Opportunity recognition is a process used by entrepreneurs.
Opportunity recognition, a theory based on entrepreneurship, suggests that people use a specific cognitive process to recognize the potential in a new business opportunity. The idea is based on considering past experiences, risks and market trends to recognize the potential in and make a decision about a business venture.
Importance
Opportunity recognition is considered the first critical step in starting a new business. It is during this phase that an opportunity is first recognized and evaluated. A decision to move forward in a new business venture is a direct result of the opportunity recognition process.
Theory
The basic idea of opportunity recognition is that profitable business ideas surround us on a daily basis but they are only recognized by people with an entrepreneurial mindset.
Studies
Entrepreneurship has been the topic of scholarly studies, mainly because many think there is a genetic, cognitive trait that allows those with it to evaluate opportunities in a different way. It is suggested that people predisposed to opportunity-recognition thought processes usually have personalities that are open to new experiences and this allows them to recognize opportunities when others do not.
Tags: business venture, Opportunity recognition, opportunity recognition, recognition process, recognize potential, that people
