ENTREPRENEURSHIP

❖​ ENTREPRENEUR
❖​ From the French word entreprendre which means “to undertake”.
❖​ A person who creates, organizes, operates a new business, bearing most of the risks and enjoying
most of the rewards. – Investopedia
❖​ A person who strongly advocates and correctly practices the concepts and principles of
entrepreneurship in operating and managing the self-owned business venture.
❖​ An innovator, a source of new ideas, goods, services, and business/or procedures.

What is the difference between a BUSINESSMAN and an ENTREPRENEUR?

An entrepreneur is an individual having an exclusive idea to establish a new venture. A businessman is an
individual who establishes a business with an old business idea.
●​ Entrepreneurs are market leaders.
●​ Businessmen are market players.

TYPES OF ENTREPRENEURS

Innovative Entrepreneur
➢​ those who always make new things by thinking of new ideas.
➢​ have ability to think newer,better and more economical ideas.

Imitating Entrepreneurs
➢​ those who don't create new things but only follow the ideas of other entrepreneurs.

Fabian Entrepreneurs
➢​ are skeptical about changes to be made in the organization.
➢​ They don't initiate but follow only after they are satisfied.

Drone Entrepreneur
➢​ are those who lives on the labor of others.
➢​ are die-hard conservatives even ready to suffer the loss of business.

Social Entrepreneurs
➢​ are those who initiate changes and drive social innovation and transformation in the various fields
such as education, health, human rights, environment and enterprise development.

HISTORY OF ENTREPRENEURSHIP
The original entrepreneurs were traders and merchants. Human trading came from Mesopotamia 6000 BC
initially, they used trading of weapons,foods, and spices.

BARTER
The oldest system of trading. exchange of goods and services between two parties without any
involvement of cash.
 ADVANTAGES AND DISADVANTAGES OF BARTER
ADVANTAGES
1. NO COMPLICATIONS IN SELLING AND BUYING. (HASSLE FREE)
2. NO POSSIBLE HOARDING OF COMMODITIES

DISADVANTAGE
• THEY CANNOT DETECT THE VALUE OF THE COMMODITIES EXCHANGED

❖​ ENTREPRENEURSHIP
❖​ Comes from the word entrepreneur.
❖​ refers to the process of using resources effectively and transforming them into profitable venture.
❖​ The concept of creating, organizing, and operating a new business venture in order to gain profit
along with its uncertainties.
❖​ Entrepreneurship is the pursuit of opportunity beyond resources controlled. – Howard Stevenson.

Entrepreneurship and the activities of ordinary small businesses differ in the following areas:
❖​ Motive in opening a business
❖​ Perception of risk in the business
❖​ Reactions to changes in the environment
❖​ View on competition
❖​ Vision for development and growth
❖​ Horizon of business operation
❖​ Sources of business funds

Think of entrepreneurs in your community. What are the effects of their presence in your
community?
●​ It brings profit and wealth.
●​ It creates new job opportunities.
●​ It helps to bring new products and ideas to the market.
●​ It contributes to economic growth.
●​ It creates social change.
●​ It contributes to community development.

Core Competencies in Entrepreneurship

1. Economic and dynamic activity - Entrepreneurship is an economic activity because it involves the
creation and operation o f an enterprise with a view to creating value or wealth by ensuring optimum
utilization of limited resources.
2. Innovative - Entrepreneurs constantly look for new ideas, thus he needs to be creative.
3. Profit Potential - The entrepreneur can be compensated by his profit coming from the operation.
4. Risk bearing – The entrepreneur needs to gamble but wise enough to offset the risk.

Qualities of an Entrepreneur
• Risk-taker. Open-minded to whatever untoward things that may happen; they consider constraints as
challenges.
• Goal-oriented. Plan and set a goal, leaving them to strive so hard to attain it.
• Persistent. Not easily discouraged. They pursue their goals even in the face of adversity and hostile
circumstances.
• Full of energy. They do not get tired easily no matter what how tedious the work is.
• Open to criticism. They take suggestions and feedbacks positively.
• Responsible. They know how to carry out important actions or deals.
• Confident and self-reliant. They believe in themselves without a doubt.
• Knowledgeable. They are experts in their own line of occupation.
• Human Management Ability. They know how to consider the needs of the people under their care and
make sure that they get what these people deserve.
• Innovative. They are creative because they believe that there are always new and better ways of
presenting things.
• Achievement-oriented. They want to see the results of their labor.
• Proactive. They can control a situation by making things to happen or by preparing for possible future
problems.
Career Opportunities of Entrepreneurship

CAREER OPPORTUNITIES DESCRIPTION

Advertising, Marketing, and Public Relations Working in advertising, marketing, and public
relations will help you gain ideas on how to
reach a target customer when you already have
your own product or services.

Business Development Employed by companies to develop and execute

strategies to increase sales and profits.

Business Consultant They help companies find solutions to the

different business challenges and obstacles
being met.

Software, Web or App Developer, E-commerce Every business needs technology. Your work as
and Social Media a software, web or app developer will enhance
your skill set that will be vital when you start to
grow your own business.

Sales Manager/ Account Executive Sales management positions provide

experiences and opportunities that will allow
you to generate income for the business, meet
and achieve sales goals

Product Manager, Design Product managers work on the enhancement of

a product through research, development,
engineering, manufacturing, and distribution

Management Working towards a career in management will

 give you the leadership, people, and
communication experience that you need to be
successful.

Teacher A graduate of Entrepreneurship can use his

knowledge in teaching.

Profile of a Successful Entrepreneur

• Strong desire for independence
• Strong drive to succeed
• Strong determination in decision making
• Develops a feedback mechanism for results
• Result-driven individual

Parts of a BUSINESS PLAN

Nature and Concept
❖​ A detailed and integrated written document that describes the various activities involved in the
opening and operating a new entrepreneurial venture.
❖​ A formal written document containing the goal of the business, the methods of attaining those
goals, and the time-frame for the achievement of the goals. Wikipedia
❖​ The roadmap of the new business.

Why is BUSINESS PLAN important?

Benjamin Franklin once said, “If you fail to plan, you are planning to fail”.
• A business plan is a very important strategic tool for entrepreneurs.
• Even excellent business ideas can be useless if you cannot formulate, execute and implement a strategic
plan to make your business idea work.
• A good business plan needs to clear and easy to read and understand.
Four Major Reasons to Implement a Plan
1. To make sound decisions. Having a business plan help you to define and focus on your business ideas
and strategies.
2. To help you identify any potential weakness. Identify experts and professionals who are in a position
to give you invaluable advice and share your plan with them.
3. To raise money for your business. Potential investors or lenders want a written business plan before
they give you money.
4. To communicate your ideas to stakeholders. A business plan is a communication tool that you can use
to secure investment capital from financial institutions or lenders. You can also use it to convince people
to work for your enterprise, to secure credit from suppliers and to attract potential customers.
At its core, your plan should identify where you are now, where you want your business to go, and how
will you get there.

Major Parts of the Business Plan

1. Title Page
●​ Name of your business
 ●​ Business logo
●​ Name of the owners
●​ Company name and business address
2. Table of Contents
●​ An overview of the document’s contents and organization
●​ It allows readers to go directly to a specific section of the document

3. Preface
●​ This is a short introductory statement (written by the owners) which states how and why the
business plan came into being and its purpose
4. Executive Summary
●​ It goes near the beginning of the plan but it is written last
●​ It points out the overall highlights of the business plan as well as the bird’s-eye view of its section
●​ It should provide a short, concise, and optimistic overview of the business that captures the
reader’s attention and gives them interest in learning more about it
5. Business Description
Presents the nature and form of the business and may cover two or three pages.
A. Name of your business
B. Vision, Mission, Goals and Objectives
C. Business industry
D. Form of business organization
6. Products and/or Services
●​ Introduces the products and/or services to be produced or sell
●​ Shows the products/services costing and pricing
●​ Presents the competitive advantage of the business
The Concept of Needs, Wants, and Branding
NEEDS
Products/Services Plan Refers to the things that a person must have in order to survive.
WANTS
Refers to the things that a person must have in order to be happy, comfortable, and satisfied.
BRANDING
has been considered by experts in marketing and entrepreneurship to be another marketing strategy of
product positioning.
What comes into your mind when you hear the word “toothpaste”? How about “shampoo”? “softdrink”?
“burger”?
Brand
Refers to the name, design, color, symbol, quality, features, or a combination of these elements that make
the product separate and distinct from similar products of the competitors. Carries the attributes, benefits,
and quality of the product. It communicates to the consumers the relevant information about the product.
Brand names play a significant role in the positioning of the product.
Pricing a Product Products/Services Plan
- To establish a selling price for a product/service. Entrepreneur.com
Basic Rules of Pricing
All prices must cover costs and profits.
The most effective way to lower prices is to lower costs.
Review prices frequently to assure that they reflect the dynamics of cost, market demand, response to the
competition, and profit objectives.
Prices must be established to assure sales.
Costs components:
1. Variable costs
2. Fixed costs
Cost components:

1. VARIABLE COSTS
- comprises all direct costs related to producing your product or service; direct materials & direct labor. -
These costs are directly proportional to the number of units you produce or plan to sell.
Characteristics:

Variable Cost
To illustrate, if the cost of material per unit of a certain product is P5.00 and each product requires one
unit of material, production of 1,000 units of product will require 1,000 units of material at a total cost of
P5,000.00.

2. FIXED COSTS
- these are costs that do not change with changing levels of activity. In other words, they remain constant
regardless of the change in activity level; rental fee, salaries, insurance fee, etc. - these costs are inversely
proportional to the number of units you produce or plan to sell. - characteristics:

Fixed Cost For instance, if the P25,000 monthly rental for the factory building is allocated to to the units
of product manufactured during the period, unit fixed cost will vary in an opposite direction with the
change in volume.
Cost-Based Pricing
Cost-Plus Pricing - involves calculating the total costs it takes to make your product, then adding a
percentage mark-up to determine the final price.
- example, let’s say you’ve designed a product with the following costs:
Material costs P20
Labor costs 10
Overhead 8 Total costs P38
Mark-up 50% 19
Selling Price P5

7. Marketing Plan (with SWOT Analysis)

Marketing Plan
❖​ Identifies the target market/potential customers
❖​ Identifies the business’ competitors
❖​ Presents the SWOT analysis
❖​ Presents the marketing strategies
❖​ Explains the unique selling points of your products/services
❖​ Answers why should customers buy your products/services
The Marketing Mix
-Refers to the mode, means, or tool used by the entrepreneur to position the product in the target market
segment to efficiently and effectively deliver it to the consumers and to convince them about the benefits
that they will derive from buying the product.
-refers to the marketing activities that we have to satisfy customer needs and position our offering clearly
in the mind of the customer (Oxford College of Marketing).
-Also known as the “Ps” in marketing.
THE 7P’S IN THE MARKETING
PRODUCT
Refers to the tangible goods or intangible service offered by the business to the target customer.
- It must satisfy the needs or wants of the customers better than the other competing products. -
Remember that customers are buying the product. Any additional features carried by the product are
product attributes that the customers are willing to pay for.
- Product mix strategy
– making different products or services available to customers on top of the primary product. The
product, therefore, is the nucleus of the marketing mix.
PRICE
This is the only revenue-generating element of the mix – all other marketing activities represent a cost.
So it is important to get the price right to not only cover costs but generate profit!
PLACE
This is where customers make a purchase. This is the place where the target customers are. - This can be a
physical store, through an app or via a website.
Put your business where your customers are willing to buy the product
PROMOTION
So we have a fantastic product, at an appealing price, available in all the right places, but how do
customers know this?
Promotion is the key!
- It is about communicating messages to customers to generate awareness, interest, desire or action.
- It utilizes the appropriate media to reach customers:
• Advertising – tv or radio commercials, print advertisements, online advertising, packaging ads
• Personal selling – involves a sales person
• Sales promotion – discounts, coupons, “bo-go”, eat-all-you-can
• Direct marketing – one-on-one approach
PEOPLE
-It refers to individual employees or workers who are directly involved in the production, marketing, and
sales of the product of service. They become the ‘face’ of the business for the customer.
The entrepreneur must be sure to hire the right person for the position.
PROCESS
- Understanding the steps of the customer journey – from making inquiry to requesting information and
making a purchase – helps the entrepreneur to consider what processes need to be in place to ensure the
customer to have a positive experience
PHYSICAL EVIDENCE
Provides tangible cues of the quality of experience that a company is offering. - It can be particularly
useful when a customer needs some reassurance. - Examples: physical store, website, online reviews,
testimonials, etc.
The 7Ps of marketing mix helps the entrepreneur to stand out against competitors with an offering that
satisfies customer needs, which is what marketing is all about.
SWOT ANALYSIS
It is one of the primary methods an entrepreneur can use to prompt the major issues which face the
business now and into the future. It is one of the key components of any marketing plan.
Objective: To study the internal and external environments of a company, through the identification and
analysis of the strengths and weaknesses of the organization, and the opportunities and threats to which it
is exposed.
8. Operational Plan
This section describes the physical necessities of your business’ operation:
- General: do an outline of your business day-to-day operations (hours of operation and days the business
opens) and its location
- Production process: exact procedure, materials or ingredients, expected time to finish the output,
storage, and inventory systems.
- Physical facilities: the manufacturing plant, machinery and equipment, tools
- Employees
- Suppliers or sources of materials
- Process for monitoring of progres
9. Management and Organization
Management & Organizational Plan
-It shows the organizational structure of the business
- Job description: shows the roles and responsibilities of the various position in the business organization
- Salary requirement
10. Financial Plan
- This is one of the most essential components of the business plan
- Purpose is two-fold:
• need in seeking investment from venture capitalist, angel capitalist, or in obtaining a loan from banks or
financial institutions
• to understand how you project you business will do - Rule of thumb: BE REALISTIC
- It accumulates and describes all the data expressed in monetary units from the other sections of the
business plan:
1. Major assumptions
2. Product Costing/Pricing
3. Sales Projection
4. Cost of Goods Sold Projection
5. Projected Expenses
6. Projected Start-up Expenses
7. Projected Income Statement
8. Projected Financial Position
9. Projected Cash Flow
Innovation & Corporate Social Responsibility
✦ Innovation is the development and application of ideas that improve the way things done or what can
be achieved.
✦ Innovation results to new products or services, new and improved business processes, changes in the
way your products are marketed or the introduction of new technology.
Innovation & Corporate Social Responsibility
What is Corporate Social Responsibility (CSR)?
✦ CSR is a self-regulating business model that helps a company be socially accountable – to itself, its
stakeholders, and the public.
✦ Aka Corporate Citizenship – the kind of impact they are having on all aspects of society – economic,
social, environmental.
What is the importance of CSR?
✦ It can forge stronger bond between employees and companies.
✦ It boosts morale.
✦ It help both employees and employers feel more connected with the world around them.
Example of CSR?
Starbucks CSR milestones:
- Reaching 99% of ethically sourced coffee;
- Creating a global network of coffee farmers;
- Pioneering green building throughout its stores;
- Contributing millions of hours of community service; and,
- Creating a groundbreaking college program for its partners/employees.
11. Appendix
- The place to include any additional documents that you want to use to give your reader a feel for your
product, marketing, services and so on.
• Charts, graphs, tables that supplement information from other sections of your business plan • Product
illustrations or product packaging samples
• Marketing materials
• Resumes for each of your executive team
• Licenses, permits, trademark documentation