Investigating the utilisation of information sources to screen business opportunities by prospective entrepreneurs

Abstract

In the past two years, South Africa has experienced lower economic growth than its annual population growth of around 1.6%, which means that the country is going rapidly backwards. Information is a very important asset for entrepreneurs in a sense that it helps them to identify gaps in the market and find ways to address those gaps, which contributes to economic growth. The purpose of this study was, therefore, aimed at investigating prospective entrepreneurs at a University of Technology whether they actively search for and utilise information sources on business opportunities. The literature review was conducted on several types of information sources. The Information sources are classified into three categories, namely: • Format: documentary versus oral information; textual versus audio-visual; electronic versus paper-based information. • Status: personal versus impersonal; published/open versus unpublished/ secret or confidential information. • Location: which is internal versus external information. Not all of the three categories are important, but status and location are important for the business. Since this study was mainly focussing on prospective entrepreneurs, only external information sources of the status and location dimensions were investigated. Both information sources collaboratively constitute the external-formal and external-informal sources of information. The research approach utilised in this study was a quantitative research approach. A structured questionnaire was utilised and a systematic random sampling method was employed. The findings of the study indicated that the prospective entrepreneurs do sometimes utilise the information sources but not as often as would be preferred. The empirical results showed that the prospective entrepreneurs perceived the external-formal sources of information to be more important than the external-informal sources. The external-formal sources of information are therefore utilised more than the external-informal sources.