is extremely important that business owners are clear about what kind of business they want to run and direct all their work and energy towards this one goal.

The most common type of business in the Pacific is the mixed business, sometimes called a trade store, family store, general store or even convenience store. In countries like Australia and England, they might be called a general store or corner store (even though it might not be on a corner). A number of countries still have successful co-operatives owned by local groups and managed by salaried managers (sometimes called secretaries), responsible to a board of directors. These businesses concentrate on the most popular food and consumer items, often including fast food.

An important aim of this book is to assist in the diversification of the retail sector within the Pacific communities and to raise people’s awareness of the many other opportunities for small businesses. We hope that locally owned businesses will be able to compete more favourably with the ever increasing numbers of foreign-owned businesses, which at times are operating illegally or using local people as ‘fronts’.

The basic requirements for a successful business, whether it is a small owner-operated shop or large supermarket, are similar. This book provides information and guidelines for a variety of businesses. The first chapter of the book describes how to look for new business opportunities and use creative thinking skills.

David Burrowes was involved in training entrepreneurs and government business advisers and developing small businesses in Papua New Guinea for ten years. For a further three years, he managed a Pacific Regional Project for Small Enterprise Development funded by the United Nations Development Programme. He has developed and managed a number of businesses himself and continues to work as a consultant.

Rex Kinder, similarly, was involved in education and in developing instructional materials for small businesses for ten years in Papua New Guinea. He also has been involved in promoting and starting small businesses and has worked as a consultant in the Southeast Asia, South and Central Asia, Middle East, Eastern Europe and the Pacific for the last thirty years. He has published a short story collection and a novel. Rex also continues to work as a consultant.

Both authors sincerely hope that the ideas presented in this book, based as they are on simple but well-tried and proven methods, will help existing and intending island business people, especially those running their businesses in competition with foreign-owned ones. With the questions inserted for revision at the end of each chapter, it is intended the book also be used as a text in schools or other group-learning situations.

How to Use this Book

Each chapter is set out as a guide for self-learning, as a school or adult learning text.

First, there is an introduction, which provides a brief summary of what the chapter is about.

Second, there are some outcomes listed for each chapter. You also might call these ‘Objectives’. We intend that by the time you read and work through a chapter, you should be able to perform or at least understand better the most important lessons described there.

Third, there is a list of words with their meanings that you will meet in each chapter. You will find those words in the text.

Fourth, in many cases, there are tables, diagrams and pictures that follow the chapter text to help you comprehend the principles being described and to emphasise important points.

Fifth, at the end of each chapter there is a brief summary of the main points covered and some review questions and exercises that readers can use to check on their progress towards the outcomes listed at the beginning. Teachers or trainers may use these questions for discussion and setting assignments.

Sixth, please note that the currency used in the text for examples and illustrations is a dollar with the usual $ sign. As the book is sold in different countries, the authors thought it best to use a single currency rather than select any particular currency for examples. The values included in the examples do not reflect the exchange rate between a $ and any other currency. As you read, you will need to substitute your currency if it is unique to your country. The book uses the decimal system.

Seventh, the owl is thought to be smart or wise in its daily life. The owl also has an aggressive side to its nature, which is important in business, so we have used a picture of a small owl studying a book in its claws to illustrate important points described in each chapter.

Finally, some chapters have references to what is known as a URL. This means Uniform Resource Identifier, which is the usual term for all types of names and addresses that refer to objects on the World Wide Web (www)—the Internet. We might also use the term ‘web address’ for URL. The purpose in putting these near to some text will indicate that you can go to that web address for further information on that topic. However, as the book ages, some of these addresses could change or disappear completely. If this happens, you will need to look for a similar link on the Internet.

If you are reading this book online, or from a legal electronic medium, you simply can push the ‘Ctrl’ button on your keyboard at the same time as clicking the left button on your mouse or keypad (Windows). If you use Apple, you can just click on the URL.

If you are reading the book as a text and have an Internet connection, you can copy the URL into your search engine search box and then travel to the recommended Website.

The heroine in the book is a business person called Lepan Ropi. She is in business for herself and employs her younger brother and sister in her store. The authors intentionally wrote Lepan into the book to encourage women in the Pacific to run their own successful businesses.

Introduction

Many people in our Pacific communities believe that it is easy to make a lot of money by starting a business. Often, the business is almost an exact copy of the one at the other end of the village, or the one with similar stock further down the road. Many people decide to open some kind of retail business believing that it is a sign of a very important person. These two ideas certainly are not true and most often result in a new business venture failing and the invested (personal funds put into the business) money lost.

Making a business work successfully and earning a profit requires hard work and long hours. It needs a person with their family members who are happy to work until the business grows before they begin to take money out of it. Anyone who believes that they only have to build a store and open the doors to become rich and important soon will find that both the money and the importance will run away like water.

Many people start in business because they want to be their own boss rather than work for somebody else. This kind of person is independent-minded, likes making their own decisions and doesn’t like being told what to do by somebody else in an ordinary job. However, if you are not an independent thinker and find yourself relying on other people to make decisions for you, then perhaps running your own business is not for you.

Many people have wrong ideas about running businesses and often find out too late when the business has had to close down that there was much to learn and plenty of hard work still to be done to become successful. By this time, their investment has gone.

The authors, during recent return visits to PNG and other countries in the Region, discovered that there are few trade stores and other types of retail businesses owned and operated entirely by local people. Many businesses appear to be owned by foreigners, despite government controls and policies that such businesses are restricted to nationals. Perhaps the foreigners described have been accepted as citizens, but whatever the real situation, it is sad that nationals are not involved in running one of the most basic forms of business available to them.

We discuss in the book the ‘wantok’ (extended family) system, the pressures the business owner and their extended family must face when running a business and what they can do about them. However, our recent visits have confirmed our opinions that it is the wantok or extended family system that is the most important factor preventing national people from succeeding in business. This presents opportunities for foreigners to step in and start businesses, or take over existing businesses. They do not have to worry quite so much about the extended family system and its pressures.

The next most important thing preventing nationals from succeeding in business is competing against the foreign-owned businesses nearby. This only can be overcome by nationals who understand business principles better and run their businesses more successfully.

We sincerely hope that this book provides some ideas for coping with these difficulties and helps you become a successful business person.

You now should be ready for Chapter 1. It introduces new ways of thinking and considering how business opportunities may be seen where previously you only saw a problem, or confusing information.

Happy business hunting from here on!

Chapter 1

How to Identify Business Opportunities

’Business opportunities are like buses;

there’s always another one coming.’

– Richard Branson, Founder of Virgin Airlines and Virgin Galactic

1.1. Introduction

‘An opportunity is as real an ingredient in business as raw materials, labour or finance—but it only exists when you can see it.’

These are the opening words in one of Edward de Bono’s famous books entitled, Opportunities – A Handbook of Business Opportunity Search. They sum up what we cover in Chapter 1.

Edward de Bono goes on to say: ‘To get something done, we need to combine method and motivation. Motivation without method is inefficient. Method without motivation sits on the library shelf.’ The most important thing about an opportunity we will learn is the person who goes looking for it. A person who isn’t motivated often will not see, and hence ignore, even the most obvious business opportunity.The next most important thing is that if you do see an opportunity, you must analyse it so that you can assess the difficulties, problems and risks associated with it (what we can call a pre-feasibility study). Important words you will see in the chapter are explained in Table 1.

Table 1: Important words you will see in Chapter 1

After working through the text, you should be able to:

Think more positively so that you too can look for business opportunities.

Look for opportunities where previously you saw problems.

Begin with new thinking and start looking for business opportunities.

Conduct preliminary appraisals (pre-feasibility) of different ideas and opportunities so that you can decide whether to go further with them.

1.2. Quick Self-Diagnosis For You

Ask yourself these questions and make a note near each one that fits you best.

Where am I now?

Have I ignored an opportunity that I saw just recently?

Am I motivated enough to look for something to get involved in?

Am I prepared to take a calculated risk on something I see as a good idea?

Have I seen a problem that could be solved by starting a small business enterprise?

II. Am I in my present situation because:

I have not seen any opportunities.

I have not been looking for opportunities.

I have seen opportunities but not done anything about them.

I have seen an opportunity and would like to move forward.

III. Where do I go now?

Do I continue down the same old road and do nothing?

Do I become adventurous and enterprising, constantly looking for new opportunities?

How do I learn to see opportunities?

What do I look for?

IV. How do I get moving on an idea?

Can I do the analysis or pre-feasibility required?

Where can I look for information on how to do this?

Do I need professional help?

Can I learn from this chapter?

1.3. Identifying Good Ideas And Developing Opportunities

A business, new direction or maybe an innovation for a business originates from ideas like these:

Shifting resources from one kind of use to another

Using existing resources for something completely different

Solving a problem with something that previously didn’t work very well

Doing something better, cheaper or faster

Solving a problem with a good idea and going ahead with that

Responding to a disadvantageous situation you might find yourself in and resolving it

Reading about something or listening to someone that gives you an idea to explore, etc.

The entrepreneur is a person who:

Always thinks creatively and then strategically

Is opportunity-oriented (always thinking)

Always observes what happens around them

Has the ability and determination to begin to organise and bring together what is necessary to take advantage of an opportunity

The entrepreneur continually observes and assesses the political, economic, socio-cultural and technological environment. This enables them to think about possible new opportunities. Such ideas also arise from new ways of using an existing piece of equipment, or to use a by-product of some other production process (instead of it being discarded).

Examples that come to mind here include:

The quite sudden activity by people to collect all bits of metal (mostly steel and iron) when the world price of steel went up some years ago. People suddenly found there was a good market for those old car bodies and pieces of wreckage from World War II. Another good result was the clean-up of all this stuff from villages and towns.

A successful business, which is discussed in Chapter 18, about a company that collected old computers and other IT items and sold them to new businesses that could not afford the latest equipment.

Ideas can arise from suggestions and conversations with colleagues and friends, whilst other opportunities can develop from one of your hobbies or interests that can be turned into a business. Commercial history is full of examples of opportunities being taken up from these kinds of things.

Although perhaps not thinking about quite the same things discussed here, the famous sculpture, The Thinker, from the late 1800s by Auguste Rodin, describes what we are saying—‘that to dream up opportunities, we need to sit down and think’.

Examples could include converting your own private boat into a fishing adventure boat or charter operation, or using an interest or skill you have; for example, therapeutic or traditional massage and studying to gain a recognised qualification to run it as a business. A lot of studies have been done with entrepreneurs and opportunities they have taken up and whilst there are many ‘accidental’ entrepreneurs (people who almost fall into business opportunities), most business openings arise as a result of good hard thinking.

This hard thinking is the ‘creative’ or ‘lateral thinking’ that we discuss in Chapter 18.

Many of the new ideas in manufacturing processes, motor vehicles, information technology and so on, arise from a person’s bright idea. You might know that prototypes are on the road already and it might not be too long before we see truly ‘driverless cars’. Bigger companies have what they call a ‘Research and Development Division’, or R&D, to look into new and better ways of doing things (we hope, ethically). Other organisations might pay their employees for ideas they come up with to improve safety, cut costs or improve products and services. Small businesses can do this also (and very cheaply), simply by having an Ideas Box available for employees to suggest new ideas or better (and safer) ways of doing things. The employee who comes up with the good idea can be rewarded.

1.4. Thinking Differently

Another great example of doing the same thing but differently is Uber ‘taxi’ services. Private car owners can join up and be paid by passengers to provide a taxi service. Passengers contact car owners by SMS or phone to arrange a ride. Uber services have now extended to include fast food delivery. You might know that motor bike and private car owners in most South East Asian countries have been doing similar things for many years before Uber came into being.

An example from the authors’ own experience was when we purchased an ailing small island resort. Through good planning and management, we developed it into a successful SCUBA diving, holiday and conference resort.

Without a problem forcing us into action, we stagnate in our comfort zones. How can you use this mindset to become a better individual, more successful business owner or healthier person?

Thinking differently can follow a simple three-step approach that we extracted from a US Website from an article on problem solving called Early to Rise. The Website link is in the list of references at the end of the chapter.

Step 1 – Identify the problem as specifically as possible.

In 2005 (or about that time), a 28-year-old woman bought a pair of unlined cream-coloured pants, which cost $89. This was a high price for someone trying to earn their living selling facsimile machines door-to-door. The pants infuriated her: every undergarment showed through; the thick waistband caused a ripple; and the legs made a rumple. The woman was Sarah Blakely, founder of Spanx. Blakely’s frustration inspired her. She created the first prototype of a billion-dollar product, Spanx, by cutting the feet off a pair of traditional pantyhose. Most women know this product by the generic names now of ‘leggings’ or ‘active wear’.

Blakely’s solution was a hit with millions of women that shared her frustrations. Her plain-talk marketing spoke to her audience strongly and sales exploded. ‘It makes your butt look better,’ she said, and women everywhere agreed. Blakely turned a problem into an opportunity.

Step 2 – Reflect on the opportunities.

When a problem comes your way, get up, get out and get thinking. Research shows we generate big ideas away from our regular workspace. Your Aha! moment often will come while you are in the shower, walking your dog or exercising. It’s vital you give yourself space and time to think big, to reflect patiently and even to sleep on the problem.

As the story goes, Napolean Hill had just three hours to come up with a name for his book. It was tentatively titled, ‘Use Your Noodle to Get the Boodle’. Can you imagine how many fewer copies it would have sold and lives it would have impacted had the name, Think and Grow Rich, not come to his subconscious while he slept?

Step 3 – Take action on the opportunity and take advantage of the problem.

In 2008, Travis Kalanick already was rich, having sold a technology company for a lot of money. He is a great example of an entrepreneur. He looked for ways to turn problems into opportunities. While attending a technology conference, he first had the idea for Uber.

One New Year’s eve, not long before, Kalanick and a few friends had spent $800 hiring a private car and driver. While Kalanick had made a fortune selling StumbleUpon (a ‘discovery engine’ or search engine that recommends Web content to people searching for information and ideas), he still felt that almost a thousand dollars was too high a price for one night of convenience. He had been mulling over ways to bring down the cost of car hire services ever since.

According to an article on Business Insider, ’He (Kalanick) realised that splitting the cost with many people—say a few dozen elite users in Silicon Valley—could make it affordable. The idea eventually became Uber (the taxi service mentioned earlier). You can search for it on the Internet.

Morphed is an important word. It means developed or grew. Your first solution might not be the best solution, but you have to take action and try out a solution before you can get to the pot of gold at the end of the rainbow. Don’t give up if your first attempt doesn’t work perfectly. ‘If we are spending our time and effort focusing on a return to normal, sometimes we miss the opportunity that’s right in front of us’. If Kalanick hadn’t taken action, he never would have been in the position to develop Uber or had the confidence to go ahead with his big idea.

When a problem comes up in life, use the opportunity to learn from that problem, build new skills and add value to the world. Put in time, energy and love on your journey to becoming better at what you do and solving problems. That is how you will make your mark in the world. You might not create the next billion dollar start-up business because of a small problem in your life, but you just might! You never know until you take the bitter pill and make it better. Embrace your hardships. At the very least, they will make you stronger and they could make you very rich. Craig Ballantyne is the editor of Early to Rise (a health magazine), where this article first appeared. To read more, go to the Early to Rise Website. It has other interesting articles as well.

1.5. Guidelines For Seeking Opportunities

The following notes have been adapted from a series written by the authors in 1980 for a Pacific Regional Project for Small Enterprise and Entrepreneurship. For a person thinking about going into business, there is not one definite way of choosing the best type of business or the most likely opportunity.

A few guidelines are set out below that might help a new entrepreneur who is looking out for new opportunities:

Think about everything happening around you in your environment

For you to identify and recognise income and business opportunities, it depends on how much you are aware of the economic, political, cultural and technological developments in your area and country. A good starting point in getting to know more about your place might be knowledge of the environment (such as a community and national profile as a base document).

Be very much aware of the changing political environment

The political climate (which political party is in government and what the opposition party members are saying) is a most important consideration for aspiring business people. An entrepreneur must know and understand what government actions have been taken to encourage investments in business. For example, what are the government attitudes to foreign investment (and foreign-owned small businesses), incentive and assistance schemes and availability of low cost loans? The business sector should note any new business support policy to boost exports as well as government incentive and assistance schemes.

Often, the government or its planning departments identifies those sectors or industries that will get priority for development. These are often given special incentives and assistance programmes. These can include tax holidays, training seminars and subsidies, reduction of import duties, tariffs and quotas (or even embargos) protection and the like. Such programmes give good encouragement and support to new start-up businesses.

Perhaps there will be opportunities for what we call ‘backward linkages’ from industries such as wood and forest products, including furniture, wood, chip, pulp, fibre and so on. The extra money generated by new businesses can lead to the growth of retail and service establishments.

Other opportunities can develop through ‘forward linkages’ in paper and paper products, printing and publishing, packaging (bags and cartons and related products), transport and storage.

We must always be aware of what the government attitude is towards small business. Be prepared to get together with other business people and entrepreneurs and work as a ‘lobby group’ to change government knowledge and thinking if necessary. Take advantage of any new initiatives such as reducing red tape, streamlining small business start-up requirements and actions like decentralisation. Decentralisation is the transfer of administrative services and functions to lower government levels with full authority and related responsibilities for provincial policy, planning, implementation and funding.

Continually scan the economic environment

Watch carefully the general health of the economy and its prospects because this will provide you with important information. Statistics such as per capita income, the total amount of savings held by the country’s banks, credit availability and distribution of income, all are important things to know about and of which to take note.

A growing economy should mean a corresponding increase in the number and extent of industrial, commercial, agricultural and service enterprises. Knowledge of the economy then, is a necessary part of the feasibility study in the market assessment and forecasts. Population growth (if it is growing) and its profile and geographical spread (such as movement to urban areas) are important for the estimate of potential demand for products and services.

Other indications of opportunities can be found in scanning the lists of what goods are produced locally, imports and exports and consumption of goods like TV’s, computers, smart phones, tablets and so on. These can provide clues about what is in demand and what might be in short supply, or even what products and services could be over-supplied for the size of the market.

Imports particularly suggest new opportunities and given the recent increases in transport, insurance and handling costs, the growth of local industries and businesses to replace some of the imports could provide good possibilities. You might not know that the tree nut we know as a Macadamia actually is a wild Australian tree nut. The Australians did not see the opportunity to grow more nuts, harvest and coat them with chocolate. They do now, of course, but cannot market it as ‘Macadamia’ because that is the worldwide known name for them owned by the Americans.

Related to imports is a study of the exports of the country, particularly where the government encourages export development. Export lists reveal opportunities for upgrading the quality and nature of existing export products by improving them or processing them better or differently.

It is most important to investigate local materials and resources and especially for importing countries, what is becoming popular that you could take advantage of. Bottled drinking water and the growth of the market for coconut water provide good examples. Products like these should receive good support from government. Many craft and cottage industries rely on local sources of supply. Subscriptions to the Government Gazette for tender advertisements could open up new possibilities. Many tender advertisements relate to the supply of equipment and components, especially for the police and defense forces. You also should watch the newspapers for invitations to tender from private sector firms, aid programmes and community organisations.

Assess the technological environment

It certainly seems true to say that we are in an age of technology (such as digital and WiFi), which is providing many new opportunities while it also is responsible for the demise of others. We should remember that people of the time probably regarded the Industrial Revolution, which took place in Europe between 1760 and 1840, in much the same way. New developments in science and technology continually create new business and industrial opportunities and new products and processes can make many businesses obsolete almost overnight. The tremendous increase in online (on the Internet) buying and selling has meant that the traditional large department stores have had to adapt and copy or go out of business.

How many of you remember what a slide rule is or how to use logarithm tables, or even calculators? It wasn’t so long ago they were used every day. These all have been replaced and refined. We are now able to have on our desk or in our hand a piece of technology that has the same ability and capacity that a computer the size of a house once used to have. Such a computer called ENIAC was built in 1946 and was, amongst other things, called a ‘giant brain’ (Wikipedia). You can see a picture of it on the Wikipedia page entitled ENIAC.

1.6. Sources of Information

In many cases, the new or would-be entrepreneur is on their own and afraid to discuss their idea for fear of somebody else taking it. At other times, people see an opportunity but lack the motivation and risk-taking decisiveness to do something about it. Still other people refuse to see an opportunity when it is right in front of them.

An invention, called ‘Autoscan’, was designed by an Australian some years ago to help pilots land aircraft in bad weather, but the Australian government did not support it. A foreign organisation saw the opportunity and Australia lost it. Ralph Sarich supported his invention, the ‘orbital engine’, with his own investments, government, private investors and a large Australian company. There is a Website and list of references about this.

The difficulty in starting a venture is reduced when the person knows what information to look for and where to get it. The search for information could be a simple Internet search. Often, there is plenty of information available; you just have to find it. Consider the following sources:

Internet searches

Import and export tables (as mentioned above)

Government publications on tariffs and import duties

Population statistics on immigration, production, consumer price index all are available (or should be) from the Statistics Office

Magazines, newspapers and other publications in print and online, provide information on business opportunities, new technologies and new products

Foreign Trade Commissions operating in each country have important trade journals, new products, trade incentives and so on

Data and information from other branches of government such as:

National Development Plan from the Planning Office (or equivalent)

Development Bank publications and Website

Private bank publications and Websites

Business and trade journals from the Department of Trade and Industry (or equivalent)

Price control and consumer affairs information from the appropriate body or business advisory service

Trade, industry and commerce and business seminar information from the Chamber of Commerce or Business Association

Above all, an aspiring entrepreneur, a person with the idea, the initiative, energy, some finance and organisational ability, must follow a rule from an old but popular management training film called the GOYA Effect. GOYA means ‘Get off Your Ass’! That is exactly the type of person an entrepreneur really is!

1.7. Entrepreneurship And Risk-Taking

Some entrepreneurs take great risks. They don’t like to collect the necessary information even when there is time to do so. Some others don’t like to listen to or read other people’s views. They tend to make decisions based on their feelings rather not on facts. This increases the risks. We might call these people the impatient risk-takers.

Some others who choose high-risk alternatives with the aim of achieving high returns can be called high risk-takers. Both kinds are likely to meet problems. In taking the risk they reduce their control over the activity. Control of the result or outcome also is reduced. This impatient risk-taking and high risk-taking is like gambling. So, an entrepreneur is like a gambler. Successful gamblers are rare, but those who make money know what they are doing.

There are many other people like these risk-takers. We will meet some in Chapter 13 in discussion of the large number of people scammed on the Internet by an increasing range of clever (and not clever but successful) scams. The people scammed also want to get rich quickly, but most end up losing money to someone cleverer than they are. Successful entrepreneurs take another kind of risk, a calculated risk. They understand their goal clearly and are careful about setting down what they want out of an activity and risk. Successful entrepreneurs are the calculating risk-takers.

1.8. Where To Look For Ideas

Now we will consider where to look for these ideas that might work for us.

Change equals opportunity

Think about changes that occur in the following areas that could lead to opportunities, including:

Demographic change

Economic change

Ecological change

Technological change

Political change

Cultural change

Building on your own ideas and experiences

These could include:

Inventing a new product or component

Identifying new markets from trends, fashions or finding uses for waste material or offcuts

Identifying markets that are about to grow

Substituting materials in existing markets

Finding a niche in mass markets

Catering for markets that are shrinking in size

Combining groups of businesses or services

Adding value to existing products

Transferring concepts and methods from one industry to another

Substituting imported products or components

Building on other people’s ideas and experiences

You can:

Look into the feasibility of buying a franchise

Buy an existing business

Assemble a product under contract

Package a product under contract

Market someone else’s product or service for them

Act as an agent for someone’s product or service

Rebuild or remanufacture someone’s else’s product

Manufacture a product under licence

Second-try failed products or services with better marketing

Do something better, quicker and cheaper

Imitate, legally, existing products or services (with care)

1.9. Summary Of Chapter 1

Chapter 1 outlined what might help you in a search for new business opportunities. These alone cannot make you an instant entrepreneur. We hope we have convinced you that there is much thinking and hard work to do before moving ahead. Entrepreneurs see opportunities in most things they see. That is how they look at the world. Most new businesses result from constant scanning and clear hard thinking about the:

Geographical and natural environment

Political environment

Economic environment

Social and cultural environment

Technological environment

We couldn’t write a more appropriate conclusion to this chapter than two more of Edward de Bono’s gems. They are from his book, Opportunities – A Handbook of Business Opportunity Search. Edward de Bono wrote that:

‘An opportunity is a course of action that is possible and obviously worth pursuing.’

And:

‘With a problem, you search for the solution; with an opportunity, you search for the benefit.’

1.10. Review Questions And Exercises

Now, some questions for people in business already, those about to start a business and students in schools or those attending adult learning classes in small business start-up and management. You now should set aside an exercise book, or Word file on your computer if you have one, so that you can record your answers and look back at them over time. We hope you find these interesting and challenging.

At the start, we wrote that after working through the text, you should be able to:

Think more positively so that you too can look for business opportunities.

Look for opportunities where previously you saw problems.

Begin with new thinking and start looking for business opportunities.

Conduct preliminary appraisals (pre-feasibility) of different ideas and opportunities so that you can decide whether to go further with them.

The aim of the exercise is to start you down the road to making preliminary evaluations of any ideas that you have moving around inside your head. After completing it you should be able to conduct a preliminary investigation of a new business possibility. The exercise involves an adaptation of Edward de Bono’s ‘IF-BOX MAP’ (Figure 1).

Figure 1 – Example of an If Box

Now, it’s your turn

At an early stage of any undertaking, it is important to gain some general impressions—a bird’s-eye view. (In these modern times, it might be called a ‘drone’s-eye view’.) This comes from asking broad, ranging questions whilst filtering and modifying ideas for the opportunity search. This all takes place before you do a full feasibility study and will involve collection of