ENTREPRENEURSHIP

Governor Pack Road, Baguio City, Philippines 2600

Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

STARTING A BUSINESS
Why Start Your Own Business?
What sort of characteristics distinguishes those who start businesses from those who don’t? Or, more
to the point, why do some people actually follow through on the desire to start up their own
businesses? The most common reasons for starting a business are the following:
• To be your own boss
• To accommodate a desired lifestyle
• To achieve financial independence
• To enjoy creative freedom
• To use your skills and knowledge

The Small Business Administration (SBA) points out, though, that these are likely to be advantages
only “for the right person.” How do you know if you’re one of the “right people”? The SBA suggests
that you assess your strengths and weaknesses by asking yourself a few relevant questions:
• Am I a self-starter? You’ll need to develop and follow through on your ideas.
• How well do I get along with different personalities? Strong working relationships with a variety
of people are crucial.
• How good am I at making decisions? Especially under pressure…..
• Do I have the physical and emotional stamina? Expect six or seven work days of about twelve
hours every week.
• How well do I plan and organize? Poor planning is the culprit in most business failures.
• How will my business affect my family? Family members need to know what to expect: long
hours and, at least initially, a more modest standard of living.

Before we discuss why businesses fail we should consider why a huge number of business ideas never
even make it to the grand opening. One business analyst cites four reservations (or fears) that
prevent people from starting businesses:

• Money. Without cash, you can’t get very far. What to do: line up initial financing early or at
least have done enough research to have a plan to raise money.
• Security. A lot of people don’t want to sacrifice the steady income that comes with the nine-
to-five job. What to do: don’t give up your day job. Run the business part time or connect with
someone to help run your business – a “co-founder”.
• Competition. A lot of people don’t know how to distinguish their business ideas from similar
ideas. What to do: figure out how to do something cheaper, faster, or better.
• Lack of ideas. Some people simply don’t know what sort of business they want to get into.
What to do: find out what trends are successful. Turn a hobby into a business. Think about a
franchise. Find a solution to something that annoys you – entrepreneurs call this a “pain point”
- and try to turn it into a business.
If you’re still interested in going into business for yourself, try to regard such drawbacks as mere
obstacles to be overcome by a combination of planning and creative thinking.

Reasons to start a business

• Financial Stability
• Self-fulfilment
• help the family
• provide employment to others
• have his/her business
WAYS TO START A NEW VENTURE
• Start up
• Buying an existing business
• Franchising –owner of the company that already has successful product or service, licenses,
trade name and methods of doing business to others in exchange for an initial franchise fee
and royalty payments.
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

FACTORS TO CONSIDER IN STARTING A BUSINESS

• Focus and Direction- There should be a clear and documented vision-mission and strategies to
begin with
• Sources of Capital- These can be from personal funds, family and friends, government loans,
and/or the stock market
• Good Network - Building good relationships and working with other people
• Legal Requirements- Refers to the laws and regulations that governs the type of business
• Personal Competence - Refers to the attributes, attitudes and personality of an entrepreneur
• Degree of Risk- The probability or chance of failure
• Research and Development - Adequate support to inventors, scientists and new products for
innovation
• Availability of Resources- Pertains to raw materials, human resources an machineries/
equipment.

Why Do Some Businesses Fail?

If you’ve paid attention to the occupancy of shopping malls over a few years, you’ve noticed that
retailers come and go with surprising frequency. The same thing happens with restaurants—
indeed, with all kinds of businesses. By definition, starting a business—small or large—is risky, and
though many businesses succeed, a large proportion of them don’t.

Businesses fail for any number of reasons, but many experts agree that the vast majority of failures
result from some combination of the following problems:
• Bad business idea. Like any idea, a business idea can be flawed, either in the conception or
in the execution. If you tried selling snow blowers in Hawaii, you could count on little
competition, but you’d still be doomed to failure.
• Cash problems. Too many new businesses are underfunded. The owner borrows enough
money to set up the business but doesn’t have enough extra cash to operate during the start-
up phase, when very little money is coming in but a lot is going out.
• Managerial inexperience or incompetence. Many new business owners have no experience
in running a business; many have limited management skills. Maybe an owner knows how to
make or market a product but doesn’t know how to manage people. Maybe an owner can’t
attract and keep talented employees. Maybe an owner has poor leadership skills and isn’t
willing to plan ahead.
• Lack of customer focus. A major advantage of a small business is the ability to provide special
attention to customers. But some small businesses fail to seize this advantage. Perhaps the
owner doesn’t anticipate customers’ needs or keep up with changing markets or the
customer-focused practices of competitors.
• Inability to handle growth. You’d think that a sales increase would be a good thing. Often it is,
of course, but sometimes it can be a major problem. When a company grows, the owner’s
role changes. He or she needs to delegate work to others and build a business structure that
can handle the increase in volume. Some owners don’t make the transition and find
themselves overwhelmed. Things don’t get done, customers become unhappy, and
expansion actually damages the company

OPPORTUNITY SEEKING, SCREENING and SEIZING

What is opportunity?
▪ In a business sense, it is an idea that has commercial potential
▪ Something you can make money with, develop a business around it, or create value with
it.
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

Sources of Opportunity:
● Internal –Innovation /Creativity
▪ Past jobs
▪ Hobbies
▪ Social network
▪ Travel
● External
▪ Macromarket
▪ Micromarket
▪ Analysis
▪ Irritants in the marketplace

Innovation – Creating or modifying products based on the needs of customers.

Types of Product Innovation

1. Create an entirely new product

2. Alter / modify an existing product

3. Re-brand /Reformulate an existing / old product

 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

Ways to Innovate
● Make it LARGER

Examples:
- Family size - Jumbo
- 2-liter -Airbus
- Big TV
- Thick Crust
- Big Pizza

● Modify – change the

o Name
o Color
o Container
o Shape
o Creative copying

● Make it stronger / faster

● Make it smaller / lighter
● Substitute
o Materials
o Methods

Other Methods (Internal)

SERENDIPITY WALK
▪ Walk along an avenue or street
▪ Observe, Observe, Observe
▪ What customer needs can still be met?
▪ Observe competition

An opportunity is anything that provides you with a chance to change your circumstances
for the better. Are opportunities everywhere? Yes and no. According to Adam Sicinski “many
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

of the opportunities we come across are actually disguised as problems or hard work.
However, to the untrained eye — unable to see past the present moment — all opportunities
are actually insurmountable problems that make life difficult, stressful, and hard.

Seizing opportunities: how to identify them

Sicinski urges you to identify first what it is you want: “how in the world are you supposed to
identify any opportunities that come your way if you are not clear about what it is you want
in the first place? Unless you know exactly what it is you are looking for, then how exactly are
you supposed to find it?” Then, you need to identify several things that may hold you back
from taking advantage of the opportunities that life throws your way.

1. Look at your beliefs and identify if there are any unhelpful beliefs that could potentially prevent
you from taking advantage of opportunities.
2. Look at your strengths and weaknesses, and evaluate how they can help or hinder you
throughout this process.
3. Identify your risk tolerance. This is important because the more risk you are willing and able to
take, the more chances/opportunities you will be able to take advantage of.

Your assessment of these areas will help you to understand yourself, your motivations, your
limitations, and the actions you are willing or unwilling to take when opportunities present
themselves.

OPPORTUNITY SEIZING IN BUSINESS

Here are the four steps of seizing the opportunity:

1.
1. Crafting a position statement
2. Conceptualizing the product
3. Designing and prototyping the product
4. Implementing, organizing, and financing.

The focus of this module is on designing and prototyping.

Prototype - An original or first model of something in which other forms are copied or
developed.

Two types of prototype

1. Business Model
2. Product

DESIGNING BUSINESS PROTOTYPE USING Alex Osterwalder’s

Business Model Canvas

The business model canvas is a great tool to help you understand a business model in a
straightforward, structured way. Using this canvas will lead to insights about the customers you
serve, what value propositions are offered through what channels, and how your company
makes money. You can also use the business model canvas to understand your own business
model or that of a competitor! The Business Model Canvas was created by Alexander
Osterwalder, of Strategyzer.
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

● KEY PARTNERS

Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring
from partners? Which Key Activities do partners perform?

MOTIVATIONS FOR PARTNERSHIPS: Optimization and economy, Reduction of risk and uncertainty,
Acquisition of particular resources and activities

● KEY ACTIVITIES

What Key Activities do our Value Propositions require? Our Distribution Channels? Customer
Relationships? Revenue streams?

CATEGORIES:

Production, Problem Solving, Platform/Network

● VALUE PROPOSITIONS

What value do we deliver to the customer? Which one of our customer’s problems are we helping
to solve? What bundles of products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?

CHARACTERISTICS: Newness, Performance, Customization, “Getting the Job Done”, Design,

Brand/Status, Price, Cost Reduction, Risk Reduction, Accessibility, Convenience/Usability

● CUSTOMER RELATIONSHIPS

What type of relationship does each of our Customer Segments expect us to establish and
maintain with them? Which ones have we established? How are they integrated with the rest of
our business model? How costly are they?
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

● CUSTOMER SEGMENTS

For whom are we creating value? Who are our most important customers? Is our customer base a
Mass Market, Niche Market, Segmented, Diversified, Multi-sided Platform

● KEY RESOURCES

What Key Resources do our Value Propositions require? Our Distribution Channels? Customer
Relationships Revenue Streams?

TYPES OF RESOURCES: Physical, Intellectual (brand patents, copyrights, data), Human, Financial

● CHANNELS

Through which Channels do our Customer Segments want to be reached? How are we reaching
them now? How are our Channels integrated? Which ones work best? Which ones are most cost-
efficient? How are we integrating them with customer routines?

● COST STRUCTURE

What are the most important costs inherent in our business model? Which Key Resources are most
expensive? Which Key Activities are most expensive?

IS YOUR BUSINESS MORE: Cost Driven (leanest cost structure, low price value proposition,
maximum automation, extensive outsourcing), Value Driven (focused on value creation, premium
value proposition).

SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents, utilities), Variable costs, Economies of scale,
Economies of scope

● REVENUE STREAMS

For what value are our customers really willing to pay? For what do they currently pay? How are
they currently paying? How would they prefer to pay? How much does each Revenue Stream
contribute to overall revenues?

TYPES: Asset sale, Usage fee, Subscription Fees, Lending/Renting/Leasing, Licensing, Brokerage
fees, Advertising

FIXED PRICING: List Price, Product feature dependent, Customer segment dependent, Volume
dependent

DYNAMIC PRICING: Negotiation (bargaining), Yield Management, Real-time-Market

SAMPLES:
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

PRODUCT PROTOTYPING

What is a product?

Until recently, the term was used only in relation to something material and often found in a retail
store. Nowadays, it is coming to mean digital products as well. Apps and websites are modern
products.

When it comes to building great products, the design is the most important “feature.” We’ve moved
into the stage where product design dominates — it’s what sets companies apart and gives a real
edge over competitors.

What Is Product Design?

Product design is the process of identifying a market opportunity, clearly defining the problem,
developing a proper solution for that problem, and validating the solution with real users.

DESIGN THINKING AS THE FOUNDATION FOR THE DESIGN PROCESS

Design thinking is a method for the practical resolution of problems. Originally coined by David Kelley
and Tim Brown of IDEO, design thinking has become a popular approach to creating products. This
approach encapsulates methods and ideas of human-centered design into a single unified
concept.

Design thinking is a human-centric creative process to build meaningful and effective solutions for
people.

When thinking about products or features, designers should understand the business objectives and
be able to answer the following questions first:

1. What problem are we solving?

2. Who has this problem?
3. What do we want to achieve?

Answering these questions helps designers understand the user experience of a product as a whole,
not purely the interaction (feel) or visual (look) part of the design. Only after answering these
questions does it make sense to move to find a solution to the problem.
 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: STEM 12
Email: [email protected]; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher: Kenny Jones A. Amlos

Finding a solution to a problem includes the following five phases:

While design thinking is simply an approach to problem-solving, it increases the probability of

success. That’s because design thinking is focused on understanding people's needs and discovering
the best solutions to meet those needs.

• Empathize
Learn about the people for whom you are designing. Conduct research to develop a deeper
understanding of your users.
• Define
Create a point of view that is based on user needs and insights.
• Ideate
Brainstorm and come up with as many creative solutions as possible. Generate a range of
potential solutions by giving yourself and your team total freedom.
• Prototype
Build a prototype (or series of prototypes) to test your hypothesis. Creating a prototype lets
designers see if they’re on the right track, and it often sparks different ideas that you wouldn’t
have come up with otherwise.
• Test
Return to your users for feedback.

References:
Edralin,D.M. Entrepreneurship. Quezon City: Vibal Group Inc.
Kawasaki, G. (2004). Art of start: The time-tested, battle-hardened guide for anyone starting anything.
USA: Penguin Group
Skripak, S. J. (2016). Fundamentals of business. USA: Pamplin College of Business and Virginia Tech
Libraries

The School of Life. (2017, November 28). How to Start a Business. Retrieved from
https://www.youtube.com/watch?v=AH1FN_y8IP8

Carmichael, Evan. (2015, January 13). The to 7 things not to do when starting a business. Retrieved
from https://www.youtube.com/watch?v=QsNdXC_2b1o

Prospective LLC. (2014, November 24). Basic Business Principles. Retrieved from
https://www.youtube.com/watch?v=ZobEVTGl5Jo

Edralin,D.M. Entrepreneurship. Quezon City: Vibal Group Inc.

Skripak, S. J. (2016). Fundamentals of business. USA: Pamplin College of Business and Virginia Tech
Libraries