REVIEWER IN ENTREPRENEURSHIP

MODULE 1: Overview of Entrepreneurship

ENTREPRENEURSHIP - is a proactive process of developing a business venture to make a profit.

❑ It involves seeking opportunities for market.
❑ Establishing and operating a business out of the opportunity
❑ Assessing risks and rewards through close monitoring of operations
❑ An entrepreneur is successful if the business that he or she envisioned has materialized into a thriving
industry with regular customers and financial gain.
❑

SOCIETAL AND ECONOMIC BENEFITS OF ENTREPRENEURSHIP

❑ Produces more jobs that equate to an increase in national income

❑ Amplifies economic activities of different sectors of society
❑ Introduces new and innovative products and services
❑ Improve people’s living standards
❑ Disperses the economic power and creates equality
❑ Controls the local wealth and balances regional development
❑ Reduces social conflicts and political unrest
❑ Elicits economic independence and capital formation

WHO IS AN ENTREPRENEUR?
❑ Entrepreneur has a French origin and was coined from the words entre which means “between”, and
prendre, which means “to take”
❑ An entrepreneur is a unique individual who has the innate ability and extraordinary dedication to establish
and manage a business, acknowledging all the reaps and rewards
❑ It entails a holistic business talent to be considered one, ranging from the product and marketing expertise
to operations agility, and to financial proficiency
❑ Natural talent of an entrepreneur- being perceptive for opportunities in his or her surroundings

Leadership -is the core of every entrepreneur

❑ He or she is always excited about his/her business and bravely takes risks
❑ He or she innovates, executes his/her ideas and rarely procrastinates

FIVE LEVELS OF ENTREPRENEURIAL DEVELOPMENT (Action Coach)

1. The self-employed
❑ Persons who are not comfortable with the routines of a desk job
❑ They do not want to conform to a fixed working schedule
❑ They want to do things on their own and start to feel agitated when controlled by powers-that-be
 2. The manager
❑ In this level, entrepreneurs feel the need to step up and ask help from people around them
❑ They will begin to create positions that match the requirement of business and the employees’ expertise

3. The leader
❑ Entrepreneurs in this level already seeing their people flourish, stepping and producing great results
with minimal supervision
❑ They already recognized key leaders in their organization
❑ Entrepreneurs focus at this stage is the big picture and strategic direction of business rather than
generating sales and operating the business

4. The investor
❑ They look for more opportunities to grow
❑ They may either purchase one or two businesses or sell established business (franchise)

5. The true entrepreneur

❑ They aim for quality and excellence in their work

Four steps of learning:

❑ Idealization- entrepreneurs dream enormously and desire to build environment
❑ Visualization- entrepreneurs start to create plans to make the dream a reality
❑ Verbalization- involves sharing their ideas with other people knowing their vision is occurring already
❑ Materialization- happens when the vision becomes reality. In this stage, true entrepreneurs now have an
income that keeps on multiplying even if they do not put much effort

TYPES OF ENTREPRENEUR
1. Technopreneur- is an entrepreneur who puts technology at the core of his/her business model
2. Social Entrepreneur- one who recognizes the country’s social problems and turn them to profitable
institutions with the intention of helping the disadvantaged community rather than making a profit
3. Intrapreneur- one who is tasked to think, establish and run a new big idea or project. They are usually the
product managers or business development managers
4. Extrapreneur- entrepreneur who hops from one company to another to act as the innovation champion,
providing creative and efficient solutions

Common and Core Competencies in Entrepreneurship

❑ one must possess common entrepreneurial competencies that are needed all throughout the
entrepreneurial career
❑ You should also possess core competencies that are needed for business sustainability and
management
COMMON TRAITS OF ENTREPRENEUR

Proactive
- Reactive rather than passive
- Address issues, problems and challenges before they come rather than when they already happened

Agent of Change
- Innovation champions. They are always enthused to improve and develop new products and services and introduce
them to the market.

Risk takers
- Entrepreneurs do not just grab opportunities left and right; they have to take into consideration the potential various
threats they may encounter.

Have a sharp eye for opportunities

- Know how to assess the net cause and effect of an opportunity and decide intelligently if a venture should be
considered or not.

Sociable
- Soft skills are one pf the most important competencies of entrepreneurs as these establish the relationship with the
most important assets of the company. (Its people and customers.)

Networkers
- A networker knows the people to connect with. Successful entrepreneurs gain trust of their valuable network and
maintain long-lasting relationship with them
Decisive.
- Entrepreneurs do not settle for gray areas or unclear solutions, they do not leave issue unsolved without disposition,
they have clear objectives and strategies
- They base their decision on scientific calculations backed up by their experience and technical knowledge

Balanced
- The minds of entrepreneurs should have a balance between the analytical and creative side (unique ideas)
- Entrepreneurs always have “Eureka!” moments and enjoy them
Innovative
- The minds of entrepreneurs are rich with big ideas that can add value to their existing business or could become
changer in the industry or business where they belong
- They do not stop improving and thinking of new and worthwhile ideas for their business
CORE TRAITS OF AN ENTREPRENEUR

Leaders
- To be successful leaders, they must be a source of inspiration for their employees
-They must be very humble, approachable, friendly and also know how to listen to people’s concerns
- act according to responsibilities given to them and know how to unite the team to bring out the best in every
employee

Communicators
- Entrepreneurs know how to use all forms of communication to effectively share ideas and address certain concerns
with costumers or employees
- Effective communication not only provides people with a clear view of what the business offers, they also help
prevent mishaps in the organization

Specialists
- Experts in their chosen business
- Can easily think of innovating and improving the product or service offerings because they know their intricacies

Problem Solvers
- Possess critical thinking skills and look at problems as challenges or puzzles that they need to solve
- Able to solve problems by immersing themselves in day-to-day activities, knowing what is happening in and out of
their business
- Aware of their employees’ personalities

MODULE 2: Recognizing the Potential Market

OPPORTUNITY SPOTTING AND ASSESMENT

❑ Beginning and considered as most difficult
❑ Entrepreneurs take note of interesting trends in the environment
❑ Consumers are reliable sources of opportunity information

Other major sources of opportunity

❑ Problems in the environment
❑ Problems encountered by co-entrepreneurs
❑ New trends

DEVELOPING A BUSSINESS PLAN

❑ Entrepreneurs should formulate a business plan when they have already spotted assessed the
opportunities for the market.
 ❑ A BUSSINESS PLAN is comprehensive paper that details the marketing, operational, human resource,
financial, strategic direction, and tactics of the business.
❑ The plan will be the core guide and direction of the entrepreneur in calculating the resources needed,
assessing how to obtain these resources, and running the business.

DETERMINING THE CAPITAL NEEDED

❑ It is mandatory in the entrepreneurial process to calculate the sources needed to establish the business
❑ Careful calculation must be applied in computing the complete set of resources needed and include only
those items that are considered as the real needs in venture creation
❑ Allowance must also be considered

RUNNING THE BUSINESS

❑ This is part where the entrepreneur should use the resources allowed for the new venture
❑ All aspects of the business plan should be critically observed from operations, marketing and sales,
human resources, finance, and the strategy implementation
❑ The entrepreneur should have a control and monitoring system

SCANNING THE MARKETING ENVIRONMENT

❑ Scanning the marketing environment is the starting point of any new venture that involves understanding
and knowing the complexity of the environment
❑ Through scanning the environment an entrepreneur can recognize various opportunities and understand
thoroughly the arena where the future business will operate

SEEKING, SCREENING, SEIZING

❑ The 3S of opportunity spotting and assessment the framework that most of the promising
entrepreneurs use to finally come up with the ultimate product or service suited for a specific
opportunity
❑ An opportunity is an entrepreneur’s business idea that can potentially become a commercial product
or service in the future

S1: SEEKING THE OPPORTUNITY

❑ Opportunity seeking is the first and is the most difficult process to the number of options that the
entrepreneur will have to choose from. It involves the development of new ideas from various sources:

MACRO-ENVIRONMENTAL SOURCES

❑ STEEPLED – This is a mnemonic for sociocultural, technological, economic, environmental, political, legal,
ethical and demographic factors
❑ INDUSTRY
❑ NEW DISCOVERY OR KNOWLEDGE
❑ FUTURISTIC OPPORTUNITIES
 MICRO-MARKET SOURCES

❑ Consumers preferences, interests and perception

– current needs and wants
❑ COMPETITORS
❑ UNEXPECTED OPPORTUNITIES FROM CUSTOMERS
❑ IRRITANTS IN THE MARKETPLACE (such as deterents, problems, complaints and delays)
❑ TALENTS, HOBBIES, SKILLS, and EXPERTISE
❑ LOCATIONS

METHODS IN GENERATING IDEAS

❑ FOCUSED GROUP DISCUSSION (FGD)
– A moderator handles a very open, free flowing and in-depth discussion with a group of people who can
provide insightful ideas about a new product or service that will fill a market need.

❑ PROBLEM SOLVING ANALYSIS

– This is similar to the FDG except that the participants are already given an inventory of product or
service problems. The participants will just identify from the list given the compelling problems of
potential product/service instead of generating new ideas

❑ BRAINSTORMING
– Similar to FGD, brainstorming is an activity that allows the participants to share creative ideas using the
following rules: No destructive criticism, wilder ideas are accepted, more ideas are preferred,
improvement of others’ ideas is allowed.

❑ BRAINWRITING OR INTERNET BRAINSTORMING

– This is exactly the same as brainstorming except that the channel used is not face-to-face, but in writing
or online.

S2: SCREENING THE OPPORTUNITY

❑ It is process of cautiously selecting the best opportunity. The selection will depend on the entrepreneur’s;
internal intent, main objective that the business will accomplish in the entrepreneur’s life; external
intent which will address the compelling needs of the target.

S3: SEIZING THE OPPORTUNITY

❑ This the “publishing through” with the chosen opportunity. Entrepreneurs should make the best out this
opportunity, and they should exert effort and dedication for the future success of the new venture.
Entrepreneurs’ idea can any be type of innovations.

❑ BREAKTHROUGH INNOVATION
– This innovation, which may also include inventions, occur infrequently as these establish the platform
on which future innovations in an area are developed. Breakthrough innovations must be protected by
a patent, a trade secret, or a copyright.
 ❑ TECHNOLOGICAL INNOVATION
– This innovation is technological advancements of an existing product or service. These innovations
need to be protected.

❑ ORDINARY INNOVATION
– They are commonly originating from market analysis and technology pull instead of a technology push.
This means that the market has a strong influence in the implementation of an innovation.

PRODUCT OR SERVICE PLANNING AND DEVELOPMENT PROCESS

❑ In seeking process, one opportunity stood out from a number of sources. The opportunity was tested
according to its attractiveness and feasibility in the screening process. The last process, called product or
service planning and development process.

❑ IDEA STAGE
– Feasible products that suits opportunity
– Market evaluation
– Assess whether the new product or service ideas will be accepted by the market

❑ CONCEPT STAGE
– Consumer acceptance test
– Initial reactions of primary target market
– Conversational interviews
– To understand consumer preference on physical characteristics and attributes of a product

❑ PRODUCT DEVELOPMENT STAGE

– Leverages on the information generated from the prospective customers via the concept stage

❑ TEST MARKETING STAGE

– Actual sales results will be the foundation of the customer’s acceptance level and will be the basis in
commercializing the product or service.

MODULE 3: The Marketing Plan

BUSSINESS PLAN - A business plan is a written document describing a company's core business activities,
objectives, and how it plans to achieve its goals.

MARKETING PROCESS
❑ Marketing is all about knowing the CUSTOMERS.
❑ Identifying the customers’ needs
❑ You study what the customers’ want or desire
VALUE PROPOSITION AND UNIQUE SELLING PROPOSITION

VALUE PROPOSITION (VP)

❑ states WHY A CUSTOMER SHOULD BUY a certain product or service.
❑ Always focus on how customers define your value.

UNIQUE SELLING PROPOSITION (USP)

❑ Refers to HOW YOU WILL SELL the product or service to your customers.
❑ The marketing statement you use to sell your products and services to prospective customers.

KNOW YOUR CUSTOMERS

MARKETING RESEARCH - Is a comprehensive process of understanding the customers’ intricacies and the
industry they revolve in.
MARKET SIZE - It is the size the arena where the entrepreneur’s business will play.
CUSTOMER REQUIREMENTS - They are specific features and requirements that the customers need from a
product or a service.

PRIMARY AND SECONDARY TARGET MARKET

Market Intelligence – includes customer profiling, drives the entrepreneur on what correct strategies and tactics to
employ.
Market Segmentation – is the process of grouping similar or homogeneous customers according to demographic,
psychographic, geographic, and behavior.
Secondary target market – are customers who don’t have enough purchasing power or have fewer demands. They
may not be your primary target market, but they can be converted once effective marketing strategies are
implemented.

MARKET SEGMENTATION
1. Demographic
➢ Also called as socioeconomic segmentation.
➢ It is the process of grouping customers according to relevant socioeconomic variables for the
business venture which include income range and social class, occupation, gender and age,
religion, and ethnicity.

2. Psychographic
➢ It is the process of grouping customers according to their: Perceptions, Way of life, Motivations,
Inclinations
3. Geographic
➢ It is simply grouping customers according to their location.
➢ Moreover, this is critical in the analysis of the target market as this encompasses the cultures,
beliefs, preferences, politics, and lifestyle of a certain geography besides from the location of the
target market.
 4. Behavioral
➢ It is the process of grouping the customers according to their actions.

THE 7 Ps OF MARKETING

PRODUCT
❑ It is any physical good, service, or idea that is created by an entrepreneur or an innovator in serving the
needs of the customers and addressing their existing problems.
PLACE
❑ Refers to a location or the medium of transaction.

PRICE
❑ It is the peso value that the entrepreneur assigns to a certain product or service after considering its cost,
competition, objectives, positioning, and target market.
PROMOTION
❑ It involves presenting the products or services to the public and how these can address the public’s needs,
wants, problems, or desires.
PEOPLE
❑ In today’s marketing arena, people play a vital role in servicing customers even though the entrepreneur
sells only physical goods.
PACKAGING
❑ It is how the product or service is presented to customers.

PROCESS
❑ It is defined as a step-by-step procedure or activity workflow that the entrepreneur or employee follow to
effectively and efficiently serve customer.

FUNDAMENTALS OF BRAND MANAGEMENT

BRAND – refers to the identity of a company, of a product, of a service, or of an entrepreneur himself or herself.
❑ The challenge for the budding entrepreneur is to understand how to craft the brand, how to market this
brand, and how to make this brand deliver – these are the entire message of brand management.
BRAND MANAGEMENT – is the supervision of the tangible and intangible elements of a brand
BRANDING – is the process of integrating the strategies formed from the marketing mix to give an identity to the
product or service.
MODULE 4: Product Development, Operations, and Financial Plan

Fundamental of Product Development

PRODUCT DEVELOPMENT – is the process of developing, testing and commercializing a product or service with
the ultimate objective of solving the problem of the primary target market. It is composed of four sequential steps:
(1) Developing a product or service description (2) Creating a prototype (3) Testing the prototype, and (4) Validating
the market.

Product or Service Description

➢ It simply describes how a product or service works and how it benefits the customers.

1. It should directly address the primary target market in personal manner using everyday language.
2. It should highlight the features that will cater to the customer’s needs or address the customer’s problems.
3. Realistic superlatives should be used for the product description.

Creating a Prototype of the Product or Service

Prototype - is a preliminary model or sample of a new product or service that is created to test a product concept or
service process.
According to Entrepreneur, creating a prototype lessens implementation/commercialization risks and provides
the entrepreneur a bunch of advantages as follows:
1. creating a prototype enables the entrepreneur to engage in trial-and-error, provides room for improvement,
and refines the functionality of the product design or service process.
2. creating a prototype provides the entrepreneur a window to test the performance and specifications of
various materials and service processes.
3. A prototype helps the entrepreneur effectively describe the product or service to the product team.
4. Creating a prototype elicits respect from key stakeholders and customers.

Testing the Prototype

➢ It is mandatory to ensure that the product or service will not fail the customers and will deliver its definitive
purpose. This will elicit customer satisfaction and, eventually, customer loyalty and retention

1. Focus group discussion

2. Legality and ethical test
3. Safety test
4. Product costing test
5. Component test
6. Competitors’ product/service test

Validation of Market Acceptability - a process of finding out if the intended primary target will be buying the product
or availing the service.
Market Acceptability - is a critical factor that the entrepreneur must validate before launching the product or service,
because this can strongly suggest if the business will be successful or not.

METHODS
➢ The methods aspect represents the day-to-day operations of a business. It describes how an entrepreneur
will run the business from all facets of the business such as the manufacturing of goods, service delivery
process, distribution of goods and services, logistics for delivery of goods, and inventory management.
Manufacturing - is the process of translating raw materials into finished goods that are acceptable to the customer’s
standards. Three elements:
1. Inputs – the materials or ingredients to be used in creating the product.
2. Process – the transformation phase where inputs are processed by manpower and machines to come up
with final product.
3. Output – the final product of the process stage, which is intended to be sold to target customers.

Following Manufacturing sites:

• Home-based – most startups do not have financial capacity to establish a manufacturing site. This option is the
cheapest and highly flexible.
• Commercial space for rent – this is advisable if the business really requires a commercial space for the
processing of goods and if the home option is not viable anymore.
• Commercial space purchase – this option requires the biggest amount of capital expenditure, but it also provides
the entrepreneur substantial freedom and flexibility to design and run the commercial space.

Service Delivery Process

Service blueprint – service entrepreneurs must prepare a detailed flowchart of the service business.
Bottleneck – is a part of the process where there is an apparent inefficiency and where the customer waits longer.

Distribution Method
Distribution – is the process of bringing the products or services to customers. Distribution is not a straight process
from the entrepreneur to customers; thus, the term supply chain or distribution channel was coined.
Manufacturer – it handles the invention, development, and production of the product or service.
Distributors – are entrepreneurs who often buy products or services to the manufacturers and sell them at a markup
price to either wholesalers or retailers.
Agents on the other hand, don’t own the products or services because they do not buy these from the manufacturer.
Instead, they negotiate with buyers as to how much or how many are to be sold.

MANPOWER
➢ One of the highest costs of operating a business but it is also the most instrumental to its success. The right
human resources who will handle certain business operations.
Job description enumerates the duties and responsibilities of the potential employee, including the scope,
imitations, and terms and conditions of employment. The heading of a job description is the job title, which is the
summary of what the employee will do.

Employee Qualification
➢ In hiring suitable employees for the job needed, entrepreneurs will have to look for the following criteria:

1. Educational background – this gives the entrepreneur an idea on the degree of the candidate’s knowledge
of basic things.
2. Work experience – this will tell him or her what to expect from the applicant and what he or she can
potentially contribute to the business based on his or her past positions and experiences.
3. Specific skill or knowledge – this one is important especially on technical jobs that require high
proficiency.
4. Work attitude – these deals with the worker’s integrity and how he or she deals with his or her coworkers,
bosses, and customers

Job Offer
➢ Once the entrepreneur or the hiring manager has been convinced already of the credentials and the
interview answers of the candidate.
Job contract
➢ It generally summarizes the terms and conditions of the candidate’s employment with the business. It
usually includes the following details:

1. Rank or position of the candidate.

2. A list of responsibilities or deliverables and its scope and limitations.
3. The salary and benefits including vacation and sick leaves.
4. Work schedule.
5. Probationary period if any and qualifications to become a regular employee.
6. The duration of the contract.
7. Resignation procedure (e.g., 30-day notice or leave immediately).

Employee Development
➢ Training people is one of the biggest investments of an entrepreneur or businessman.
➢ Employee orientation is usually a one-to-two-day session that summarizes the history of the
business, its vision and mission, policies and procedure, culture, and norms of the business.
➢ Buddy system is a training program wherein an expert team member is assigned to assist a new
employee in his or her function.
➢ Mentor-mentee program is a training program for supervisors, wherein they will be mentored by a
senior executive or senior office of the business
MACHINES
➢ It can be described as the “best friend” of manpower in producing goods and offering services.
• Equipment and other facilities
• Telecommunications and Information
➢ Technology
➢ Landline phones
➢ Mobile phones (smartphones, tablet computers, phablets)
➢ Laptop and desktop computers
➢ POS machines
➢ Accounting and inventory software
➢ Web site

MATERIALS
❑ To be used in creating a product or performing a service, which includes supply chain management.
Outsourcing is the process of appointing third party manufacturer to do the manufacturing operations of the
business.
• Patent is the right to protect the entrepreneur regarding the product or service.
• Trademark is a sign or symbol that helps distinguish the product from others.
• Logistics – entrepreneur/manufacturers can also venture into distributing their products on their own
without the aid of a distributor or agent.
➢ Warehousing is storing the finished goods manufactured in a facility until they are distributed to end users.
➢ Transportation it is the process of efficiently transferring the products to retailers or consumers.
➢ Distribution hub is where the entrepreneur/ manufacturer combines the goods before delivery to retailers or
end consumers.

The Business Model

➢ Inventory it is should also be tracked religiously by the entrepreneur/ manufacturer

The Business Model

❑ According to Don Deebelak in his article “Developing a Great Business Model” on the Entrepreneur Web
site, the entrepreneur must adapt the dynamics of traffic lights in developing the business model.
The Green Lights
1. Target high-value customers. These customers are often misinterpreted as affluent or high-end
customers.
➢ Someone who is easy to find.
➢ Someone who is willing to pay a price that will reasonably profit the entrepreneur.
➢ Someone who is easy to persuade with the least promotional effort.
➢ Someone who can join the bandwagon of customers that, when consolidated.

2. Offer products or services with great value.

3. Offer products or services with reasonable profits.
The Red Lights
1. Satisfying the customer becomes too costly and irrational. In marketing, the term lifetime value of a customer
was coined to understand the potential value that a customer can bring to the business in the long run. But there are
obvious red flags, which are collectively called customer satisfaction cost.
a. Warranty
b. After sales costs
2. Being a market leader is difficult to sustain.
➢ If there are major customers purchasing the entrepreneur’s product or services.
➢ If there are major players in the industry that control the majority of the distribution network.
➢ If technology has changed the way the entrepreneur operates the business, compelling him or her to invest
on rigorous product research and development.
➢ If technology replaces the need for the entrepreneur’s product or service.
➢ If the competitors can easily tap the market of the entrepreneur.
3. Return on investment (ROI) takes too long and too small.

The Financial Plan one of the most difficult parts of the business plan. It is also providing the entrepreneur financial
data such as liquidity, cash flow, and financial standing of the business. The financial plan also gives the
entrepreneur bases for his or her decisions on financial matters such as offering credit terms to customers, applying
for a bank loan, expand, or sell the business.
Capital is the money that will be allocated by the entrepreneur to establish a business.
Collateral refers to a high value asset that is submitted by the business to the bank when applying for a loan and will
be subject for repossession if the business defaults.

Factors Affecting Estimation of Revenue

Revenue is the output of a sale wherein the sales price exceeds the cost to produce the product or render the
service. Revenue is considered earned when the product is already sold or service has been rendered regardless if
the business is paid in cash or credit. Revenue is considered deferred when the product or service has not yet been
delivered or sold but the customer already paid in advance.
1. The economy and the external primary target market.
2. The external competitors.
➢ Direct competitors are those that offer exactly the same product/product lines or services as the
entrepreneur.
➢ Indirect competitors are those that do not offer exactly the same products or services but influence or
affect the entrepreneur’s market share.
3. The internal business.