Lesson Proper for Week 3
Entrepreneurial competencies refer to the important characteristics that should be possessed by an
individual in order to perform entrepreneurial functions effectively. In this module, you will learn some of the
most important characteristics, attributes, lifestyle, skills and traits of a successful entrepreneur or an employee
to be successful in a chosen career.
Below are few important characteristics / traits / attributes of a good entrepreneur:
Ø Hardworking: One of the important characteristics of a good entrepreneur is hardworking. This means
working diligently and being consistent about it. Hardworking people keep improving their performance to
produce good products and/or provide good services.
Ø Confident: Entrepreneurs have self-reliance in one’s ability and judgment. They exhibit self-confidence to
cope with the risks of operating their own business.
Ø Disciplined: Successful entrepreneurs always stick to the plan and fight the temptation to do what is
unimportant.
Ø Committed: Good entrepreneurs assume full responsibility over their business. They give full commitment
and solid dedication to make the business successful.
Ø Ability to accept change: Nothing is permanent but change. Change occurs frequently. When you own a
business, you should cope with and thrive on changes. Capitalize on positive changes to make your business
grow.
Ø Creative: An entrepreneur should be creative and innovative to stay in the business and in order to have an
edge over the other competitors.
Ø Has the initiative: An entrepreneur takes the initiative. You must put yourself in a position where you are
responsible for the failure or success of your business.
Ø Profit-oriented: An entrepreneur enters the world of business to generate profit or additional income. The
business shall become your bread and butter. Therefore, you must see to it that the business can generate
income.
Listed below are the important skills of a successful entrepreneur:
Ø Excellent planner
Planning involves strategic thinking and goal setting to achieve objectives by carefully maximizing all the
available resources. A good entrepreneur develops and follows the steps in the plans diligently to realize goals.
A good entrepreneur knows that planning is an effective skill only when combined with action.
Ø Possesses people skills
This is a very important skill needed to be successful in any kind of business. People skills refer to effective and
efficient communication and establishing good relationship to the people working in and out of your business.
In day-to-day business transactions, you need to deal with people. A well-developed interpersonal skill can
make a huge difference between success and failure of the business.
Ø Sound decision maker
Successful entrepreneurs have the ability to think quickly and to make wise decisions towards a pre-
determined set of objectives. No one can deny that the ability to make wise decisions is an important skill that
an entrepreneur should possess. Sound decisions should be based on given facts and information and lead
towards the pre-determined objectives.
Environment and Market EM
Aspiring entrepreneur need to explore the economic, cultural, and social conditions prevailing in an area.
Needs and wants of the people in a certain area that are not met may be considered business opportunities.
Identifying the needs of the community, its resources, available raw materials, skills, and appropriate
technology can help a new entrepreneur seize business opportunities.
To be successful in any kind of business venture, potential entrepreneurs should look closely at the
environment and market. They should always be watchful of existing opportunities and constraints, and to
take calculated risks. The opportunities in the business environment are factors that provide possibilities for a
business to expand and make more profit. Constraints, on the other hand, are factors that limit business
growth, hence reduce the chance of generating profit. One of the best ways to evaluate opportunities and
constraints is to conduct a Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis.
SWOT Analysis is a managerial tool used to assess the environment. It is used to gather important
information which is then used in strategic planning. Strengths and weaknesses are internal in an organization.
They relate to resources owned by an organization that you have control over and also the extent of its
marketing.
Opportunities and threats exist in the external environment. Opportunities relate to the market, new
technologies, and the external factors such as government policies, climate, and trends. Threats replace what
the competitors are doing. It also includes legal and other constraints.
Product Development
When we talk of product development, we are referring to a process of making a new product to be sold
by a business or enterprise to its customers. Product development may involve modification of an existing
product or its presentation, or formulation of an entirely new product that satisfies a newly-defined customer’s
needs, wants and/or a market place.
The term development in this module refers collectively to the entire process of identifying a market
opportunity, creating a product to appeal to the identified market, and testing, modifying, and refining the
product until it becomes ready for production.
There are basic, yet vital questions that you can ask yourself about product development. When you find
acceptable answers to them, you may now say that you are ready to develop a product and/or render services.
These questions include the following:
1. For whom are the product/services aimed at?
2. What benefit will the customers expect from product/service?
3. How will the product/service differ from the existing brand? From its competitor?
In addition, needs and wants of the people within an area should also be taken into big consideration.
Everyone has his/her own needs and wants. However, each person has different concepts of needs and wants.
Needs in business are the important things that an individual cannot live without in a society.
These include:
1. basic commodities for consumption,
2. clothing and other personal belongings,
3. shelter, sanitation and health, and
4. education.
Basic needs are essential to an individual to live with dignity and pride in a community. These needs can
obviously help you generate business ideas and subsequently to product development.
Wants are desires, luxury and extravagance that signify wealth and expensive way of living. Wants or
desires are considered above all the basic necessities of life. Some examples of wants or desires are: fashion
accessories, expensive shoes and clothes, travels, eating in an expensive restaurant, watching movies, concerts,
having luxurious cars, wearing expensive jewelry and perfume, living in impressive homes, among others.
Needs and wants of people are the basic indicators of the kind of business that you may engage in
because it can serve as the measure of your success. Some other points that might be considered in business
undertakings are the kind of people, their needs, wants, lifestyle, culture and tradition, and their social
orientation.
To summarize, product development entirely depends on the needs and wants of the customers.
Another important issue to deal with is the key concepts of developing a product. The succeeding topic shall
enlighten you about the procedure in coming up with a product.
Concepts of Developing a Product
Concept development is a critical phase in the development of a product. In this stage, the needs of the
target market are identified, and competitive products are reviewed before the product specifications are
defined. The product concept is selected along with an economic analysis to come up with an outline of how a
product is being developed.
STAGES OF CENCEPT DEVELOPMENT
The process of product development follows the following stages:
1. Identify customer needs
Using survey forms, interviews, researches, focus group discussions, and observations, an
entrepreneur can easily identify customers’ needs and wants. In this stage, the information that can be possibly
gathered are product specifications (performance, taste, size, color, shape, life span of the product, etc.). This
stage is very important because it would determine the product to be produced or provided.
2. Establish target specifications
Based on customers' needs and reviews of competitive products, you can now establish target
specifications of the prospective new product and/or services. A target specification is essentially a wish-list.
3. Analyze competitive products
It is imperative to analyze existing competitive products to provide important information in
establishing product or service specifications. Other products may exhibit successful design attributes that
should be emulated or improved upon in the new product or service.
4. Generate product concepts
After having gone through with the previous processes, you may now develop a number of
product concepts to illustrate the types of products or services that are technically feasible and will best meet
the requirements of the target specifications.
5. Select a product concept
Through the process of evaluation between attributes, a final concept is selected. After the final
selection, additional market research can be applied to obtain feedback from certain key customers.
6. Refine product specifications
In this stage, product or services specifications are refined on the basis of input from the
foregoing activities. Final specifications are the result of extensive study, expected service life, projected selling
price among others are being considered in this stage.
7. Perform economic analysis
Throughout the process of product development, it is very important to always review and
estimate the economic implications regarding development expenses, manufacturing costs, and selling price of
the product or services to be offered or provided.
8. Plan the remaining development project
In this final stage of concept development, you can prepare a detailed development plan which
includes list of activities, necessary resources and expenses, and development schedule with milestones for
tracking progress.
Finding Value
People buy for a reason. There should be something in your product or service that would give
consumers a good reason to go back and buy more. There must be something that will make you the best
option for target customers; otherwise, they have no reason to buy what you are selling. This implies further,
that you offer something to your customers that will make them value your product or service.
The value you incorporate in your product is called value proposition. Value proposition is a believable
collection of the most persuasive reasons why people should notice you and take the action you’re asking for. It
is what gets people moving, what makes people spend for your product or service.
Innovation
Innovation is the introduction of something new in your product or service. This may be a new idea, a
new method, or a new device. If you want to increase your sales and profit, you must innovate. Some of the
possible innovations for your products are change of packaging, improvement of taste, color, size, shape, and
perhaps price. Some of the possible innovations in providing services are application of new and improved
methods, additional featured services, and possibly freebies.
Unique Selling Proposition (USP)
Unique Selling Proposition is the factor or consideration presented by a seller as the reason that one
product or service is different from and better than that of the competition. Before you can begin to sell your
product or service to your target customers, you have to sell yourself in it. This is especially important when
your product or service is similar to your competitors. USP requires careful analysis of other businesses' ads
and marketing messages. If you analyze what they say or what they sell, not just their product or service
characteristics, you can learn a great deal about how companies distinguish themselves from competitors.
Here's how to discover your USP and how to use it to increase your sales and profit:
Ø Use empathy
Put yourself in the shoes of your customers. Always focus on the needs of the target customers and
forget falling in love with your own product or service. Always remember, you are making/providing
this product not for yourself but for the target customers to eventually increase sales and earn profit. Essential
question such as what could make them come back and ignore competition, should be asked to oneself. Most
possible answers may be focused on quality, availability, convenience, cleanliness, and reliability of the product
or service.
Ø Identify customer’s desires
It is very important for you to understand and find out what drives and motivates your customers to buy
your product or service. Make some effort to find out, analyze and utilize the information that motivates the
customers in their decision to purchase the product or service.
Ø Discover customer’s genuine reasons for buying the product
Information is very important in decision making. A competitive entrepreneur always improve their products or
services to provide satisfaction and of course retention of customers. As your business grows, you should
always consider the process of asking your customers important information and questions that you can use to
improve your product or service.
