This document summarizes an international workshop on skills development for small and medium enterprises (SMEs) and entrepreneurship. The workshop covered topics such as business know-how, new business development perspectives, identifying opportunities, and developing opportunities. Business know-how is essential for regional development and can be acquired through education, experience, and learning by doing. Identifying opportunities involves understanding customer needs and problems. Developing opportunities progresses from defining a business concept to creating a business model and plan. The workshop emphasized the importance of interacting with customers and mobilizing resources to commercialize opportunities.

1. International Workshop
Skills Development for SMEs and
Entrepreneurship
Development of opportunities - Basic skill for
entrepreneurs
Research Director Markku Virtanen
Aalto University School of Business
Small Business Center

2. Contents
• Entity of Business and Business Know-how
• Perspectives on new business development
• Identification of opportunities
• Development of opportunities
• Summary and implications
2012 © Markku Virtanen

3. Regional development and business
know-how
• Basis for regional development: successful businesses
are essential
• Successful businesses posses high level of business
know-how
• Fostering regional development requires acquisition
and/or development of business know-how
• What do we mean by business know-how and where
from do we get it?
2012 © Markku Virtanen

4. Business Know-How
• Business Management Skills:
Business Operative
Business – Management
Management
Skills – Leadership
Skills
• Operative Business Skills
Business
Know-How
= Business Know-How 
Mastery of Business Entity =
Governance of business know-how in
relation to risks involved in the
business
Success

5. Risk Management
• Tolerance of risks one entrepreneurial characteristic
• Risk attitude
– Risk averse
– Risk neutral
– Risk lover
– Entrepreneur / Business Manager
 Successful entrepreneurs keep the risks under their control
 Calculated risk taking

6. Where do you get business know-
how?
• Research  time span?!
• Education  time span?!
• Experience
• Learning by doing

7. Where do you get business know-
how?
Applied
Basic Research
Continuing
Research Education: Education Experience
Degree Courses
Programs

8. Where do we need and use business know-
how?

9. New business/venture development –
entrepreneurial and organisational perspective
• Entrepreneurial perspective on new business
development
– Schumpeter (1936; 1943): innovations, creative destruction
• Organisational perspective on new business
development and entrepreneurial behaviour
– Opportunity identification and development (Ardichvili et. al.,
2003; Baron 2006; Shane and Venkataraman 2000;
Sarashvathy 2003)
2012 © Markku Virtanen

10. How to identify opportunity / problem or need of
a customer (Sarasvathy et. al. 2003) ?
a) opportunity recognition: identification of an opportunity
is matching of market demand and supply
b) opportunity discovery: search for information about
characteristics of market especially potential customers
and competitors is essential
c) opportunity creation: both demand and supply are
unknown (test your idea)
2012 © Markku Virtanen

11. CHARACTERISTICS OF OPPORTUNITY
(Timmons 1999)
• OPPORTUNITY HAS THE QUALITIES OF BEING
– ATTRACTIVE: MARKET AND GROWTH LARGE ENOUGH
– DURABLE: LONG TERM BUSINESS
– TIMELY: OPPORTUNITY WINDOW OPEN FOR LONG TIME ENOUGH
• IS ANCHORED IN A PRODUCT OR SERVICE WHICH
CREATES OR ADDS VALUE FOR ITS BUYER AND/OR
END USER
• MARKET AND CUSTOMER FOCUS
– SOLVES CUSTOMER’S PROBLEM AND OFFERS THE
SOLUTION TO THE CUSTOMER
• THE MANAGEMENT TEAM CAPABLE FOR SEIZING IT
2012 © Markku Virtanen

12. QUESTIONS IN DEFINING THE OPPORTUNITY
(Virtanen 2004)
1. TO WHOM? WHO IS THE CUSTOMER? WHERE IS
THE MARKET? (Listen to the customers!)
2. WHAT AND WHY? WHAT IS THE PROBLEM OF THE
CUSTOMER? HOW DO WE SOLVE IT?
(PRODUCTS /SERVICES)
3. WHEN? WHAT IS THE TIMING OF DIFFERENT
ACTIONS? (OPPORTUNITY WINDOW!)
4. WITH WHICH MEANS? HOW DO WE DO THAT?
5. WHO? IS THE CAPABILITY OF THE TEAM
APPROPRIATE?
6. WHAT IS THE VALUE? HOW DOES THIS
OPPORTUNITY ADD VALUE TO THE VENTURE / TO
THE INVESTORS/TO THE CUSTOMERS?
2012 © Markku Virtanen

13. Market Industry
Market Industry
Macro attractiveness attractiveness
level
Domains of Ability to
Mission
opportunity Objectives execute
Risk atti- CSF
(Mullins 2006) tudes Team
Connectedness
Up and down in
Micro The value chain
level
Benefits and Sustainable
Attractiveness competitive
Of the target advantage
segment
2012 © Markku Virtanen

14. Opportunity development (Ardichvili et. al. 2003)
VALUE CREATION CAPABILITY OF OPPORTUNITY
UNDERUTILISED RESOURCES OR UNEMPLOYED SERVICES
BUSINESS CONCEPT
MARKET NEEDS DEFINED IN TERMS OF BENEFITS,
VALUE SOUGHT AND RESOURCES MORE PRECISELY
BUSINESS MODEL
MATURE BUSINESS CONCEPT WHERE INFORMATION OF COMPETI-
TORS, PRICING AND PROFIT-GENERATION MODEL IS INCLUDED
BUSINESS PLAN
THE MOST ELABORATED FORM OF OPPORTUNITY INCLUDES
BUSINESS CONCEPT AND BUSINESS AND FINANCIAL MODEL
2012 © Markku Virtanen

15. Basic skill of entrepreneur to create and
develop opportunities
(Puhakka 2002, 2007)
• Collect a team – people are the most important, ability to
execute CSFs
• Define together mission and values
• Recognize, identify or create opportunity
• Analyse your value creation capability and define
business concept and business model
• Mobilize the other necessary resources to pursuit the
opportunity
2012 © Markku Virtanen

16. Summary
• Business know-how is essential for fostering regional
development
• Entrepreneurial and organizational perspective
overlapping
• Opportunity identification = identifying of customer’s
needs and solving customer’s problems or creation of
opportunities  listen to your customers
• Development of opportunities from value creation
capability via business concept and business model to
business plan
• Mobilize resources for successful commercialisation
2012 © Markku Virtanen

17. Implications
• Regional development – fastest way to acquire business
know-how is to recruit experienced business managers
• Policy makers should pay attention to the development
of opportunities in addition to / instead of promotion of
innovation inputs
– Resources should be allocated more to encourage contacting
and meeting the customers and sales efforts
– Emphasize creativity and encourage to be different
www.mindspace.fi
– Encourage modernising and diversification in existing firms
– Pay attention to succession processes and their novice
entrepreneurs
• Allocation of resources in business degree education =
you have to be patient
2012 © Markku Virtanen

18. THANK YOU!