HELE 5

Lesson 1 – The process of Entrepreneurship

To be an entrepreneur is to be in business, and to be in business means to earn money by
providing people with products and services that they need from day to day.

One of the first things you should remember when starting a business is to know the
entrepreneurial process.

1. Opportunities - a chance for progress or advancement.

2. Ownership- the act, state, or right of having or possessing something.
3. Products - anything that can be offered to a market that might satisfy a
want or need.
4. Profitable-resulting in or likely to result in a profit or an advantage.
5. Resilient able to become strong, healthy, or successful again after something bad happens.
6. Service - a means of delivering value to customers by facilitating outcomes and customers,
want to achieve without the ownership of specific costs and risks.
7. DTI – Department of Trade and Industry

Entrepreneurship is the ability to create things, invest in an enterprise, and expand through
additional new markets, products, and techniques to offer goods or services to a specific market
for the purpose of making a profit.

Entrepreneurial Process

When starting a new business, there is an entrepreneurial process that is often followed. An
entrepreneur must find, evaluate, and develop an opportunity by overcoming the forces that
resist the creation of something new. The entrepreneurial process consists of four steps:

1. Deciding to become an entrepreneur;

2. development of the business plan;
3. moving from an idea to an enterprise; and
4. management of the resulting enterprise.

Spotting and Identifying Business Opportunities

Spotting opportunities for business is one of the most important aspects of entrepreneurship. An
entrepreneur must be able to distinguish between opportunities that can potentially turn into a
good product or business venture from those that will not be lucrative. The following are factors
to consider when spotting and identifying business opportunities.

1. Markets (present or potential demand)

Markets refer to people, institutions, organizations, or agencies that will use or buy
products or avail services. Evaluation should also include the quantity of prospective customers,
the degree of competition, the quality of products/services, and the prices.

2. Individual special aptitude and interest

Would-be entrepreneurs have different business interests that match the opportunities.

3. Capital or available funds

This is the most important element in putting up a business. Capital must be suited to the
type of business needed to organize. Start a micro business with a capital of less than fifty
thousand pesos.
4. Skills/training/education/experience
Would-be entrepreneurs should be technically skillful in the type of business they plan to
put up and should not rely solely on the services of assistants or employees.

5. Suppliers of inputs
It is necessary to know what raw materials are abundant in the area to sustain needed
materials for the business to survive.

6. Manpower
Be sure to hire well-trained and efficient personnel/workers.

7. Technology
Products or services must continually be innovative to accommodate the changing trends
and tastes of customers.

Strengths, Weaknesses, Opportunities, and Threats (SWOT)

SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool one uses to

evaluate and explore a career and the possibilities needed to cater. It is a technique that allows
an individual to recognize and evaluate his/her strengths and weaknesses, as well as the
potential environment and market.

Strengths – These are the characteristics that make a business strong and resilient.
Weaknesses – These are the areas where the business is lacking and could be improved. These
make any businesses susceptible to negative market forces and aggressive competitors.
Opportunities – These are things with the potential to make the business stronger, more
enduring, and more profitable.
Threats – These are things with the potential to adversely affect your business.

Differences Between Products and Services

Goods are basically objects or products which have to be manufactured, stored,
transported, marketed, and sold. Services are outputs of individuals that can be a collective or
individualistic action or performance. A barber gives individual service, while airlines offer a
collective service.
Goods are tangible in nature, while services are defined by intangibility, heterogeneity,
perishability, and variability.

Additional characteristics that differentiate goods from services are the following:
1. Ownership is not transferred – When you buy a service, the service ownership is not
transferred to the end customer.

2. Intangibility – The time and effort gone for giving service to the customer are intangible.
Both ownership and intangibility are the main differences between goods and services.

3. Involvement of customer – Customer involvement is also considered when comparing

between goods and services. Customer involvement is more present in services than in
products.

4. Quality Product mass manufacturing means uniformity which may vary due to the
involvement of manual labor.

5. Evaluation of services is tougher as the service quality varies from time to time and customer
involvement is maximum, evaluation of different services becomes tougher.
Lesson 2 – Spotting Opportunities for Products and Services

Successful entrepreneurship is the result of following some processes that an entrepreneur must
know and do. It starts with spotting opportunities for products and services. Knowing the
difference between products and services will guide the entrepreneur in determining the needs
of the home and community. Selling products and services will be easier and profitable once the
community and household patronize the business. Know and learn the way to a successful
entrepreneurship.

Opportunity means the convenient time or a favorable occasion or circumstance. Business

opportunities are plentiful and convenient on special occasions and entrepreneurs must be able
to take advantage of these opportunities.

Products and Services

Products and services are needed to start a business. An entrepreneur has the choice in his/her
business venture to use either a product or a kind of service.

1. Products are tangible. They are also called goods. They can be seen, touched, smelled, and
even heard or tasted. The effect on the senses of products immediately influences customers.
Meanwhile, Services are intangible. They have to be experienced. You can only know how
well they were done after their completion. Customers depend on trust or by feedback from
other satisfied customers.

2. A Product is anything made or sourced which involves materials and labor while a Service is
the result or product of labor as distinguished from goods.

3. Products can be quantified, counted, and/or measured. You can buy products per piece or
gram (retail) or by bulk or volume (wholesale). Services charge certain fees based on time
(hourly, monthly, or fixed time) or upon completion of a project or activity.

4. Products and services are located either on a physical store like a shop, a stall, a kiosk, and
a counter; or virtual or online store like Amazon, OLX, Lazada, and Zalora. Physical store is the
traditional set up for products wherein two of their effective advertisements are displayed, as
well as the products arranged in the shelves or counters. Buying products online depends on the
pictures and the write-ups posted. Services are more flexible and mobile; a service provider can
do a house call or set an appointment based on customer's preference.

5. A Product can sell itself. It is usually packaged with labels. However, many similar products
but with different brands are placed next to each other. Entrepreneurs give promotional sales
such as Buy 1, Take 1 or discounts, freebies, or add-ons to compete with other brands. On the
other hand, Services are promoted by word of mouth, free trials, discounts, and by establishing
good relationships with patrons. Referral and networking are also effective promotional tactics
for service-based businesses.

Some entrepreneurs combine products and services in their business establishments. For
instance, in a restaurant business, the products are the meals and the service is the serving and
catering of food and attending to the needs of the diners. In another example, a beauty salon
primarily offers services such as hair styling, make up, and nail care. If the owner concocted
his/her own beauty products or consigned branded beauty products, he/she can instruct his/her
beauticians to promote them to the customers while they are being attended to.
Lesson 3: The Demand for Products and Services
The demand for products and services is influenced mainly by the basic needs of people.
Other factors include changes in business activities, trends in prices, and markets and potential
customers.
According to the Entrepreneur Philippines, the demand for products and services are
greatly influenced by the following factors:

Basic needs of people are essential for their survival. These include food, water, shelter,
clothing, transportation, medicine, and education. Products and services catering to this
category are always in demand. Should there be problems in their supply, people will find ways
to get them.

When needs are satisfied, Want becomes predominant. People search for products that are
interesting and pleasurable. These include books, music, smartphones, movies, facials, Internet
connection, and a lot more.

Most of the entrepreneurs focus on want category that they even create them because people are
willing to pay to experience them. Read the following case study:

Changes taking place in business. These are caused by government regulations, customer's
preferences, and activities of competing businesses. Read the following case:
Trends in the prices of basic commodities. The prices of basic commodities affect the cost of
making the product.

Target markets and potential customers. Markets for entrepreneurship include Mass
Market or the general public and the Luxury Market catering to the desires and cravings of
customers or buyers of the products and services. Potential customers in the luxury markets are
the youth, senior citizens, and overseas Filipino workers (OFW).