REVIEWER (SS 113 | Sir Aaron)

ENTREPRENEURS- are those people or individuals with the skills and capabilities to
see and evaluate business opportunities. They are the ones who can strategically identify
products or services needed by the community, and have the capacity to deliver them at the
right time and at the right place.
ENTREPRENEURSHIP- on the other hand, is not just a simple business activity but
a strategic process of innovation and new product creation. Basically, entrepreneurship is both
an art and science of converting business ideas into marketable products or services to improve
the quality of living.
ENTREPRENEURIAL MIND- it is a specific state of mind which orientates human conduct
towards entrepreneurial activities and outcomes.
MINDSET- it is the ability to think and imagine. It is a way of thinking and opinions of a person.
Or an entity from belief that we have, the criteria are - expectations, attitude, habits, decisions,
and opinions that we spend in looking at ourselves.

ESSENTIAL CHARACTERISTICS OF THE ENTREPRENEURIAL MIND

1. CREATIVITY- It is the use of the imagination or original ideas, especially in the
production of an artistic work.

2. SUSPICION OF PREDICTORS- Entrepreneurs tend to labor under the assumption that

data is the sole predictors of an outcome.

3. COMFORT WITH UNCERTAINTY- a distrust of prediction and analysis creates an

atmosphere where uncertainty rules. Indeed, uncertainty is the very essence of
entrepreneurship.

4. OPENNESS- A comfort with experimentation goes beyond educated trial and error.

5. FUNCTIONAL HUMILITY- Egos can destroy the very best ideas.

COMPETENCE- refers to the combination of Knowledge, Skills, Motive, Attitude and Habits.
ENTREPRENEURIAL COMPETENCIES- is the important characteristics that should be possessed
by an individual in order to perform entrepreneurial functions effectively.
IMPORTANT CHARACTERISTICS / TRAITS / ATTRIBUTES OF THE GOOD ENTREPRENEUR:

• HARDWORKING- This means • CREATIVE- An entrepreneur should

working diligently and being be creative and innovative to stay in
consistent about the
it. Hardworking people keep business and in order to have an
improving their performance to edge over the other competitors.
produce good
products and/or provide good • INITIATIVE- An entrepreneur takes
services. the initiative. You must put yourself
in a
• CONFIDENT- Entrepreneurs have position where you are responsible
self-reliance in one’s ability and for the failure or success of your
judgment. business.
They exhibit self-confidence to cope
with the risks of operating their own • PROFIT-ORIENTED- An entrepreneur
business. enters the world of business to
generate
• DISCIPLINED- Successful profit or additional income.
entrepreneurs always stick to the
plan and fight • PERSISTENT- An entrepreneur takes
the temptation to do what is repeated
unimportant. actions to overcome obstacles that
get in the way
• COMMITTED- Good entrepreneurs of achieving goals and ensure efforts
assume full responsibility over their to solve a
business. They give full commitment problem or barrier.
and solid dedication to make the
business successful. • INFORMATION SEEKER- An
entrepreneur takes action to help
• CHANGE OCCURS FREQUENTLY- reach objectives. He/she
When you own a business, you personally undertaking a research or
should cope analysis to find out answers of some
with and thrive on changes. problems.
Capitalize on positive changes to
make your • PROBLEM SOLVER- An entrepreneur
business grow. identifies and applies new and
potentially unique ideas to reach the
• ABILITY TO ACCEPT CHANGE- goals.
Nothing is permanent but change.
 • ASSERTIVE- An entrepreneur • CONCERN FOR OTHERS’ WELFARE-
confronts problems and issues with An entrepreneur takes action to
others improve
directly, speaks politely but firmly the welfare of employees and their
and tells others clearly what they families or responds positively to
have to employees’ specific needs
do.

IMPORTANT SKILLS OF A SUCCESSFUL ENTREPRENEUR:

• Excellent planner
• Possesses people skills
• Sound decision maker

CREATIVITY- is the ability to generate something from nothing. It utilizes new ideas to discover
new ways of looking at problems and opportunities (matter of thought).
INNOVATION- is the ability to apply creative solutions to problems or produce opportunities to
enrich the lives of people.
The result of applying creativity and innovation to the needs and opportunities in the
marketplace in a disciplined and systematic process is called Entrepreneurship.

CREATIVITY---------> INNOVATION----------> ENTREPRENEURSHIP----------> BUSINNESS

LEFT-BRAINED INDIVIDUALS are usually guided by linear and vertical thinking. They usually
handle language, logic, and symbols much better.
RIGHT-BRAINED INDIVIDUALS are often referred to as “Creative Thinkers”.

HOW TO ENHANCE INDIVIDUAL CREATIVITY

1. Allow yourself to be creative
2. Give your mind fresh input everyday
3. Observe new creation, trend and patterns
4. Recognize the creative power of mistakes
5. Notice what is missing
6. Keep a journal handy to record your thoughts and ideas
 7. Listen to other people
8. Listen to customers
9. Talk to a child
10. Do something ordinary in an unusual way
11. Do not through away seemingly bad ideas
12. Read books on stimulating creativity or take a class on creativity
13. Take some time off
14. Be persistent

BARRIERS TO CREATIVITY
1. Searching for the one “right” answer
2. Focus on “being logical”
3. Blindly following the rules
4. Constantly being practical
5. Viewing play as frivolous
6. Becoming overly specialized
7. Avoiding ambiguity
8. Fearing looking foolish
9. Fearing mistakes and failure
10. Believing that “I’m not creative”

THE FOLLOWING STEPS ARE WHAT A CREATIVE PROCESS WILL TAKE:

STEP 1: PREPARATION
- This step involves getting the mind ready for creative thinking. Preparation might include a
formal education, on-the job training, work experience, and taking advantage of other learning
opportunities

STEP 2: INVESTIGATION
- This step requires developing a solid understanding of the problem or situation, decision on
hand. To create new ideas and concepts in a particular field, an individual first must study the
problem and understand its basic components.

STEP 3: TRANSFORMATION
- Transformation involves viewing the similarities and the differences in the information
collected. This phase requires two types of thinking: convergent thinking, and divergent
thinking.
 • Convergent Thinking
-The ability to see the similarities and the connections among various and often diverse
data and events.

• Divergent Thinking
-The ability to see the differences among various data and events.

STEP 4: INCUBATION
- Incubation occurs while the individual is away from the problem, often engaging in some
totally unrelated activity.

STEP 5: ILLUMINATION
- This phase of the creative process occurs at some point during the incubation stage when a
spontaneous breakthrough causes “the light bulb to go on”. It takes place after five minutes or
five years. In the illumination stage, all the previous stages come to produce the ‘’Eureka
factor’’ - the creation of the innovative idea.

STEP 6: VERIFICATION
- Validating the idea as accurate and useful, for entrepreneurs, may include conducting
experiments, running simulations, test marketing a product or service, establishing small-scale
pilot programs and other activities designed to verify that the new idea will work and is
practical to implement.

STEP 7: IMPLEMENTATION
- The focus of this step is to transform the idea into reality. Plenty of people come up with
creative ideas for promising new products, but most never take them beyond the idea stage.
What sets entrepreneurs apart is that they act on their ideas.

TECHNIQUES FOR IMPROVING THE CREATIVE PROCESS

• BRAINSTORMING
- A creative process in which a small group of people interact with very little
structure with a goal is to create a large quantity of new and imaginative
ideas

• MIND-MAPPING
- It is an extension of brainstorming
 • RAPID PROTOTYPING
- Rapid prototyping transforms an idea into an actual model will point out flaws
in the original idea and will lead to improvements in its design.

-The three principles of rapid prototyping are the three R’s:

rough, rapid, and right

FORMS OF BUSINESS ENTERPRISES

SINGLE OR SOLE PROPRIETORSHIP- is a form of business owned by a single person, known as
the proprietor. Because one person can organize it, it is the easiest enterprise to set up. Most of
the country’s businesses belong to single proprietorship. The bulk of self-employed people are
single proprietors, and these include informal or unorganized sector.
Advantages
1. Ease of formation and dissolution
2. Typically, there are low start-up costs and low operational overhead.
3. Ownership of all profits.
4. Sole Proprietorships are typically subject to fewer regulations.
5. No corporate income taxes.
Disadvantages
1. Unlimited liability
2. Limited life
3. It may be difficult for an individual to raise capital
4. Limited ability to expand

Example of Sole Proprietorship

-Side walk vendor
-Owner of Sari-sari store
-Offer Tutoring Services

PARTNERSHIP- is a business organization that is an association of at least two or more persons

who agree to place money, property or of Industry in a common fund with the aim of sharing
the profits among themselves. In addition, a partnership agreement can be oral or written,
although Philippine law requires a written agreement when real property is involved, or when a
limited partnership is being established.
Advantages
1. Easy to form.
2. Flexibility of operations.
3. Efficiency in operations.
4. Partners are expected to have great interest in the operation of the partnership.
5. Possibility of bigger resources.

Disadvantages
1. Partners have unlimited liability for partnership debts.
2. It has a limited life or it lacks stability.
3. Limited ability to raise capital.
4. Conflicts and quarrels between among partners.

CORPORATION- is a form of business organization in which the owners (known as:

stockholders) have an undivided ownership share in the assets of the corporation upon its
dissolution; and a share in its profits corresponding to the amount of shares of stock which they
own. (EXAMPLES ARE: JOLLIBEE, SAN MIGUEL CORPORATION, TOTAL)

Advantages
1. It has a legal capacity.
2. It has Continued and more or less permanent existence.
3. Management is centralized.
4. It has the most efficient management.
5. Shareholders have limited liability.
6. Shareholders' freedom.
7. Ability to raise more capital.

Disadvantages
1. Complicated to maintain and not easy to organize.
2. Governmental intervention.
3. Subject to higher tax.
4. It has limited powers.
5. Abuses of corporation officials.
6. Some corporation are engaged in questionable activities.
7. There is a very impersonal or formal relationship between the officers and employees of a
corporation.

Classification of Corporation
• Based on nature of its capital
• Based on purpose
 • Based on relation to another corporation.
• Based on situs of incorporation
• Based on whether they want to open in public or not

CATEGORIES OF SHARES OF STOCKS

1. COMMON STOCK- represents the basic issue of shares, and has all the basic rights of a
share of stock so that it is often referred to as the basic ownership in a corporation.
2. PREFERRED STOCK- is a type of stock having certain preferences over common stock.
These preferences may be in the distribution of dividends and/or corporate assets, upon
dissolution of the corporation. If dividends have been declared by the company, the
preferred stockholders are prioritized to receive it first.
3. CLASS A SHARES- these are the available stocks offered to Filipino shareholders.
4. CLASS B SHARES- these are the available stocks offered to foreign investors.
5. PAR VALUE SHARES- this refers to shares of capital stock that have been assigned a
definite or fixed value in the articles of incorporation. So as to fix its minimum
subscription or original issue price.
6. NO PAR VALUE SHARES- are shares which have not been assigned a definite or fixed
value.
7. FOUNDERS' SHARES- are those classified, as such in the articles of incorporation and
may be given certain rights and privileges not enjoy by other stockholders. It is usually
given to incorporators-the formators of the corporation.

DIVIDENDS- It is also called as the distributed profits of the corporation. It represents the
corporation's profit, which are distributed to stockholders according to the proportionate
interest of their shareholding.
Kinds of Dividends
1. Cash - This is paid in cash to the stockholders.
2. Property - This is in the form of non-cash assets of corporation.
3. Stock - This is the dividend in the form of stocks of the issuing corporation.
4. Scrip - The dividend in the form of promissory notes indicating the kind of benefits the
stockholders shall be entitled to receive in the future (cash, non-cash, stock or some
other form of dividend).
5. Bond - This is in the form of bonds of the company
6. Liquidating - This refers to return of capital by a corporation
OBJECTIVES OF A COOPERATIVE- The primary objective of every cooperative is to provide
goods and services to its members, and thus enable them to attain increased income and
savings, investments, productivity, and purchasing power and promote among them equitable
distribution of net surplus through maximum utilization of economies of scale, cost- sharing and
risk-sharing without, however, conducting the affairs of the cooperative for eleemosynary or
charitable purposes.
SIMILARITIES BETWEEN A COOPERATIVE AND A CORPORATION
- Factors of production are privately owned and managed. They both depend on business
efficiency to survive in a competitive market. Also, their activities and operations are regulated
and supervised by the government. Lastly, they both enjoy a reasonable degree of economic
freedom.
DIFFERENCES BETWEEN A COOPERATIVE AND A CORPORATION
- A cooperative is primarily organized for service while a corporation's purpose is mainly for
profit. Membership in a cooperative is open and voluntary while in a corporation, membership
is restricted. Management of a cooperative is more democratic. It is one man one vote, with no
proxy voting. In the case of a corporation, it is one share, one vote and more shares, more
votes. Moreover, savings or net profits are refunded to the members of a cooperative on the
basis of their individual patronage, while in a corporation; profits are distributed to
stockholders on the basis of the number of shares.

BUSINESS PLAN- is a written document that describes in detail how a business—usually a new
one—is going to achieve its goals. It lays out a written plan from a marketing, financial and
operational viewpoint. This term, which started from the USA, is used as synonym for
"company concept" or "business concept". A Business Plan describes your business idea with
the aim of implementing this idea in your proposed project.

THE BUSINESS PLAN COMPRISES TWO:

• Written formulation of your business idea with regard to your proposed business
products, services, customers, and marketing. This is a text section of your business plan
• Planning for financing, planned revenue and expenditure, (financial part).

THE BUSINESS PLAN SERVES THREE IMPORTANT PURPOSES

1. The business plan explains the idea behind your business and spells out how your
product or service will be produced and sold.
2. It sets specific objectives and describes how your business expects to achieve them.
3. It describes the backgrounds and experience of the leadership team of the business.
IMPORTANCE OF A BUSINESS PLAN TO AN ENTREPRENEUR:
• Writing a business plan allows you to have a clear indication of what you’re doing, and
where you are going; you get more clarity about an idea, as well as the execution plan.
• A business plan helps you to understand the industry you are venturing into, in an in-
depth manner, before your start-up.
• It will enable you to brain-storm on things you may not have, and think critically about
and the industry (business) you are going into. A lot of ideas sound great on paper and
even in discussion, until when you start adding the numbers.
• A business plan makes you to think through the numbers, making sure of the possibility
to hit your revenue and profit goals.
• Writing a business plan is an ideal way to ensure that everyone in your team is aligned
with the current and future plans for the business.
• A business plan ensures that you think and create a long-term vision and strategy for
your idea.
• It helps you stay organized, remain on track and remain committed to your business’
long-term goals. It provides benchmarks that you can use to track your performance and
make mid-course corrections, in the course of business.

The completed and printed Business Plan should comprise a maximum of 30 to 35 pages in
total, so that it can be read by possible donors, such as banks or promotion agencies, in a short
time. This is to be written for three to five years into the future. You should plan in the first year
on a monthly basis, in the following years you can also plan annually.

CONTENTS OF A BUSINESS PLAN ARE:

INTRODUCTORY ELEMENTS

• Cover sheet
- The cover sheet should include the name of the business, the names of the
directors, addresses, and number of the business and directors.
• Table of Contents
- It is a list of the chapters or sections given at the front of a business plan. This
section should not be more than one page. The purpose of the table of
contents is to help the reader to locate the section of interest easily.
• Executive Summary
- This section highlights briefly and convincingly the different parts in the business plan.
It sums up the following areas such as:
> purpose and objectives of a plan,
> market opportunity,
 > management,
> financial projection and funding requirements.

MAIN BODY

• Introduction (Description of the venture/project )

- It provides complete picture or description of the products and services and their
unique features. In your description, you consider the following aspects:

a. Description of the people involved in starting your business

b. Products and Services - what your product or service is and what it does:
> Background to its development
> Benefits and features
> Unique selling points
> Advantages to customers and others
> Disadvantages or weak points
> Future developments

c. Objectives of the Venture/Project - state the specific milestones to be achieved over

the next five years
d. Long Term Aim of the business – state the long-term of the project

• Operating Time
- This part gives the detail of how products are to be manufactured. The merchandising
plan for trading business shows in detail how the products are to be acquired.

• Marketing Plan
- It describes market conditions and strategy related to how products and services will
be priced, distributed and promoted. Further, this section covers your market research
and competitor analysis. You must show that you have done the market research to
justify the projections made in your business plan.

a. Target Market
b. Total market valuation
c. Target revenue
d. Market Trends
e. Profile of Competitors
f. Competitive advantage
g. Benefits to clients
• Marketing Strategies/Sales
- This section sets out your strategies for reaching out market, raising their interest in
your product or service, and actually delivering the product or services to them in sales.

a. Marketing Strategy
b. Sales Strategy
c. Pricing
d. Marketing and Communication Strategy

• Organization and Management Plan

- This section describes the form of ownership and lines of authority and responsibilities
of the people in the organization. This is where you will outline the intended structure
of your project in terms of management, number of employees, their skills and
qualification, and the physical operational requirements to produce or supply your
products or service.

a. Management Organizational Chart

b. Staffing
c. Training Plans
d. Operations

• Financial Management/Analysis
- This section reviews the key assumption used in the financial projections. It is a guide
to explain how key figures in the financial projections were arrived Likewise, it explains
how the company is expected to perform financially over the next several years.
(Sometimes called a “pro-forma projection.”) Because investors and lenders look closely
at this projection as a measure of your company’s growth potential, professional input is
strongly recommended.

a. Profit and Loss Account

b. Balance sheet
c. Cash flow

• Appendix of Supporting Documents

Appendices or Annexes
- The appendix to the business plan includes supporting documents that provide
additional information and back-up statements made in the body of the report.
SWOT ANALYSIS
The SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is one of the strategic
planning tools that is utilized by businesses and other organizations to ensure that there
is a clear objective defined for the project or venture, and that all factors related to the
effort, both positive and negative, are identified and addressed.

MISTAKES IN BUSINESS PLANNING

1. Unrealistic financial projections
2. An Undefined Target Market
3. Poor research
4. Ignored Competition
5. Inconsistences in the business plan
6. You should review your final business plan to be sure it is well written and formatted
in an attractive style.

KRISHA TENEGRA BPEd 3-B