Opportunity Assessment Plans

In this study, quantitative research is conducted. The purpose of this study is to ascertain through causal research whether there is a correlation or more specifically causality between the formulation of a business plan and the assessment of opportunities.

In this study, the business plan is the independent variable (IV), and assessment of opportunities the dependent variable (DV). Business ownership; when the business was started; education; and how the business plan was formulated were also added and included as independent variables (IVs). The study hypothesised the relationship of the above independent and dependent variables. The hypotheses stated in this study are explanatory (causal) hypotheses, as there was an implication that the existence of one or a change in one variable caused or led to a change in the other variable.

Unfortunately, most research studies cannot be carried out experimentally by manipulating variables. However, one can still study subjects that have been exposed to the independent variable and those that have not, and compare the results. This is known as ex post facto design, which is used in this study. In the ex post facto design the research has to accept the world the way it is found; investigators have no control over the variables in the sense of being able to manipulate them.

The study adopted the simple random sampling technique, which is a probability sampling procedure, and the questionnaire as the method for data collection, as information about past events is often available only through surveying or interviewing people who remember the events. The questionnaire consists of the following main sections:

Section 1: solicits demographic and socioeconomic information about previous or current potential entrepreneurs such as gender, age, level of education, race, and business ownership status.

Section 2: addresses the different aspects regarding the business plan. It identifies how the business plan was formulated as well as the content detail of the business plan in accordance with the UP business plan.

Section 3: contains questions about opportunity assessment. Primarily the questions relate to identifying between ideas and opportunities and the development of opportunities. The funnel technique is utilised in this section.

This study concluded that the online questionnaire would be the optimum method, due to the sampling required as well as the use of available resources. However, during the data collection period, an alternation method was added in order to increase the actual sample size. Questionnaires were handed out, via the random sampling method, to BCom and Μ Phil UP students in a controlled environment during their examinations. The questionnaire was administered to 260 sample units in the sample frame, selected through the sampling process (Figure 3 explains the sampling process and how data was collected). This study's sample frame included respondents from Absa Enterprise Development branches across South Africa, SoftstartBTI and Business Partners (incubators), and UP students who studied BCom (Entrepreneurship) or MPhil (Entrepreneurship and Small Business Management). Due to the nature of these institutions, the respondents were guaranteed to have been potential entrepreneurs at some point, regardless of their current entrepreneurial status.

The actual sample size was 76, as 80 responses were successfully completed and returned, while four respondents had to be excluded from the study, as they did not have business plans. A pilot study was conducted on three respondents, a statistical analyst and academics in order to test the design of the questionnaire. This study's target population or research population is previous potential entrepreneurs or current potential entrepreneurs in South Africa that were new or inexperienced when they formulated their business plan.

The study uses descriptive and inferential statistics to analyse the data collected. Descriptive statistics are the elementary transformation of raw data, in a way that describes the basic characteristics such as the central tendency, variability and shape of the distributions. Frequency tables, cross-tabulations, bar graphs and pie graphs are utilised in order to illustrate the descriptive statistics. This study consists of 'more than 2' subsamples, which were independent, and the measurement scales included nominal, ordinal and interval scales. The following statistical tests are employed in the analysis of this study: Analysis of Variance (ANOVA) and Kruskal-Wallis tests. Factor analysis is utilised to confirm validity as well as reliability in the study. It is important to note that factor analysis was done on the two factors separately and that each factor had nine items therefore the sample size of 76 was sufficient and factor analysis could be carried out successfully.

Hypotheses testing

The study performed hypotheses testing in order to accept or reject the null or alternative hypotheses. The three hypotheses developed are supported by the literature but they needed to be statistically tested and then either accepted or rejected, based on the findings and the levels of significance. If the probability of the occurrence of the observed data was smaller than the level of significance, then the data would suggest that the null hypothesis should be rejected.

Two types of errors can be committed in hypotheses testing, with the possibility of four situations. Under these situations, the null hypothesis could be either true or false and the decision to accept or reject the null hypothesis would emanate from a statistical decision. Type I error is rejecting a null hypothesis that should not be rejected, and a Type II error is not rejecting a null hypothesis that should be rejected.