GEED 20013 Entrepreneurial Mindset

Republic of the Philippines
Polytechnic University of the Philippines

Office of the Vice President for Academic Affairs
COLLEGE OF BUSINESS ADMINISTRATION
Department of Entrepreneurship
Sta. Mesa Manila
INSTRUCTIONAL MATERIAL FOR

GEED 20013:
ENTREPRENEURIAL MINDSET
Compiled by:
Prof. Mark Christian Catapang
PUP A. Mabini Campus, Anonas Street, Sta. Mesa, Manila 1016

Direct Line: 335-1730 | Trunk Line: 335-1787 or 335-1777 local 000
Website: www.pup.edu.ph | Email: inquire@pup.edu.ph
THE COUNTRY’S 1st POLYTECHNIC

TABLE OF CONTENTS
Page Number
Overview 3
Module Objectives 3
Grading System 3
Course Materials
Topic 1 Empowering Entrepreneurs 4
Topic 2 Transforming Entrepreneurial Concepts 15
Topic 3 Entrepreneurial Opportunities 27
Topic 4 Goal Settings 38
Topic 5 Learning Strategies 43
Topic 6 Creating Sustainable Wealth 50
Topic 7 Building a Sustainable Brand 55
Topic 8 Networking 58
Assessments 61
References 69
Entrepreneurial Mindset | GEED 20013 2

 OVERVIEW
There is no precise formula that guarantees success when it comes to entrepreneurship

education and training, however, there is a common thread—that a mindset guides the decisions
enabling entrepreneurs to succeed. For this course, the term “entrepreneurial mindset” is defined
as the underlying beliefs and assumptions that drive the behavior enabling entrepreneurs to
succeed. This course also takes the approach that anyone (not just those who want to start
businesses or enterprises) can benefit from understanding and applying an entrepreneurial
mindset to any situation that demands a change in their life. This course is designed to immerse
students in learning about the fundamental aspects of an entrepreneurial mindset and the
unlimited opportunities it can provide. students then will take that knowledge and apply it to the
creation, implementation, and evaluation of a self-directed project with a topic of their choosing.
 MODULE OBJECTIVES
After the completion of this module, you should be able to:

• use critical thinking skills to identify and evaluate entrepreneurial opportunities, manage
risks, and learn from the results of evaluating that process;
• know the process that enables entrepreneurs with limited resources to transform a simple
idea into a sustainable success;
• cognize and apply fundamental aspects of entrepreneurial thinking across disciplines and
as a means of personal development;
• establish goals, identify resources, and determine the steps required to address those
goals; and
• use critical inquiry skills to identify, interview and generally build relationships with local
innovators, entrepreneurs, and other community leaders.
 GRADING SYSTEM
Upon the completion of this module, you will be evaluated based on the following grading
system:
Class Standing 70%

• Quizzes
• Projects
• Assignments
• Seatwork
Midterm/Final Examinations 30%
TOTAL 100%
Midterm Grade + Final Term Grade

= 𝐅𝐈𝐍𝐀𝐋 𝐆𝐑𝐀𝐃𝐄
2

 COURSE MATERIALS
TOPIC 1: EMPOWERING ENTREPRENEURS
At the end of this lesson, you should be able to:

• examine beliefs and assumptions that empower entrepreneurs; and
• analyze circumstances surrounding entrepreneurial successes and failures.
ENTREPRENEURIAL MINDSET
Entrepreneurial mindset, as defined by Hisrich, Peters, and Shepherd (2017), involves

the ability to rapidly sense, act, and mobilize, even under uncertain conditions. Additionally,
Bosman and Fernhaber (2018) defined entrepreneurial mindset as the inclination to discover,
evaluate, and exploit opportunities. Lastly, H. Neck, C. Neck, and Murray (2017) defined
entrepreneurial mindset is the ability to quickly sense, act, and get the organized under uncertain
conditions.
Venturelab.org specified some entrepreneurial mindset in relation to the traits of the

entrepreneurs.
1. Curiosity. Entrepreneurs always ask “what if” and “why” and seek new and creative ways of
learning and doing.
2. Growth Mindset. Entrepreneurs recognize their potential for learning and achieving anything
and the power to stretch their brains and sharpen their minds.
3. Courage. Entrepreneurs dare to step out their comfort zone/s to accomplish great things.
4. Persistence and Grit. Entrepreneurs learn to work through failure to create solutions for the
problems they are passionate about.
5. Opportunity-seeking. Entrepreneurs actively observe, identify, and act on circumstances

where they can innovate or solve a problem.
6. Problem-solving. Entrepreneurs proactively develop creative solutions to the problems

around them.
7. Redefining Failure. Entrepreneurs see failure as a learning opportunity and a launchpad for
their next success or discovery.
8. Optimism. Entrepreneurs need to be confident in their ability to innovate and in their potential
for making an impact.
9. Resourcefulness. Entrepreneurs develop quick and clever ways to overcome challenges.
10. Adaptability. Entrepreneurs make smart changes when challenges arise without losing heart
or giving up.

11. Empathy. Entrepreneurs think about other people’s needs and feelings and keeping these
in mind when solving a problem.
ENTREPRENEURIAL SKILLSET
Entrepreneurs, with an entrepreneurial mindset, are halfway there to bring their innovative
ideas to life. In addition to this, entrepreneurs need to learn the practical tools or skills that
successful entrepreneurs have.
1. Creativity. Being creative, to entrepreneurs, means being bold and imaginative and not
limiting their thinking to what is already been done.
2. Teamwork. It is rare for someone to accomplish great things by themselves. Entrepreneurs

seek out teams with diverse perspectives, skills, and talents.
3. Idea Generation. The key to innovation is to let the mind spread its wings and fly. The more
ideas the better. Wildly and silly ideas are also welcome.
4. Opportunity Analysis. Entrepreneurs look for and analyze different patterns and trends to
see if an idea will be successful and if it is the right time to get started.
5. Market Research and Customer Validation. It is important to gather information about the
potential clients or customers. Entrepreneurs turn the customers idea into something that
they will want.
6. Design Thinking. To develop effective solutions, entrepreneurs need to put the user first and
seek out feedback to design with users in mind.
7. Prototyping. Entrepreneurs create prototypes – simple models to explain their idea, get
feedback, and learn how their product can be improved.
8. Business Model Methodology. Business models helps answer questions like:

• What will it cost to make your product?
• What should you charge?
9. Pitching. It is critical to rally the entrepreneur’s idea to people. Effective pitches to potential
users and investors are clear, short, and persuasive.
10. Public Speaking. When the entrepreneur has opportunities to speak about his/her idea,
he/she want to do so as effective as possible.
METACOGNITION
Many successful entrepreneurs appear to be very smart – but rather than being born with
high intelligence, it is often the way they use their intelligence that counts. Cognitive strategies
are the ways in which people solve problems such as reasoning, analyzing, experimenting, etc.
The entrepreneurial mindset involves employing numerous cognitive strategies to identify
opportunities, consider alternative options, and take action. Because working in uncertain
environments “goes with the territory” in entrepreneurship, the entrepreneurial mindset requires

constant thinking and rethinking, adaptability, and self-regulation – the capacity to control our
emotions and impulses.
Metacognition is the way in which to understand one’s performance or the process of

thinking about thinking. Entrepreneurs are regularly engaged in metacognitive processes to adapt
to changing circumstances by thinking about alternative routes to take and choosing one or more
strategies based on these options. Metacognitive awareness is part of the mindset, and it is not
something that we are both with. It can be developed over time through continuous practice.
What do I
What
How already How much
What is strategy
motivated know time will it
my goal? works
am I? about take?
best?
this?
PASSION AND ENTREPRENEURSHIP
Among many elements of the entrepreneurial mindset, one of the most talked-about is the
element of passion. The entrepreneurial mindset is about understanding yourself, who you are,
and how you view the world. It deeply connects to your desired impact which some people equate
to passion.
Passion is an intense positive emotion, which is usually related to entrepreneurs who are
engaged in meaningful ventures, or tasks and activities, and which has the effect of motivating
and stimulating entrepreneurs to overcome obstacles and remain focused on their goals. This
type of passion is aroused by the pleasure of engaging in the activities we enjoy. Research has
found that passion can also enhance mental activity and provide meaning to everyday work, as
well as fostering creativity and recognition of new patterns that are critical in opportunity
exploitation in uncertain and risky environments.
Passion has also been associated with a wide range of positive effects, such as strength
and courage, motivation, energy, drive, tenacity, strong initiative, resilience, love, pride, pleasure,
enthusiasm, and joy, all of which can occur as part of the process of entrepreneurship. However,
there can also be a dysfunctional side of passion. It is possible to become blinded by passion
and so obsessed with an idea or new venture that we fail to heed the warning signs or refuse to
listen to negative information or feedback. This type of negative passion can curb business
growth and limit the ability to creatively solve problems.
ENTREPRENEURSHIP AS A HABIT
Mindset is not a predisposed condition. Anyone can develop a more entrepreneurial

mindset. The question is how?
A good approach is to consider developing new habits. A habit is a sometimes-

unconscious pattern of behavior that is carried out often and regularly. Good habits can be
learned through a habit loop. The habit loop is a process by which our brain decides whether a

certain behavior should be stored and repeated. There are three habits that need to be cultivated
for an entrepreneurial mindset: the self-leadership, creativity, and improvisation.
Self-Leadership Habit
In the entrepreneurship context, self-leadership is a process whereby people can

influence and control their behavior, actions, and thinking to achieve the self-direction and self-
motivation necessary to build their entrepreneurial business ventures. Entrepreneurship requires
a deep understanding of self and an ability to motivate oneself to act. It consists of three main
strategies: behavior-focused strategies; natural reward strategies; and constructive thought
pattern strategies.
1. Behavior-focused Strategies helps increase self-awareness to manage behaviors

particularly when dealing with necessary but unpleasant tasks. These strategies include self-
observation, self-goal setting, self-reward, self-punishment, and self-cueing.
• Self-observation raises one’s awareness of how, when, and why we behave the way
he/she do in certain circumstances. This is the first step toward addressing unhelpful or
unproductive behaviors to devise ways of altering them to enhance performance.
• Self-goal setting is the process of setting individual goals for ourselves. This is especially
effective when it is accompanied by self-reward.
• Self-reward is the ways in which an individual compensate himself/herself achieve their
goals. These rewards can be tangible or intangible. Setting rewards is a powerful way of
motivating somebody to accomplish his/her goals.
• Self-punishment or self-correcting feedback is a process that allows an individual to
examine his/her own behaviors in a constructive way to reshape these behaviors. Yet,
many people have the tendency to beat themselves up over perceived mistakes or
failures; indeed, excessive self-punishment involving guilt and self-criticism can be very
harmful to their performance.
• Self-cuing is the process of prompting that act as a reminder of desired goals and keeps
an individual’s attention on what he/she are trying to achieve.
2. Natural Reward Strategies endeavors to make aspects of a task or activity more enjoyable
by building in certain features, or by reshaping perceptions to focus on the most positive
aspects of the task and the value it holds.
3. Constructive Thought Patterns help to form positive and productive ways of thinking that
can be benefit performance. It includes identifying destructive beliefs and assumptions and
reframing those thoughts through practicing self-talk and mental imagery.
Creativity Habit
Creativity is a difficult concept to define, mainly because it covers such a wide breadth of
processes and people – from artists to writers, to inventors, to entrepreneurs – all of whom could
be described as creative. Creativity is the capacity to produce new ideas, insights, inventions,
products, or artistic objects that are considered to be unique, useful, and of value to others.
Creativity is not something people are born with, but a developed skill.

The Fear Factor
James L. Adams, a Standford University professor who specialized creativity, identified

six main emotional roadblocks preventing people from practicing creativity:
• fear
• no appetite for chaos
• preferences for judging over generating ideas
• dislike for incubating ideas
• perceived lack of challenged
• inability to distinguish reality from fantasy
Out of these six emotional roadblocks, it is fear that has the most detrimental effect on
people’s capacity to be creative. The danger of fear is that it can cause self-doubt, insecurity,
and discomfort even before the beginning of the creative process. It can also block people from
sharing their creativity with others because of the risk of failure, negative, feedback, or ridicule.
Improvisation Habit
Improvisation is the art of spontaneously creating something without preparation.

Improvisation is connected to the mindset because it helps us develop the cognitive ability to
rapidly sense and act as well as change direction quickly.
The ability to function in an uncertain world requires a degree of improvisation.

Entrepreneurs may begin with a certain idea or direction, but obstacles such as limited resources,
unforeseen market conditions, or even conflicts with team members can prevent them from
executing their initial plans. This means they need to find a way to quickly adapt to their
circumstances, think on their feet, and create new plans to realize their vision.
Improvisation is especially relevant to the world of entrepreneurship where uncertainty is

high and the ability to react is essential. Below are the improvisation guidelines.
• Improvisation is not just for actors or musicians.

• There is no such thing as being wrong.
• Nothing suggested is questioned or rejected (no matter how crazy it might sound).
• Ideas are taken on board, expanded, and passed on for further input.
• Everything is important.
• It is a group activity – you will have the support of the group.
• You can trust that the group will solve a certain problem.
• It is about listening closely and accepting what you are given.
• It is about being spontaneous, imaginative, and dealing with the unexpected.
THE POWER OF BELIEFS
Belief, as defined by collinsdictionary.com, is a feeling of confidence that something exists,

is true, or is good. Beliefs can make ordinary people do great things. Limiting beliefs can make
talented people fail.
Bill Gates, on of the richest man on earth did not graduate from Harvard University, yet he
could be where he is now. The Wright brothers did not possess more engineering skills than all

the engineers and inventors of their time. In fact, they were bicycle repairmen. Li Ka Shing was
from a poor family and din not even finish formal education, and yet he is the 46th richest man in
the world according to the 2018 Forbes Report. Beliefs are what empower these people, and
many other entrepreneurs to achieve extraordinary things. Conversely, limiting beliefs are what
keep most people, despite their knowledge, talents, and resources to achieve what they really
can.
The entrepreneur's beliefs will drive the actions he or she takes. If an entrepreneur
believes that something is possible, he or she will focus on his or her efforts and make it happen.
The entrepreneur must take actions and commit to staying on track. As a result, he or she unlocks
his or her ability and achieves great results.
When entrepreneurs start a business, they develop a business plan, attract investors, and
launch their marketing campaign. When they meet obstacles, their beliefs will power them
through, and they will return failure into feedback, and change their strategy to get good results.
However, when entrepreneurs have a limiting belief, they will probably not take action, and even
if they did, they would hit the first obstacle and quit, thus, fulfilling their self-made prophecy. If
they do not believe they can start a successful business, they can never be a boss as they think,
“I don’t have what it takes” or “Its too hard for me.”
Entrepreneurs Tap Their Potential
When entrepreneurs believe in something, they will inevitably summon all their resources
to support their belief. They will tap into their passion, creativity, energy, and resources.
Entrepreneurs, when starting their business, needs to believe that they can succeed.
Resolve
Sometimes people have such strong beliefs that they start to have personal resolve. It
refers to the determination that governs how people think, act, and behave. There are many
inspirational stories about people doing amazing things with their resolve. Terry Fox, a teenager
with cancer, managed to run a marathon with only one leg. His strength and determination
allowed him to do what a lot of normal people would not be able to do – to compete a marathon.
In high levels of competition, even in physical games, an athlete needs to be both

physically prepared, and mentally prepared. To be successful, and to be an entrepreneur,
preparing the mind is very important. It is needed to have a strong beliefs and determination to
be truly succeed.
LIMITING BELIEFS
In our lives, we are taught many things that are not true. We are taught never to challenge
those beliefs, and eventually make them part of our logic. To succeed, we sometimes have to
break these mental barriers and myths that may limit us.
What Limiting Beliefs Do You Have?
Do you believe in the following:

1. Limiting beliefs about identity and capability.
• I am too young? • Don’t have motivation?
• Too old? • Lazy?
• Not Talented? • Not a good speaker?
• Not smart enough? • Will never succeeds in business?
• Not qualified enough? • Not creative enough?
• No luck for business? • Cannot manage people?
• Lack the drive?
2. Limiting beliefs about money.

• Money is difficult to earn.
• To be rich, you must already be rich.
• Money will lead to problems.
• Impossible to access money.
• Money is the root of all evil.
3. Limiting beliefs about relationships and people.

• I must socialize and drink before I can network.
• People cannot be trusted.
• Marriages never lead to happy endings.
• “Perfect partner” for life is a myth.
4. Limiting beliefs about my career or business.

• Market is too saturated.
• My idea is already somewhere in the market.
• Business is tough.
• No one will trust my new idea.
• Hard to make money in recession.
• No opportunities out there.
• I cannot expand my business.
• Its hard to get a job if I quit.
• My business has reached its growth limit.
FORMULA FOR SUCCESS
To succeed, entrepreneurs must first have a clear goal. The goal must be tangible,
specific, measurable, attainable, result-oriented, and timebound.
To achieve their goal, entrepreneurs need to develop a strategy. Break the strategy down
into phases if need. The strategies also have to flexible, as the goals is a destination, and
strategies are the different roads leading to that destination.
To succeed, one has to do and take action. Without action, your goals are nothing but
dreams. For many people who want to start their own business, having an excellent business
plan in the computer, without execution, is just another computer document. There are many
intelligent people, and they may be creative and hardworking, as well. However, they will never
succeed if they do not try. Taking consistent action is necessary for success. Emotions, like fear,
inertia, uncertainty, and anxiety hinders people from achieving success. Emotions like
enthusiasm, motivation, and confidence make things happen.

Turn failure into feedback and develop a new strategy for success. People rarely succeed
on their first try, and accepting failures is just a part of life. To succeed, entrepreneurs need to
acknowledge failure and turn it into a form of feedback. There are a few ways of dealing with
failure:
1. Pretend it never happened, or never try it at all. Being in denial does not solve the
problem. It may eventually come up, and you will still be unable to face it. Typical quote:
“I don’t think I can do this; I’m just not that kind of a person’.
2. Giving excuses, blaming others, and giving up. Feeling helpless and frustrated may stop
you from taking further action, and you give up. You will reign in on your goals and
believe that the goals are out of reach. Giving excuses and giving up still does not solve
the problem. Typical quote:
• “I don’t think I’m good enough.”
• “I’m too young/old.”
• “I’m not as lucky as you!”
• “I always have it harder.”
• I’ve never won in this game before, so I’m not playing anymore.”
3. Keep repeating the same thing over again. Following the same strategy without examining
your failure does not help in overcoming the problem at all. Typical quote:
• “If I keep doing it, eventually I’ll succeed”.
• “I don’t think I tried hard enough.”
4. Get Feedback, change strategy, and take action. Keep repeating the process until you
succeed. You need to understand your failure, reanalyze the strategy, change it if
necessary, and try out the new strategy, until you succeed. For example, Thomas Edison
took almost 10,000 attempts before inventing the light bulb. He used 9,999 failures as his
feedback to change his strategy to get to his goal.
ACTIVITY
1. List down all your limiting beliefs. You need to find reasons to change the beliefs and list the
consequences if these beliefs can continue to limit you in the future.
a. Limiting Belief
b. What opportunities has this belief cost you in the part? What price have you paid
holding onto this belief?

c. What is the cost of this belief if you continue to hold on to it? What would it prevent you
from achieving?
Challenge the “evidences” that support the belief.
You need to analyze and challenge all the evidence that supports the belief. You can do so
by answering these questions.
d. How did I first create this belief?
e. What makes me believe that is true?
f. Challenge the evidence by asking: “What else can this mean?”, “Is there a counter
example?” How credible is the person giving me this belief?”
Create an empowering belief.
g. My new empowering belief.

h. Create new evidences that support this belief.
i. Associate all the new benefits of having this new belief.

• Because I have made this new belief, I will make the following new decisions, and
take the following actions:
• By making this new belief, I will benefit in the following ways.
2. Write down three examples of you succeeding in a task by using feedback and changing your
strategy.
3. Case Study: Rescue One Financial
The journey of an entrepreneur is filled with peaks and valleys. Bradley Smith, CEO of Rescue
One Financial, experienced a financial dilemma. He helped clients with their debt, but secretly
he shared their troubles.
Smith started his own financial services company and worked long hours counseling clients
on how to get out of debt. All the while, no one knew that he was sinking deeper and deeper

into debt himself. He sold the Rolex watch he had bought with his first paycheck and had to
borrow $10,000 from his father. As his debt grew, he found his wife was pregnant with their
first child. He didn’t see any way to save his company.
If you are Smith, what would you do?

TOPIC 2: TRANSFORMING ENTREPRENEURIAL CONCEPTS

• identify requirements of implementing an entrepreneurial concept; and
• identify actions necessary to move from implementing the concept to achieving
sustainable success.
WHAT IS THE BUSINESS PLAN?
Business Plan, as defined by Hisrich, Peters, and Shepherd (2017), is a written document
prepared by the entrepreneur that outlines all applicable external and internal elements involved
in the start-up of a new business. It is often an integration of functional plans such as marketing,
finance, manufacturing, and human resources. It also addresses both short-term and long-term
decision making for the first three years of operation. Thus, the business plan, sometimes referred
to the game plan or road map, answers the questions, Where am I now? Where am I going? and
How will I get there? Potential investors, suppliers, and even customers will request or require a
business plan.
Scope and Value of the Business Plan
The business plan may be read by employees, investors, bankers, venture capitalists,
suppliers, customers, advisors, and consultants. The one who is expected to read a business
plan can often influence its actual content and focus. Since each of these groups reads a plan
for various reasons, the entrepreneur must be prepared to resolve all problems and concerns of
the company.
However, there are probably three perspectives that should be considered in preparing
the plan. First is the perspective of the entrepreneur, who understands better than anyone else
the creativity and technology involved in the new venture. The entrepreneur must be able to
clearly articulate what the venture is all about. Second is the marketing perspective. Too often,
an entrepreneur will consider only the product or technology and not whether someone would buy
it. Entrepreneurs must try to view their business through the eyes of their customer. Third, the
entrepreneur should try to view his or her business through the eyes of the investor. Sound
financial projections are required; if the entrepreneur does not have the skills to prepare this
information, then outside sources can be of assistance.
The depth and detail in the business plan depend on the size and scope of the proposed
new venture. The differences in the scope of the business plan may depend on whether the new
venture is a service, involves manufacturing, or is a consumer good or industrial product. The size
of the market, competition, and potential growth may also affect the scope of the business plan.
The business plan is valuable to the entrepreneur, potential investors, or even new
personnel, who are trying to familiarize themselves with the venture, its goals, and objectives.
The business plan is important to these people because:
• It helps determine the viability of the venture in a designated market.
• It provides guidance to the entrepreneur in organizing his or her planning activities.
• It serves as an important tool in helping to obtain financing.

BUSINESS PLAN WRITING
The business plan should be comprehensive enough to give any potential investor a
complete picture and understanding of the new venture, and it should help the entrepreneur clarify
his or her thinking about the business.
Below is an outline for a business plan. This outline is only meant to be a guide. As
discussed, the entrepreneur should be aware that each business plan may be different depending
on the purpose of the plan and who will be reading it.
I. Introductory Page
A. Name and address of business
B. Name(s) and address(es) of principal(s)
C. Name of business
D. Statement of financing needed
E. Statement of confidentiality of report
II. Executive Summary – Two to three pages summarizing the complete business plan
III. Industry Analysis

A. Future outlook and trends
B. Analysis of competitors
C. Market segmentation
D. Industry and market forecasts
IV. Description of Venture

A. Product(s)
B. Service(s)
C. Size of business
D. Office equipment and personnel
E. Background of entrepreneur(s)
V. Production Plan
A. Manufacturing process (amount subcontracted)
B. Physical plant
C. Machinery and equipment
D. Names of suppliers of raw materials
VI. Operations Plan

A. Description of company’s operation
B. Flow of orders for goods and/or services
C. Technology utilization
VII. Marketing Plan

A. Pricing
B. Distribution
C. Promotion
D. Product forecasts
E. Controls

VIII. Organizational Plan
A. Form of ownership
B. Identification of partners or principal shareholders
C. Authority of principals
D. Management team background
E. Roles and responsibilities of members of organization
IX. Assessment of Risk

A. Evaluate weakness(es) of business
B. New technologies
C. Contingency plans
X. Financial Plan
A. Assumptions
B. Pro forma income statement
C. Cash flow projections
D. Pro forma balance sheet
E. Break-even analysis
F. Sources and applications of funds
XI. Appendix (contains backup material)

A. Letters
B. Market research data
C. Leases or contracts
D. Price lists from suppliers
Introductory Page
This is the title or cover page that provides a summary of the business plan’s contents.
The introductory page should contain the following:
• The name and address of the company.
• The name of the entrepreneur(s), telephone number, fax number, e-mail address, and
• Web site address if available.
• A paragraph describing the company and the nature of the business.
• The amount of financing needed. The entrepreneur may offer a package (e.g., stock or
debt). However, many venture capitalists prefer to structure this package in their own way.
• A statement of the confidentiality of the report. This is for security purposes and is
important for the entrepreneur.
This title page sets out the basic concept that the entrepreneur is attempting to develop.
Investors consider it important because they can determine the amount of investment needed
without having to read through the entire plan.
Executive Summary
This section of the business plan is prepared after the total plan is written. About two to three
pages in length, the executive summary should stimulate the interest of the potential investor.
This is a very important section of the business plan and should not be taken lightly by the
entrepreneur since the investor uses the summary to determine if the entire business plan is worth

reading. Thus, it should highlight in a concise and convincing manner the key points in the
business plan.
Generally, the executive summary should address a number of issues or questions that
anyone picking up the written plan for the first time would want to know. For example:
• What is the business concept or model?
• How is this business concept or model unique?
• Who are the individuals starting this business?
• How will they make money and how much?
Sample Introductory Page

KC CLEANING SERVICE
OAK KNOLL ROAD
BOSTON, MA 02167
(617) 969-0010
www.cleaning.com
Co-owners: Kimberly Peters, Christa Peters
Description of Business:
This business will provide cleaning service on a contract basis to small and medium-sized
businesses. Services include cleaning of floors, carpets, draperies, and windows, and regular
sweeping, dusting, and washing. Contracts will be for one year and will specify the specific
services and scheduling for completion of services.
Financing:
Initial financing requested is a $100,000 loan to be paid off over six years. This debt will cover
office space, office equipment and supplies, two leased vans, advertising, and selling costs.
This report is confidential and is the property of the co-owners listed above. It is intended for
use only by the persons to whom it is transmitted, and any reproduction or divulgence of any
of its contents without the prior written consent of the company is prohibited.
Environmental and Industry Analysis

Environmental analysis is an assessment of external uncontrollable variables that may
impact the business plan. It is done to identify trends and changes occurring on a national and
international level that may impact the new venture. Examples of these environmental factors
are:
• Economy. The entrepreneur should consider trends in the GNP, unemployment by
geographic area, disposable income, and so on.
• Culture. An evaluation of cultural changes may consider shifts in the population by
demographics.
• Technology. Advances in technology are difficult to predict. Being in a market that is
rapidly changing due to technological development will require the entrepreneur to make
careful short-term marketing decisions as well as to be prepared with contingency plans
given any new technological developments that may affect his or her product or service.
• Legal concerns. There are many important legal issues in starting a new venture. The
entrepreneur should be prepared for any future legislation that may affect the product or
service, channel of distribution, price, or promotion strategy.

Industry analysis reviews industry trends and competitive strategies. This will focus on
specific industry trends. Some examples of these factors are:
• Industry demand. Demand as it relates to the industry is often available from published
sources. Knowledge of whether the market is growing or declining, the number of new
competitors, and possible changes in consumer needs are all important issues in trying to
ascertain the potential business that might be achieved by the new venture. The projected
demand for the entrepreneur’s product or service will require some additional marketing
research.
• Competition. Most entrepreneurs generally face potential threats from larger corporations.
The entrepreneur must be prepared for these threats and should be aware of who the
competitors are and what their strengths and weaknesses are so that an effective
marketing plan can be implemented. Most competitors can be easily identified from
experience, trade journal articles, advertisements, Web sites, or even the yellow pages.
A list of some key questions the entrepreneur should consider for this section of the business
plan is presented below.
Critical Issues for Environmental and Industry Analysis

1. What are the major economic, technological, legal, and political trends on a national and an
international level?
2. What are total industry sales over the past five years?
3. What is anticipated growth in this industry?
4. How many new firms have entered this industry in the past three years?
5. What new products have been recently introduced in this industry?
6. Who are the nearest competitors?
7. How will your business operation be better than this?
8. Are the sales of each of your major competitors growing, declining, or steady?
9. What are the strengths and weaknesses of each of your competitors?
10. What trends are occurring in your specific market area?
11. What is the profile of your customers?
12. How does your customer profile differ from that of your competition?
Description of Venture
The description of the venture provides complete overview of the product(s), service(s),
and operations of a new venture. This section will enable the investor to ascertain the size and
scope of the business. This section should begin with the mission statement or company mission
of the new venture. This statement basically describes the nature of the business and what the
entrepreneur hopes to accomplish with that business. This mission statement or business
definition will guide the firm through long-term decision making. After the mission statement,
several important factors that provide a clear description and understanding of the business
venture should be discussed. Key elements are the product(s) or service(s), the location and size
of the business, the personnel and office equipment that will be needed, the background of the
entrepreneur(s), and the history of the venture. If the product is very technical, it will be important
to make sure that it is description is clear and easy to understand.
The location of any business may be vital to its success, particularly if the business is retail or
involves a service. Thus, the emphasis on location in the business plan is a function of the type
of business. In assessing the building or space the business will occupy, the entrepreneur may
need to evaluate such factors as parking; access from roadways to facility; and access to

customers, suppliers, distributors, delivery rates, and town regulations or zoning laws. An
enlarged local map may help give the location some perspective with regard to roads, highways,
access, and so forth.
Describing the Venture

1. What is the mission of the new venture?
2. What are your reasons for going into business?
3. Why will you be successful in this venture?
4. What development work has been completed to date?
5. What is your product(s) and/or service(s)?
6. Describe the product(s) and/or service(s), including patent, copyright, or trademark status.
7. Where will the business be located?
8. Is your building new? old? in need of renovations? (If renovation is needed, state costs.)
9. Is the building leased or owned? (State the terms.)
10. Why is this building and location right for your business?
11. What office equipment will be needed?
12. Will equipment be purchased or leased?
13. What experience do you have and/or will you need to successfully implement the
business plan?
Production Plan
The production plan details how the product(s) will be manufactured. If some or all the
manufacturing process is to be subcontracted, the plan should describe the subcontractor(s),
including location, reasons for selection, costs, and any contracts that have been completed. If
the manufacturing is to be carried out in whole or in part by the entrepreneur, he or she will need
to describe the physical plant layout; the machinery and equipment needed to perform the
manufacturing operations; raw materials and suppliers’ names, addresses, and terms; costs of
manufacturing; and any future capital equipment needs. In a manufacturing operation, the
discussion of these items will be important to any potential investor in assessing financial needs.
The table below summarizes some of the key questions in this section of the business plan. If the
new venture does not include any manufacturing functions, this section should be eliminated from
the plan.
Production Plan
1. Will you be responsible for all or part of the manufacturing operation?
2. If some manufacturing is subcontracted, who will be the subcontractors? (Give names and
addresses.)
3. Why were these subcontractors selected?
4. What are the costs of the subcontracted manufacturing? (Include copies of any written
contracts.)
5. What will be the layout of the production process? (Illustrate steps if possible.)
6. What equipment will be needed immediately for manufacturing?
7. What raw materials will be needed for manufacturing?
8. Who are the suppliers of new materials and what are the appropriate costs?
9. What are the costs of manufacturing the product?
10. What are the future capital equipment needs of the venture?

Production Plan
If a Retail Operation or Service:
1. From whom will merchandise be purchased?
2. How will the inventory control system operate?
3. What are the storage needs of the venture and how will they be promoted?
4. How will the goods flow to the customer?
5. Chronologically, what are the steps involved in a business transaction?
6. What are the technology utilization requirements to service customers effectively?
Operations Plan
All businesses—manufacturing or nonmanufacturing—should include an operations plan
as part of the business plan. This section goes beyond the manufacturing process (when the new
venture involves manufacturing) and describes the flow of goods and services from production to
the customer. It might include inventory or storage of manufactured products, shipping, inventory
control procedures, and customer support services. A non-manufacturer such as a retailer or
service provider would also need this section in the business plan to explain the chronological
steps in completing a business transaction.
It is important to note here that the major distinction between services and manufactured
goods is services involve intangible performances. This implies that they cannot be touched,
seen, tasted, heard, or felt in the same manner as manufactured products. Airlines, hotels, car
rental agencies, theaters, and hospitals, to name a few, rely on business delivery or quality of
service. For these firms, performance often depends on location, facility layout, and personnel,
which can, in turn, affect service quality (including such factors as reliability, responsiveness, and
assurance). The process of delivering this service quality is what distinguishes one new service
venture from another and thus needs to be the focus of an operations plan. Some key questions
or issues for both the manufacturing and nonmanufacturing new venture are summarized in table
above.
Marketing Plan
Marketing plan describes market conditions and strategy related to how the product(s)
and service(a) will be distributed, priced, and promoted. Marketing research evidence to support
any of the critical marketing decision strategies as well as for forecasting sales should be
described in this section. Specific forecasts for a product(s) or service(s) are indicated to project
the profitability of the venture. Potential investors regard the marketing plan as critical to the
success of the new venture. Thus, the entrepreneur should make every effort to prepare as
comprehensive and detailed a plan as possible so that investors can be clear as to what the goals
of the venture are and what strategies are to be implemented to effectively achieve these goals.
Marketing planning will be an annual requirement (with careful monitoring and changes made on
a weekly or monthly basis) for the entrepreneur and should be regarded as the road map for short-
term decision making.
Organizational Plan
Organizational plan describes form of ownership and lines of authority and responsibility
of members of new venture. The organizational plan is the part of the business plan that describes
the venture’s form of ownership—that is, proprietorship, partnership, or corporation. If the venture
is a partnership, the terms of the partnership should be included. If the venture is a corporation, it

is important to detail the shares of stock authorized and share options, as well as the names,
addresses, and resumes of the directors and officers of the corporation. It is also helpful to provide
an organization chart indicating the line of authority and the responsibilities of the members of the
organization. The table below summarizes some of the key questions the entrepreneur needs to
answer in preparing this section of the business plan. This information provides the potential
investor with a clear understanding of who controls the organization and how other members will
interact in performing their management functions.
Organization Structure
1. What is the form of ownership of the organization?
2. If a partnership, who are the partners and what are the terms of agreement?
3. If incorporated, who are the principal shareholders and how much stock do they own?
4. How many shares of voting or nonvoting stock have been issued and what type?
5. Who are the members of the board of directors? (Give names, addresses, and resumes.)
6. Who has check-signing authority or control?
7. Who are the members of the management team and what are their backgrounds?
8. What are the roles and responsibilities of each member of the management team?
9. What are the salaries, bonuses, or other forms of payment for each member of the
management team?
Assessment of Risk
Assessment of risk identifies potential hazards and alternative strategies to meet business
plan goals and objectives. Every new venture will be faced with some potential hazards, given
its particular industry and competitive environment. It is important that the entrepreneur assess
risk in the following manner. First, the entrepreneur should indicate the potential risks to the new
venture. Next should be a discussion of what might happen if these risks become reality. Finally,
the entrepreneur should discuss the strategy that will be employed to prevent, minimize, or
respond to the risks should they occur. Major risks for a new venture could result from a
competitor’s reaction; weaknesses in the marketing, production, or management team; and new
advances in technology that might render the new product obsolete. Even if these factors present
no risks to the new venture, the business plan should discuss why that is the case.
Financial Plan
Financial plan is a projection of key the key financial data that determine economic
feasibility and necessary financial investment commitment. It determines the potential investment
commitment needed for the new venture and indicates whether the business plan is economically
feasible.
Generally, three financial areas are discussed in this section of the business plan. First,
the entrepreneur should summarize the forecasted sales and the appropriate expenses for at
least the first three years, with the first year’s projections provided monthly. It includes the
forecasted sales, cost of goods sold, and the general and administrative expenses. Net profit after
taxes can then be projected by estimating income taxes.
The second major area of financial information needed is cash flow figures for at least
three years, although sometimes investors may want to see five-year projections. The first year
of projections, however, should be on a monthly basis. Since bills have to be paid at different
times of the year, it is important to determine the demands on cash on a monthly basis, especially
in the first year. Remember that sales may be irregular, and receipts from customers also may be

spread out, thus necessitating the borrowing of short-term capital to meet fixed expenses such
as salaries and utilities.
The last financial item needed in this section of the business plan is the projected balance
sheet. This shows the financial condition of the business at a specific time. It summarizes the
assets of a business, its liabilities (what is owed), the investment of the entrepreneur and any
partners, and retained earnings (or cumulative losses). Any assumptions considered for the
balance sheet or any other item in the financial plan should be listed for the benefit of the potential
investor.
Appendix
The appendix of the business plan generally contains any backup material that is not
necessary in the text of the document. Reference to any of the documents in the appendix should
be made in the plan itself.
Letters from customers, distributors, or subcontractors are examples of information that

should be included in the appendix. Any documentation of information—that is, secondary data
or primary research data used to support plan decisions—should also be included. Leases,
contracts, or any other types of agreements that have been initiated also may be included in the
appendix. Finally, price lists from suppliers and competitors may be added.
USING AND IMPLEMENTING THE BUSINESS PLAN

The business plan is designed to guide the entrepreneur through the first year of
operations. It is important that the implementation of the strategy contain control points to
ascertain progress and to initiate contingency plans if necessary. Most important to the
entrepreneur is that the business plan does not end up in a drawer somewhere once the financing
has been attained and the business launched.
There has been a tendency among many entrepreneurs to avoid planning. The reason
often given is that planning is dull or boring and is something used only by large companies. This
may be an excuse; perhaps the truth is that some entrepreneurs are afraid to plan. Planning is
an important part of any business operation. Without good planning, the entrepreneur is likely to
pay an enormous price. All one has to do is consider the planning done by suppliers, customers,
competitors, and banks to realize that it is important for the entrepreneur. It is also important to
realize that without good planning the employees will not understand the company’s goals and
how they are expected to perform in their jobs.
Bankers are the first to admit that few business failures result from a lack of cash but,
instead, that businesses fail because of the entrepreneur’s inability to plan effectively. Intelligent
planning is not a difficult or impossible exercise for the inexperienced entrepreneur. With the
proper commitment and support from many outside resources, the entrepreneur can prepare an
effective business plan. In addition, the entrepreneur can enhance effective implementation of
the business plan by developing a schedule to measure progress and to institute contingency
plans.

Measuring Plan Progress
During the introductory phases of the start-up, the entrepreneur should determine the
points at which decisions should be made as to whether the goals or objectives are on schedule.
Typically, the business plan projections will be made on a 12-month schedule. However, the
entrepreneur cannot wait 12 months to see whether the plan has been successfully achieved.
Instead, on a frequent basis (i.e., the beginning of each month), the entrepreneur should check
the profit and loss statement; cash flow projections; and information on inventory, production,
quality, sales, collection of accounts receivable, and disbursements for the previous month.
Company Web sites should also be assessed as part of this process. This feedback should be
simple but should provide key members of the organization with current information in time to
correct any major deviations from the goals and objectives outlined. A brief description of each of
these control elements is given here:
• Inventory Control. By controlling inventory, the firm can ensure maximum service to the
customer. The faster the firm gets back its investment in raw materials and finished goods,
the faster that capital can be reinvested to meet additional customer needs.
• Production Control. Compare the cost figures estimated in the business plan with day-to-
day operation costs. This will help control machine time, worker hours, process time, delay
time, and downtime cost.
• Quality Control. This will depend on the type of production system but is designed to make
sure that the product performs satisfactorily.
• Sales Control. Information on units, dollars, specific products sold, price of sales, meeting
of delivery dates, and credit terms is useful to get a good perspective of the sales of the
new venture. In addition, an effective collections system for accounts receivable should
be set up to avoid aging of accounts and bad debts.
• Disbursements. The new venture should also control the amount of money paid out. All
bills should be reviewed to determine how much is being disbursed and for what purpose.
• Web Site Control. With more and more sales being supported or garnered from a
company’s Web site, it is very important to continually evaluate the Web site to ascertain
its effectiveness in meeting the goals and objectives of the plan. There are many services
and software packages available to assist the entrepreneur in this process.
Updating the Plan
The most effective business plan can become out-of-date if conditions change.
Environmental factors such as the economy, customers, new technology, or competition—and
internal factors such as the loss or addition of key employees—can all change the direction of the
business plan. Thus, it is important to be sensitive to changes in the company, industry, and
market. If these changes are likely to affect the business plan, the entrepreneur should determine
what revisions are needed. In this manner, the entrepreneur can maintain reasonable targets and
goals and keep the new venture on a course that will increase its probability of success.
WHY SOME BUSINESS PLANS FAILS
Generally, a poorly prepared business plan can be blamed on one or more of the following
factors:
• Goals set by the entrepreneur are unreasonable.
• Objectives are not measurable.

• The entrepreneur has not made a total commitment to the business or to the family.
• The entrepreneur has no experience in the planned business.
• The entrepreneur has no sense of potential threats or weaknesses to the business.
• No customer need was established for the proposed product or service.
Setting objectives requires the entrepreneur to be well informed about the type of business
and the competitive environment. Objectives should be specific and not so mundane as to lack
any basis of control. For example, the entrepreneur may target a specific market share, units sold,
or revenue. These objectives are measurable and can be monitored over time.
In addition, the entrepreneur and his or her family must make a total commitment to the
business to be able to meet the demands of a new venture. For example, it is difficult to operate
a new venture on a part-time basis while still holding onto a full-time position. And it is also difficult
to operate a business without an understanding from family members as to the time and resources
that will be needed. Lenders or investors will not be favorably inclined toward a venture that does
not have full-time commitment.
Generally, a lack of experience will result in failure unless the entrepreneur can either attain
the necessary knowledge or team up with someone who already has it. For example, an
entrepreneur trying to start a new restaurant without any experience or knowledge of the
restaurant business would be in a disastrous situation.
The entrepreneur should also document customer needs before preparing the plan. Customer
needs can be identified from direct experience, letters from customers, or marketing research. A
clear understanding of these needs and how the entrepreneur’s business will effectively meet
them is vital to the success of the new venture.
ACTIVITY
1. Given the difficulties in accurately predicting the future, is a business plan useful? Provide
three reasons for writing one and three reasons for not preparing a plan. What is your
conclusion and why?
2. What makes an excellent business plan?

3. Would the entrepreneur be better off spending more time selling his or her product rather than
investing so much time in writing a business plan?
4. If a business plan is to be used to raise capital, then why would the entrepreneur want to
advertise the firm’s major risks by detailing them in the business plan?
5. What is the purpose of the business plan if the audience is (a) the entrepreneur, (b) an
investor, or (c) a key supplier? How might the plan be adapted for these audiences? Or do
you believe that it is better to simply have one business plan that serves all audiences?
6. Personal Business Plan

a. Using the business plan outlines provided, create a plan in which YOU are the business
or enterprise at this point in your life. In other words, wherever “business” appears in the
template, substitute your own name.
b. Try to write the plan in terms of a comprehensive “YOU” by integrating your personal and
professional expectations.

TOPIC 3: ENTREPRENEURIAL OPPORTUNITIES

• Identify opportunities that ignite ambition and foster self-reliance, resourcefulness,
perseverance, and determination.
• Analyze circumstances, skills and strategies which yield entrepreneurial success.
WHAT IS AN OPPORTUNITY?
Opportunity is an apparent way of generating value through unique, novel, or desirable

products, services, and even processes that have not been previously exploited. For an
opportunity to be viable, the idea must have the capacity to generate value.
Value can take many forms. The most common form of value is economic value: the
capacity to generate profit. Two other forms of value—social value and environmental value—are
less common but equally important. An opportunity has social value if it helps to address a social
need. Environmental value exists if the opportunity protects or preserves the environment.
All forms of value, however, are predicated on the assumption that there is a market
populated with enough people to buy your product or service. This does not mean that a large
market is required; there are countless examples of successful businesses that run on a small
scale, catering to a market that is limited in one way or another. The key is to scale the business
and its costs to the size of the market—to balance supply with demand. Here again, the
entrepreneurial mindset is what enables us to envision how a new product or service can generate
value for a niche, an age group or interest segment, a geographic area, or a larger population.
Innovation, Invention, Improvement, or Irrelevant?
All ideas are not created equal. Part of recognizing an opportunity is the ability to evaluate
ideas and identify those with the highest likelihood of success. One framework for doing this is
to rate an idea on four different dimensions: the idea may be an innovation, an invention, an
improvement, or irrelevant. Of these, innovations and inventions are high in novelty, while
improvements and irrelevant ideas are low in novelty.
A successful idea scores highly as an innovation if the product or service is novel, useful,
and valuable. Today’s smartphone, and the basic cellular phone of the 1980s, are both good
examples of a product that meets all the requirements of a successful innovation. Innovations
and inventions are often paired together, but the difference between them lies in demand.
Inventions, by definition, score highly for novelty; but if an invention does not reach the market or
appeal to consumers, then it will be rendered useless. Inventions that succeed in finding a market
move to the innovation stage.
Ideas do not always need to be unique or novel to appeal to customers. There are many
ideas that focus on improvement. These improvements are based on enhancing existing
products. Take folding sunglasses, serrated ice cream scoops, or reusable sticky notes, for
instance. Each product has been revisited and improved on. While the products may not be high
in novelty, there is still a strong market for these products, as many people will find them useful
to a degree.

Finally, there are ideas that fall into the irrelevant category, scoring low on both novelty
and usefulness. The beverage industry has experimented with some changes over the years that
have failed to meet consumer expectations. Coca-Cola changing its recipe to produce “New
Coke” and Pepsi-Cola introducing colorless “Crystal Pepsi”; the Life Saver Soda drink; and
Maxwell House producing coffee in a carton. All of these are arguably examples of irrelevant
ideas.
Idea Classification Matrix
Opportunities spring from ideas, but not all ideas are opportunities. While we all have the
capability to generate a huge range of ideas, not every one of us knows how to turn an idea into
a valuable, revenue-generating opportunity. Making an idea a reality is a process that involves
time, resources, commitment, and a great deal of work, which can seem a little daunting to many
of us.
SEVEN STRATEGIES FOR IDEA GENERATION
Researchers have defined many formal methods of idea generation. Out of these, we
have chosen seven main strategies that we believe are effective in the generation of new ideas
for entrepreneurs. They include the following:
• analytical strategies,
• search strategies,
• imagination-based strategies,
• habit-breaking strategies,
• relationship-seeking strategies,
• development strategies, and
• interpersonal strategies.

1. Analytical strategies involve taking time to think carefully about a problem by breaking it up
into parts or looking at it in a more general way to generate ideas about how certain products
or services can be improved or made more innovative. In some cases, you may see very little
correlation between problems until you think about them analytically. For example, in one
study, a group was asked to think about different ways of stacking certain items. The ideas
they came up with were then considered as ways to park cars. In another study, researchers
found that artists who carried out critical analysis before they started their work, as well as
through the duration of the task, were more successful than those who did not use the same
analysis.
2. Search strategies involve using memory to retrieve information to make links or connections
based on past experience that are relevant to the current problem using stimuli. For example,
say you were asked to design a door hinge. Here, the door hinge is a stimulus—a starting
point for searching solutions to the problem. Although you may not have any prior experience
of designing door hinges, you could search your memory to see if you can think of anything
that you can associate with a door hinge to support the design process. For example, the
search process may stimulate your memory of the opening and closing of a clam shell. By
drawing on this memory, you could use your knowledge of the clam shell and apply it to the
hinge design. This strategy illustrates our ability to be resourceful in generating associations
between objects that at first appear to have no apparent relationship with each other.
3. Imagination plays an important part in idea generation. Imagination-based strategies involve

suspending disbelief and dropping constraints to create unrealistic states, or fantasies. For
example, the Gillette team also used imagination to come up with a new shampoo by
imagining themselves as human hairs.
4. To think creatively, our mind needs to break out of its usual response patterns. Habit-breaking
strategies are techniques that help to break our minds out of mental fixedness to bring about
creative insights. One strategy is to think about the opposite of something you believe, to
explore a new perspective. Another method focuses on taking the viewpoint of someone who
may or may not be involved in the situation. A popular habit-breaking strategy is to take the
role of a famous or admired individual and think about how he or she would perceive the
situation. This is sometimes called the Napoleon technique, as in “What would Napoleon do?”
referring to the skills of this famous military and political leader.
5. Relationship-seeking strategies involve consciously making links between concepts or ideas

that are not normally associated with each other. For example, you could make a list of words
that are completely unrelated to the problem you are trying to solve, such as doorknob, then
list the characteristics of each item on the list. Next, apply those characteristics to the problem
with a view toward coming up with ideas to solve the problem. The purpose of this exercise
is to stimulate toward the mind into making connections that would otherwise have gone
unnoticed.
6. Development strategies are employed to enhance and modify existing ideas to create better
alternatives and new possibilities. A common exercise in idea enhancement is to gather a
group of four to six people together. Each person writes down three ideas, which are then
passed around the group. Then every member spends five minutes suggesting improvements
on the ideas to make them more feasible and effective.

7. The most dominant of the strategies within group scenarios are interpersonal strategies, in
which group members collaborate to come up with new or improved ideas. Group
brainstorming is a good example of an interpersonal strategy where members exchange
thoughts and build on ideas.
The point of these seven strategies is to direct your mind toward generating enough ideas that
will eventually provide pathways to new opportunities.
TWO PATHWAYS TO OPPORTUNITY IDENTIFICATION
When the famous explorer George Leigh Mallory was asked why he climbed Mount
Everest, he answered, “Because it’s there.” This indicates that Mallory took the opportunity to
climb Everest simply because it was there for the taking. If we apply this concept to
entrepreneurship, we could argue that, like the mountain, entrepreneurial opportunities already
exist—we just need to find them. This is called the finding approach, a concept that assumes
that opportunities exist independent of entrepreneurs and are waiting to be found. It is based on
the concept that entrepreneurial opportunities exist as a result of the changing landscape in
technology, consumer preferences, government regulations, and demographics.
It is based on the concept that entrepreneurial opportunities exist as a result of the

changing landscape in technology, consumer preferences, government regulations, and
demographics.
The finding approach views decisions as risky. Because opportunities already exist, it
stands to reason that the information is available and the data there to be collected. Because the
data exists, it can be used through a process of analysis techniques to work out the probability of
the outcome, if you were to pursue the opportunity; in other words, the information is available to
reasonably ascertain the level of risk. For example, using the mountain metaphor, plenty of
information about Mount Everest has been collected over the years to assist mountain climbers
with the knowledge they will need when considering an ascent, and it is up to a would-be climber
to find this information.
The building approach, a concept that assumes that opportunities do not exist
independent of entrepreneurs but are instead a product of the mind. In the building approach,
opportunities are created, not found. They originate from the entrepreneur’s prior knowledge and
experience, which equip the entrepreneur to create them. To identify opportunities, this approach
advocates using what you know, whom you know, and who you are. Your role as an entrepreneur
is to take action and see how the market responds, recognize patterns, and learn from iteration
to define the opportunity as it evolves.
Whereas decision making is perceived as risky within the finding approach, decision
making is thought to be uncertain in the building approach. Because the opportunity doesn’t exist
yet, it needs to be created. The building approach acknowledges that information about how to
proceed is not readily available. Unlike the finding approach, entrepreneurs do not have existing
information to build a mountain because the mountains do not yet exist. In order to learn, improve,
and succeed, the entrepreneur must continually take actions and adjust to changing
circumstances. The entrepreneur cannot predict the probability of the outcomes, given the
potential lack of information. This leaves the entrepreneur with two decisions: either to find ways
to source the information and resources in order to create an opportunity or to decide against the
opportunity altogether.

Finding Building Opportunities
Changes in technology,
markets, consumer tastes, Prior knowledge and
Origin of Opportunities
government regulations, experience
demographics
The opportunity exists and is Opportunities don’t exist until
Assumptions
waiting to be identified they are created
Search and scan the
Methods of Identification Build networks
environment
Be alert to changes in the Take action; continuous
Role of the Entrepreneur
environment learning and iteration
Decisions Perceived as risky Perceived as uncertain

Source: Adapted from Sarasvathy, S. D. (2008). Effectuation: Elements of entrepreneurial expertise. Northampton, MA: Edward Elgar;
Alvarez, S. A. & Barney, J. B. (2007). Discover and creation: Alternative theories of entrepreneurial action. Strategic Entrepreneurship
Journal, 1, 11–26.
OPPORTUNITIES THROUGH ACTIVE SEARCH AND ALERTNESS
Access to the right information is one of the key influences of opportunity identification.
However, access to information is not enough. It is how this information is used that makes the
real impact. In the finding approach, entrepreneurs often engage in active search to discover
existing opportunities. This implies, in accord with the finding approach, that the opportunity is
already present in the environment and can be discovered through a systematic search. But
where do entrepreneurs source their information? A recent study showed that entrepreneurs tend
to consciously seek information through their own personal contacts and relevant publications,
not from reading newspapers, magazines, or other trade publications. In other words, in accord
with the building approach, they use whom they know and what they know to find the answers to
their questions. Let’s take a closer look at each of these methods of finding opportunities.
Active Search
We all possess certain information sets, or knowledge bases, established by our existing
knowledge. By actively searching these sets, we can access a wealth of information. For
example, you could use your own knowledge base to search for people who could potentially
support you in your venture, such as your inner circle of friends, family, business contacts,
neighbors, and so on.
While such rational and conscious search processes are undoubtedly useful, they do not
always apply to every situation, especially when discoveries can occur so randomly. For example,
if we confine ourselves to the specific information sets or knowledge base we possess, we may
focus only on those things that are relevant to our personal inventory of information, and run the
risk of missing those random occurrences that fall outside what we think we know.
The finding approach suggests that any existing opportunity is there to be exploited, as long as
we have the skills and awareness to do so. But if that were the case, why aren’t there floods of
people rushing in to seize every possible existing opportunity? Surely, it would be difficult to
produce profitmaking products and services with everybody else potentially doing the same thing.

Therefore, it is not enough for entrepreneurs to identify opportunities within the confines of their
existing knowledge sets. In short, active search can be very helpful in the recognition of
opportunities, but we also need to be alert to nonobvious opportunities when they arise.
Alertness
To address the question of why some people spot opportunities and some don’t,
researchers have suggested that opportunities are everywhere waiting to be discovered. Such
discovery is made by those entrepreneurs who have alertness, the ability to identify opportunities
in their environment. This means that entrepreneurs do not necessarily rationally and
systematically search their environment, or their particular information sets for opportunities.
Rather, they become alert to opportunities that already exist through their daily activities. In some
instances, even being taken by surprise by what they observe.
Some researchers believe that entrepreneurs may be more adept at spotting opportunities
than non-entrepreneurs for several reasons:
• they have access to more information,
• they may be more prone to pursuing risks rather than avoiding them, and
• they may possess different cognitive styles from those of non-entrepreneurs.
Cognitive strategies are ways in which people solve problems; similarly, cognitive styles are
ways and patterns of thinking. Cognitive styles attributed to successful entrepreneurs include a
higher degree of intelligence, creativity, and self-efficacy.
All of the above attributes are thought to influence opportunity recognition, and they may
explain why some entrepreneurs are more likely to become aware of opportunities while others
may remain oblivious.
Building Opportunities: Prior Knowledge and Pattern Recognition
There has been a great deal of research in measuring how entrepreneurs recognize
opportunities. We have explored the importance of actively searching for opportunities, alertness
to recognizing opportunities when they arise, and the importance of taking action to support the
formation of opportunities. But once entrepreneurs have identified opportunities, how do they go
about building on them?
Researchers have identified two major factors in the building of opportunities: prior
knowledge and pattern recognition. Prior knowledge is preexisting information gained from a
combination of life and work experience. Many studies indicate that entrepreneurs with
preexisting knowledge of an industry or market, together with a broad network, are more likely to
recognize opportunities than those who have less experience or fewer contacts. Successful
entrepreneurs often have prior knowledge with respect to a market, industry, or customers, which
they can then apply to their own ventures.
Another key factor in building and recognizing opportunities is pattern recognition: the
process of identifying links or connections between apparently unrelated things or events. Pattern
recognition takes place when people “connect the dots” in order to identify and then build on
opportunities.

In a recent study, highly experienced entrepreneurs were asked to describe the process
they used to identify opportunities. Each entrepreneur reported using prior knowledge to make
connections between seemingly unrelated events and trends. In cognitive science, pattern
recognition is thought to be one of the ways in which we attempt to understand the world around
us.
Some of the simplest ideas are born from making links from one event to the other. For
example, compact wheeled luggage was used by airline crew for years before the same type of
luggage was marketed for passengers. This idea to make the product available to airline
passengers came from an airline pilot, who connected the dots between three major trends that
were happening at the time, such as an increase in the number of passengers, which made
airports busier and carrying traditional luggage more difficult; the overflow of bags that needed to
be checked in, which opened up a need for carry-on luggage; and the inconvenience of
transporting bags over large distances as a result of expanding airports. Once these trends were
recognized, the product was built and marketed to a huge customer base to enormous success.
Moving from the idea to identifying an opportunity may seem like a daunting prospect, but
we can all train ourselves to get better at recognizing opportunities. We do so by identifying
changes in technology, markets, and demographics; engaging in active searches; and keeping
an open mind to recognizing trends and patterns.
FROM IDEA GENERATION TO OPPORTUNITY RECOGNITION
As we have explored, for an opportunity to be viable, the idea must be new or unique or at
least a variation on an existing theme that you are confident that people will accept and adopt. It
must involve something that people need, desire, find useful or valuable; and it must have the
capacity to generate profit. We cannot credit divine intervention as the source of new ideas, nor
is every idea an opportunity. The best ideas are based on existing knowledge and the ability to
transform the idea into a viable opportunity.
Idea Generation, Creativity, and Opportunity Recognition
Source: Baron, R. A., & Shane, S. A. (2008). Entrepreneurship: A process perspective (p. 69). South-Western Educational: Mason,
OH.
Look at the process that connects idea generation to opportunity recognition. Typically,
entrepreneurs go through three processes before they are able to identify an opportunity for a
new business venture: idea generation, creativity, and opportunity recognition. The first step is
generating lots of ideas for something new, potentially through the strategies we discussed earlier
in the chapter. During the creativity stage, we sort out these ideas for newness and usefulness.
Finally, the opportunity recognition stage allows us to sort out the remaining ideas for both
newness and usefulness, and also assess them for their ability to generate economic value.

The second step is the creativity stage. We all have the ability to think creatively through
practice, and to transcend the boundaries of our existing knowledge structures. While these
knowledge structures are essential in making sense of the world, they tend to inhibit creative
thinking, as they allow us only to interpret the familiar with what we already know. This is why it
is so important to train our minds to think creatively. Let’s explore the role of creativity and its
relationship to opportunity identification.
Researchers have identified four approaches that we can practice to enhance our creativity with
the purpose of transforming our ideas into opportunities. These approaches yield the acronym
SEEC: securing, expanding, exposing, and challenging. Securing is the capacity not only to focus
on new ideas but also to sustain them. Expanding is the broadening or the acquisition of new
skills that enable people to generate ideas and share knowledge. Exposing involves the skills
required to open ourselves to diverse and fluctuating circumstances and events. Challenging is
the process of building on past failures by braving new encounters.
SEEC Model
Similar to alertness, securing involves being consciously
aware of possibilities, but also focuses on the deliberate
capture of those ideas that sometimes have a habit of
Securing: the capacity to focus drifting in and out of our minds before we have a chance to
on and sustain new ideas. focus on them. A useful way of securing those ideas is to
keep a written log of opportunities that you observe during
your daily activities, which is a simple but effective way to
record ideas for later use.
Expanding skills enables people to generate ideas and
share knowledge. A useful exercise carried out in a group
Expanding: broadening or setting is to list recent problems you have encountered in
acquiring new skills your daily life, and design some possible solutions, which
are then shared with the class for further discussion and
feedback.
Entrepreneurs tread a fine line between structure and
turbulence, and so it is useful to build resilience by exposing
ourselves to diverse and fluctuating circumstances and
Exposing: opening ourselves to
events. This exposure builds our ability to function in an
circumstances and events
unstructured and uncertain environment. Brainstorming
and becoming a consumer of information about creativity
are productive ways of building exposure.
We all fail at times, and the important thing is not how often
Challenging: overcoming past we fail but how well we recover. Further, we must not let
failures by braving new past failures stop us from challenging ourselves to make
encounters new efforts and try new things. Learning from failure can
lead to enhanced creativity and further idea identification.
Source: Adapted from DeTienne, D. R., & Chandler, G. N. (2004). Opportunity identification and its role in the entrepreneurial
classroom: A pedagogical approach and empirical test. Academy of Management Learning and Education, 3, 242–257. Material on
pp. 246–248.

ACTIVITY
1. What are some advantages a teenager might have over an experienced adult when it comes
to recognizing and implementing a business opportunity?
2. Have you ever had someone take credit for your idea or work? Did someone profit financially
or receive public praise for your work? How did that make you feel? What did you do in
response?
3. Do you agree that it is always important to look for new ideas and solutions if a workable
solution already exists? Give examples to support your answer.
4. How would you measure the effectiveness of SEEC training? How would you quantify how
innovative students’ ideas were, or how skilled students were at opportunity recognition?
5. Case Study: Jack Ma, Founder and Chairman, Alibaba Group
Jack Ma knows a thing or two about creating new opportunities. A self-made billionaire, Ma
was ranked #33 on the Forbes billionaire list for 2015. He got there by orchestrating the
development of Alibaba, a mega-e-commerce company that went public on the New York Stock
Exchange (NYSE) with the largest initial public offering (IPO) in history, beating out erstwhile
mega-IPOs including Facebook, Visa, and General Motors (GM).
Jack Ma was born as Ma Yun in Hangzhou, in China’s Zhejiang Province, about 100 miles
from one of the world’s largest cities, Shanghai Jack’s entrepreneurship efforts began at an early
age. When he was only 12 years old, Ma recognized the tremendous opportunities he could create

for himself if he learned English. To accomplish his goal, he would ride his bike for 40 minutes
every day—regardless of the weather—to an international hotel in Hangzhou’s West Lake district
where he could fraternize with foreigners, offering his services as a tour guide free of charge. In
return, he learned English. Just as important, he learned about the rest of the world firsthand. He
quickly realized that the foreigners he spoke with had a different story to tell than did his native
Chinese teachers and textbooks, which presented reality through the distorted lens of
communism.
In 1979, Ma met an Australian couple and became pen pals with their two children. In 1985,
the family invited Ma to visit them “Down Under,” further opening up Jack’s eyes to the way the
rest of the world—especially the Western world—lived and worked. His efforts to seek out
education and opportunities beyond the borders of his own country changed his thinking and his
life.
Like virtually all entrepreneurs, Ma faced a lot of failure and disappointment in his early
working years. From flunking his university admission exam to being rejected in his application
to become a secretary to a Kentucky Fried Chicken general manager, Ma learned the hard way
that success rarely happens overnight. In 1995, Ma was able to move to the United States as an
interpreter for a trade delegation. It was in Seattle that he first learned about the Internet. Jack
and a friend quickly discovered that China was not yet utilizing the Internet, so they launched their
own website, called China Pages.
With virtually zero knowledge of the Internet, or even how to properly use a keyboard, Ma
invested $2,000 to start a company. He had enough early success to attract the interest of the
state-owned China Telecom, but later parted ways when the communications giant showed little
interest in Ma’s vision or goals.
In 1999, Ma courageously ventured out on his own again with a single-minded vision of
starting his own e-commerce corporation. With some close associates who believed in him, and
$60,000, Ma and his team went to work.
I wanted to have a global company, so I chose a global name. Alibaba

is easy to spell, and people everywhere associate that with “Open, Sesame,”
the command that Ali Baba used to open doors to hidden treasures in One
Thousand and One Nights (Fannin, 2008, online).
Alibaba began business in Ma’s apartment. The company’s core values included frugality,
flexibility, and innovativeness. With serious irony, Ma cites three reasons for his company’s initial
survival: “We had no money, we had no technology, and we had no plan.”
As is often the case, Alibaba expanded too fast initially, leading to layoffs and minuscule
profits. Ma refers to these challenging times as “The dark days at Alibaba” (Fannin, 2008, online).
But with determination and persistence, Ma and his associates eventually prevailed in epic
fashion. Their global financial success was consummated on September 19, 2014, when Alibaba
went public on the NYSE with the ticker symbol BABA and was valued at $231 billion (Baker,
Toonkel, & Vlastelica, 2014), making Ma one of the richest people in the world.
From his childhood in Hangzhou to his mid-forties as a megacelebrity on Wall Street and
around the world, Ma has been a big thinker. He has also been willing to take calculated risks to
create opportunities and accomplish his vision—which has yet to be fully realized. Ma’s

entrepreneurial vision expands well beyond making money, as he has expressed the desire to
change the world, and especially his native country of China, in positive ways.
Questions:
a. Describe how Ma’s desire to influence and contribute to Chinese social and economic culture
aided his rise as a global entrepreneur. Now identify some entrepreneurial opportunities for
making a meaningful contribution to your own nation or culture.
b. Entrepreneurs tend to see the opportunity even in the most challenging circumstances. Riding
his bike—rain or shine—for 40 minutes a day for years took unusual dedication and personal
drive. What difficulties do you currently face—or would you be willing to face—to take
advantage of entrepreneurial opportunities?
c. What is something you could learn (e.g., a foreign language), or a skill you could acquire (e.g.,
trade, process, function), that would empower you to create additional entrepreneurial
opportunities for yourself in the future?

TOPIC 4: GOAL SETTING
At the end of the lesson, you should be able to:

• review goals set by other entrepreneurs and the impact of goal setting on entrepreneurial
success, and
• applying the course content, establish individual goals to develop personal entrepreneurial
skills.
STARTING SETTING GOALS
You have to start setting your goals in every major area of your life and your business. It
does not matter how young or old you are, without something to focus on, the decision and actions
we take daily will not have any long-term direction and will not converge to any form of success.
Even when you have your own business, without any direction you will be caught up with
short term outcomes, like paying the bills, going to the movies, and just making it through a long
work week. You will still be on the thread-mill going around in circles in just another rat race.
There are a lot of distractions – even more-so with the Internet and social media. Your
mind needs to be focused on something that can lead you to success, or you may waste too much
time on short-term goals, and myriad distractions, and end up throwing your opportunities away.
WHY DO PEOPLE NOT PLAN?
There are various reasons why some people do not set clear goals for themselves.
1. Limiting Beliefs
It is a very easy to dream about what you would love to have, but when it comes to committing
to a specific target and plan, many don’t even try. Try still think: “Why bother . . . Its
impossible”. These are nothing but limiting beliefs and generalizations about ourselves.
Unless we break them, we can never design goals that would propel us forward.
2. “I don’t know”
A very common answer to “What specific goals do you have?” is “I don’t know.” Our formal
education has taught us to conform and to obey. I feel that most people may have stopped
dreaming. After many failures and disappointments, and constantly getting told, “It can’t be
done.”. “That’s impossible.” Our rational mind often forbids us to dream anymore. It is not
really that they don’t know what they want – they have stopped daring to dream.
3. Fear of Failure
The fear of failure, of rejection, and embarrassment paralyzes many people from even starting
to plan. They fear failing once they have a specific goal. Many people do not learn to swim,
because of the fear of drowning, even if this sounds ironic.
So. . . for the people who set goals, have they no fear? I don’t believe so, as I feel that
everyone hates the feeling of failure. So what gives them the courage to set high goals and
go for it? Remember, the only ones who can tell us that we failed and make us feel bad are .
. . ourselves. By repositioning your failure as the first attempt towards success, learning from
the failure, these people “do not fail” as they make it “step one” towards their success. This
belief drives them forward to do anything, since they alone decide when to quit.

4. Inertia
Many people who do not set goals have too much inertia and are satisfied with the way they
live. Unless their comfy lifestyle is seriously under threat, they will not do anything that calls
for a change.
Setting goals means changing habits and sacrificing time from watching TV or YouTube. That
is why these people make half-hearted attempts. As soon as they feel inconvenienced by
their new path, they revert to their old ways.
There are no shortcuts to success. Sacrifices need to be made.
5. Failed and Gave Up

Many people have a common response, “I have tried setting goals, but they failed me.” Many
people set goals and give up once they failed. If you remember the formula of success, you
need to develop a strategy, follow up with your goals, take actions, change strategy from
feedback, and repeat process.
When you do not have a specific goal, you move towards what short-terms goals you have.
You are like an amoeba, moving towards food. After son time, you have traveled everywhere,
and end up nowhere.
When you have a clear goal and focus towards it, you make decisions and actions to reach it.
You move towards what you want. This is much easier said than done, as this path is rarely
straight and smooth. There will be obstacle and you will encounter frustrations.
Nobody ever succeeds all the time, every time – and for many of these people who have set
goals before and did not succeed, they gave up. Sometimes they give up after their second
attempt. To really succeed, you will have to be able to pick yourself up and keep taking
actions. Come back even stronger, even after major blows.
SECRETS TO POWERFUL GOALS
For you to set goals that you can achieve, they must be:
1. Specific and Measurable

The more specific the goals are, the more focused your mind and your effort will be. Specific
and measurable outcomes will lead to effective strategies and action. Goals like “Having five
thousand followers on Twitter in ninety days” and “Run 2.4 km in under ten minutes, in thirty
days.”
The more specific the goal, (Timeframe, date of accomplishment, magnitude), the easier to
plan and ultimately, easier to move towards.
2. Passionate and Exciting

We must set goals that we are passionate about and which give us a high level and
excitement. Have you ever been so passionate about something that keeps you awake all
night, and you constantly think about it?
When you are passionate about something, it gives you a higher level of energy when you
are doing it. If you are passionate about your goals, they can charge you and keep you moving

forward. The same thing is true when you choose your business. It is important that your
passion fuels your business, and you like doing it.
People who achieve their goals despite all odds and setbacks, got there because of one
reason – PASSION. They love doing what they do.
We are constantly driven by emotions and not logic. Many smokers know that smoking is
bad, and yet they cannot quit when our goals are truly aligned with what is important to us,
we will automatically have the drive and discipline that allows us to follow through.
3. HUGGs
HUGGs (Huge, Unbelievable Greatly Goals) are very goods ways to increase what you would
like to have. HUGGs are goals that are set a lot higher than your current level. Incremental
goals are goals that are slightly higher than what you are already achieving.
For example, your company may have sales of Php 50,000 a month and an incremental goal
would be Php 60,000. A HUGG, however, would be one aiming for Php 500,000 per month.
There are two main reasons why people set HUGGs.
a. HUGGs are extremely powerful. They are far more exciting than incremental goals. The
thought of achieving something so much bigger than your current level will boost your
energy level, excitement, and drive. If you are an athlete, the thought of winning a gold
medal at an international event far beats the thought of just winning at your regional level,
which you are already playing in.
b. As you move towards your goal, in your stretch goal, the thought of possibly succeeding
such as goal that many may think “impossible”, will certainly drive you a lot more to take
more actions. It will become less of a chore, and more of an adventure.
Example of HUGG:
• Become a published author.
• Start a charitable organization.
• Move to another country.
• Establish your own company.
• Become a millionaire.
• Win a gold medal at the Olympic Games.
• Be nominated for Nobel Prize.
HUGGs require creative strategies.

Imagine if you were given Php 1,000 and your goals is to make it Php 10,000 in 1 day. After
setting up a car wash in your garage and using the money to get cleaning equipment, getting
some friends to promote the car wash, the target of earning Php 10,000 from Php 1,000 is not
really that hard. This is an incremental goal, and often, without much planning, the goal can,
eventually, be reached.
However, if I had Php 1, 000 and you wanted a house. Many you would think that it is
impossible, and there is no way it is ever going to happen. They may be right if you just use
the current way of thinking and strategy. But, if you were given no choice but to succeed, and

you really dared to come up with many different out-of-the-box ideas to challenge the problem,
eventually, you could find a way to succeed.
Setting incremental goals are what we have a tendency to do. If we save Php 10, 000 am
month, it is not hard to save Php 15, 000 a month by the end off the year. However, if we
keep setting these incremental targets, we will just keep working harder and harder, doing the
same thing over and over again.
However, once we use a HUGG, our brain knows that it is impossible to reach the goal, if we
continue the path. It then forces us to think of new ways to come up with revolutionary ideas
to change and achieve that goal.
If you still think that, if you started with Php 1,000 and you wanted to get a house, is impossible,
I would like to inform you that Kyle MacDonald has done it. He traded on red paperclip a
house.
Of course, the journey would not be a smooth sailing one, but there are so many proverbs
that teach us, “No pain, no gain!” and “If you want it, earn it.” You need to use out-of-the-box
strategies.
People who make history are those who set goals that everyone else believe it to be
“impossible”, is still impossible because a strategy has not been found yet. Many things we
take for granted today were deemed “unrealistic” not too long ago.
Just ten years ago, if you wanted a phone that you could carry in your pocket, that allows you
to play hours of music, have a built in GPS, and take photos, people would think that such
things exist only in spy movies. However, today you can easily find such a phone, even in a
secondhand store.
ACTIVITY
1. What do you really enjoy doing? What is your passion? Can your passion be a platform for
a viable opportunity?
2. What ideas do you have for a new business? How can you multiply the stimuli around these
ideas to enhance them and identify attractive opportunities?

3. How can you shape, reshape, and refine your opportunities so that they have a greater chance
to succeed and thrive?

TOPIC 5: LEARNING STRATEGIES
At the end of this lesson, you should be able:

• identify the impact of knowledge applied to effort, and
• analyze the power of self-directed life-long learning.
LEARNING
Learning is defined as acquiring knowledge, skills, abilities through study, experience, or

being taught. However, that is the result. What is the process? How do we learn?
Learning always involves self-development - learning to act differently, think differently,

and act differently. Learning is natural. We learn as we live, and it is part of adapting to changing
circumstances.
We may learn things by being taught directly in schools. Sometimes we may come to a
conclusion that we are not very good at learning; in fact, we are not very good at being taught.
Learning differs from education. Education describes the results of learning and is often tested
by examinations. Teaching cannot exist by itself. It is a two-way process, and it make no sense
to say, “I taught the subject, but the students did not learn it”. This is the educational equivalent
to the medical joke. “The operation was successful, but the patient died.”
Education is often seen as the teacher pouring knowledge into an empty vessel – the
student. This is not education. This is knowledge injection. Having this presupposition leaves
the teacher literally drained, and the student feeling “knowledge bloated”, only to take an
examination where everything in the vessel is regurgitated at the right time to clear space for the
next binge.
MAIN STAGES OF TRADITIONAL LEARNING
1. Unconscious Incompetence. You don’t know and you just don’t know. Think of some activity
that you do very well now, such as reading, searching the internet, or driving a car. Once
upon a time, you did not know anything about it. You were not even aware of its existence.
2. Conscious Incompetence. You’ve tried it before, but you are still not good at it. You learn
fast at this stage, though, because the less you know, the greater the room for improvement.
You can get immediate results through practice.
3. Conscious Competence. You have the skill, but you are still not yet consistent and habitual.
You need to focus to get things right. This is a satisfying stage of the learning process, but
improvement is harder. The better you are, the more difficult it is to make noticeable
improvements.
4. Unconscious Competence. Now your skill is habitual and automatic. You don’t have to think
about it. The goal of learning is to put as much skill as possible into this realm of unconscious
competence, so that your conscious mind is free to do something else, i.e. talk to passengers
and listen to music while driving.

Lastly, there is a final stage that only the few chosen ones attain – that is Mastery. Mastery
is more than unconscious competence. It is an extra dimension that few attain. It is not only
effective, but also beautiful to watch. When you reach this level of mastery, you no longer have
to try. Everything comes in a constant flow. Everything seems to fit into place and the results are
magical. Like with the NBA -- you know you are watching a master because they make everything
look so beautiful and easy (even when you may not appreciate every facet of their skill). In any
case, learning takes time. It takes many hours to reach conscious competence, and many more
to reach unconscious competence -- and a lot more to reach mastery.
There are, however, short cuts. One short cut is good teaching. A good teacher will keep
your motivation level high, divide the work into manageable chunks, and give you a constant feed
to keep you in a good emotional state, and satisfy your intellectual curiosity about the subject.
They are also good at the subject themselves, and as a role model, accelerate your learning
curve. They will not only give you knowledge, but also a good strategy to learn the subject.
THE LEARNING ZONE
When you start learning new ideas or behaviors, beware of the two following scenarios:
1. Your are completely stuck and do no know what to do next. You might feel anxious and
helpless. You are in the anxiety zone, where perceived difficulty exceeds the resources you
have.
You also need to take a break. Take a step back and relax. Breathe in deeply and think,
what do you need to do next? What other resources are required? Can you ask for help?
Do you need a complete break?
2. It seems all too easy that you seem to be able to do it without much challenge. You are
uninterested, bored, or fell uninvolved. You are now in the drone zone. The resources you
have far exceed what is required by the task.
In this zone, you also need to take a break. Take a step back and relax. Breathe in deeply
and think, what do you need to do next? Maybe you need to further stretch your outcome and
increase the challenge level, or you may not need to learn the skill anymore.
Three Zones Involve in Learning
1. The learning zone is when perceived

difficulty roughly matches your perceived
resources.
2. The anxiety zone is when perceived

difficulty is much greater than your
perceived resources.
3. Boredom or drone zone is when perceived

difficulty is far lower than your perceived
resources.

When learning, you have to be aware of your emotional state, stay in the learning zone
and learning will be rewarding and enjoyable.
TYPES OF LEARNING
There are two types of learning. These are simple and generative learning.
Simple Learning is also called simple loop learning. Here, there is a gap between what to know
and what you want to know, and you take actions to close that gaps. The results are feedback
leading to increased knowledge
and skills. If your feedback tells
you that your actions get you
closer to your goals, you do more
of it. If your feedback tells you
that your are getting further away
from your goal, you stop and re-
evaluate your actions and take a
different action.
Simple learning and problem solving takes place within a boundary of assumptions and
beliefs about what is possible and necessary. For example, a man who falls sick frequently, goes
to the doctor. The doctor prescribes some medicine. Simple problem – simple situation.
A business is losing market share to competitors. Competitors are investing in a modern

manufacturing plant. The business evaluates which vendors supply the best machines, and
upgrades. Six months later, the manufacturing plant is upgraded and running at full capacity.
Simple problem – simple situation.
Generative Learning, also called

double loop learning, brings our
beliefs and assumptions about the
issue into the feedback loop.
Feedback from our actions leads us
to question our assumptions.
In previous example, the

man who falls sick frequently may
question why it is happening to him.
He might find out that he may need
to change his lifestyle or diet. He
may also want to take responsibility
for his own health, instead of going to the doctor every time he falls sick.
The business that is losing market share to competitors may question if everyone else is
doing the right thing, whether the new machines are worth investing in. He may question if the
market is too crowded now, and he may need to diversify into alternative product, rather than
continue following everyone else.
The basic questions to ask for double loop learning are:

• What are my assumptions about this?

• How else could I think about this?
• How might my assumptions to be contributing to the problem?
• Why has this situation persisted?
Other Tips to Enhance and Accelerate Learning
You need to remember that there are many levels of beliefs and assumptions everybody
has, which affect learning. Sometimes, when you are learning, keep in mind that such factors
should be included in your feedback loop, as your beliefs and assumptions of them may be wrong.
The following are levels which you should examine and use it with your feedback to enhance
learning:
• Identity, it is also very difficult to dismiss a non- performing relative.
• belief
• capability
• behavior
• environment.
When you are exploring a problem, or when you are stuck, confused or uncertain, you need
to determine what level you are stuck on, so that you can examine what sort of resources are
needed.
• Identity – Do you feel that it is a worthwhile thing to do, but somehow, it is just “not you”?
• Beliefs and values – Do you know that you have the ability, but not want to do it, or not
think it is important?
• Capability – Do you know what to do, but doubt you have the ability to do it?
• Behavior – Do you have enough information, but do not know where to start? -- or what to
do?
• Environment – Do you need more information about the situation?
All these levels can be summarized in just one sentence: “I can’t do it here”.’ When “I” is
stressed, it is a statement about identity. When “can’t” is stressed, it is a statement about belief.
When “do” is stressed, it is a statement about capability. When “it” is stressed, it is a statement
about behavior. When “here” is stressed, it is a statement about environment.
Today, it is very confusing as children are often told “You are bad” (identity) when they have
done something wrong (behavior). Consequently, many people think that they are what they do,
and judge themselves accordingly. Hence, there is much confusion over behavior and identity.
Remember: You are not your behavior. Steps to build your resources and analogy by using
and understanding levels. It is best done with a guide who can guide you through the process.
You can do it mentally, but it is most effective when done physically.
1. Think of a difficult situation where you would like more choices -- where you suspect you may
not have used all your resources. You can also use this exercise if you want to engage all your
resources for a particular situation.
2. Begin with the environment where you typically experience the problem:
• Describe your surroundings.
• Where are you?
• Who is around you?
• What else is significant about the environment?

3. Now begin on the behavioral level;
• What are you doing?
• Think about your actions and thoughts.
• How does your behavior fit into the environment?
4. Now you are on the capability level:

• Think about your skills. Are you only expressing a fraction of your skills in this
situation?
• What is the quality of your thinking?
• What mental strategies do you have?
• What skills do you have in life?
• What are you good at (in any context)?
• What qualities do you have that will serve you well?
• Think of your skills of rapport, outcome, and creative thinking.
• What other communication and relational skills do you have?
• What have you accomplished so far, and what are the main skills used to accomplish
it?
5. Now, reflect on your values and beliefs:

• What is important to you?
• What empowering beliefs do you have?
• What do you find worthwhile about what you do?
• What principles do you strive to act on?
6. Now focus on your identity:

• What is your mission in life?
• What sort of person are you?
• What do you want to accomplish and what ideas or symbols come to mind that seem
to express your identity?
7. Now, think of your connectivity and networking:

• How do you connect with others?
• Do you have a personal belief or religious belief?
• How are you connected with other things in this world? (On a spiritual level?)
8. Now, with an understanding of who you are and who you can be, keep your physiology of the
identity level as you ask these questions:
• What is important now?
• What do you believe now?
• What do you want to be important?
• What do you want to believe?
• What believes and values best express your identity?
9. Take this sense of your beliefs and values. Keeping your previous physiology from the beliefs
and values level, ask these questions:
• How can you use your skills in the best possible way?
• How can your skills be transformed and intensified with this greater depth?

10. Keep your physiology of your capable level and step forward to your behavior level:
• How can you act to express the alignment you feel?
11. Now, step into the present environment as it is right now:

• How it is different when you bring these levels of yourself to it?
• Notice how you feel about where you are with this greater depth and clarity of your
values, purpose, and sense of connectedness.
If you were to bring all of this to the problem situation, it would mean you would have
exhausted all of your resources to this problem.
Perceptual Positions
People have different opinions, as they do not share the same point of view in most cases.
To understand a situation fully, you may need to take different perspectives, just as when looking
at an object from different angles, to see its breadth, height and depth. Though there are no
“right” opinions or perspectives in any situation, you can often build a better understanding of the
situation by looking at it from many perspectives.
The first position is your own reality; your own point of view of any situation. Personal
mastery comes from a strong first position. You need to know yourself and your values to be an
effective role model and influence others by example. The second position is to take another
person’s perspective. You have to think what they think. Second position is the basis of empathy
and rapport. This gives us an ability to appreciate other people’s feelings. An emotional second
position is the understanding of another person’s emotions. You, therefore, do not want to hurt
them, because you can imagine their pain. An intellectual second position is the ability to
understand how another person thinks; the kinds of ideas they have; and the sort of opinions and
outcomes they hold. The third position is a step outside of your view, and the other person’s view,
to a detached perceptive. There you can see the relationship between the two viewpoints. This
third position is important for checking into the ecology of your outcomes. You will have to forget
for a moment that it is your outcome, and that you want it, and look at it in a more detached way.
All of these positions are important and useful. Many people are good at one position, but not so
in another. The best understanding comes from all three.
ACTIVITY
1. What do you associate with the word “learning”?
2. What sort of feeling does it give you? What was your experience with learning in school?

3. What have you learned about learning from your life’s experiences?
4. Who have been your best teachers? What was it about them that made them stand out?
5. When you listen to your friend telling you about a problem, listen beyond the words to the
different levels. Which level does the problem seem to come from?

TOPIC 6: CREATING SUSTAINABLE WEALTH

• demonstrate an understanding of basic financial literacy, and
• illustrate how entrepreneurs create sustainable wealth regardless of circumstances.
FINANCIAL RESOURCES HOW I FIND AND MANAGE MY MONEY
Estimating the Cost of Launching A Business
When the nature of the new business has been decided, it will be necessary to
estimate the cost of starting operations.
These may include the cost of:

• premises
• utilities
• equipment
• initial stock
• insurance, etc.
Obtaining Funds
The funds for launching the business may be obtained from one or a combination of
sources:
• personal savings
• family funds
• community co-operative organizations
• community financial syndicates
• micro-finance organizations
• post office
• savings and loan associations
• banks, etc.
Banks offer a variety of financial facilities, such as:

• current or cheque accounts
• savings accounts
• loan services.
It may be necessary to open an account with a bank before you qualify to obtain financial
assistance. Loans obtained from banks will involve repayment with interest. A new entrepreneur
should investigate as many sources of funding as possible in order to secure the best terms and
conditions for repayment. This means ‘shopping around’ for the most favorable interest rates and
repayment conditions.
Lending institutions may require evidence regarding the prospective business, such as a
business plan, a guarantee and a contribution by the entrepreneur, before they actually disburse
funds.

MANAGING MY MONEY
When funds have been obtained for the purpose of launching a business, the entrepreneur
needs to be meticulous about keeping records of income on the one hand, and expenditures on
the other. The entrepreneur’s financial records need to be reconciled with periodic statements
that the lending institutions will send.
The entrepreneur needs to be particular about making repayments, according to the

schedule agreed on by the two parties, in order to avoid penalties and higher interest rates.
Financial discipline is key to a successful business. Business accounts need to be kept completely
separate from personal accounts.
RESOURCES NEEDED AND HOW TO FINANCE YOUR START UP

If you have any expenditure for your business before you are able to start selling and
generating income you need start-up capital. There are three kinds of costs we should take a look
at:
• Introduction and marketing costs – quite often you will have to spend money on advertising
or assembling marketing materials before or during the start of your business venture.
• Running costs – these are costs for raw materials and supplies you will use when you are
running your business. To start your business, you will need enough supplies to carry you
through the initial phase until you start getting money from customers and can buy more
supplies.
• Investments – these are procurements like machines, which will last for several years.
When you start your first business you should avoid investing too much money. If you
need machines, perhaps it will be possible for you to borrow or rent these to start off with.
CAN WE RUN THE BUSINESS AT A PROFIT?
To find out if the business will be profitable you must make an income/expenditure budget.
We need to calculate the income we will earn and the costs we will incur.
Profit is the difference between

income and cost. To make a profit, income
must be higher than expenditure. If you are
to be able to run a business successfully
over time the business must generate a
profit. This will ensure that there will be
reserves if something goes wrong or if sales
fall off during a period. Profits also enable
the business to branch out into new activities
and invest in new equipment.
Income is all payments received by a

business for the products or service it sells.
To calculate yearly income, you must
estimate how much you will be able to sell
and the price you can charge for each item.
Yearly income is often quite difficult to

calculate, but it is important that you try to establish as closely as possible how many customers
you can expect and how much they are willing to pay for your products. It usually takes much
longer than you might expect to reach out to customers and for sales to take off. Quite often the
volume of sales will be low during the first few months, or even the first year, because not all
presumptive customers will know about your business.
Income = Number of Products sold x price of each product
Income = Number of hours of services provided x price per hour
Costs. As soon as you start your business, even during preparation time, you will incur
costs that have to be paid.
Costs can be grouped into different categories:

• Costs for buying raw materials or readymade products for sale.
• Costs for wages and labor.
• Miscellaneous costs such as training, transport, telephones, repairs, marketing materials,
bookkeeping etc.
• Interest on loans.
It is important that all types of costs are listed and carefully calculated. It is a common
error when setting up a budget to neglect or forget some costs and exclude these from the budget,
or that your calculations are too optimistic, i.e., the estimated cost turns out to be much lower than
the actual cost.
Total Costs = raw material and bought products + labor costs + miscellaneous costs for
workshops, office premises, telephones, transport, bookkeeping + marketing + interest on
loans.
BUDGET FOR INCOME AND EXPENDITURE
Now take your calculations with regard to income and costs and put them into your income
and expenditure budget.
It is always a good idea to calculate for different scenarios. One budget can show income
and expenditure if your business turns out exactly as you plan. You can also compile a budget
with a slightly more pessimistic outcome. Maybe it will take much longer to sell your products
than you have hoped and/or maybe the costs will be higher than expected.
When you summarize your total income and deduct all costs the remaining sum will be
your profit. If the costs are higher than your income, your business will not be profitable and be
running at a loss. In this case you should go back and see if you can change anything – either
by reducing costs or by trying to increase your income. If this is not possible, then you should
probably try to think of another business idea.

INCOME STATEMENT
An income statement is a simple summary of the business’ cash generating ability. It

should be prepared on a monthly basis and should contain at least the following information:
• income (funds procured to start the business, such as the loan, and money earned by
selling your product or service)
• cost of materials (includes all costs incurred in buying materials)
• operating expenses (own salary, labour costs, overheads such as electricity and water,
etc.)
• repayment of loan (capital + interest)
• gross profit (the earning after cost of production, including the repayment of the loan, has
been reduced from the money earned from sales)
• taxes (the national government as well as local authorities may levy taxes on business
operations)
• net profit (the earnings of the business after taxes have been paid).
CASH FLOW STATEMENT
A cash flow statement is important because it gives the entrepreneur an idea of the amount
of liquid cash available in the business at any given time. It is prepared by recording all income
received by the business on the one hand, and all expenditures incurred by the business on the
other. The difference between the two will give an indication of the positive or negative cash flow
situation in the business at the end of a given period.
Balance sheet
A business needs to prepare its balance sheet periodically, as an indication of the

performance of the business. This information is of interest not only to the entrepreneur, but also
to concerned organizations such as investors, lending institutions, suppliers of materials, staff,
etc.
The balance sheet is a summary of the business’ assets, liabilities and equity:
• Assets are the premises, materials, equipment and stock owned by the business.
• Liabilities are the financial obligations of the business, such as rent for premises, loan
repayments, etc.
• Equity is the difference between the monetary value of the assets and the liabilities.
ACTIVITY
1. How much will it cost to start your business?

2. Where can you obtain funds to start my business? Loans obtained from banks will involve
repayment with interest. A new entrepreneur should investigate as many sources of funding
as possible in order to secure the best terms and conditions for repayment. This means
‘shopping around’ for the most favorable interest rates.
3. What banking services are available to you? How much would you pay?
4. Why do I need to keep records of money even if I receive a bank statement regularly?
5. Why is financial planning important?

TOPIC 7: BUILDING A SUSTAINABLE BRAND

• recognize the importance of reliability as a key to building a successful and sustainable
brand, and
• discuss the impact responsibility plays in building a successful and sustainable brand.
BRANDING
Branding
The brand is a name, term, sign, symbol or design, or
a combination of these, intended to identify the goods or
services of one seller or group of sellers and to differentiate
them from those of competitors.
Branding helps buyers in many ways. Brand names

tell the buyer something about product quality. Brand names
also increase the shoppers efficiency. Lastly, brand names
help call consumers’ attention to new products that might
benefit them.
Branding also gives the supplier several advantages.

The brand name makes it easier for the supplier to process orders and track down problems. The
supplier’s brand name and trademark provide legal protection for unique production features that
otherwise might be copied by competitors. Branding also enables the supplier to attract a loyal
and profitable set of customers. Finally, branding helps the supplier to segment markets.
Branding adds value to customers and society. How? Branding leads to higher and more
consistent product quality. Branding increases innovation by giving producers an incentive to
look for new features that can be protective against imitating competitors. Furthermore, branding
helps shoppers because it provides much more information about products and where to find
them.
BRAND MANAGEMENT RESPONSIBILITIES

1. Monitor, measure and manage brand equity/strength. Brand Equity means the public
valuation of a brand.
2. Increase brand awareness, relevant differentiation, value, accessibility and emotional
connection.
3. Develop Brand Plan.
4. Monitor progress against brand plan.
5. Be responsible for results against brand plan.
6. Drive brand understanding and support throughout the organization.
7. Champion/drive initiatives that support delivery of the brand promise.
8. Brand messaging (elevator speech, tagline, campaign themes, proof points, etc.)
9. Manage the brand architecture. It describes how a family of brands relate to one another.
10. Maintain brand identity consistency.

Characteristics of a Good Brand Name
Short and simple Suggestive products benefits
Easy to spell and read Adaptable to packaging/labelling needs
Easy to recognize and remember No undesirable imagery
Easy to pronounce Always timely (does not go out -of-date)
Can be pronounced in only one way Adaptable to any advertising medium

Can be pronounced in all languages (for Legally available for use (not in use by
international markets) another firm)
ACTIVITY
1. Explain the meaning of branding.
2. Differentiate brand name from trademark. Give three specific examples of each.
3. Describe the importance of branding of entrepreneurs who will start their business.

4. Discuss the characteristics of a good brand name when an entrepreneur would like to develop
a brand name.
5. Many organizations combine their brand names with logos that make the company instantly
recognizable. A logo is a symbol that helps identify an organization. The most famous logo
of all is for McDonald’s. The Golden Arches are well known all over the world and they
symbolize the fast food chain. On the space provided, formulate a brand name, and draw a
logo for your future company.

TOPIC 8: NETWORKING

• understand the value a community of success by learning how to connect and collaborate
with innovators, entrepreneurs, mentors, and trusted advisors who can assist in
transforming entrepreneurial ideas into sustainable successes, and
• discuss strategies for implementing a personal community of success.
NETWORKING: FINDING YOUR TEAM.
You don’t need to know everything and be good in everything when you start a business.
Whatever you don’t know, find out a little and partner or hire someone who has the information.
Every business owner needs a trusted team of advisors and specialists. Here is how to get yours.
It may be okay for an experienced trapeze artist to work without a net. Beginning
entrepreneurs, however, can’t afford such a risk. As a business owner, you need a support team,
your own safety net, of trusted individuals whom you can count on to advise you, and assist you,
and to catch you before you fall.
Not only can a strong support team mean the difference between success and failure for your
new company, but it can also ensure your personal sanity. The most common mistake people
make when starting a business is trusting their gut too often. Not that their instincts aren’t
important; they’re essential. But it’s even more important to talk out your ideas, your trouble
points, and your opportunities with skilled individuals. Often, just the process of explaining a
situation to someone else will spark alternatives that can give you a new perspective.
Get the Best
Supporter generally come in two forms: advisors and specialists. Advisors are
professionals who focus overwhelmingly on helping a company; experts who provide insight and
assistance in specific business areas. Specialist a term for people who are expert on a specific
aspect of a job, rather than working more generally in the field. Some you hire, some you pay for,
and some you obtain through networking and outreach. Obviously, you want to obtain your team
as inexpensively as possible, but don’t be afraid to pay for experience and expertise, if necessary.
Smart people at your side can save you years of hard work – and missteps.
When to Start?
As soon as you start writing your business plan, especially if you’re new to the process.
Contact an accountant, an insurance agent, a lawyer, a banker, a professional business coach or
an expert to get an accurate read on the validity and requirements of your plans.
Make a list of everyone you’ve ever known or met personally who might be of assistance.
Relatives, old college buddies and even friends of friends may have the perspective you need.
Remember, objectivity is personality-based, not relationship-based. If a person is mature,
experienced, and knowledgeable, they will be of value to you.

Professional Networking
Business clubs and associations are other places to get free advice. Network with people
in your field or closely related to it. Visit trade shows and talk with exhibitors. Seek out the
business incubator program at your local university or colleges. The folks at these places are
excellent sources of business contact, information on government programs, procedural advice,
and even prospective customers.
Your best informal resources are other small business owners who’ve already been
through what you’re experiencing. Running a business is a lone profession, and owners often
can’t share personal experiences with their own employees. With you, however, they can convey
the lessons learned from their experiences. Don’t be afraid to tell them details about your concept
either.
Match Your Needs
When your business grows, start hiring people who can take skilled tasks, like business
development, accounting, or operations off your shoulders. Make sure everyone you hire is
savvier than you are. Excellent employees make for excellent companies.
Your business and your situation will dictate who to hire first. Of course, it’s less expensive
in the beginning to use a la carte service providers for disciplines such as legal, human resource,
and marketing. An outside business coach can also be an invaluable source of ideas and
strategy.
As you begin to hire professionals in a specific discipline, however, don’t automatically

reach out for people you’ve retained in the part for other tasks. Just because your personal
accountant does a great job on your tax return, for example, doesn’t mean he or she will be the
kind of bookkeeper that will benefit your company. Look for people with proven experience
handling the unique requirements of the position.
At the start of a business, every penny counts. Manage your cash flow and do not add
people until you absolutely have to, even if you have the cash reserves to support the payroll.
Not all free advice is good advice. In fact, there are many people who give advice who
have their hidden agendas, which may not benefit you, and may cost you the most in the end.
Get great advice and great help, even if you have to pay for it.
STRATEGIES IN IMPLEMENTING COMMUNITY SUCCESS
1. Do the work. Creating an extensive valuable network will not happen overnight or even
quickly. You can speed things up attending the right kind of events. There is a “You can get
rich quick, but nobody gets wealthy quick.” Having a great network is wealth.
2. Become your best self. First, identify the ideal person you would want to do business with
from a philosophical, character and principled perspective.
Second, to have an ideal network, first become your ideal self. Put in mind that " We attract
who we become." Life is never about what we get; it’s about who we become.

Third, connect to people with similar interests using all mediums. The best thing you can do
is grow your social media network while working hard on becoming the ideal person who you
want to attract.
3. Meet strangers. One of the easiest ways to meet new people is a strategy I employed when
I had almost nothing: taking strangers out to lunches or dinners.
4. Give instead of take. Provide value as possible to people in your network without asking for
anything in return. In the beginning of a new relationship, you have to earn the right to have a
genuine relationship. The only way you can do that is by giving an insane amount of value.
5. Make a life-changing introduction. Networking was not about building database but about
being the gateway to another great relationship. Every timey you meet someone new, train
yourself to ask the question, “Whom can I introduce this person to that could change their
life?”
6. Invest in your people portfolio. Your network is your net worth, invest in it like a financial
portfolio. Be willing to invest. Give to the relationship first and in earnest. The opportunity to
create authentic depth in a relationship is irreplaceable and cannot be achieved with
unlimited office meetings.
7. Treat connections like neighbors. Everyone was expected to contribute to the success of the
village. But this concept is slipping away as social networks revolutionize how we
communicate. We get competitive, only revealing certain aspects of ourselves, especially our
successes. The key is to offer value before asking for help.
8. Give back. Get involved, Don’t just donate money or attend a stuffy fundraiser dinner. Roll
up your sleeves and serve. Word-of-mouth spreads. Everybody knows somebody, and it's a
great fun to give back to your community.
ACTIVITY
1. What is networking?
2. Why is it important to entrepreneurs?

ASSESSMENTS:
MID TERM EXAMINATION
GENERAL INSTRUCTION: Read and follow the instructions carefully and answer all the items
the best as you can.
I. TRUE OR FALSE: Write your answers on the space provided.

A. If the first and second statements are TRUE, write (A).
B. If the first and second statements are FALSE, write (B).
C. If the first statement is TRUE and the second statement is FALSE, write (C), and
D. If the first statement is FALSE and the second statement is TRUE, write (D).
_____1. A. Entrepreneurs need to think about other people’s needs and feelings and keeping
these in mind when solving a problem.
B. Entrepreneurial Mindset is a way of thinking than can’t be learned and practiced.
_____2. A. Entrepreneurs should not announce what he/she can’t do.

B. Entrepreneurs need to develop a strategy before setting goals.
_____3. A. Innovation is the same as invention.

B. SMART stands for Specific, Measurable, Attainable, Result-oriented, or Realistic,
and Timebound.
_____4. A. Inertia means lack of activity, interest, or reluctance to do anything.

B. Limiting belief can make ordinary people do great things.
_____5. A. Persistence is a sense of hope for the future or for success.

B. Grit means bravery and character strength.
_____6. A. Entrepreneurial opportunities are situations where new products, services, raw
materials, and methods of organization can be introduced and sold more than their
production costs.
B. Entrepreneur must adopt a passive attitude.
_____7. A. To succeed, entrepreneurs must first have a broad goal.

B. The marketing plan is a written document prepared by the entrepreneur that outlines
all applicable external and internal elements involved in the start-up of a new
business.
_____8. A. HUGEs are goals that are set a lot higher than your current level.
B. Angel Investors are individuals who invest their own money in an entrepreneurial
company.
_____9. A. Pitching means presenting a business idea to potential investors.

B. Prototype is a product pre- production model designed for full-service testing.

_____10. A. Entrepreneurs develop creative solutions to the issues proactively.
B. An entrepreneur dares leave his comfort zone to do great things.
II. MULTIPLE CHOICE: Select the best answer to the question or statement. Shade the box that
correspond to your answer.
1. Sheldon is starting a new business and has established relationships with several successful
local companies. Which of the following is the best way to use these relationships to succeed in
his business?
Ⓐ Gaining inside marketing information
Ⓐ Persistently asking those business owners to invest in his company
Ⓐ Attending trade shows and conferences to make new connections
Ⓐ Sharing those businesses' content on social media
2. There are several car repair shops in your town, but Penny’s repair shop is remarkable. The
customer service is what distinguishes her shop. Every client is welcomed by a friendly employee
and s/he receives snacks and drinks while s/he is waiting for the repairs. The great customer
service that people can expect from Penny’s business is considered her _______________.
Ⓐ Vision Ⓐ Brand Promise
Ⓐ Tagline Ⓐ Mission Statement
3. An entrepreneurial business owner must

Ⓐ Dislike business planning
Ⓐ Be independently wealthy
Ⓐ Desire regular 40-hour work weeks
Ⓐ Have an adventurous spirit
4. Looking at problems from various points of view helps entrepreneurs develop

Ⓐ Practical arguments
Ⓐ Creative solutions
Ⓐ Unnecessary conflicts
Ⓐ Unpredictable results
5. Raj would like to develop, manufacture and sell a new product. Before it does so, Raj spends
six months conducting marketing research. What are the main advantages of his action?
Ⓐ Delaying production and increasing labor costs
Ⓐ Increasing costs and identifying consumer dislikes
Ⓐ Predicting trends and provide information to customers
Ⓐ Determining customer preferences and reducing losses
6. Given below are some reasons why people are not planning except
Ⓐ Superstitious Beliefs Ⓐ Inertia
Ⓐ Fear of failure Ⓐ Limiting Beliefs

7. Howard wants to start up his own enterprise, however, he doesn’t have enough funds. Amy,
his friend, decided to lend him some of her money with no interest. Amy is considered as
__________________.
Ⓐ Crowd Funder Ⓐ Angel Investor
Ⓐ Startup Incubators Ⓐ Capitalist
8. According to Newlands (2014), below are awesome opportunities for entrepreneurs, except
Ⓐ Foreign Market Ⓐ Social power of internet
Ⓐ Invest in multiple business Ⓐ Social Media
9. _______________ is a set of proposed rules and techniques to change behavior in order to

achieve self- improvement, self- management and more efficient interpersonal communication.
Ⓐ Neuro-linguistic Programming Ⓐ Entrepreneurial Mindset
Ⓐ Entrepreneurial Skillset Ⓐ PAW Process
10. Which of the following can limit the opportunity for entrepreneurship?
Ⓐ New technological development
Ⓐ Economic expansion
Ⓐ Growth of cities
Ⓐ Fear of failure
11. What behavior is exhibited when an individual recognizes the possibility of an undesirable
outcome and continues to work toward a goal?
Ⓐ Self-discipline Ⓐ Risk-taking
Ⓐ Flexibility Ⓐ Creativity
12. Successful entrepreneurs enjoy their work and often start their businesses so that they can
share their interests and enthusiasm with others. In other words, successful entrepreneurs have
which characteristic for what they do?
Ⓐ Apathy Ⓐ Reservation
Ⓐ Concern Ⓐ Passion
13. After Leonard realized that he processed an order incorrectly, he waited too long to correct
the problem. As a result, an incorrect item was shipped to the customer. Now, the customer will
need to ship the item back to the warehouse, and Leonard’s company will need to pay extra
charges to have the product returned. What does this situation illustrate?
Ⓐ The company has unrealistic expectations about the ability of Leonard to carry out his
work.
Ⓐ Employees should inform their supervisors of all problems immediately.
Ⓐ Customers are probably very angry about the mistakes made by employees.
Ⓐ An employee's decisions and actions can have a negative impact on others.

14. What is often a positive result of accepting responsibility for a poor decision?
Ⓐ The control of opinions of others
Ⓐ The reinforcement of skeptical attitudes
Ⓐ The gain of respect of others
Ⓐ The demonstration of self-importance
15. Which of the following does not belong to the group?

Ⓐ People cannot be trusted.
Ⓐ I cannot expand my business.
Ⓐ No one will trust my new idea.
Ⓐ My business has reached its growth limit.
III. IDENTIFICATION: On the space provided, write MATATAG if the item pertains to
Entrepreneurial Mindset, and MARUPOK if the item pertains to Entrepreneurial Skillset.
_____________1. Opportunity-Seeking _____________12. Problem-Solving

_____________2. Prototyping _____________13. Adaptability
_____________3. Courage _____________14. Opportunity Analysis
_____________4. Business Model Methodology _____________15. Teamwork
_____________5. Public Speaking _____________16. Growth Mindset
_____________6. Redefining Failure _____________17. Market Research and
_____________7. Optimism Customer Validation
_____________8. Curiosity _____________18. Resourcefulness
_____________9. Idea Generation _____________19. Design Thinking
_____________10. Persistence and Grit _____________20. Empathy
_____________11. Creativity

FINAL EXAMINATION
MULTIPLE CHOICE: Encircle the best answer to the questions or statements.
1. Which of the following would be the best solution if there is not enough funding to start up a
business?
a. Loan money from lending companies
b. Postpone the business start up until there is enough funding
c. Accept help from a friend who’s willing to lend his money to you without interest
d. Borrow from your parents
2. Which of the following is not a characteristic of a great leader?

a. A great leader has great passion.
b. A great leader is good boss.
c. A great leader is decisive.
d. A great leader is willing to learn.
3. Mico is facilitating a group brainstorming session to generate new product ideas for his
business. Which of the following attitudes is important for Mico to demonstrate?
a. Judgmental c. Passive
b. Neutral d. Authoritarian
4. Looking at problems from various points of view helps a small-business owner develop
a. Creative solutions c. Unnecessary conflicts
b. Practical arguments d. Unpredictable results
5. Which of the following is not an example of passive income?

a. Interest c. Dividend
b. Salary d. Commission
6. When a business has been running successfully for several years, what would be a probable
next financial step?
a. Purchasing a second location c. Deciding on financial goals
b. Acquiring start-up funds d. Determining product prices
7. Which of the following is not an element of self-leadership?

a. Self- Reward
b. Self-Cueing
c. Self-Monitoring
d. Self-Observation
8. Active income is ________________.

a. Investment income you earn even when you do not work
b. Fund periodic wants and further increase investments
c. Income derived from labor or work
d. Income earned from assets, investments, or both

9. _________ means acquiring knowledge, skills and abilities through study, experience, or being
taught.
a. Learning
b. Teaching
c. Leading
d. Training
10. It is a physiological requirement for the survival of humans.

a. Want
b. Income
c. Work
d. Need
11. Which of the following stages of traditional learning that means entrepreneur have the skill,
but he/she is still not yet consistent and habitual?
a. Unconscious Incompetence
b. Conscious Competence
c. Conscious Incompetence
d. Unconscious Competence
12. Which of the following stages of traditional learning that means the skill is already habitual
and automatic?
a. Unconscious Incompetence
b. Conscious Competence
c. Conscious Incompetence
d. Unconscious Competence
13. Which of the following is not part of the checklist to become a better decision-maker?
a. Aspiration
b. Analytical
c. Thoughtful
d. Quickly
14. A major benefit of receiving recognition for your efforts and contributions is that it _______.
a. allows you to relax.
b. gives you motivation.
c. helps you learn.
d. provides a good example.
15. After preparing his business's cash flow statement, Otis determines that the business will have
a deficit for the next few weeks. What is the best way for Otis to cover his expenses?
a. Sell assets
b. Close the business temporarily
c. Hire additional salespeople
d. Obtain a loan
16. A small restaurant wants to expand, but first it needs to raise funds. Hugo wants to raise
capital through debt financing, but his partner, Ally, isn't sure that's a good idea. What is one
downside of debt financing that Ally could cite to prove his point to Hugo?
a. Shareholders will own part of their business.
b. They will have to pay interest on the borrowed amount.

c. They will need to sell stock in their business.
d. They will be required to repay the money immediately.
17. To prevent viruses and spyware from infecting his business's computer network, Howard built
a network firewall. Howard acted
a. carelessly. c. haphazardly.
b. reactively. d. proactively.
18. _______ is when perceived difficulty is much greater than your perceived resources.
a. Learning Zone
b. Anxiety Zone
c. Difficulty Zone
d. Boredom Zone
19. _______ is when perceived difficulty roughly matches your perceived resources.
a. Learning Zone
b. Anxiety Zone
c. Difficulty Zone
d. Boredom Zone
20. Which of the following best describes Generative Learning?

a. There is a gap between what you know and what you want to know, and you take
actions to close that gap.
b. The results are feedback leading to increased knowledge and skills.
c. Feedback from our actions leads us to question our assumptions.
d. If our feedback tells you that you are getting further away from your goal, you stop and
re-evaluate your actions and take a different action.
21. “Yes, you'll save money instantly” is an example of a statement with

a. threatening language
b. an impersonal message
c. persuasive words
d. body language
22. An entrepreneur needs to put _______ into words.

a. Mission c. Goal
b. Action d. Vision
23. For successful business to occur, entrepreneurs must be willing to ___________ while
developing ideas.
a. Learn
b. Teach
c. Avoid results
d. Work alone
24. Entrepreneurs commit to their goals and never give up because they have
a. positivity
b. attentiveness
c. persistence
d. a sense of humor

25. Which of the following is not the best option to spend a loaned money?
a. Purchase motor vehicle for delivery service
b. Installation of Wi-Fi service for customers
c. Opening another branch
d. Purchasing of new attractive and relaxing furniture and fixtures
26. ________ is a process that raises an entrepreneur’s awareness of how, when, and why he/she
behave the way he/she do in certain circumstances.
a. Self-Cueing
b. Self-Goal Setting
c. Self-Reward
d. Self-Observation
27. It is the process of prompting that acts as a reminder of desired goals and keeps your attention
on what you are trying to achieve.
a. Self-Cueing
b. Self-Goal Setting
c. Self-Reward
d. Self-Observation
28. Which of the following statements is not true?

a. Simple Learning is also called Simple Loop Learning
b. Boredom Zone is synonymous to the Drone Zone
c. Anxiety Zone is synonymous to the Drone Zone
d. Generative Learning is also called Double Loop Learning
ESSAY: What is entrepreneurial mindset? Do you think that without it an entrepreneur can
succeed? Why or why not? (2 points)

 REFERENCES
Books
Belief. (n.d.) In CollinsDictionary.com. Retrieved from

https://www.collinsdictionary.com/dictionary/english/belief
Bosman, L., Fernhaber, S., & SpringerLink (Online service). (2018). Teaching the Entrepreneurial
Mindset to Engineers. Switzerland: Springer International Publishing.
Hisrich, R., Peters, M., & Shepherd, D. (2017). Entrepreneurship. Thousand Hills Oaks.
Neck, H. M., Neck, C. P., & Murray, E. L. (2017). Entrepreneurship: The Practice and Mindset.
SAGE Publications, Incorporated.
Low, R. (2009). Entrepreneurship Mindset.
Links
https://venturelab.org/wp-content/uploads/2018/04/VentureLab-Entrepreneurial-Mindset-and-
Skillset.pdf

GEED 20013 Entrepreneurial Mindset

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

GEED 20013 Entrepreneurial Mindset

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

Polytechnic University of the Philippines

INSTRUCTIONAL MATERIAL FOR

Prof. Mark Christian Catapang

PUP A. Mabini Campus, Anonas Street, Sta. Mesa, Manila 1016

THE COUNTRY’S 1st POLYTECHNIC

Entrepreneurial Mindset | GEED 20013 2

There is no precise formula that guarantees success when it comes to entrepreneurship

After the completion of this module, you should be able to:

Class Standing 70%

Midterm Grade + Final Term Grade

Entrepreneurial Mindset | GEED 20013 3

TOPIC 1: EMPOWERING ENTREPRENEURS

At the end of this lesson, you should be able to:

Entrepreneurial mindset, as defined by Hisrich, Peters, and Shepherd (2017), involves

Venturelab.org specified some entrepreneurial mindset in relation to the traits of the

5. Opportunity-seeking. Entrepreneurs actively observe, identify, and act on circumstances

6. Problem-solving. Entrepreneurs proactively develop creative solutions to the problems

9. Resourcefulness. Entrepreneurs develop quick and clever ways to overcome challenges.

Entrepreneurial Mindset | GEED 20013 4

2. Teamwork. It is rare for someone to accomplish great things by themselves. Entrepreneurs

8. Business Model Methodology. Business models helps answer questions like:

Entrepreneurial Mindset | GEED 20013 5

Metacognition is the way in which to understand one’s performance or the process of

PASSION AND ENTREPRENEURSHIP

Mindset is not a predisposed condition. Anyone can develop a more entrepreneurial

A good approach is to consider developing new habits. A habit is a sometimes-

Entrepreneurial Mindset | GEED 20013 6

In the entrepreneurship context, self-leadership is a process whereby people can

1. Behavior-focused Strategies helps increase self-awareness to manage behaviors

Entrepreneurial Mindset | GEED 20013 7

James L. Adams, a Standford University professor who specialized creativity, identified

Improvisation is the art of spontaneously creating something without preparation.

The ability to function in an uncertain world requires a degree of improvisation.

Improvisation is especially relevant to the world of entrepreneurship where uncertainty is

• Improvisation is not just for actors or musicians.

THE POWER OF BELIEFS

Belief, as defined by collinsdictionary.com, is a feeling of confidence that something exists,

Entrepreneurial Mindset | GEED 20013 8

Entrepreneurs Tap Their Potential

In high levels of competition, even in physical games, an athlete needs to be both

What Limiting Beliefs Do You Have?

Do you believe in the following:

Entrepreneurial Mindset | GEED 20013 9

2. Limiting beliefs about money.

3. Limiting beliefs about relationships and people.

4. Limiting beliefs about my career or business.

FORMULA FOR SUCCESS

Entrepreneurial Mindset | GEED 20013 10

Entrepreneurial Mindset | GEED 20013 11

Challenge the “evidences” that support the belief.

d. How did I first create this belief?

e. What makes me believe that is true?

Create an empowering belief.

g. My new empowering belief.

Entrepreneurial Mindset | GEED 20013 12

i. Associate all the new benefits of having this new belief.

• By making this new belief, I will benefit in the following ways.

3. Case Study: Rescue One Financial

Entrepreneurial Mindset | GEED 20013 13

If you are Smith, what would you do?

Entrepreneurial Mindset | GEED 20013 14

At the end of this lesson, you should be able to:

WHAT IS THE BUSINESS PLAN?