A business opportunity (or bizopp) involves sale or

lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...

of any product, service, equipment, etc. that will enable the purchaser-licensee to begin a business. The licensor or seller of a business opportunity usually declares that it will secure or assist the buyer in finding a suitable location or provide the product to the purchaser-licensee. This is different from the sale of an independent business, in which there is no continued relationship required by the seller. Eckhardt and Shane (2003) argue that when taking the path of

entrepreneurship Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values t ...

, one of the most important indicators for future

is the skill of finding the business opportunity. This is seen as the lynchpin around which the promise of entrepreneurial venture is to be built. Shane and state that individuals must possess prior knowledge and the

cognitive Cognition refers to "the mental action or process of acquiring knowledge and understanding through thought, experience, and the senses". It encompasses all aspects of intellectual functions and processes such as: perception, attention, thought ...

properties necessary to value such

knowledge Knowledge can be defined as awareness of facts or as practical skills, and may also refer to familiarity with objects or situations. Knowledge of facts, also called propositional knowledge, is often defined as true belief that is distin ...

in order to identify the new opportunity. This normally allows a triggering of the opportunity which can then move forward to scoping and validation.

Concept

A common type of business opportunity involves a company that sells bulk vending machines and promises to secure suitable locations for the machines. The purchaser is counting on the company to find locations where sales will be high enough to enable them to recoup their expenses and make a profit. Because of the many cases of fraudulent biz-ops in which companies have not followed through on their promises, or in which profits were much less than what the company led the investor to believe, governments closely regulate these operations. In the United States, the

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction o ...

receives complaints and helps coordinate enforcement action against fraudulent business opportunities.What We Do
Federal Trade Commission, retrieved 11 July 2014

Makeup of a business opportunity

A business opportunity consists of four elements all of which are to be present most often within the same domain or geographical location, before it can be claimed as a business opportunity. These four elements are: * A need * The means to fulfill the need * A method to apply the means to fulfill the need and; * A method to benefit With any one of the elements missing, a business opportunity may be developed, by finding the missing element. A desirable characteristic is for the combination of elements to be unique. The more control an institution (or individual) has over the elements, the better they are positioned to exploit the opportunity and become a

niche market A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that i ...

leader.

References

External links

Investor Bulletin: Business Opportunity Fraud
State of Connecticut Department of Banking, July 1995.
Federal Business Opportunities
Official federal government procurement opportunities allowing contractors to retrieve services posted by government buyers. {{DEFAULTSORT:Business Opportunity