Entrepreneurship

- Business  An innovator, a source of new ideas,

goods, services, and business/or
- if the business come from a unique idea procedures.
it is entrepreneurship.  Playing a key role in any economy,
- is one of the resources economists using the skills and initiative
categorize as integral to production; necessary to anticipate needs and
bring good new ideas to market.
 The Three Resources are:
- Land Note: Understanding what an
- Labor, and entrepreneur is can help more people
- Capital recognize the value they contribute to the
world.
Economy – production and consumption
Common Elements of Entrepreneurship
 An entrepreneur combine these three (Edralin, D. M., 2016)
to manufacture goods or provide
 Innovation
services.
 Opportunity seeking and
 They typically create a business, hire
exploitation
labor, acquire resources and
 Resource mobilizing
financing, and provide leadership
 Encountering risks and uncertainties
and management for the business
 Economic and personal rewards
Entrepreneurship is...
Roles of Entrepreneurship and
 The act of creating a business or Entrepreneurs in Economic Development
businesses while building and and Society
scaling it to generate a profit.
(Edralin, D. M, 2016):
 An important driver of economic
growth and innovation. o Creates employment
 What people do to take their career o Develops new markets
and dreams into their hands and lead o Introduces innovation
it in the direction of their own o Generates new sources of materials
choice. o Stimulates investment interest in the
 About building a life on your own new business ventures being created
terms. No bosses. No schedules. And o Improves the quality of life
no one holds you back. o Serves as role models
An entrepreneur is... o Brings social benefits to the people
o Utilizes and mobilizes indigenous
 A person who sets up a business resources
with the aim to make a profit and o Provides more alternatives for
creates a new business, bearing most consumers
of the risks and enjoying most of the
rewards. Three levels of competencies, which all
entrepreneurs need:
1. Personal competencies - These are entrepreneur possesses, which are
your abilities to ground yourself so that necessary to effectively perform
you are secure and self- assured in their functions and responsibilities
whatever situation you may find yourself.
Entrepreneurial competencies
Ex. creativity, determination, integrity, facilitate:
self-criticism.
➤opportunity recognition,
2. Interpersonal competencies - These are
your ability to lead, influence, ➤help adapt rapidly to changes,
communicate, supervise, negotiate, and
control people at all levels. It is the ability ➤enhances business performance,
to get along with people and motivate
people to perform jobs. Entrepreneurs ➤ strengthen the firm's competitive
must effectively manage people. position and stir the achievement of
organizational success.
Ex. communication, engagement,
delegation Examples of Core and Common
Competencies in Entrepreneurship
3. Business competencies -These are set
of particular abilities and knowledge that Core Competencies:
sets a company apart from its
competitors. It also refers to the key 1. Organizing and Planning
characteristics that successful
2. Cash Bow management
entrepreneurs should have in order to be
successful. 3. Personnel management
Ex. business vision, financial 4. Operations and distribution
management, networking.
5. Customer Relations
Core vs. Common Competencies in
Entrepreneurship 6. Bookkeeping/Accounting

 Competencies in entrepreneurship 7. Premotions and Advertising

play a leading role in making
8. Resources Management
entrepreneurs successful
 Core competence is the foundation 9. Financial Management
for sharpening a company's
competitive edge and it guides brand 10. Information Management
reputation, business growth, and
marketing strategy Common Competencies:
 Common competence is one that 1. Analytical and critical thinking
describes the knowledge, skills and
abilities found in most or all 2. Decision making
position.
 Entrepreneurial competencies it is 3. Leadership
the sum total of the personality,
4. Communication
skills and knowledge that the
5. Computer Literacy 4. Recognition and Status

6. Human Relations 5. Family

7. Managing Change 6. Dissatisfaction with Current Work

Arrangements
8. Creative Thinking
7. Community and Social Motivation
9. Time Management
Ways to spot an opportunity
10. Conflict Management
A vast number of ways can be used for an
Entrepreneurship Career
entrepreneur to spot, analyze and act on
Opportunities for the Academic Track
an opportunity.
o Business Consultant • Different articles, websites, videos and
o Sales books will suggest these various ways.
o Research and development An entrepreneur may use the following
o Not-for-profit fundraiser three steps to spot and act on an
o Teacher opportunity.
o Talent recruiter
• (1) The first step is to recognise an
o Business reporter
opportunity which can be known as
o New venture creation
opportunity seeking.
o Career in existing entrepreneurial
ventures • (2) The second step is to analyze the
opportunity found which can be known as
Job Opportunities for opportunity screening.
Entrepreneurship as a Career
• (3) The final step is to act on the
• If you're an aspiring entrepreneur, there opportunity which can be known as
are different career paths you can take to opportunity seizing.
turn your dream into a reality. Which path
choose will depend on your experience, • These steps should not be taken for
skills, finances, and flexibility, as well as granted as they are not as simple as they
your goals for the future Career may seem. If these steps are followed
opportunities you might pursue according carefully the likelihood of success in a
to Michalowicz (2011) as cited. project is much higher.

Reasons why many would like to • Is Unique Selling Proposition (USP) and
become an entrepreneur: Value Proposition (VP)? This part allows
the entrepreneur to prepare himself on
1. Achievement, Challenge, & Learning how to advertise and sell his product even
if it is similar to others.
2. Independence & Autonomy - you can
set your own goals, pick their own Value Proposition (VP)
partners, and face the consequences of
your decisions. - is a business or marketing statement
that summarizes why a consumer should
3. Income Security and Financial Success buy a company's product or use its
service. This statement is often used to •The two propositions are used to
convince a customer to purchase a differentiate the products from
particular product or service to add a competitors.
form of value to their lives
• For example, Jollibee is known to have
In creating Value Proposition, a Filipino taste burger. This brand has a
entrepreneurs will consider the basic unique selling point because of its tagline
elements: "Langhap Sarap"

- Target Customer •Unique Selling Proposition and Value

Proposition are two of the most famous
- Needs/opportunity tools used to explain why prospect
customers buy each product and service.
- Name of the product
Base on each definition, we learn that
- Name of the enterprise/company USP and VP are frameworks of each
business industry.
Unique Selling Proposition (USP)
• The two propositions are valuable for
- refers to how you sell your product or the entrepreneurs. Make sure that you're
services to your customer. You will focusing on a solution that is a need, and
address the wants and desires of your make sure that you are targeting a
customers. customer segment that's large enough and
cares enough about your solution so that
• As an entrepreneur, you should think of you can build a viable business.
marketing concepts that persuade your
target customers. You may ask the 4 Aspects of Entrepreneurial Process
following questions in doing this:
1. OPPORTUNITY SPOTTING AND
• What do the customers want? ASSESSMENT
• What brand does well? • CONSUMERS- are reliable sources of
opportunity Information because market
• What does your competitor sell well?
needs originate from them.
Some for the entrepreneur on how to
• MAJOR SOURCES OF
create an effective unique selling
OPPORTUNITY- glaring problems in the
proposition to the target customers are:
environment, problems encountered by
• Identify and rank the uniqueness of the co-entrepreneurs, new trends, and
product or services character developments in the environment.

• Be very Specific 2. DEVELOPING A BUSINESS PLAN

•Keep it Short and Simple (KISS) - BUSINESS PLAN- a comprehensive

paper that details the marketing,
•Readers get confused between value operational, human resource, financial,
proposition and unique selling strategic direction and tactics of the
proposition. business. This will be the core guide and
direction of the entrepreneur in
calculating the resources needed,
assessing how to obtain these resources e. Education
efficiently, and running the business
sustainably. f. Religion

3. DETEMINING THE CAPITAL g. Ethnic group

NEEDED
h. Family size
4. RUNNING THE BUSINESS
3. Psychological Segmentation-divided in
terms of how customers think and believe

In targeting a specific market Variables to consider

• Target marketing allows you to focus a Needs and wants

your marketing money and brand
b. Attitudes
message on a specific market that is more
likely to buy from you than other c. Social class
markets. Choose a product that is more
affordable, efficient, and effective to d. Personality traits
reach potential clients and generate
e. Knowledge and awareness
business.
f. Brand concept
Commonly used methods for
segmenting the markets are follows: g. Lifestyle
1. Geographic segmentation - the total 4. Behavioral Segmentation - divided
market is divided according to according to customers' behavior pattern
geographical location. as they interact with a company.
Variables to consider Variables to consider
a. Climate a. Perceptions
b. Dominant group b. Knowledge
c. Culture c. Reaction
d. Density (either rural or urban d. Benefits
2. Demographic Segmentation-divided e. Loyalty
based on consumers
f. Responses
Variables to consider
B. Customer Requirements
a. Gender
• Customer requirements are the specific
b. Age characteristics that the customers need
from a product or a service.
c. Income
There can be two types of customer
d. Occupation
requirements:
1. Service Requirement Target Market - refers to a group of
potential customers to whom a company
2. Output Requirement wants to sell its products and services.
Target markets are generally categorized
Output Requirements:
by age, location, income, and lifestyle
- Tangible thing or things that can be (Kenton, W., 2019).
seen. Characteristic specifications that a
Penetrated Market - is a set of customers
consumer expects to be fulfilled in the
or clients who are already using a
product. Costumers will avail services as
particular product or service.
a product, then various service
requirements can take the form of output Need - is a motivating force that compels
requirements. action for its satisfaction. Needs range
from basic survival needs (common to all
C. Market Size
human beings) satisfied by necessities, to
• The entrepreneur's most critical task is cultural, intellectual, and social needs
to calculate the market size, and the (varying from place to place and age
potential value that market has for their group to age group) satisfied by
start-up business. necessaries.

• Market research will determine the A Market - is a place where two parties
entrepreneurs' possible customers in one can gather to facilitate the exchange of
locality. goods and services

What is Market Size? Existing customers - are people who have

already purchased your product.
• Market size is like a size of the arena
where the entrepreneurs will play their Prospects - are people who have not yet
business. It is the approximate number of purchased your product but are
sellers and buyers in a particular market. considering it.

In determining the market size, the Market - A is a place where two parties
entrepreneur will conduct a strategic can gather to facilitate the exchange of
marketing research from reliable sources goods and services.
using the following method:
Target market users - are people in your
• The first step is to the potential market - target market who are not currently
approximate number of customers that looking for a solution.
will buy the product or avail your
The size of a potential market
services.
- helps a company understand the level of
Potential market - is the part of the total
investment it should make further in the
population that has shown some level of
market, while taking into consideration
interest in buying a particular product or
other factors.
service. Potential market is also called
Total addressable market (TAM) (MBA Concepts about Product and Service
Skool Team, 2018).
A product 1. Correctly identifying customers' needs
is essential for ensuring customer
• can be defined as anything that we can satisfaction and loyalty.
offer to a market for attention,
acquisition, use or consumption that 2. Customers have unique needs.
could satisfy a need or want.
3. Often, customers either aren't clear
• broad definition of product includes about what they need or they don't really
services, events, persons, places, know what they want.
organizations or even ideas
4. Identifying clients' needs creates
Services satisfied customers, and satisfied
customers are less likely to have reason to
• are special form of product which enter into disputes with the organization
consists of activities, benefits or or contemplate legal action.
satisfactions offered for sale that are
intangible and do not result in the • Innovation comes from identifying
ownership of anything customers' needs and providing solutions
that meet those needs.
• A service can thus include banking,
airline travel, communication services,
hotel services and so on.

Concepts about Product and Service

Key Points:
• A product is a tangible item that is put
1. To ensure customer satisfaction,
on the market for acquisition, attention, or
entrepreneurs must correctly identify
consumption, while a service is an
customers needs.
intangible item, which arises from the
output of one or more individuals. 2. To identify needs, entrepreneurs must
both listen and ask the right questions
Identifying and Meeting Customer
Needs 3. After Identifying needs, always check
for additional or related needs.
• Customer needs are the named and
unnamed needs of customers when they 4. As an entrepreneur, use your
come in contact with the different knowledge and experience to identify and
business establishments or when they present the right products, services, and
search for the solutions which businesses solutions to meet your customers' needs.
provide.
How to Meet the Needs of Customers
• superior customer service means
meeting customers' needs by providing 1. Identify what the customers need
them with the products and services they through keyword research, focus groups,
want or by providing effective solutions or social listening.
to their problems
2. Distribute the information to relevant
"Identifying Customer Needs" Matters stakeholders in the organization.
3. Craft product features or create content face-to-face or on the Web (e.g. Skype or
that speaks to the customer's needs. Viber).

4. Collect customer feedback in order to INTERVIEW - is one of the most reliable

meet their expectations. and credible ways of getting relevant
information from target customers. It is
Market Research or Marketing typically done in person between the
Research Process can be defined as... researcher/entrepreneur and a respondent
where the researcher asks pertinent
- the process of gathering, analyzing and
questions that will give significant pieces
interpreting the information about the
of information about the problem that he
products or the services to be offered for
will solve.
sale to the potential consumers in the
market (De Guzman, 2018, p. 25) • Interviews normally last from 15 to 40
minutes, but they can last longer,
DATA COLLECTION - is the most
depending on the participants' interest in
valuable tool in any type of research
the topic. In a structured interview, the
study. Inaccurate data collection may
researcher asks a standard set of questions
cause mistakes and ultimately lead to
and nothing more. (Leedy & Ormrod,
invalid results. (Edralin, 2016, p. 80)
2001, pp.38-39
TIPS in COLLECTING DATA
Personal interviews - are the traditional
method of conducting an interview It
• Organize collected data as soon as it is
allows the researcher to establish
available
relationship with potential participants
• Know what message you want to get and therefore gain their cooperation. It
across and then collect data that is generates highest response rates in survey
relevant to the message research. They also allow the researcher
to clarify indefinite answers and when
• Collect more data necessary, seek follow-up information.
(Leedy & Ormrod, 2001, pp.39)
• Create more data
Telephone interviews - are less expensive
• Take note of interesting or significant
and less time- consuming, but the
data
disadvantages are that the response rate is
In this lesson, we will consider not as high as the face-to-face interview,
the three different data collection but considerably higher than the mailed
techniques - SURVEY (Questionnaire), questionnaire...
INTERVIEW and FOCUS GROUP
FOCUS GROUP DISCUSSION (FGD)-
DISCUSSION and evaluate their
is an excellent method for generating and
suitability under different circumstances
screening ideas and concepts. It can be
SURVEYS - are the most common way moderated group interviews and
to gather primary research with the use of brainstorming sessions that provide
questionnaires or interview schedule. information on user's needs and
These can be done via direct mail, over behaviors.
the phone, internet (e.g. Google) or email,
The following are considerations in the programs to motion the enterprise to
use of focus group discussions in profitability.
market research:
2. Manpower or human resource - refers
• The length of the session is between 90 to the people who work for the business
and 120 minutes and the entrepreneur.

• Conduct focus groups discussion with 8 3. Management must capitalize in the use
to 10 participants per group of new technology - As it helps in easing
work for employees, speeds up work,
• Assign an expert moderator/facilitator increase productivity, improves quality of
who can manage group dynamic products or service better.
Developing a Business Plan: Screening Things Test-Check Business Viability of
Proposed Solutions New Venture Ideas Question to ponder:
How viable is my business?
Screening solutions based on
viability, profitability & customer 1. Uniqueness
requirements
2. Financing the venture
What is viability?
3. Customer
Viability is defined as the
ability to survive or persist; the quality 4. Competition
of being able to happen or having a
reasonable chance of success. 5. Economic Mood

It also refers to the practical 6. Timing

potential of start-up business idea to
7. Marketing goods and services
survive and grow in the marketplace.
Viability of the business is likewise 8. Continuing cash flow
measured by its long-term survival and its
ability to sustain profits and continue 9. Basic feasibility
doing business over a period of time.

Entrepreneurs must give serious

1. Uniqueness
considerations based on viability in the
following areas: - How do you stand out from others? It
doesn't necessarily mean you have to
1. Objectives
invent or create an entirely new idea for
2. Manpower or human resource 3. your target market but, it should be
Management must be capitalize in the use advantageously different and stand out
of technology from your competitors.

1. Objectives - or goals of the business 2. Financing the venture

serves as its direction. It must be clearly
- How much would you need to finance
set by the management in its Mission and
your new venture? You need to make
Vision as a guiding tool for its plans and
realistic estimation and know where to
obtain your budget. Have a good finance - How can I do better than my
understanding. The amount needed competitors? It is more expected than
could be from you own money, loan, or not that you have competitors in the
from a willing investor. market offering the same. Competitors
can be a great resource to you as an
Sources of Capital/Funds for the business upstart; you can see how much they
charge, what marketing strategy they
1. Internal source
use and the location they choose.
a. Savings and assets (personal
5. Economic Mood
properties) of a starting entrepreneur
- Where are consumers' mind right now?
b. Sources from internal operation
What are the concerns that affect their
(business revenue)
spending behavior? Your business'
c. Short-term sources of debt financing success can greatly depend on economic
(banks, investment/lending institutions) mood. Gauge the state of the economic
environment and think of how it relates to
2. External source your new business venture. Are
consumers cutting expenses or
a. Long-term sources of debt financing spending more?
b. Bank loans 6. Timing.

- Is your business seasonal or not? If you

expect your business to be seasonal, time
to open your business at the strongest
3. Other sources consumer demand.

a. Partners' contribution for partnership 7. Marketing of goods and services.

organization
- What is your marketing strategy? In
b. Stock options for Corporations/equity step three you identified your customer.
financing At this point develop a marketing
strategy for your potential buyers for
c. Liquidation of assets them to know about your great new
business and on how to buy them.
3. Customer
8. Continuing Cash Flow.
- Who's going to buy? Knowing who
will be buying your product or service is - Do you have a proper financial plan?
important for your business success Before you open up shop, prepare a
because you would know where to find detailed financial plan. This is in
them. Who are your customers? Define preparation if the business will already be
your customers whether they are booming and more supplies and costs
students, busy professionals, mothers, will be needed to keep with the
teenagers, etc. demand.
4. Competition. 9. Basic Feasibility.
- Is it legal? Can the product or service Payback period = Initial
work? There are legal requirements that Investment/Capital
needs to be complied for opening a
business. Make sure that your business Profit
idea will not violate government
requirements and proper documents can
be legally obtained. Formula:

ROI = Net Income or Profit

Cost of Investment or Capital

Screening solutions based on viability,
profitability & customer requirements
Formula:
Profitability is a business'
ability to gain profit from its business Operating Profit = Net Sales -Operating
activities and investment. Though profit Expense
is closely related to profitability, the latter
Return on Sales = Operating Profit Net
is but, a measurement of business
Sales X 100%
efficiency - and ultimately it's success
or failure. A further definition of
profitability is a business's ability to
produce a return on an investment based Return on sales (ROS) also called as Net
on its resources. Profit Margin measures the overall
operating results of an entity. The
Return on Investment (ROI) also called measure considers all income recognized
Return on Assets is a performance and all expenses incurred during the
measure used to evaluate the efficiency of period. Return on Sales is a financial
an investment or compare the efficiency ratio that shows how efficiently a
of a number of different investments. ROI company is able to generate operating
tries to directly measure the amount of profit from its revenue.
return on a particular investment,
relative to the investment's cost. To Profit is what is left of the
calculate ROI, the benefit (or return) of business income or sales after it pays all
an investment is divided by the cost of the expenses. Directly related expense to
investment. The result is expressed as a revenue include wages, expenses in
percentage or a ratio. producing a product, operating expenses,
debt-reduction payments and other
To measure profitability expenses related to the conduct of the
business activities.
Payback period refers to the allotted time,
usually number of years that an Profit = Revenue or Sales - Expenses
investment is recovered. Simply put, the
payback period is the length of time an what if there is no profit? nor loss after
investment reaches a break-even point. deducting the expenses from revenue?
Break- even happens when there is no It consists of elements like:
profit nor loss after deducting expenses
from revenue. - on- time delivery,

Profit = Expense - service with a smile,

Formula: - easy payment etc. It encompasses all

aspects of how a customer expects to be
Operating Profit Net Sales-Operating treated while purchasing a product and
Expense how

Return on Sales

Operating Profit Net Sales X 100% 2 TYPES OF CUSTOMER

REQUIREMENTS

1. Service Requirement
What is Figure of Speech?
2. Output Requirement
A figure of speech is a rhetorical device
or language feature that involves the use SERVICE REQUIREMENT
of words in a way that deviates from
their conventional or literal meanings to - It encompasses all aspects of how a
create a more expressive, vivid, or customer expects to be treated while
imaginative effect. purchasing a product and how smooth his
buying process goes.
There are various types of figures of
speech, including: OUTPUT REQUIREMENT

Simile: A comparison between two - These are mostly the tangible

unlike things using "like" or "as." For characteristics, features or specifications
example, "as brave as a lion" or "like a that a consumer expects to be fulfilled in
bolt of lightning." the product.

Metaphor: A direct comparison It is important that as customer we set

between two unrelated things, stating requirements because it motivates the
that one thing another. For instance, customer to buy the product or service.
"time is a thief" or "the world is a stage." You will be convince to buy the
product or avail the service.
Customer Requirement refers to
characteristics or specifications that How are you going to convince your
should be present in a product for it to customer to buy your product/service?
be deemed desirable by the consumer.
How are you going to convince your
customer

SERVICE REQUIREMENT 1. Provide clear and detailed description

of your product.
- Intangible aspects of purchasing a
product that a customer expects to be 2. Mention concrete examples Of the
fulfilled. benefit of your product
3. Emphasize unique qualities of your  It gives you an opportunity to make
product or service right changes if there is a problem
and the right time to improve upon
1. Provide a little of more than of what is the customer and meet their needs.
expected.  Because excellent customer service
is a sure way to exceed customer
Three levels of customer requirements:
expectation as it creates loyal
1. Must Haves customers for life.

2. Satisfiers

3. Delighters

Must Haves

- These are the bare minimum

requirements expected by the customers;
if fulfilled customers will be not show
any exceptional appreciation but if not
fulfilled, the customer will show
dissatisfaction.

Satisfiers

- There are the requirements that

customers express their desire for,
explicitly. If you offer better or more of
these satisfiers, then the customers will
appreciate it more and will be more
satisfied.

Delighters

- These are the extras or the add-ons.

Absence of these will not leave the
customer dissatisfied; in fact, the absence
of these characteristics might not even be
noticed. But adding these would increase
the customer's satisfaction greatly and
will leave them delighted. For ex, you
order a-la-carte in a restaurant and get
complimentary wine.

As a business owner, why do we need to

understand and be aware of the
requirement/s of our customers?