ENTREPRENEURSHIP

ENTREPRENEUR

The term “entrepreneur” originates from the French word entreprende which means “to undertake.”
It connotes a business a business paradigm which signifies the start of a new business undertaking.

ENTREPRENEURSHIP

The term “entrepreneurship” comes from the entrepreneur. It refers to the art of observing correct
practices in managing and operating a self-owned wealth-creating business enterprise by providing goods and
services that are valuable to the customers.

ENTREPRENEURIAL CHARACTER TRAITS

Character Trait refers to the mark or attribute that distinguishes an entrepreneur from the owner of an
ordinary small business.

Based on the studies conducted by the Small Enterprise Research and Development Foundation
(SERDF) of the Department of Trade and Industry (DTI), there are ten entrepreneurial characteristics grouped
into three major clusters: Achievement, Planning and Power Cluster.

Achievement Cluster consists of entrepreneurial characteristics traits that are directly related to the
entrepreneur’s desire to be an achiever in the field of entrepreneurship like opportunity-seeker, committed,
persistent, risk-taker and efficient & quality-oriented.

Planning Cluster is a set of characteristics of successful entrepreneurs that basically supports the
character traits in the achievement cluster like goal-setter, information-seeker and systematic in planning &
monitoring.

Power Cluster includes a set of character traits that reflect the degree of the interpersonal relations
maintained by successful entrepreneurs in the community like persuasive & positive networker and self-
confident.

SKILLS AND CORE COMPETENCIES IN ENTREPRENEURSHIP

Cognitive Skills refer to the mental ability of the entrepreneur to learn new things, generate new ideas,
and express knowledge in both oral and written forms which includes ability to understand written materials,
ability to learn and apply new information, ability to solve problems systematically, ability to create new
ideas and ability to innovate new products and procedures or methods.

Technical Skills relate to the knowledge and proficiency in a specialized field or other related technical
fields which include proficiency and ability in the areas of information technology, feasibly study and
business plan preparation, technical writings skill, marketing and management & finance.

Interpersonal Skills are basically about the relationship and interaction of the entrepreneur with the
workers, suppliers, creditors, and other members of the members of the business community which includes
skills in verbal communication, skills in non-verbal communication, skills in listening, skills in in leading and
skills in negotiating.

Entrepreneurial Core Competency is a combination of entrepreneurial concepts and principles,

entrepreneurial character traits and entrepreneurial skills that provide and become the ultimate source of
competitive advantage of the entrepreneur.

JOB OPPORTUNITIES FOR ENTREPRENEURSHIP AS A CAREER

Start a New Business Concept

You come up with a new idea for an innovative business be it a new type of hamburger restaurant,
waste hauling service or web site. You figure out what resources are needed to launch it -- money, retail
space, equipment, employees -- and get started.
Buy a Franchise

Some who have a strong desire to own their own business and be their own boss choose to buy a
franchise. A franchise is defined as an agreement between a small business owner, the franchisee, and the
parent company, the franchiser. The parent company gives the franchisee the right to sell the company's
products and often provides support services like advertising and supplier relationships, in return for a
franchise fee and percent of the profits.

Buy an Existing Business

If there's no one innovative idea of your own that you think would make a good business, you might
consider buying an existing business. This offers the chance to start out with an established small business that
already has an income stream and a core set of customers.

Copy an Existing Concept

Find a great local business started by someone else. If there's nothing like it in your own community,
you can study it and transfer it to your community or to a place you want to live. You need to thoroughly do
your research and be sure that a "match" exists between the concept and demographics of where you choose
to locate the business. And of course, while you can copy a general idea, don't run the risk of a lawsuit -- or
worse -- by infringing on someone else's trademarks, copyrights, or other protected intellectual property.

Become a One Person Firm

You can subcontract your skills and become a one person consulting or services firm. You have the
advantage of being highly focused and can offer your clients lower costs, specialized services, and greater
flexibility than they would have if they tried to hire full-time employees with the same skills. A great many
professional, technical, and clerical specialists have chosen this career path. Companies find it easier and
cheaper to subcontract out work rather than hiring folks that they may have just laid off in their last round of
cost-cutting -- or may have to lay off next week or next year. It allows them to stay lean and flexible.

Start a "Work at Home" Business

This is one of the hottest areas in the economy today. Many small business ideas can be launched from
home. This can involve everything from stuffing envelopes to running an Ebay business or starting your own
web site.

HOW TO WRITE A BUSINESS PLAN

A business plan is a written description document that conveys your organization’s prospects and
growth potential of your business's future. That's all there is to it--a document that describes what you plan to
do and how you plan to do it.

It describes:

– You and your products and services.

– The market and your role in it.

Business plans can help perform a number of tasks for those who write and read them. They're used by
investment-seeking entrepreneurs to convey their vision to potential investors. They may also be used by
firms that are trying to attract key employees, prospect for new business, deal with suppliers or simply to
understand how to manage their companies better.

A business plan conveys your business goals, the strategies you'll use to meet them, potential problems
that may confront your business and ways to solve them, the organizational structure of your business
(including titles and responsibilities), and finally, the amount of capital required to finance your venture and
keep it going until it breaks even.

A good business plan follows generally accepted guidelines for both form and content. There are three
primary parts to a business plan:

 The first is the business concept, where you discuss the industry, your business structure, your
particular product or service, and how you plan to make your business a success.
  The second is the marketplace section, in which you describe and analyze potential customers: who
and where they are, what makes them buy and so on. Here, you also describe the competition and
how you'll position yourself to beat it.
 Finally, the financial section contains your income and cash flow statement, balance sheet and other
financial ratios, such as break-even analyses. This part may require help from your accountant and a
good spreadsheet software program.

Breaking these three major sections down even further, a business plan consists of seven key
components:

1. Executive Summary – presenting the overview of your business.

2. Business Details – provides short description, who you are, what to sell, why and to whom. Including
the location of your business, identify key employees and other qualities that makes your business
stand out.
3. Marketing and Sales Strategy – understanding your target market. Outline why you think people
would buy you want to sell and detail how you plan to sell to them.
4. Management and Personnel Team – believing and trusting in your management of your business.
5. Setup – explaining what facilities and other related matters the business will have.
6. Financial Plan and Projections – this part translates everything you said in the previous sections into
numbers
7. In addition to these sections, a business plan should also have a cover, title page, acknowledgments,
table of contents, list of tables and figures.

Top Ten Do's and Don'ts

THE TOP TEN DO'S

1. Prepare a complete business plan for any business you are considering.
2. Use the business plan templates furnished in each session.
3. Complete sections of your business plan as you proceed through the course.
4. Research (use search engines) to find business plans that are available on the Internet.
5. Package your business plan in an attractive kit as a selling tool.
6. Submit your business plan to experts in your intended business for their advice.
7. Spell out your strategies on how you intend to handle adversities.
8. Spell out the strengths and weaknesses of your management team.
9. Include a monthly one-year cash flow projection.
10. Freely and frequently modify your business plans to account for changing conditions.

THE TOP TEN DON'TS

1. Be optimistic (on the high side) in estimating future sales.

2. Be optimistic (on the low side) in estimating future costs.
3. Disregard or discount weaknesses in your plan. Spell them out.
4. Stress long-term projections. Better to focus on projections for your first year.
5. Depend entirely on the uniqueness of your business or the success of an invention.
6. Project yourself as someone you're not. Be brutally realistic.
7. Be everything to everybody. Highly focused specialists usually do best.
8. Proceed without adequate financial and accounting know-how.
9. Base your business plan on a wonderful concept. Test it first.
10. Pursue a business not substantiated by your business plan analysis.
Spotting and Actualizing Business Ideas and Opportunities

What is an opportunity?

• In a business sense, it is an idea that has commercial potential.

• Something you can make money with, develop a business around it, or create value with it.

JI WEI

We look first at the opportunity, and yes, recognize that there is danger.

THE ENTREPRENEURIAL MINDSET

 Opportunity Seeking - The ongoing process of considering, evaluating, and pursuing market-based
activities that are believed to be advantageous for the firm.
Entrepreneurs are innovative opportunity seekers. They have an insatiable curiosity to discover new or
different ideas that will work in the marketplace. This curious streak is what separates them from the
ordinary businessman whose obsession is, simply, to make a profit from producing, buying and selling
goods. A lot of wannabe businessmen set up shop to repeat what everybody else is doing but this is
not really entrepreneurship. It is just doing “business as usual.”
 Opportunity Screening - The process of evaluating which market offers the greatest opportunity.
You have looked at your surrounding environment. You have considered the trends in the market
place. You have an idea of what products or services people are looking for. You have familiarized
yourself with current and future advances in technology. At this point, you should already have a list of
possible opportunities and business proposals that you can take on as an entrepreneur.
 Opportunity Seizing – The process of thriving the business opportunities.
After screening several opportunities according to well-defined criteria, the next step for the
entrepreneur is to seize the chosen business opportunity. At one end, there are critical factors that
enable the entrepreneur to exploit the opportunity to the heights of success. On the other end, there
are critical factors that would drag down the opportunity to failure. Therefore, the entrepreneur must
determine exactly what critical factors cause business opportunities to succeed and what critical
factors cause it to fail.

MARKET ANALYSIS FOR A BUSINESS PLAN

A market is a group of potential customers who have similar needs and are willing to purchase goods or
services to satisfy those needs.
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the
market both in volume and in value, the various customer segments and buying patterns, the competition, and
the economic environment in terms of barriers to entry and regulation.
Market Need
Market need is where you show your potential investor that you have an intimate knowledge of your
market. You know why they buy!
Demographics Segmentation
Demographic segmentation is market segmentation according to age, race, religion, gender, family size,
ethnicity, income, and education.
Competition
The aim of this section is to give a fair view of who you are competing against. You need to explain your
competitors' positioning and describe their strengths and weaknesses.
Competition is the idea to analyse your competitor’s angle to the market in order to find a weakness
that your company will be able to use in its own market positioning.
One way to carry the analysis is to benchmark your competitor against each of the key drivers of
demand for your market (price, quality, add-on services, etc.) and present the results in a table.
Barriers to Entry

 Investment
 Technology
 Brand
 Regulation
 Access to resources
 Access to distribution channels
 Location

SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats

• The SWOT Analysis framework is a very important and useful tool to use in marketing management
and other business applications.
• As a basic tool its mastery is a fundamental requirement for the marketer, entrepreneur or business
person.
• A scan of the internal and external environment is an important part of the strategic planning process.
• Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W),
and those external to the firm can be classified as opportunities (O) or threats (T).
STRENGHTS

• A firm's strengths are its resources and capabilities that can be used for developing a competitive
advantage. Examples of such strengths include:
• Patents
• Strong brand names
• Good reputation among customers
• Cost advantages from proprietary know-how
• Exclusive access to natural resources
• Good access to distribution networks

WEAKNESSES

• The absence of certain strengths are a weakness. For example, the following may be considered
weaknesses:
• Lack of patent protection
• A weak brand name
• Poor reputation among customers
• High cost structure
• Lack of access to best natural resources
• Lack of access to key distribution channels
 OPPORTUNITIES

• The external environmental analysis may reveal certain new chances for profit and growth. Some
examples of such opportunities include:
• An unfulfilled customer need
• Arrival of new technologies
• Loosening of regulations
• Removal of international trade barriers

THREATS

• Changes in the external environmental also may present dangers to the firm. Some examples of such
threats include:
• shifts in consumer tastes away from the firm's products
• emergence of substitute products
• new regulations
• increased trade barriers

SWOT MATRIX

• S-O strategies pursue opportunities that fit well the company's strengths.
• W-O strategies overcome weaknesses to pursue opportunities.
• S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external
threats.
• W-T strategies make a defensive plan to prevent the firm's weaknesses from making it susceptible to
external threats.

Viability is defined as ability to survive. In a business sense, that ability to survive is ultimately linked to
financial performance and position.

Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business
generates after it pays all expenses directly related to the generation of the revenue, such as producing
a product, and other expenses related to the conduct of the business activities.

Revenue is the amount of money that a company actually receives during a specific period, including
discounts and deductions for returned merchandise. It is the top line or gross income figure form
which costs are subtracted to determine net income.

UNIQUE SELLING PROPOSITION AND VALUE PROPOSITION

A Unique Selling Proposition (USP) is that aspect that differentiates a product or service from
all other similar products or services. The “uniqueness” is in some way singular, exclusive, one-of-a-
kind. Factors to be consider in unique selling proposition: audience, problem and uniqueness.
A Value Proposition is a definitive expression or statement of the concrete outcome of using
your products and/or services. Ways to develop value proposition: testimony, statistics and language.

TARGET MARKET

A target market is defined as a specific group of potential buyers for which a business positions
its products and services. Or in simpler terms, it's the group of people who are the most likely buyers
of your products or services.
Targeting, or “segmenting” these people means you’ll be able to build your store for the right
audience, efficiently using your resources to impress and attract your potential customers.

MARKET RESEARCH

- is the collection and analysis information aimed at understanding the behavior of consumer
in a certain market.
- Important market information can only be obtained by conducting a good market research.
- The most common methods of gathering primary data about customers are interview,
docus grouped discussion, observation, field trials and survey.
 Basic Questions in Market Research

Why? – Purpose and objective for conducting the market research.

What? – Determines the scope and the limitations of the market research to be conducted.

Which? – Determines which segment of the market must be studied: this must be the market segment
that entrepreneur is eyeing.

Who? – Identifies who among the members of the selected market will participate in the market
research

When? – Determines the time and the timing of the research. This is critical for entrepreneurs whose
product or service will be offered to a time – constrained market such as office workers.

Where? – Pinpoints the relevant location of the market research.

How? – Determines the methodology to be used for the market research.

Interview

Interviews are often used in qualitative research in which firms try to understand how consumers think.

Focus Group Discussion

It is a form of qualitative research consisting of interviews in which a group of people are asked about their
perceptions, opinions, beliefs, and attitudes towards a product, service, concept, advertisement, idea, or
packaging.

Survey

A detailed study of a market or geographical area to gather data on attitudes, impressions, opinions,
satisfaction level, etc., by polling a section of the population.

Observation

The action or process of observing something or someone carefully in order to gain active acquisition of information
from a primary source.