Pointers to Review in Entrep

Introduction to Entrepreneurship

Entrepreneurs are encouraged by the economy because they can provide a lot of
opportunities for the unemployed young people. It will increase per capita income, higher standard
of living and increased individual saving, revenue to the government in the form of income tax,
value added tax, export duties, import duties, and balance.

Lesson Concept of Entrepreneurship

The word “entrepreneur” was derived from the French verb entreprendre, which means
“ to undertake” This is pinpointing to those who ”undertake” the risk of enterprise. The enterprise
is created by an entrepreneur and the process is called “Entrepreneurship”
Entrepreneurs are innovators, willing to take risks and generate new ideas to make
unique and profitable solutions to present-day problems.
Factors Affecting Entrepreneurship

1. Personality Factors which includes:

a. Initiative- which means doing things even before being told
b. Proactive-which means he can classify opportunities and seize it.

c. Problem Solver- which means he can retain good relations with other people

d. Perseverance-meaning he will pursue things to get done regardless of challenges

e. Persuasion- means that he can entice people to buy even if they don’t.
f. A Planner- meaning he makes a plan before doing things and does not fail to monitor
it.
g. Risk-taker which means that he is willing to gamble but he will calculate it first.
2. Environmental Factors which include political, climate, legal system, economic and
social conditions and market situations.

Common Competencies in Entrepreneurship

1. Decisive- an entrepreneur must be firm in making decisions.

2. Communicator- an entrepreneur must have a convincing power.

3. Leader-an entrepreneur must have the charisma to be obeyed by his employees

4. Opportunity seeker- an entrepreneur must have the ability to be the first to see business
chances.
5. Proactive- controlling a situation by making things happen or by preparing for possible
future problems.
6. Risk Taker- they have the courage to pursue what are their business ideas.
7. Innovative- the entrepreneurs have big business ideas and they do not stop improving
and thinking of new worthwhile ideas for their business.
 Core Competencies in Entrepreneurship

1. Economic and dynamic activity- Entrepreneurship is an economic activity because it

involves the creation and operation of 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- meaning the entrepreneur can be compensated by his profit coming from
the operation.
4. Risk bearing –meaning the entrepreneur needs to gamble but wise enough to offset the
risk.

Types of entrepreneurs

1. Innovative entrepreneur- they are those who always make new things by thinking of new
ideas.
2. Imitating entrepreneurs- they are those who don’t create new things but only follow the
ideas of other entrepreneurs.
3. Fabian entrepreneurs- they are those skeptical. They don’t initiate but follow only after
they are satisfied.
4. Drone entrepreneurs- they are those who live on the labor of others. They are die-hard
conservatives even ready to suffer the loss of business.
5. Social entrepreneurs-they are those who initiate changes in the various fields such as
education, health, human rights, environment and enterprise development.

Essentials in Entrepreneur’s Opportunity Seeking

These are the basic foundation that the entrepreneur must have in seeking Opportunities:

Entrepreneurial mind frame. This allows the entrepreneur to see things in a

in a very positive and optimistic way in the midst of a difficult situation.
Being a risk - taker, An entrepreneur can find solutions when problems arise.

Entrepreneurial heart flame. Entrepreneur's driven passion, they are

attracted to discover satisfaction in the act and process of discovery. Passion is the
great desire of an entrepreneur to achieve his/her goals.

Entrepreneurial gut game. This refers to the ability of the entrepreneur to be intuitive. This is also known
as intuition.

5 Forces of Competition Model

It is also known as the “five forces of competition,” An industry environment is
a competitive environment. Regardless of what product or services you have,
competition is always present.

1. Buyers
The buyers are the one that pays cash in exchange to your goods and
services.

2. Potential New Entrants

A new entrant is defined as the one who enters something. For example, the
level of capital requirements, if the business requires huge capital, new entrants should decline to join the
business.

3. Rivalry among Existing Firms

Rivalry is a state or situation in which people or groups are competing with
each other.

4. Substitute Products
Substitute means anything that takes the place or function of another.
For example , the consumers decide to use margarine as a substitute for butter. In case
the price of butter increases, preferably the consumer will gradually switch to
margarine.

A substitute product can give a big threat in the industry environment if the following
factors are notice:

a. Switching cost is low.

b. Preferences and tastes of the customers easily change.
c. Product differentiation is highly noticeable
d. The quality of substitute products dramatically improves.
e. The price of substitute products is substantially lower.

5. Suppliers
The Suppliers are the one that provide something that is needed or wanted.

Commonly used methods for segmenting the market are as follows.

1. Geographic segmentation – the total market is divided according to geographical location.
• Variable to consider . Climate b. Dominant ethnic group c. Culture d. Density (either rural or urban)
2. Demographic Segmentation – divided based consumers. • Variable to consider
a. Gender b. Age c. Income d. Occupation e. Education f. Religion g. Ethnic group
h. Family size
3. Psychological Segmentation- divided in terms of customers' thoughts and beliefs.
• Variable to consider a. Needs and wants b. Attitudes c. Social class . Personality traits e.
Knowledge and awareness of. Brand concept g. Lifestyle
4. Behavioral Segmentation- divided according to customers behavior pattern as they interact
with a company.
C. Market Size
Entrepreneur’s most critical task is to calculate the market size, and the potential value that market
has for their startup business. Market research will determine entrepreneur possible customers in
one locality.
LESSON 3 What is Market Size
Market size is like an arena where the entrepreneurs will play their business. Market size becomes
the most important if you ever need to raise funding for your business.
Market Research
DATA COLLECTION is the most valuable tool of any type of research study.
Inaccurate data collection may cause mistakes and ultimately lead to invalid results.
SURVEYS are the most common way to gather primary research with the use
of questionnaires or interview schedules. These can be done via direct mail, over the
phone, internet (e.g. Google) or email, face-to-face or on Web (e.g. Skype or Viber).
INTERVIEW is one of the most reliable and credible ways of getting relevant information from target
customers.• Personal interviews are the traditional method of conducting an interview. It allows
the researcher to establish relationships with potential participants and therefore gain their
cooperation. It generates the highest response rates in survey research. They also allow the
researcher to clarify indefinite answers and when necessary, seek follow-up information.
 • Telephone interviews are less expensive and less time consuming, but the disadvantages are
that the response rate is not as high as the face-to- face interview, but considerably higher than
the mailed questionnaire.

TYPES OF BUSINESS PLAN

1. FEASIBILTY STUDY- it is created to minimize risk and to ascertain the viability of a project.
-project summary which deals with the introductory statements of the problem.

FIVE MAJOR COMPONENTS OF FEASIBILITY STUDY

- Marketing Study – demands for the products
- Technical Study- Consider manufacturing process, plant size, production sched, machinery
- Management Study- involves on how the project shall be manage.
- Financial Study- the assessment of total capital requirements break even outputs, sales and
prices.
- Social Desirability -measured by economics benefits to people living in community.

2. Concept Paper- written plan for a business on how it will be manage.

Different Parts of the Concept Paper

- Introductions- discusses the significant details of the products and services.
- Objectives- gives the detail of the business both specific and general.
- Rationale- focuses on the advantages of putting a certain business.
- Terms and Conditions- specific agreement from particular to general things are clarified.
- Recommendations- it helps to improve the project in the future.

3. BUSINESS PLAN- a business plan describe the nature of the business, the sales and marketing
strategy, the financial background, containing projected profit loss and loss statement.

Components of Business Plan.

- The Environment -needs of the people in the community should be identified.
- Behavior of the project- know the Market Trends products demands in the community.
- Location of the business- consider the place where customers prefer to buy.
- Organizational plans- needed workers in the business must be listed in the organizational chart.
- Production plan- involves the manpower, money, machinery, materials and methods to be able to
produce the desire.

4. Project Proposal- initial documents that converts and ideas or policy into details of a potential project.

The Essential Parts of a Business Proposal.

- Executive summary- overview of the proposal from beginning to end.
- Justification- emphasizes the need of the proposal
- Procedure- the steps are being explained where to start and to end.
- Objectives- the goals or targets of the business are define.
- Project Organization and Management- the man power and function of each are clearly stated.
- Budget- determine the source for the input and output , the profits and loss of the business.

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"Remember, every exam is just a step toward your bright future. Good luck!"

Prepared by; Ms Glenda Cabio