ENTREPRENEURSHIP Forbes, 2012

A person who attempts to create a new product,

Definition service or solution while accepting responsibility
- Self-employment of any sort for the results.
- Activity that involves identifying opportunities
within the economic system Say, 1816
Entrepreneurs are change agents
(Batisan, 2016)
- Refers to all the processes and activities Quick MBA, 2010
involved in establishing, nurturing, and  The entrepreneur is defined as one who
sustaining a business enterprise. It is an combines various input factors in an
economic activity that involves setting up, innovative manner to generate value to the
operating, and taking the financial risks of a customer with the hope that this value will
business. exceed the cost of the input factors, thus
generating superior returns that result in the
(Gamatero, 2019) creation of wealth.
- Is a proactive process of developing a business
venture to make a profit Entrepreneurs create value by introducing new
products or services or finding better ways of
RONALDO BATISAN making them.
- Entrepreneurship involves seeking
opportunities for a market, establishing, and WHAT IS AN ENTREPRENEUR?
operating a business out of the opportunity and ENTREPRENEUR create value by introducing
assessing its risks and rewards through close new products or services or finding better ways
monitoring of the operations. of making them
 They may innovate on the design of a product
Benefits of Entrepreneurship or add features to existing ones
 Produces more jobs that increases national  They may experiment on work flows and
income. operating systems to extract greater
 Amplifies economic activities for nation efficiencies
building.  They may improve technologies to gain better
 Provide products and solutions that better economies or achieve unassailable superiority
the lives of their customers.  They may create new demand from
 Disperses the economic power and creates undiscovered customers.
equality.  They may expand horizontally or vertically to
 Controls the local wealth and balances maximize market coverage or ensure
regional development. production control.
 Reduces social conflicts and political  They push their competitive advantage to the
unrest. Elicits economic independence and limit in order to gain industry dominance.
capital formation
Note: BUSINESSMAN, simply makes profit from
ENTREPRENEUR producing, buying, and selling goods.
 From the French word “entreprendre”
 Individuals who have generated
substantial value and profits from
innovations in a very short period. -
Schumpeter, 1934

Oxford Dictionary 2017

- A person who sets up a business or businesses,
taking on financial risks in the hope of profit.
Entrepreneurial Traits and Entrepreneurial
Intentions
 Internal factors 5 LEVELS OF ENTREPRENEURIAL
o Demographics DEVELOPMENT
o personal traits
o psychological characteristics Self-employed
o individual skills - You are the boss and at the same time the
o prior knowledge employee. This will be the first step to
o socialties establish yourself and be known in this field.
The Manager
 External factors
- Greatest asset of the company is under the
o environmental support
manager
o environmental influence - A good manager trains people not to be a
follower but to be someone who could be a
Characteristics of an Entrepreneur manager also in the future.
- Open minded The Leader
- Innovative - Serves as an inspiration to the people
- Action Oriented - Tells you what is the right thing to do
- Risk Taker The Investor
- Smells what sells - Invests in more diverse portfolio
- Vision and direction The True Entrepreneurs
- Listens to people - Your money is working for you
- Communicates well - You all have the time in the world
- Passionate - You have a life freedom and financial freedom
- Tough - You can now retire
- Perseverance
ENTREPRENEUR’S FIELD OF
What are the qualities of a successful EXPERIENCE
entrepreneur?
SOCIAL ENTREPRENEUR
1. An entrepreneur asks  one who takes advantage of the country’s
- Do I know what I want in life? social problems and turn them to profitable
- Do I know my own abilities/talents? institutions with the intention of helping the
- Am I good at analyzing the things happening disadvantaged community rather than making
around me? profit.
- Am I creative?
TECHNOPRENEUR
2. The heart of an entrepreneur  an entrepreneur who puts technology as the
- Do I know what my passions/convictions are? core of his or her business model.
- Do I know what I like?
- What do I love to do? INTRAPRENEUR
- Am I good at empathizing with others?  an entrepreneur in a large company or
corporation who is tasked to think, establish,
3. The guts of an entrepreneur and run a new big idea or project.
- Do I have a lot of guts? Intrapreneurs are usually the product managers
- Am I bold? or the business development managers of a
- Do I follow my intuition? company.
What are requisite to becoming a EXTRAPRENEUR
successful entrepreneur?  an entrepreneur who hops from one company
- Passion, love for what one is doing, and the to another to act as innovation champion,
ability to empathize with others providing creative and efficient solutions.
- Creative thinking, broad perspective, talent
and wisdom
- Guts, strength and perseverance
 CUSTOMER FOCUS
COMMON AND CORE COMPETENCIES OF  Serving customers directly and effectively
AN ENTREPRENEUR  produce products and services desired by
customers
COGNITIVE SKILLS  excel in customer service
 Understand written materials
 Learn and apply new information QUALITY PERFORMANCE
 Solve problems  Should be part of the business culture
 Create new ideas  Should not accept anything less than the
highest quality performance
TECHNICAL SKILLS
 Information Technology INTEGRITY AND RESPONSIBILITY
 Research and Development  A solid reputation for honesty and
 Feasibility study and business plan dependability to good customer service and
 Technical writing excellent product quality
 Organization and Management  Trust is the foundation of all relationships,
 Marketing including business relationships
 Operations
 Finance INNOVATION
 Originality
INTERPERSONAL SKILLS  Good at developing others’ ideas/ Improving
 Nonverbal/Verbal existing products
 communication  Taking inventions or innovations developed
 Listening elsewhere and put them into use, which
 Leading requires marketing, sales, and organization
 Negotiating  Using technology to innovate

COMMON COMPETENCIES NICHE MARKETS

 Proactive  Targeting a specific group of customers who
have
 Agent of change
 Risk taker  identifiable but very narrow range of product
or service interests and compromise
 Sharp eyes for opportunities
 Specialized product
 Sociable
 Particular geographical area
 Networkers
 Decisive
 Balanced EMPLOYEE VS. ENTREPRENEURS
 Innovative ADVANTAGES
EMPLOYEES
CORE COMPETENCIES - LEAVE BENEFITS
 Leaders - GUARANTEED INCOME
 Communicators - FIXED WORKING HOURS
 Specialists - LESS RESPONSIBILITY
 Problem solvers
ENTREPRENEURS
- GROWTH IN CAREER
- INDEPENDENCE
- FLEXIBLE WORKING HOURS
- ABILITY TO EARN
- CHANGE AND EXPLORATION
DISADVANTAGES
EMPLOYEES 3’S OF OPPORTUNITY
- DEPENDENCY ENTREPRENEURIAL MIND FRAME
- LIMITED INCOME - Allows the entrepreneur to see things in a very
- LIMITED DEVELOPMENT SCOPE positive and optimistic light.
- JOB SECURITY

ENTREPRENEURS
- STRESS
- INVESTMENT
- LONG WORKING HOURS
- FINANCIAL INSTABILITY
- RISK
ENTREPRENEURIAL HEART FLAME
- The surging passion to find fulfillment in the act
SMARTER Goal Setting
and process of discovery.
S Specific
M Measurable PASSION - Is wanting something so much that a
A Ambitious person would be willing to devote one’s self totally to
R Realistic the quest.
T Time-Bound
E Exciting ENTREPRENEURIAL GUT GAME
R Recorded/ - Total involvement of the entrepreneur in the
Rewarding exciting game of business, demanding the
keenest of intuitive abilities and the strongest
Review intestinal fortitude.
- Entrepreneurship is about seeking and taking
advantage of the opportunities in the market GUTS
by providing customer needs. Ability to sense without using the five senses.
- An entrepreneur is considered successful when - This is INTUITION. The ability to jump to
the vision has materialized into a thriving insightful conclusion without doing rigorous
business and giving the desired returns. process of thinking.
- An entrepreneur possesses qualities and Being able to withstand adversity.
competencies that makes him or her - This is COURAGE. It enables the entrepreneur
successful. to plunge into difficult ventures with all the traps
and pitfalls. Fearlessness. Thinks anything is
- One may choose to become an entrepreneur of
attainable.
an employee.
- But one may also consider both given the right Scanning the Marketing Environment
opportunity as long as he/she can manage. - Involves understanding and knowing the
- Whichever direction you take never forget the intricacies of the environment. (macro, micro,
value of integrity. internal)

ENTREPRENEURIAL PROCESS Methods of Generating Ideas

DISCOVERY 1. FGD
DEVELOPMENT OF CONCEPT 2. Brainstorming
ORGANIZING RESOURCES 3. Brainwriting or Internet brainstorming
IMPLEMENTATION 4. Problem Inventory Analysis
RETURNS
SEEKING OPPORTUNITY - The growing awareness in the world today makes this factor
The Many Sources of Opportunity more and more important for countries and industries.
- Macro-Environmental Sources - Save the Planet advocacies
- Industry and Market Sources of Opportunities - Opportunities can come from natural resources locally
available (and abundant)
- Consumer Preferences
- Consumer Piques 5. Technological environment
- Consumer Perceptions Technology leads to the commercialization of new
products.
- Other Sources of Opportunities - The nature of technology used for production of goods and
services is an important factor responsible for the success of a
MACRO ENVIRONMENT business firm.
1. Social and Cultural Environment (Includes demographics)
2. Political and legal environment Example:
3. Ecological environment Increased usage of smartphones
4. Economic environment - Greater utility of apps to place orders which may expand
5. Technological environment market reach.
1. Social and Cultural Environment (Includes demographics) MICRO-LEVEL: Industry Sources of Opportunities
Demographics and cultural dimensions that govern the relevant Defining an Industry provides many opportunities. One way to
entrepreneurial behavior. analyze an industry is according to product types and according to
• Beliefs functions.
• Taste and behaviors
• Traditions and customs

Through keen assessment of

competitive brands within each.
Industry, you can get business
opportunities by focusing on
areas they don’t own or
products they don’t serve BUT
NEEDED BY CUSTOMERS.

MICRO-LEVEL: Industry Sources of Opportunities

Defining an Industry by tracing the industry from its most basic
raw material. This value chain alone presents many opportunities.
2. Political and legal environment Example: AGRICULTURAL VALUE CHAIN
It governs business practices as well as the permits, approvals, and
licenses necessary to operate the business
 laws
 rules
 regulations

Example:
Tax exemption for 13th month pay
- Increased purchasing power leading to higher
retail sales.
The Modernization plan is changing jeepney drivers’ lives SUPPLIERS
forever - Suppliers provide businesses with the materials they need to
carry out their business activities.
3. Ecological environment
 Supply and Demand EMPLOYEES
 Import and Export - If a business employs staff without motivation, skills or
 Foreign exchange rate experience it will affect customer service and ultimately
 Purchasing power sales.

Example: COMPETITORS
ASEAN INTEGRATION 2015 - These are your rivals which compete with the firm in market
- Enterprises could expand to other ASEAN and resources.
Markets
NEW CLARK CITY TWO TYPES:
Indirect Competitors
o Offers different product but with similar benefit.
Direct Competitors
o Offers the exactly the same product
 - Will I sacrifice my existing lifestyle, endure emotional
hardship and forego my usual comforts to succeed?

PUBLIC “The
- Any group that has an actual or potential interest in or impact OPPORTUNITY ATTRACTIVENESS TEST” (OAT)
on a company’s ability to achieve its objective  “A framework to measure how compelling an
opportunity is. This test is designed to detail each
CUSTOMER entrepreneurial aspect into small chunks to come up
- The people who buy and use a firm’s product and services with a sound entrepreneurial decision.”
are an important part of external microenvironment.
12 R’S OF OPPORTUNITY SCREENING
Note: Customers have different preferences and dislikes.
1. Relevance to Vision, Mission, and Objective of
MICRO-LEVEL SOURCE: PRODUCT CONSUMERS
an Entrepreneur.
- What is your personal vision of who you will be
CONSUMER PREFERENCE ten years for now?
Taste of a particular group of people. - Will chasing the opportunity bring you closer to
Ex. Clothes people wear, food they eat, music they listen to.
achieving your long term goals?
CONSUMER DISLIKE - Do you want to be known as a programming
Things that irritate customer. There is opportunity in knowing what genius? Or just simply a billionaire?
customers don’t want.
Ex. Providing Solutions
2. Resonance to Values
CONSUMER PERCEPTION It is important that opportunities you choose to
Sometimes, product is change by the way consumers perceive pursue matches your values.
them. Convince the customer that the product is the one.
- What virtues do you possess?

3. Reinforcement of entrepreneurial interest

It is best to choose an opportunity close to your
hobby and enhances your competencies.
- If you like computers, why not engage in
computer enabled or computer-based business
which will build your knowledge further on
hardware and software.

4. Revenues
Is the revenue potential of the business worth it for
your effort?
OTHER SOURCES OF OPPORTUNITIES - It should not be grounded only on the quality
 Something unexpected that happens in a community of the opportunity but also with the capability
 You possess a set of skills or expertise that could add to the of the future enterprise to strategize and
success of your business
develop a saleable product of service.
 A sudden disruptive technology
 New knowledge in the society
 CRISIS (ex. Typhoon, Covid Pandemic) 5. Responsiveness
 Skills learned from prior employment or work experience can Responsiveness to customer needs and wants.
also be a source of business opportunities
- If your chosen opportunity fits well with
 Personal experiences such as when travelling and
experiencing different cultures can also provide opportunities unfulfilled customer desires, then you will
have better chance of succeeding
SCREENING OPPORTUNITY
Narrowing choices down to a few promising opportunities
6. Reach
THE PERSONAL SCREEN Opportunities that can be expanded by adding
In screening opportunities, the entrepreneur first has to consider his similar products or services, branched, or franchise
or her preferences and capabilities.
outlets have good potential for rapid growth.
- Do I have the drive to pursue this business opportunity to the - Will the opportunity allow your enterprise to
end? have a wide market reach or geographic
- Will I spend all my time, effort, money to make this business
work? coverage?
 - Refers to the length of time a product is
introduced to consumers into the market until
it
7. Range - is “removed from the shelves”.
The wider the range of possible products, the more - It is important for the entrepreneur to
attractive is the opportunity. determine where their business opportunity
- Will the opportunity allow the entrepreneur to stands in the
come up with a wide range of related product product life cycle in order to plan accordingly.
and services?
THE PRE-FEASIBILITY STUDY
8. Revolutionary Impact  Market Potential
Revolutionary products/service make the old ones o Estimated number of possible
obsolete. customer who might avail your
- Is the opportunity going to be the next “big product or services.
thing” in the market? 1. Segment the Market
- Will it be a game changer? o Not everyone is going to be your
customer. Businesses should describe
9. Returns who their specific customers are.
Opportunities with low cost of production but o You can start by asking- “Are they
higher prices would most probably yield the higher mainly..”
return on sales and return on investments. 2. Assess competition
Returns are not only monetary. It can be the fame o Market potential is also affected by
attained by the enterprise of the recognition awards the number of establishment serving a
for the entrepreneur. target market.
o The individual strengths of each
10. Relative Ease of Implementation competitor should also be profiled.
The best opportunities are the ones easy for you to 3. Estimated Market Share
implement but hard for others. o Projected Market Share-
- Example: If you come from a family of tailors,
“EDUCATED GUESS”
then you would have an easier time than most
o Example: Are you confident that you
in setting up a tailoring/clothing shop.
can get 50% of the market? Or just
10%
11. Resources Required
With an estimated market share, you can get a
The limited resources of a start-up entrepreneur
SALES FORECAST
puts some limit to the pursuance of an opportunity.
- Estimated number of products to be sold
- Instead of putting up a big enterprise, why not
(based on target segment population and
start with a small one? Even Henry Sy started
market share %) and monetary value of sales
with a small shoe store.
(based on prices of competitors).
12. Risks
3 INVESTMENT REQUIREMENTS
Some opportunities are riskier since they are
untested and they have smaller market. More risk,
1. Pre-Operating Cost
less attractive.
Cost related to the preparation of the business.
- Some opportunities are too cyclical or seasonal
• Pre-feasibility study
and expertise may be hard to come by.
• Market Research
• Product Development
Why use the 12 r’s?
• Initial Promotional Cost
To narrow down the many opportunities.
• Organizational Development
OTHER FACTORS TO CONSIDER
2. Production/Service Facilities
• Product Life Cycle
Long-term investment for the business.
• Investment in land, machinery, equipment,
etc.
 • Renovations (If leasing)

3. Working Capital
Needed to operationalize the business
• Cash, Inventories, Accounts Receivable
The owner must have cash to cover the inventories to
be purchased and other operating expenses
Financial Forecast
Refers to the monetary transactions that the business
is expected to engage in.

FEASIBILITY STUDY
- A more in-depth study of market potential to
ensure that the business proposal will reach the
forecasted sales figures.
- Legal viability
- Proof that the product or services being offered
has the right design, attributes, specifications and
preferred features.
- More detailed costing on different assets
- Proof that the entrepreneur and his or her team
have the necessary experience, skills, and
capabilities to maximize the venture’s chances of
success
- Analysis of technology and sustainability