Competency: Develop Business Practice

What is business?

• Business is an economic activity, which is related with continuous and regular production
and distribution of goods and services for satisfying human wants.
Entrepreneurship development

What is an entrepreneur?

• An individual who undertakes the risk associated with creating, organizing, and owning a
business
• Entrepreneurship can be defined as the process of using private initiative to transform a
business concept into a new venture or to grow and diversify an existing venture or
enterprise with high growth potential.
• Entrepreneurs identify an innovation to seize an opportunity, mobilize money and
management skills, and take calculated risks to open markets for new products, processes
and services.
Personal characteristics of successful entrepreneurs

• Persistent (not giving up, keep trying)

• Creative (looking at new ways of doing things, developing solutions to problems)
• Responsible (doing what you are supposed to do and being held accountable)
• Inquisitive (asking questions and seeking answers, curiosity)
• Goal-oriented (focused on developing a plan and achieving your goals)
• Independent (able to work or act alone, doing things without supervision)
• Self-confident (belief in yourself and your abilities)
• Risk taker (not afraid to do new things and take risks)

Skills needed by successful entrepreneurs

• Communication skills (possessing the ability to read, write and speaking in an

understandable, accurate and professional manner)

• Human relations skills (the ability to build and maintain positive relationships, working
well with others)

• Math skills (knowledge of basic arithmetic and business math skills such as calculating
profit)

• Problem-solving and Decision-making skills (the ability to assess situation and make
good decisions )

• Technical skills (knowledge of computers and how to use them productively)

• Basic business skills (knowledge and understanding of the economy and business
functions such as marketing and management

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 • Who is the Entrepreneur?

• Somebody who has IDEAS and makes these ideas happens or come to life.
• Must have some BUSINESS SKILLS (ideation, creativity & innovation)
• Somebody who ASSUMES RISKS
• Desires to MAKE PROFIT
• The Role of an Entrepreneur:
1. Entrepreneurs are innovators
• They observe an opportunity.
• They create new goods and services.
• They improve existing products.
Entrepreneurs provide choice
• They add goods and services to the marketplace.
• They offer variety.
• They design different approaches to familiar problems.
Entrepreneurs provide jobs
• They hire workers for their businesses.
• They consume resources, thus providing jobs in the industries that supply those resources
Entrepreneurs help the economy grow.

Why Become an Entrepreneur?

The three primary reasons that people become entrepreneurs and start their own firms
• Desire to be their own boss
• Desire to pursue their own ideas
• Financial rewards
The four quadrants of cash flow

Quadrant 1 – EMPLOYEES: I do think that most of us belong here. We have a job. We have
to work hard, follow instructions from our bosses and superiors and get paid. We don’t own our
time. These are people who love security or tenure.

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Quadrant 2 – SELF EMPLOYED – They work for themselves. The difference with the
employees is that self-employed own their time since they don’t have superiors. They can decide
for themselves. These are people who love to be independent. They don’t want to work for
others; instead they want to work for themselves.

Quadrant 3 – BIG BUSINESS OWNERS – They love delegating tasks. They concentrate their
efforts more on activities which produces most profits. They hire people who are more intelligent
than them to do the work for them. They have built a solid system and they own it. They have
built their resources to make this possible. And so they can leave for vacation and can leave work
for some time but still earns money because there were people working for them.

Quadrant 4 – INVESTORS – These are people who have built their assets and are not working
for money anymore. Instead, the assets they have accumulated works for them providing them
constant income even if they don’t work. These are people who are called “living on interests”.
They are living thru the interests of their assets and investments. Money works for them. They
have invested their money to have more money. They can differentiate which one is an asset and
which one is a liability.

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 • Business Idea generation: – brainstorming, macro screening, micro screening,
SWOT analysis

Idea generation & brainstorming

Brainstorming is a dynamic tool, where quantities of ideas are offered with no criticism.
• It can help people solve problems, develop new products or services and increase
productivity.
• The brainstorming is a good initial one for the Business Plan to generate and select ideas
of products/services business.
• All members of the group must participate. Be creative. The more ideas, the better.
• No idea should be blocked.
• All ideas will be respected and not evaluated. Do not criticise or judge. All ideas are
equally valid at this point.
• Ideas already mentioned must be avoided.
• The ideas should not be detailed. Keep ideas brief, do not tell stories
Macro screening

• The Macro Screening is a very important step positioned between the project idea
generation and the final decision about the most promising business idea.
• Macro Screening helps to do a first selection; it’s like pouring all these ideas into a
funnel.
Micro screening

• The Micro Screening links the macro screening with the SWOT Analysis (strengths,
weaknesses, opportunities, and threats), hence being the crucial nexus between these two.
• It adds quality to the selection process by adding different parameters related to economic
judgements (market, skill availability, technology, etc.).
• Micro Screening Table

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 SWOT analysis

• The SWOT Analysis (strengths, weaknesses, opportunities, threats) is based on these

concrete project ideas.
• It is quite a simple but very powerful tool which enables the participants to do a proper
comparison of the last three projects remaining after the micro screening process.
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and
for identifying both the Opportunities open to you and the Threats you face. What makes
SWOT particularly powerful is that, with a little thought, it can help you uncover
opportunities that you are well placed to exploit. And by understanding the weaknesses of
your business, you can manage and eliminate threats that would otherwise catch you
unawares.

More than this, by looking at yourself and your competitors using the SWOT framework, you
can start to craft a strategy that helps you distinguish yourself from your competitors, so that
you can compete successfully in your market.

Strengths:

• What advantages does your organization have?

• What do you do better than anyone else?
• What unique or lowest-cost resources can you draw upon that others can't?
• What do people in your market see as your strengths?
• What factors mean that you "get the sale"?
• What is your organization's Unique Selling Proposition (USP)?
Weaknesses:

• What could you improve?

• What should you avoid?

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 • What are people in your market likely to see as weaknesses?
• What factors lose you sales?
Opportunities:
• What good opportunities can you spot?
• What interesting trends are you aware of?
Useful opportunities can come from such things as:
• Changes in technology and markets on both a broad and narrow scale.
• Changes in government policy related to your field.
• Changes in social patterns, population profiles, lifestyle changes, and so on.
• Local events.
Threats

• What obstacles do you face?

• What are your competitors doing?
• Are quality standards or specifications for your job, products or services
changing?
• Is changing technology threatening your position?
• Do you have bad debt or cash-flow problems?
• Could any of your weaknesses seriously threaten your business?

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