ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY

LESSON 1 – CONCEPT OF ENTREPRENEURSHIP

Entrepreneurship is the process of creating something new with value by devoting

the necessary time and effort; assuming the financial, physic and social risks and
uncertainties; and receiving the resulting rewards of monetary, independence and
personal satisfaction. Entrepreneurship is the dynamic process of creating incremental
wealth. The wealth is created by individuals who assume the major risk in terms of
equity, time and/or career commitment to provide value for some product or service.
The product or service may or may not be unique but, the entrepreneur must somehow
infuse value by receiving and bundling the necessary skills and resources.

Four Distinct Phases

Identification and evaluation of the opportunity Manage the enterprises
Develop a business plan Resources required
Types of Entrepreneurial
Business Reatailing Business Service Business
Manufacturing Business Wholesaling Business
Rewards in Entrepreneurship
Freedom People Lifestyle
Income Opportunities
Difference between Micro, Small & Medium Enterprises (MSMEs)

CATEGORY
ENTERPRISE BY ASSET SIZE BY NUMEBERS OF
EMPLOYEES
MICRO UP TO P3,000,000 1 - 9 EMPLOYEES
SMALL P3,000,001 – 15,000,000 10 - 99 EMPLOYEES
MEDIUM P15,000,001 – 100,000,000 100 - 199 EMPLOYEES

Attributes, Qualities and Characteristics of an Entrepreneur

Self-Awareness Confidence Decisiveness Information-Seeking
Self-Motivated Positive Thinkers Experience
Courage Patience Knowledge
LESSON 2 - THE SEARCH FOR BUSINESS OPPORTUNITY, IDEATION AND
CREATIVITY
THE SEARCH FOR BUSINESS OPPORTUNITY
In discovering business opportunities, the following factors or resources have to be
evaluated:
1.Markets 5. Suppliers of inputs
2.Individual Interests 6. Manpower
3.Capital 7. Technology
4.Skills
Other opportunity-seeking processes that can guide a prospective entrepreneur as to
what kind of business to establish are as follows:
1.Look at other successful businesses/entrepreneurs
2.Respond to a problem area
3.Home-Based business option
MARKET SEARCH
The best way to evaluate business opportunity which is defined as the study of all
problems in marketing a product.
The steps in Market Research:
1.Defining the problem 5. Analyzing the data
2.Making a preliminary investigation 6. Reaching a conclusion
3.Planning the research 7. Implementation and evaluating the decision.
4.Gathering the data
UNDERSTAND THE CONCEPT OF IDEATION, INNOVATION AND
CREATIVITY
IDEATION
-The beginning of a business endeavor.
-The first investment of anyone who seeks to be an entrepreneur.
-Ideas that are worth a business should be the one who has a market now and in the
future.
CREATIVITY
-An essential part of innovativeness, the starting point of a process, which is skillfully
managed and brings an idea into innovation.
-Considered a characteristic that is innate or inherent to every individual, but the social
environment can be influence both the level and frequency of creative behavior.
INNOVATION
-Doing something different.
-Could be introducing either something new or different.
-The capacity to create ideas and develop them to usable products and services.
SOUND BUSINESS IDEA
An economic opportunity which is within the reach of the entrepreneur and which will
provide him a desirable value. An entrepreneur who is well grounded in the concept of
sound business idea will be able to save time, effort, and money in pursuing goals.
PROCEDURE IN DETERMINING THE BEST BUSINESS IDEA
Preparation of the list of business ideas
Screening
Final Selection
METHOD FOR SEARCHING IDEAS
There are two general methods of generating business ideas.
Unanticipated means Deliberate search
1.Work 1. Using search question 5. Some other event
2.Hobbies 2. Idea prompting
3.Acquaintances 3. Someone else idea
4.Chance Event 4. Customer request

Not just for a CHANGE but most importantly, for the search of EXCELLENCE.
Do not let your ideas follow money, let money follow your IDEAS.

LESSON 3 – THE BUSINESS PLAN

THE BUSINESS PLAN
 It is a written document prepared by an entrepreneur that describes all the relevant
external and internal elements involved in starting a new venture.
 Is a document that convincingly the ability of a business to sell its products or services to
make satisfactory profit and be attractive to potential backers.
 An integration of functional plans such as marketing, finance, manufacturing and
human resources.
 It is thinking ahead of objectives, strategies, financing, production, marketing, profit
prospects and growth possibilities.

PRINCIPLES OF PLANNING
Planning must be realistic Planning must be flexible

Planning must be based on felt needs Planning must start with simple projects

STAGES OF BUSINESSOF PLANNING

1.Unplanned Stage 3. Annual Planning Stage

2.Budgeting System Stage 4. Strategic Planning Stage

COMPONENTS OF BUSINESS OF PLANNING

•SWOT (Strengths, Weaknesses, Opportunities, Threats)

•Objectives •Time Frame

•Strategies

WHY DO WE NEED A BUSINESS PLAN?

PARTS OF BUSINESS PLAN
I. EXECUTIVE SUMMARY

- Introduce your company and the management and ownership.

- Describe your main product and service offerings.

- Briefly describe the customer base you will be targeting and how your business will serve
those customers.

- Summarize the competition and how you will get market share (i.e., what is your competitive

advantage?)

- Briefly outline your financial projections for the first few years of operation.

- Describe your start-up financing requirements (if applicable).

II. COMPANY OVERVIEW

- Company Business Name: the name and the origin

- Company Address: exact location and picture

- Company Logo: logo and explanation of the logo

- Company Vision, Mission, Objectives and Core Values

- Field of Business: explain what industry you belong

- Business Description: describe what does your business do

GUIDELINES IN ESTABLISHING VISSION, MISSION, OBJECTIVES AND CORE

VALUES

Vision

-Reflects the specific mountain you are currently trying to climb the “where”.

Mission

-Part of your strategy development that tells your core purpose.

-The underlying “why” you are climbing the mountain, why you are in a business.

Objectives

- Specific performance targets.

-Should be SMART.

Specific Actionable Time-Bound

Measurable Realistic

Core Values

-Beliefs that guide the conduct, activities and goals of your organization.

 Keep the list of values to between five and seven. They need to be memorable to your
staff.
 Create phrases, but not paragraphs. One word is not enough to convey real meaning of a
value.

III. MARKET ANALYSIS AND COMPETITION

- Situational Analysis: (SWOT)

- Market Segmentation: target market

LESSON 4 – ENTREPRENEUR TYPES AND FUNCTIONS
Types of Entrepreneurs and its Functions

The types of entrepreneurs vary depending on background, country and even sector, but the
most common 5 types are:

1.Innovators 4. Researchers

2.Hustlers 5. Buyers

3.Imitators

Role of Entrepreneurship in Economic Growth

•Wealth Creation and Sharing •Standard of Living

•Create Jobs •Exports

•Balanced Regional Development •Community Development

•GDP and Per Capita Income

Reasons for Entrepreneurship Failure

Failure is not something you will consider when starting a new business. But research also
suggests, the failure rate for new start-ups within five years of their business is near to 50
percent. Most of the entrepreneurs follow all the golden rules of becoming successful.
Nevertheless, there are a lot of reasons and causes behind an entrepreneur's failure.

Some reasons are:

1.Lack of Vision 6. The Hiring of Wrong People.

2.Selection of a Business 7. Failure in Marketing

3.Lack of Proper Planning 8. Expanding Very Early.

4.Not Having Enough Capital 9. Underestimating Competition.

5.Poor Implementation of the Plan 10. Giving Up Very Early.

Business Competition

Competition is a fact of doing business. Businesses see competition in the form of price, quality,
design, sales, location, and almost every business process.

Also called market competition, business competition is usually a fact in a profitable market
many players produce similar products, sell through similar channels, and even target the same
audience. This competition, however, can be classified into three types:
Direct Competition

Direct competitors are vendors that sell the same products to the same audience and compete
for the same potential market.

Indirect Competition

Indirect competitors are vendors that sell products or services that are not necessarily the same
but satisfy the same consumer need.

Potential/Replacement

Indirect competitors are vendors that sell products or services that are not necessarily the same
but satisfy the same consumer need.

product

IV. SALES AND MARKETING PLAN

- Product: describe your offerings

- Price: how will you price your product and simple computation of your RSP

- Distribution: channels

- Promotion: how will you market your product

PRICING

Price is the value that is put to a product or service and is the result of a complex set of
calculations, research and understanding and risk- taking ability. A pricing strategy takes into
account segments, ability to pay, market conditions, competitor actions, trade margins and
input costs, amongst others. It is targeted at the defined customers and against competitors.

Pricing: Cost-Plus Pricing

Material Cost: cost of materials used to manufacture a product or provide a service

Labor Cost: sum of all wages paid to employees

Overhead Cost: those expenses associated with running a business

1.Material Cost: P100

2.Labor Cost: P50

3.Overhead Cost: P20

MC+LC+OC = 170 * 50% (retail industry standard)

170 * 50% = 85

170 + 85 = 255

RSP: P 255.00

DISTRIBUTION

A distribution channel strategy evaluates ways to improve the positioning of products to boost
demand around them. Your main goal is to find the right customers and locations of demand,
in order to speed up the process of connection between products and customers and make it
profitable.

There are two basic types of distribution channels:

Direct: Consumers buy the product or service directly from your business, whether through a
physical storefront or an e- commerce website.

Indirect: Consumers buy the product or service through an intermediary, like a big-box retailer
you have distribution agreements with or a broker agent you partner with.

PROMOTION
Any type of marketing communication used to inform target audiences of the relative merits of
a product, service, brand or issue, most of the time persuasive in nature. It helps marketers to
create a distinctive place in customers' mind, it can be either a cognitive or emotional route.