Entrepreneur Reviewer - Decision Maker

LESSON 1 Entrepreneur Employee

Entrepreneur - The person who created the business. Enjoys Managing and Enjoy Performing
Organizing
Entrepreneurship - is the activity of setting up a business
or businesses, taking on financial risk in the hope of profit. Working against time Working time is in their favor

Business Find ways to make a task easier Find ways to make their own
- Production and Selling of Goods and Services for everybody task easier
- Main purpose is to satisfy the needs and wants
of the society Workload focuses on Workload focuses on simple to
complicated to simple complicated
Goods - Tangible things that we can consume or buy
Efficient to make their job done Efficient to make their job done
and take another level of task fast
Service - Non Tangible things that we consume or buy
to be done
Needs - Necessary things that is needed for survival
Needs to be good in many Needs specialization on
things specific job
Wants - Luxurious things
Takes Risks Wants Safety
Business Basic Resources
- Men – These are the people who work in Accepts Failures Perfectionist
business enterprise.
- Money – These are needed in putting up the Wants to be valued base on Wants to be valued on the
business enterprise the result things they put into something
- Machine – Modern production requires the use
Reorganize resources to be Reorganize steps to be efficient
of machine. This is more efficient and
efficient
economical.
- Materials – These are needed in the creation of Accepts Fluctuations and not Wants a fixed income
products. being paid at all
- Methods – These refer to technology or
techniques of production. Doesn’t like repetition on work Likes repetition
- Management – These refer to planning and
Willing to work long hours Prefer working for a limited
organizing the business.
time
Are Entrepreneurs Born or Made?
- Entrepreneurial qualities can be developed early LESSON 3
in life as a result of childhood training in
independence and self-reliance, among others Market - A place where sellers and buyers exchange goods
and exposure to work and industry. or services upon an agreed price or a group of people or
organizations that buy a particular good or service
LESSON 2 concept.

Qualities of Entrepreneurs According to Institution

- Consumer Market - Directly consume a product
- Reasonable Risk Takers or service.
- Self Confident - Organizational Market - Buyers whose intention
- Hard Working is to produce another product or service.
- Innovative - International Market - Consumers from abroad.
- Leadership
- Positive Thinkers According to Form
 - Primary Market - When a firm introduces a new
product class in response to latent demand or
needs.
- Secondary Market - It is formed when customers
develop specific needs or preferences
Market Segmentation - Is a sub- group of a particular
market which is composed of units with more or less
similar characteristics.
- Geographic Segmentation – requires dividing
the market into different geographical units like
nations, regions, provinces, cities, towns, and
barangays.
- Demographics Segmentation – refers to dividing
the market into segments on the basis of
demographic variables like age, sex, family life
cycles, family size, income , occupation ,
education, religion, race, and nationality.
- Psychographic Segmentation - refers to the
classification of buyers or consumers by some
psychological characteristics they possess in
common.
- Behavior Segmentation – is a term that refers to
the grouping of buyers on the basis of their
knowledge, attitude, use or response to a
product.
Requirements for Effective Market Segmentation
- It must be measurable - easy to find information
- It must be substantial - easy to create marketing
program
- It must be accessible - easily to reached
- It must be actionable - can be useful
Criteria for Selecting Target Market
- Size - In choosing a market segment, it must be
large enough to be worth serving.
- Expected growth - there are markets that are
not currently attractive but some of these may
be expected to grow in the future.
- Competitive position - The presence of
competition in the segment. The strength of the
competition must be thoroughly analyzed.
- Cost of reaching the segment - A market
segment that is chosen must be easily reached
by the firm. If marketing efforts to reach the
market will be expensive or not.
- Compatibility - with the firm’s objectives and
resources if the firm does not have enough
resources to serve a prospective segment.
Identifying Market Problem - An entrepreneur can identify
a problem by observing what is happening in his locality
and check for any difficulties, gaps, needed improvements,
scarcity, limitations and many others.
Macro Environment - Concerns with the bigger aspect of
business which includes determination on Political,
Economic, Social, Technological, Legal and Environment
(PESTLE).
Industry - The smaller than macro-market but second to
the list in the Trends in Opportunity Seeking.
Markets - Can be a place where buyers and sellers meet to
exchange goods and services or groups of people or
organizations that buy goods and services.
Micro Market - Smaller than market but still can be a
source of opportunity to small entrepreneur.
Consumers - They are the buyers of products in retail and
for household use.
Import - The term import is derived from the conceptual
meaning as to bring in the goods and services into the port
of a country.
Export - The term export is derived from the conceptual
meaning as to ship the goods and services out of the port
of a country.
LESSON 4
Urban Areas - Which inhabitants have non agricultural
jobs.
Rural Areas - They are often farming or agricultural areas.
Business Factors need to be Evaluated
- Market – the number of prospective buyers, the
presence of competitors, and the prices and
quality of goods and services have to be
analyzed.
- Individual Interest - Business interests of
individuals vary.
- Capital –The availability of funds should fit the
type of business to be organized.
- Skills - The entrepreneur should have the proper
skills in the business he is doing to undertake.
- Suppliers of inputs –It is equally important that
there are steady suppliers of raw materials and
other inputs of the business.
 - Man power – The success of any business
enterprise primarily depends on the efficiency of
its employees.
- Technology – Tastes and preferences of
consumers are not permanent. These are heavily
influenced by innovations. And innovations are
the products of technology.
SWOT Analysis - SWOT is the acronym of Strengths,
Weakness, Opportunities and Threats.
Reasons Why Entrepreneur needs to use Market Research
- Profitable markets
- Saleable products / services
- Strengths and Weakness of competitors
- Available resources
- Business Risk
- Trends in consumer tastes and preferences
- Better marketing strategies
- Proper Business Location
- New market opportunities
- Realistic business objectives
LESSON 5
Viability - The ability as intended or to succeed; the degree
of chance that something will succeed.
b. Multistep - This type of statement is
common for companies with multiple
lines of business or those that sell
tangible goods.
- Step 1: Gross profit = net
sales – cost of goods sold
- Step 2: Operating income =
gross profit – operating
expenses
- Step 3: Net income =
operating income +
non-operating income
Statement in Changes in Owners Equity
- Owner’s Equity is defined as the proportion of
the total value of a company’s assets that can be
claimed by its owners and by its shareholders.
It is calculated by deducting all liabilities from
the total value of an asset (Equity = Assets –
Liabilities).
Balance Sheet

Profitability - The state or condition of yielding a financial

profit or gain. It is often measured by price to earnings
ratio.

Four Financial Statements

Income Statement

- An important aspect of the business transactions

for it has to look at the three different things;
ASSETS, LIABILITIES and EQUITY
- Revenues – Expenses = Income PROFIT or LOSS
- ASSETS = LIABILITIES + EQUITY
- An income statement shows business revenue
minus expenses and losses. Your income Assets
statement, also called the “profit and loss”
statement. - Owned property by a person or company.
a. Single Step - For small operations with a. Cash
a single line of business. Net income = b. Accounts Receivables
(revenues + gains) – (expenses + c. Inventories
losses). d. Land
e. Building
 f. Equipment Factors Affecting Consumer Buying Behavior

Liabilities 1. Psychological Variables - consisting of

motivation, perception, learning, attitudes and
- Responsibilities or obligations of a person or lifestyle.
company.
a. Loans Payable 2. Social Influences - personal influence, reference
b. Notes Payable groups, the family, social class and culture.
c. Accounts Payable
3. Purchase Situation - purchase task, The social
Equity surroundings , the physical surroundings ,
temporal effects and antecedent states.
- Is also called as CAPITAL or the amount invested
by the entrepreneur to start his/her business. LESSON 6

Cash Flow Statements Market Segmentation Decision

- It is important that there is a demand for the

product or services to be created that will meet a
certain segment.

Product Mix Decisions

- Product varieties for a target market to ensure

market need is solved. There can be changes
with the design, color, texture etc. but with the
same content to create varieties to choose from.

Product Specifications

- Some customers, especially in the industry, need

exact specifications and other details for the
product. This involves the measurements
- A cash flow statement is a financial statement required by the customer related to size, shape,
that provides aggregate data regarding all cash materials or composition and including its
inflows a company receives from its ongoing description.
operations and external investment sources.
Positioning And Communication Decisions
𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
Payback Period Income After Taxes = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑁𝑒𝑡
- It is how you position your products to your
Return on Sales =
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥𝑒𝑠 customers. You align your product to the minds
𝑆𝑎𝑙𝑒𝑠/𝑖𝑛𝑐𝑜𝑚𝑒
of your customers creating an image that fits
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥𝑒𝑠 their needs.
Return of Investment = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 / 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
4 Types of Customer Satisfaction
Consumer Requirements
1. Physiological Satisfactions - These are needs for
- Refer to the specifications or features of a survival like “need for sleep, food, air and
product or service that are deemed necessary by reproduction”.
customers. These requirements motivate
customers to buy a product or service. To 2. Economic Satisfactions - Customers want to have
determine customer requirements, companies a guaranteed good value for their money.
can research their target market to understand
their desires and needs.
 3. Social Satisfactions - These are related to how
the customer deals with other people or society
with its approval. A product will be best for these
people if it will be recommended by friends.
4. Psychological Satisfactions - It includes feelings
and emotions to the customer. Best products for
these customers are those things that are
associated with their positive and negative
experiences, memories of their youth and love.
Value Proposition
- It is the value a company promises to deliver to
customers should they choose to buy their
product.
Market Competition
- Competition is the rivalry between companies
selling similar products and services with the
goal of achieving revenue, profit, and market
share growth.
LESSON 7
Marketing Strategy
- Marketing strategy is a process that can allow an
organization to concentrate its limited resources
on the greatest opportunities to increase sales
and achieve a sustainable competitive
advantage.
Marketing Mix
- Refers to the set of actions, or tactics, that a
company uses to promote its brand or product in
the market.
7P’s
- Product
- Price
- Place
- Promotion
- People
- Packaging
- Positioning
Importance of Marketing Mix
1. It helps in a clean mix creation - Your marketing
mix should have all the P’s compatible with each
other.
2. Marketing mix helps in New product
development - While designing an existing
product, there are any number of ideas which
can come up for a related product that can be
designed by the company.
3. Marketing mix helps increase the product
portfolio - Whenever you want to increase the
product depth or product line and length, you
have to make minor changes to the product. In
essence, you are making minor changes in the
marketing mix itself.
4. It is a guide to improve a business -
Determining your P’s will help you improve your
business.
5. It helps in differentiation - When you analyze
the marketing mix of Competitors, there are
many different ways that you can differentiate
yourself from the competitor.
6. It helps you in being dynamic - A company
which is well prepared is also prepared when
disaster strikes.
LESSON 8
Product
- A Product is anything offered for sale by a firm to
buyers to satisfy their wants and needs. Product
may take any of the following forms
a. Physical Object
b. Service
c. Place
d. Organization
e. Idea
f. Personality
Two Classification of Products
Consumer Goods
- Are those intended for final consumption by
consumers.
a. Durable Goods - tangible goods which
normally survive many uses.
b. Non Durable Goods - tangible products
which are consumed in one or a few
uses.
c. Services - intangible goods like
activities, benefits or satisfactions
which are offered for sale.
Industrial Goods
- Are those used in the production of other goods.
a. Installations - refers to industrial
products with long life, are generally
expensive, and they form part of the
major capital equipment of an
industrial firm. Examples : Buildings,
generators, computers and others.
b. Accessory Equipment - are industrial
goods that are used as aids in the
production process. Example: hand
tools and lift trucks in factories, fax
machines and desks in offices.
c. Raw Materials - These are
unprocessed goods that will become
part of another product.
d. Component Parts and Materials -
these are processed industrial goods
that will still be used and become an
actual part of the finished product.
e. Industrial Goods - these are items that
are used as aids in the operating
process but do not become part of the
finished products. Example : pencils,
ink, paper clips, fasteners and others.
f. Services - These are expense items
that assist in the operations. Example
maintenance service for general
housekeeping, security services and
consultancy services.
Consumer Shopping Habits
- Convenience Goods - are those which are
purchased with minimum of effort. Many of
them are readily available in many retail outlets.
Example : soap, bread, soft drinks and milk.
- Shopping Goods - are those that are bought only
after an effort to compare with other goods is
made. Example: radio sets, ready to wear suits,
cell phones and shoes.
- Specialty Goods - are those that the consumers
seek to buy and they are not willing or they are
not able to accept substitutes. Example: special
medicines, jewelry, and exotic foods like turtle
eggs.
- Unsought Goods - are those that are not yet
wanted by or are still unknown to the consumer.
Because of the said reasons, consumers use no
effort to seek them.
a. New Unsought Goods - are really new
ideas or products that the consumers
still have to know to be motivated to
buy. Example: papaya soap when it was
first introduced.
b. Regular Unsought Goods - are those
that stay unsought but not unbought
forever. Examples are encyclopedias,
educational plans, memorial plans and
life insurance plans.
Place
- Place is the point where products are made
available to customers.
Price
- Price is the money, good or service exchanged
for the ownership or use of a good or service.
Promotion
- Promotions refer to the entire set of activities,
which communicate the product, brand or
service to the user.
a. Personal Selling - refers to the direct
face to face communication between
sellers and prospective buyers.
b. Public Relations - is a form of
promotion designated to favorably
influence attitudes toward an
organization, its products and its
policies.
 c. Sales Promotion - is a short term
inducement of value offered to arouse
interest in buying a good or service.
d. Advertising - may be defined as any
paid form of non personal presentation
and promotion of ideas, goods, or
services, by an identified sponsor.

People

- Refers to anyone directly or indirectly involved in

the business side of the enterprise.

Packaging

- Provides protection, convenience, safety and to

effectively promote the product.
a. Primary Package which is the product’s
immediate container.
b. Secondary Package which protects the
primary package.
c. Shipping Package which contains the
secondary package or packages. It
provides ease of storage, identification,
and shipping.

Positioning

- Positioning defines where your product stands in

relation to others offering similar products and
services in the marketplace as well as the mind
of the consumer.