ENTREPRENEURSHIP Flashcards
:“Think Different” is the slogan of
which brand?
Apple.
Process of creating or seizing an
opportunity, and pursuing it
regardless of resources controlled.
(Howard H. Stevenson)
ENTREPRENEURSHIP
BIG IDEA: “Entrepreneurs as ___________.”
INNOVATORS
Other Definition of Entrepreneurship:
A capacity for innovation
investment, and expansion
into new markets and
techniques.
According to???
Fajardo
Other Definition of Entrepreneurship:
Science of converting processed
ideas into a remarkable business
venture.
According to???
(Marife Agustin Acierto)
Underlying Principles of Business (4)
- Having a vision - “provides a sense of purpose and direction
for the business.” - Providing innovative products or
services. - “profits and help uplift the quality of life of the people.” - Managing effectively. - “entrepreneurs achieve their goals and objectives with the help of their employees & resources”
- Making informed decisions. - “involves logic and information gathering.”
A _______________________ refers to an
entrepreneur’s traits or personal
attributes rather than physical
assets or financial resources
Core competency
Identified the 10 key areas of
competencies related to entrepreneurial
development
EMPRETEC Program of United Nations
FILL IN THE BLANKS:
EMPRETEC - the Spanish acronym for
________________________ (________________) and ____________________________
(____________________); was first introduced in Argentina in 1988 and has been initiated in 36 countries.
empredendores (entrepreneurs), tecnologia (technology)
The 10 Personal Entrepreneurial Competencies (PECs)
- Opportunity seeking and initiative
- Persistence
- Fulfilling of commitments
- Demand for quality and efficiency
- Taking Calculated Risks
- Goal setting
- Information seeking
- Systematic planning and monitoring
- Persuasion and networking
- Independence and self
confidence
3 Clusters of the 10 PECs (EMPRETEC
Programme)?
Achieving, Planning, Power Behaviors (A.P.P.) Clusters 1-3
Contents of EMPRETEC Clusters?
Achieving (disregard mo na, anything that isn’t in 2nd and 3rd is this)
Planning (2nd cluster):
G.I.S. Acronym =
- Goal setting
- Information seeking
- Systematic Planning and monitoring
Power (3rd cluster):
P.I. Acronym
- Persuasion and
networking
- Independence and
self confidence
ANATOMY OF AN ENTREPRENEUR
- __________ = A pool of ideas
- __________ = Looking for investors and opportunities
- __________ = Communicating the vision
- __________ = Listening to customers feedback
- __________ = Trust your gut
- __________ = Full of passion
- __________ = Dream high but stick to the ground
- __________ = Keeps them going in tough times
- brain
- eyes
- mouth
- ears
- stomach
- heart
- feet
- legs
BIG IDEA of the Entrepreneurial Mindset?
“YOU ARE THE BOSS!”
Entrepreneurial Skills
- Creative/Critical Thinking
- Organizing
- Planning
- Business Principles
- Computer Competency
- Workplace Competencies
- High Growth High Value Entrepreneurship
- Marketing
- Interpersonal Skills
There are 2 types of Entrepreneurs:
- _______________ = Individuals who
have generated
substantial value and
profits from
innovations in a very
short period of time.
- Willing to absorb huge
risks using enormous
amounts of capital in their
business - Rapid Economic Progress
- Huge amount of value added
- Attracts number of
competitors & Imitators - Crucial in rapid economic
prosperity
- _________________ = Individuals who
initiate business
enterprise, but the
value-added and
profits they make are
limited.
- Value-added & Profits are limited
- Contributions are minimal
- Attracts few competitors and
imitators - Short in fund and inadequate in
skills - Cannot undertake huge capital,
sophisticated technology and
extensive risks - Engage in micro and small
business as an alternative to formal
employment
Mega, micro
- A system entrepreneurs follow to
achieve their goals. - A strategic process that includes
an articulation of a plan and how
this is going to be implemented. - An entrepreneurial discipline
which involves several stages.
ENTREPRENEURIAL PROCESS
What are the 5 steps of THE ENTREPRENEURIAL PROCESS?
- DISCOVERY
- DEVELOPMENT OF A BUSINESS CONCEPT
- ORGANIZING RESOURCES
- IMPLEMENTATION
- REAPING THE RETURNS
The recognition of a
business idea or the
detection of
opportunities that
could make money for
the entrepreneur.
(THE ENTREPRENEURIAL PROCESS)
DISCOVERY
*Gives more details on how the general
business idea can be realized.
*Suggest a business plan
Business Plan must also describe:
*How the enterprise is going to be
organized
*How it is going to be managed
*How the business is going to be
financed
(THE ENTREPRENEURIAL PROCESS)
DEVELOPMENT OF A BUSINESS CONCEPT
The process of identifying, sourcing and financing human, non human and other resources needed for the conduction of business.
MEGA ENTREPS.:
- Highly educated, technologically savvy, and
creative employees.
(Google, Apple) - They source their funds from the capital market
or from venture capitalists .
(Banks)
MICRO ENTREPS.:
* Draw their resources including labor from what
is available in their locality.
(Eatery)
* Funds sourced from informal lenders, and
remittances of relatives or family members
working abroad
(5,6)
(THE ENTREPRENEURIAL PROCESS)
ORGANIZING RESOURCES
The process of carrying out the business
plan.
* Management of human, physical,
technological, and financial resources.
* Confronting actual and potential rivals
* Responding to various opportunities,
challenges and developments
* Managing growth and threats for the
survival of the business
(THE ENTREPRENEURIAL PROCESS)
IMPLEMENTATION
Pertains to
strategies related
to the expansion
of the business
firm
(THE ENTREPRENEURIAL PROCESS)
REAPING THE RETURNS
(ENTREPRENEURIAL TRAITS AND CREATION OF VALUE-ADDED):
LEVEL OF EDUCATION:
- _____________ Entrepreneurs:
* Need some formal education to
be able to seize opportunities
presented by inventions,
innovations, and other
technological developments.
* Need some degree of
technological know-how - _______________ Entrepreneurs:
* Limited educational
qualifications.
* Engaging in small enterprise
does not require high level of
schooling.
* Small enterprise uses simple
technology and do not require
technical sophistication
- Mega entrepreneurs
- Micro entrepreneurs
(ENTREPRENEURIAL TRAITS AND CREATION OF VALUE-ADDED):
EMPLOYMENT STATUS:
- _____________ Entrepreneurs:
- Drawn from the pool of
unemployed or underemployed. - They see their small business
ventures as an option for making
a living
- _______________ Entrepreneurs:
- Former Employees of companies
from formal sector - Entrepreneurs professional
development - Experience in business is
important to the success of mega
entrepreneurs.
- Micro entrepreneurs
- Mega entrepreneurs
(ENTREPRENEURIAL TRAITS AND CREATION OF VALUE-ADDED):
ENTREPRENEURS WEALTH:
- _____________ Entrepreneurs:
- Source their funds from their
own wealth and from their
families. - Some generate capital from
wealth accumulated from
their past employment.
- _______________ Entrepreneurs:
- Limited Funds
- Limited human and
nonhuman resources they
cannot avail of credit from
financial institutions.
- Mega
- Micro
(ENTREPRENEURIAL TRAITS AND CREATION OF VALUE-ADDED):
RISK APPETITE:
- _____________ Entrepreneurs:
- Risk appetite is not much
- Limited wealth and have
difficulties in getting credit,
weak defenses against the
impact of uncertainties.
- _______________ Entrepreneurs:
- More willing to take risks
- Their wealth provides
security to absorb losses that
serves as potential shields
for risks
- Micro
- Mega
What are the ENTREPRENEURIAL TRAITS AND CREATION OF VALUE-ADDED? (4)
- Level of education
- Employment Status
- Entrepreneurs Wealth
- Risk Appetite
(Entrepreneurial Traits And Entrepreneurial Intentions - INTERNAL FACTORS) (5)
- Gender, age, marital status, and employment status
of individual who are likely to form entrepreneurial intentions. - Theoretical bases for the contributions of self confidence, determination, and enthusiasm and other positive human
qualities. - include a host of qualities including need for achievement, risk appetite, acceptance for vagueness, self-efficacy
and goal setting. - Vocational Know-how,
supervisory and managerial skills acquired from work experience. - important in building networks that can complement the
productivity of human and nonhuman resources of business.
- Demographics
- Personal traits
- Psychological traits
- Individual Skills & Prior Knowledge
- Social Ties
(Entrepreneurial Traits And Entrepreneurial Intentions - EXTERNAL FACTORS)
- Environmental Support
FILL IN THE BLANKS:
1a. The ______________________ enacted the
____________________ into law in
_______. This important piece of
legislation mandates the government
to provide support to them and
promote their development by
providing a conducive business
environment for them.
1b. Positive effects of
_______________, _______________
institutions and _______________
institutions (TESDA, schools
and universities) in setting
up a business.
- Environmental Influence
Includes ______________, __________, protection of
property rights, and __________________________.
1a. Philippine Congress, Magna Carta for MSMEs, 1991
1b. government, financial, training
- regulatory structure, patents, competitive environment
What are MSME’s?
Micro, Small and Medium Enterprises
(CHARACTERISTICS OF FILIPINO
ENTREPRENEURS)
- EARLY Stage of Entrepreneurial
Activities = ________________________________
1a. ADVANCED Stage of Entrepreneurial
Activities = _______________________ - EARLY Stage = ____________________________________
2a. MATURE Stage = ___________________________________________
- Female > Male, Younger > Older
1a. Male > Female - Secondary Schools
Education > Higher Level Education
2a. Higher Level Education > Secondary Schools
Education
(ENTREPRENEURIAL DECISION MAKING)
- _______________
- the systematic and rational way of providing an answer to a question.
- Explains what is going on in a
business and how a firm can survive and remain stable.
- SWOT Analysis - _______________
- involves thought process that assess current situation that can be useful in
formulation of plans for the future. - Porter’s Five Forces of competition
- Trend Analysis
- Scenario Building
- Critical Thinking
- Strategic Thinking
(Porter’s Five Forces of Competition)
FILL IN THE BLANKS:
- A tool was created by Harvard Business School professor ________________________, to analyze an industry’s attractiveness and likely profitability
2.
_______________ = This looks at the number and strength of your competitors. How many rivals do you have? Who are they?
_______________ = How Powerful are the companies that supply to me? Can they Easily Drive up prices?
_______________ = How powerful are my consumers? Can they easily choose other business and force me to change my price?
_______________ = Are there other similar products and services, which my customers might switch to?
_______________ = How easy is it for new businesses to enter my market and take my customers?
- Michael Porter
2.
- Competitive Rivalry
- Supplier Power
- Buyer Power
- Threat of Substitution
- Threat of New Entry
- are uncertain situations and developments that can
increase the probability of
loss or business failure - pertains to danger coming from the management of resources of a
business enterprise - are threats coming from various
environment outside the business firm.
- Risks
- Internal Risks
- External Risks
The process of
identifying,
assessing, and
responding to risks.
Risk Management
- Refers to the ability of individuals to be
involved in the process of producing several decision- making based on the identification and management of changes in their environment. - Can shift from one thinking to another in making decisions, depending on the objective being pursued.
- Needed in the light of the variety of changes, situations, problems, and issues that he has to confront.
- The decisions of an entrepreneur should be formulated after careful analysis, deep reflection and in an undue haste manner.
- COGNITIVE ADAPTABILITY
- FLEXIBILITY
- DYNAMISM
- SELF-CONTROL
SOURCES OF IDEAS FOR
ENTREPRENEURIAL
VENTURES
From the… (4)
- From the product
- From the process of production and distribution
- From the person
- From relationships
- Differentiates them
from those currently
in the market - Differentiate a
product by CHANGING ITS SIZE, SHAPE, COLOR, AND CONTENTS. - More than changing the product, successful entrepreneurs introduce new products because of their dissatisfaction with those available in the market.
WHAT SOURCE OF IDEA IS THIS…
FROM THE PRODUCT
Examples:
Sachets of shampoo.
Pan De Sal available throughout the day.
Fried sipao over traditional steamed siopao.
WHAT SOURCE OF IDEA IS THIS…
From the process of production and distribution
- Interests, hobbies, skills,
dreams, and even ones
travels. - Prior employment
WHAT SOURCE OF IDEA IS THIS…
- From the person
From families
and relatives.
WHAT SOURCE OF IDEA IS THIS…
- From relationships
Systematic and rational way of providing an answer to a question
LOGICAL
THINKING
Looks at things from
different perspectives
CREATIVE THINKING
- refers to a systematic analysis of data
generated from survey of individuals. - Aside from giving basic information on the
population being studied, it can also be used
for hypothesis testing on the difference of
the values of certain variables. - It can describe the trend in the demand for a particular product, as well as show which key socioeconomic variables can significantly
influence the change in the demand for a
product.
STATISTICAL ANALYSIS (LOGICAL THINKING)
- which is undertaken to know the various
factors that affect the demand for a
particular product or service. - It can also determine how certain
socioeconomic and demographic groups
will react to the introduction of a new
commodity or a change in existing products or services. This can be done through surveys, interviews and focus group discussions.
MARKET ANALYSIS (LOGICAL THINKING)
- usually describe
the state of competition
within an industry.
SWOT ANALYSIS (LOGICAL THINKING)
- is the systematic way of generating
ideas from a select group or
individuals using various rounds of
consultations or sessions. This
process is mostly used in research
and economics, that aims to collect
opinions on a particular research
question or specific topic, to gain
consensus.
DELPHI TECHNIQUE (LOGICAL THINKING)
refers to an unstructured discussion of a group to elicit ideas. Since the process is unstructured, the facilitator and participants should entertain all ideas coming from the participants, even
those that are illogical and “out of this world.” After a fixed period of discussion, the various ideas are processed and synthesized to come out with an answer to the question posed at the start of the brainstorming session.
BRAINSTORM (CREATIVE THINKING)
is similar to brainstorming. It uses the group discussion method to elicit ideas from the usual brainstorming because it is directed to identifying all possible problems encountered with a specific product or service. After identifying all the possible problems and issues with the product or service, the participants are tasked to give alternative solutions to the
problems.
PROBLEM INVENTORY ANALYSIS (CREATIVE THINKING)
- is another technique used in discovering business ideas. It is a method that has been used in psychology to elicit the unconscious thoughts of individuals by
expressing their thoughts associated with words and ideas given by the therapist; - has several applications in different fields, including business, since it can draw from participants ideas that are associated or linked with a given idea or
word - from the process of association the group can come out with an idea or set of ideas that can be the basis for business ventures.
FREE ASSOCIATION METHOD (CREATIVE THINKING)
- is another creative way of obtaining business ideas from target participants by listing all possibilities that ideas can be connected to, reprocessed and associated with
- participants in the discussion group can be asked to list down all possible changes that can be made with an existing product or service.
CHECKLIST METHOD (CREATIVE THINKING)
Alex Osborn developed a method known as…
SCAMPER (Substitute, Combine, Adapt,
Magnify, Put to other use, Eliminate, and
Rearrange)
These are Methodologies That Focused On The Business Environment (3)
- Porter’s Five Forces of Competition
- SWOT Analysis
- Environmental Scanning
Classify!
- Lower the selling price
1a. Product Differentiation - Changes in the behavior,
demographics and technological
changes in the market has
significant effect on creation of new
products and services
- Bargaining powers of its competitors and
suppliers - Sociodemographic changes and technological developments
Provide an answer to a
problem.
PROBLEM SOLVING FACTORS
Internal and external factors that
stimulate desire and energy in people
to be continually interested and
committed to a job, role or subject, or
to make an effort to attain a goal.
MOTIVATIONAL FACTORS
Creativity of an individual is manifested
when they are confronted with concrete
situations.
SITUATIONAL FACTORS
A creative person thrives in an
environment that is nurturing and
not threatening
ORGANIZATIONAL FACTORS
A procedure of answering a problem with mechanism and
technique incorporating creativity.
CREATIVE PROBLEM SOLVING
This THINKER thinks of all possible ways to reach a solution.
Divergent Thinker
This THINKER thinks for a final solution.
Convergent Thinker
This model is named _________________________
By two people being: ________________________________
________________________________
- Setting the Objective
- Revisiting the Objective
- Identifying the problem
- Looking for a solution
- Selecting the solution
- Accepting the solution
OSBORN-PARNES MODEL
DR. SYDNEY PARNES, ALEX OSBORN
> Describes the various external and internal elements involved in starting a business or in expanding an existing venture, amidst a
dynamic business environment
> Serves as a guide for short-term and
medium-term decision-making and
managerial action
BUSINESS PLAN
WHY WRITE A BUSINESS PLAN? (3 Reasons)
- Determine whether a proposed or existing business venture is viable given its target market
- Guides the entrepreneur in mobilizing
the resources needed by the business - Serves as a tool in helping get financing
for the business
WHO READS THE BUSINESS PLAN? (3)
- Entrepreneurs
- Lenders
- Investors
Assesses whether the entrepreneur will be able to meet debt using the four C’s of credit
Four Cs of Credit—character, cash flow, collateral, and equity contribution
LENDER
Gauge whether
projected returns are
acceptable
INVESTORS
Identifies the resources
needed to operate and
grow the business
ENTREPRENEUR
Provides the information
about collateral or tangible
assets that can be secured
for the loan
LENDER
Serves as a road map for managing the
business
ENTREPRENEUR
Allows the entrepreneur to
anticipate potential
business risks
ENTREPRENEUR
Provides information about the
character of the entrepreneur and
about the capability of the
venture’s management team
INVESTOR
Determine the size of the
market however, the
entrepreneur must be clear
on who his primary and
secondary markets are.
MARKET
INFORMATION NEEDS
Depends largely on the cost
of sourcing and
manufacturing the product
or of providing the service.
OPERATIONS
INFORMATION NEEDS
Require the entrepreneur
to include a list of all
sources of revenue and a
list of all possible
expenditures
FINANCIAL
INFORMATION NEEDS
MARKET, OPERATION, OR FINANCIAL INFORMATION NEEDS?
- Location
- Manufacturing or service
operations - Equipment and/or furniture
required - Space requirements
- Labor requirements
- Raw materials needed and
potential suppliers - Utilities
OPERATION INFORMATION NEEDS
MARKET, OPERATION, OR FINANCIAL INFORMATION NEEDS?
- General information
trends - Specific industry trends
- Local market conditions
- Market potential (e.g.
Market size, untapped or
underserved market) - Demographic and/or
psychographic profile of
target market
MARKET INFORMATION NEEDS
MARKET, OPERATION, OR FINANCIAL INFORMATION NEEDS?
- Rental rates
- Cost of equipment
- Cost of utilities
- Personnel costs
- Distribution costs
- Cost of insurance
- Registration and
license fees
FINANCIAL INFORMATION NEEDS
PARTS OF THE BUSINESS PLAN (IDENTIFICATION)
- _________________________
- _________________________
- __________________________
- _________________________
- _________________________
- __________________________
- __________________________
- __________________________
9.___________________________ - _________________________
- _________________________
- _________________________
- INTRODUCTORY PAGE
- EXECUTIVE SUMMARY
- ENVIRONMENTAL AND INDUSTRY ANALYSIS
- DESCRIPTION OF THE BUSINESS
- PRODUCTION PLAN
- OPERATION PLAN
- MARKETING PLAN
- ORGANIZATIONAL PLAN
- FINANCIAL PLAN
- ASSESSMENT OF RISK
- TIMETABLE/MILESTONES
- APPENDICES
Provides a brief summary of the business plan’s content.
a) The name of the business and address of the company
b) The name of the entrepreneur and his contact information (mobile no., email address and
personal website)
c) A brief description of the company and the nature of the business
a) The amount of financing needed
INTRODUCTORY PAGE
> It is prepared after
the total BUSINESS plan has been written
It must stimulate the interest of its
reader, especially if he or she is a
potential investor.
EXECUTIVE SUMMARY
This part of the business plan consists of:
- SOCIOCULTURAL CONDITIONS
- TECHNOLOGICAL CONDITIONS
- ECONOMIC CONDITIONS
- POLITICAL- LEGAL CONDITIONS
- SUPPLY AND DEMAND
- COMPETITION
ENVIRONMENTAL AND INDUSTRY
ANALYSIS
This part of the business plan consists of:
o Products and/or services
o Size of the business
o Mission statement and core values
o Location of the business and its major
physical assets
o Background of the business
owners/entrepreneurs
DESCRIPTION OF THE BUSINESS
This part of the business plan consists of:
o Manufacturing process
o Physical plant
o Machinery and equipment
o Suppliers of raw materials
o Future capital equipment
needs
PRODUCTION PLAN
This part of the business plan consists of:
o Description of the company’s operations (manufacturing,
service, retail or online business)
o Flow of orders for goods and services : (Manufacturing )
o (Service business) must describe the procedures in completing a
business transaction
o (Retail business) must explain how it will purchase the various
products it will offer, how it will manage the inventory and how
it will keep track of sales
o (Online business) how will its website be designed, how will
customers choose from its product offerings, how will they pay
for their purchases, and how will the merchandise be delivered
to them?
OPERATIONS PLAN
This part of the business plan consists of:
oPricing
oDistribution
oPromotion
oSales forecasts
MARKETING PLAN
This part of the business plan consists of:
Provides a documentation of
the venture’s form of ownership
Organizational chart
Skills and abilities
Roles and responsibilities
ORGANIZATIONAL PLAN
This part of the business plan consists of:
o Assumptions
o Pro forma balance sheet
o Pro forma income statement
o Cash flow projections
o Sources and uses of funds
o Breakeven analysis
FINANCIAL PLAN
This part of the business plan consists of:
oPotential risks-internal or external
oStrategies for preventing or
minimizing risks
oResponse to risks should they occur
ASSESSMENT OF RISK
This part of the business plan consists of:
When are major activities
will happen and when
milestones will be reached
serves a useful purpose.
TIMETABLE/MILESTONES
This part of the business plan consists of:
o Market research data
o Detailed financial projections
o Opportunity Assessment Plan
o Curriculum vitae of the
management team
o Price lists from suppliers
o Profile of competitors
o Sample Licenses (Mayor’s permit, BIR,
Health permit etc.)
APPENDICES
WHY DO SOME BUSINESS PLAN FAIL?
Document is sloppy and looks unprofessional.
Executive summary is not coherent and is too
long.
Unclear on why people would want to buy the
product can be readily produced
Sales and financial projections are
unreasonably optimistic
Inadequate description of the qualifications and
experience of the management team
Inadequate assessment of the potential threats
to the business
HOW TO PRESENT A BUSINESS PLAN?
- Tell a compelling story
- Exhibit confidence and professionalism
- Cover the basics
- Adopt a cooperative attitude when
answering questions
STAGES OF OPPORTUNITY RECOGNITION? (5)
- Preparatory stage
- Gestation phase
- Hunch; logic of connections
- Evaluation of ideas
- Production of prototype
- Precondition
- Conception
- Visioning
- Assessment
- Realization
FACTORS IN OPPORTUNITY RECOGNITION (3)
- MARKET AWARENESS (prior knowledge
of the market) - ENTREPRENEURIAL READINESS
(entrepreneurial alertness) - CONNECTIONS (networks)
(prior knowledge of
the market), refers to personal exposure to the market and its components including customers and suppliers. Tools used
are market analysis and environmental scanning.
Market Awareness
(entrepreneurial
alertness), refers to a variety of features of an individual to start a business venture; types of resources, financial, physical and human resources; ability of the individual to take risks and manage uncertainties once the enterprise is operational.
Entrepreneurial
readiness
(networks), families and friends as well as business associates can bring about opportunities that an individual can pursue.
Connections
- Also called the TRADITIONAL APPROACH
- Uses systematic procedures or the Entrepreneurial Process in proceeding with the implementation of a business opportunity
(OPPORTUNITY PATHWAYS)
RATIONAL
APPROACH
(Mega
Entrepreneurs)
Starts with the recognition of an opportunity and proceeds directly to the grabbing of the opportunity after sensing that it can be done.
(OPPORTUNITY PATHWAYS)
INTUITIVE APPROACH (Micro
Entrepreneurs)
In PRODUCT PLANNING AND
DEVELOPMENT PROCESS,
There are 2 main phases,
_______________________________
________ and the
_________________________________
___________________.
Precommercialization phase, commercialization phase.
This section summarizes
the development process of
a product from its inception,
introduction in the market,
and final decline, the
various stages that a
product or service
undergoes in its product life
PRODUCT PLANNING AND DEVELOPMENT PROCESS
