In business, an opportunity refers to a situation that can be leveraged to create additional value, generate profit, or achieve strategic goals.
Opportunities come from many sources such as changes in market conditions, customer feedback revealing unmet needs, gaps left by competitors or from innovative ideas.
An opportunity is a market need that aligns with your business's resources and capabilities. Rather than just reacting to external changes, you'll need a growth strategy that includes clear steps and milestones to make the most of new opportunities.
How to identify an opportunity:
Changes in the world around you can lead to new business ideas.
Here are some examples:
Government and policy changes: new laws or regulations (at a local, state, or national level) will affect how things are made, traded or funded.
Economic changes: when the cost of living goes up or down, it can impact consumer spending. For example, people may want cheaper options when times are tough or may spend more when times are good.
Environmental changes: when there is greater interest in sustainability, local and organic produce, or environmentally friendly products it can create new markets for businesses.
Social and lifestyle changes: such as more people working from home, can create new opportunities. For example, the shift to remote work has seen some businesses capitalise by offering more convenient and varied home food delivery options to people.
Technology changes: advances in artificial intelligence (AI) or other digital tools can help businesses work more efficiently or offer new products or services.
By paying attention to these kinds of changes, and thinking about how your business could respond, you’re more likely to identify new opportunities.
Once you think you've found an opportunity, take time to work out if it's something worth pursuing.
Ask yourself these questions:
Do we have the people, skills or resources to make this work?
Does this fit with our business aims?
Could this help our business grow or make a profit?
To make a clear decision, planning tools like the Boston Consulting Group Matrix (BCG Matrix) can help.
This tool helps you assess your products or services based on two key factors:
Market growth: is the demand for this type of product or service increasing?
Market share: how well is your product or service performing compared to others in the market?
This tool helps you assess:
which products or services are worth putting more time and money into
which products or services are growing or making money
which products or services are taking up effort without much return.
By taking time and going through each idea step by step, you’ll be better able to choose the opportunities that are most likely to help your business succeed.
BCG Matrix Guide
By using the BCG Matrix, you can spend your time and money maximising your impact and achieving your business growth objectives.
High growth, high market share. These are your strongest performers.
Is this product or service growing strongly right now?
Are sales already high or increasing?
What do we need to do to keep it as a Star?
High growth, low market share, and may have potential.
Does this product or service have the chance to grow a lot?
What would it take to turn it into a Star?
Do we have the resources to do that, and is it worth the effort?
Low growth, high market share.
Does this product or service bring in a lot of sales but doesn’t have much room to grow?
Are sales likely to go down soon?
What can we do to keep sales steady for as long as possible?
How long do we expect it to keep bringing in money?
Low growth, low market share, are generally not good opportunities.
Does this product or service have little or no chance to grow?
Are sales low and expected to fall even more?
Is there a chance it can improve, or should we stop investing in it?
Assessment: looking into the finer details
After you’ve looked externally and internally, the next step is to evaluate each opportunity to decide:
which ones you should (and shouldn’t) pursue,
what your priorities should be.
To do this, gather as much information as you can about each opportunity and compare them against clear criteria.
Spending more time on this step will help you make better, more accurate decisions.
Common evaluation criteria to check each opportunity against:
Assessment criteria
Description
Capacity to generate profit.
Would the opportunity generate profit?
Profitability should be measured in relation to the opportunity itself and its contribution to the overall profitability of the business.
Undertake a profitability forecast for each opportunity to understand/assess this criterion.
Manageable cash flow.
Does the opportunity need considerable ‘up front’ cash?
Does the opportunity need to be fed cash throughout the year (impact of seasonality, for example).
How long does it take for the opportunity to be cash positive?
Scale of investment and risk.
To what extent will it need significant up-front investment (money, equipment, people)?
Forecast the cash flow for each opportunity to understand and assess the level of investment and risk.
For each opportunity develop a project cost establishment plan together with its forecasted cash flow.
How long does it take to pay back the initial investment?
The greater the level of upfront investment and the time it will take to recoup the investment will determine the risk.
Fit with existing capacity and capability.
To what extent does it fit within the business’s existing capacity (workload) and existing capability (skills and knowledge).
If there is significant additional capacity required to establish the project, the costs and risk of failure will be increased.
Establish a plan for starting up, and ongoing operational and resource requirements for each opportunity being assessed.
Meets desired personal requirements.
Does it meet the goals and interests of the owner?
Access to required competitive resources.
To what extent does the owner have access to the resources required?
These resources can be grouped as:
valuable (resources required to produce a product or service the market wants to buy)
rare (resources a business has in greater abundance than competitors)
hard to copy (resources a business has that are very hard for competitors to copy)
non-substitutable (resources a business has access to that competitors can’t substitute something else for).
Likely to develop/maintain a sustainable competitive advantage for the business.
Likelihood of the business to develop and maintain a sustainable competitive advantage in its markets (sustainable profit, cash, access to resources, capability to respond to changes over time).
Opportunity assessment
Once you’ve identified an opportunity that you think has potential, the next step is to test whether or not it is realistic and achievable for your business.
To do this, score the likely performance of each opportunity, against each criteria in the table below. Score them out of 10, with the highest score being the likelihood of success.
For example:
Criteria
Option one
Option two
Option three
Capacity to generate profit6
6
5
3
Manageable cash flow
7
6
5
Scale of investment and risk
3
6
5
Fit with existing capacity and capability
5
6
8
Meets desired personal requirements
5
5
4
Access to required competitive resources
6
7
7
Likely to develop/maintain a sustainable competitive advantage for the business
5
5
6
Total
37
40
38
Please note: Option two is the preferred choice because it ranked highest.
Testing your top opportunity: Create a feasibility plan
Once you've identified a high-potential opportunity, the next step is to test whether it's practical and worthwhile to pursue.
A feasibility plan helps you dig deeper into key areas like:
Customer demand – is there a real, proven market for this product or service?
Financial viability – do the numbers stack up when you estimate costs, pricing and break-even points?
Operational readiness – can your business deliver this effectively with the people, tools, and systems you have (or can reasonably access)?
Legal or regulatory constraints – are there any rules or compliance issues that might slow you down or stop the idea?
Spending time on a feasibility plan helps reduce the risk of wasted time or money and gives you a solid foundation for writing a full business plan or seeking funding.
