Entrepreneurship

First Quarter, First Semester

REVIEWER

Importance of Entrepreneurship Education

1. Entrepreneurship is very important to the economy as key driver.
2. Entrepreneurship education is an individual lifelong learning process.
3. Entrepreneurship will energize school management.
4. Entrepreneurship will transform learners to be innovators.

Key Concepts in Entrepreneurship

Types of Business according to purpose
1. Business enterprise – its aim is to generate income/money only

2. Social enterprise – its aim is to promote causes like advocacy

Types of Business according to the number of employees and asset size

1. Microenterprise – 1 to 9 employees; PHP 3,000,000 or less in assets
2. Small enterprise – 10 to 99 employees; PHP 3,000,001 to PHP 15,000,000 in assets
3. Medium enterprise – 100 – to 199 employees; PHP 15,000,001 to PHP 100,000,000 in assets
4. Large enterprise – 200 or more employees; over PHP 100,000,001 or more in assets

Creativity vs. Innovation

• Creativity – thinking process; idea generation
• Innovation – productivity process; translating ideas into practice

Entrepreneur
• A person who organizes, operates, and assumes the risk of business ventures
• Etymology: French word entreprendre - “to undertake”

Definitions of Entrepreneurship
• a science of converting processed ideas into a remarkable business venture
• an art of observing correct practices in managing and operating a self-owned wealth-creating business
enterprise
• the appropriation and management of human, physical, and financial resources, for the purpose of
creating, implementing, and developing solutions
• a dynamic process of vision, change, and creation

Entrepreneurial Competencies
1. Locus of Control – Entrepreneur must know how to determine the state to which a person agreed that their
actions can directly affect a situation or that they can control a result.

2. Specific Goal Setting – Entrepreneur should be motivated to set goals, particularly business growth objectives,
have been found to increase firm growth.

3. Self-efficacy – Entrepreneurs believing in their own ability or self-confidence.

4. Layers of Competency – Entrepreneur should know the group of attributes, and not to give priority to one
competency over the others.

5. Need of Achievement – Entrepreneur must engage in in activities that have a moderate degree of consequences
and require skill and effort.

6. Ambition – Entrepreneur must be motivated, persistent, and persevere even in the face of situational challenges.

7. Willingness to Learn – Entrepreneur initiates personal career development and often secure the feedback to help
them make good career decisions.

8. Strong Initiative – Entrepreneur frequently work independently to achieve task, regardless of the extra effort
necessary to do so.

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 9. Adaptability and Flexibility – Entrepreneurs are innovative and creative, often developing novel solutions to
complicated problems.

10. Willingness to take Risks – Not only are successful entrepreneurs willing to take consequences, they can also
identify and calculate risk.

11. Interpersonal skills – Entrepreneurs with strong interpersonal skills have skills of working well with people from
different backgrounds.

Competencies for Entrepreneurial Success

1. Integrity – An entrepreneur has a positive sense of values and personal beliefs, creating in making business
decisions, influencing in making the desired actions they will take.

2. Conceptual Thinking – The entrepreneur is prepared to use new approaches and comes up with new ideas that
may enhance work.

3. Risk Taking – The entrepreneur understands that risk taking means trying to anticipate further problems thus
solve new problems that may arise in the business organization.

4. Networking/Collaboration – The entrepreneur understands that networking can provide access to information,
collaboration; and that careful planning and preparation help achieve desired results.

5. Strategic Thinking – The entrepreneur understands that thinking using strategies can help achieve goals in the
organization.

6. Commercial Aptitude – The entrepreneur keeps himself updated with developments in the locality; seeks out
best practice; and identifies and determines opportunities.

7. Decisiveness – The entrepreneur resolves issues as they arise in an unavoidable situation and responds flexibly to
deal with changing priorities.

8. Optimism – The entrepreneur persists in pursuing goals despite hindrances and problems; performs in the hope of
success rather than fear of failures; and manage difficult situation.

9. Customer Relation Service – The entrepreneur develops and builds trust and long-term relationship with
customers; and collates an expectation of high level of customer service.

10. People-Centered – The entrepreneurs create commonality among stakeholders, see and value the best in others.
They always consider the principles of inclusiveness.

Entrepreneurial Character Traits

1. Achievement Cluster
a. Opportunity-seeking
• The entrepreneur seizes unusual opportunities to obtain resources.

b. Commitment
• The entrepreneur accepts full responsibility.

c. Risk-taking
• The entrepreneur evaluates thoroughly all the available courses of action before making the final
decision.

d. Efficiency and Quality oriented

• An efficient entrepreneur produces more output using less input.
• For the quality of the product, the entrepreneur works for zero defects in the products and service.

2. Planning Cluster
a. Goal-setting
• The basic concept of planning is setting of goals and objectives.
• Starting a business requires the business plan.

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 • Business Goals vs. Business Objectives
- Business Goals – long-term targets in business
Examples: * Increase the total income of your company by 10% over the next two years.
* Develop a best-practices—based customer community approach.
- Business Objectives – short-term targets in business
Examples: * Increase product prices by 2% next month.
* Writing and publishing one new blog post or article per week.
• SMART Principle
S – SPECIFIC: This answers the question “What exactly are you trying to achieve?”
M – MEASURABLE: This answers the question “How will you know when you’ve achieved it?”
A – ATTAINABLE: This answers the question “Is it genuinely possible to achieve it?”
R – REALISTIC: This answers the question “Does it contribute to your agency’s revenue growth?”
T – TIMED: This answers the question “When do you want to achieve your goal?”

b. Information-seeking
• The entrepreneur seeks relevant information on target customers, suppliers of raw materials, and
competitors

c. Systematic
• The entrepreneur is rational and logical approach in performing activities.
• Planning - setting of goals and objectives
• Monitoring - evaluation of the activities

3. Power cluster
a. Persuasion and Positive networking
• The entrepreneur adopts specific strategies that will influence and convince others.

b. Self-confidence
• The entrepreneur projects favorable image of themselves.

Entrepreneurial Skills and Competencies

1. The entrepreneur as a missionary – The entrepreneur takes risk and invests his personal talents and resources to
make something new or different.
2. The entrepreneur is goal-driven – The entrepreneur sets high goals and strives to attain the projected target.
3. The entrepreneur is a marketing man – The entrepreneur takes the lead for innovation and makes
modifications to his product or service.
4. The entrepreneur starts small to become big – The entrepreneur starts small scale to a large one.

Factors that Develop Entrepreneurial Activity

1. The Entrepreneur Takes the Initiative - With great interest, the entrepreneur takes the initiative of venturing
into business.
2. Organization of Capital Resources - The entrepreneur considers the financial and human resources are
important in the start of the organization.
3. The Development of Administrative Machinery – The entrepreneur develops the organizational structure of the
business.
4. The Development of Entrepreneurial Autonomy - The entrepreneur develops autonomy in the operation of the
enterprise as he takes the lead in all the activities.
5. The Development of SWOT Analysis - The entrepreneur is provided a chance to see the environment of the
enterprise so that the risk involved could be seen before it happens.

The Entrepreneurial Process

- This s a step-by-step procedure in establishing any kind of business that an entrepreneur has to
undergo.

STEP 1: Opportunity Spotting and Assessment

• What are business opportunities?
- Opportunities are possible business ideas that can turn into a product or service.

• How to Spot Business Opportunities?

a. Identifying issues and problems in the community

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 b. Using social media
c. Identify trends – Trends are new developments, sometimes in the form of technological
advancements.
d. Asking opinions and suggestions from people
e. Determining the needs, wants, and/or preferences of the consumers
f. Conducting experiments and research

• Roles of Entrepreneurs in this step

a. take note of interesting trends in their environment
b. carefully assess the opportunity through estimation of opportunity length, capitalization required,
threats, profitability, and calculation of real and perceived value
*2 ways to measure the value of the product or service
- Perceived value – the value of the product or service comes from the expectation of the clients
- Real value (actual value) – the value is designated by the entrepreneur him/herself

c. assess if the opportunity is aligned with their personal goals and attributes
d. think in advance how they will position the product or service in the market and showcase its unique
selling proposition

• Part of this step is scanning the strengths and weaknesses of competitors thus entrepreneurs must do
competitors’ analysis.

Types of Competition:
a. Direct Competition – This exists due to businesses in the market that offers similar products or
services. Examples are Jollibee and McDonalds, and Pizza Hut and Greenwich.
b. Indirect Competition – This exists due to businesses in the market that offers different products or
services. Examples are Jollibee and Pizza Hut, and McDonalds and Greenwich.

STEP 2: Developing a Business Plan

• Business Plan - A comprehensive paper that details the marketing, operational, human resource,
financial, strategic direction, and tactics of the business.

STEP 3: Determining the Capital Needed

• The entrepreneur must calculate the resources needed to establish the business and compare this against
the entrepreneurs’ current resources.
• In this step, caution must be applied and allowance must be considered as well.

STEP 4: Running the Business

• The entrepreneur uses the resources allocated for the new venture
• In this step, the business plan should have been implemented.
• The business should have control and monitoring system to serve as a check and balance.

3S of Opportunity Spotting and Assessment

Environmental Scanning
• the gathering, critical evaluation, and utilization of information on events and activities and their
relationships with physical, societal and industry environment

S1 – SEEKING the opportunity

• Entrepreneurs must scan and understand the firm’s environment.
Business Environment
1. Physical Environment - also known as the natural environment; the first layer of the business
environment; composed of natural elements that are inherent in the Earth namely:
a. Climate - The climatic condition in a particular region in the Philippines where the business will
be established must be evaluated.

b. Physical Resources - The entrepreneur must critically assess the availability of raw materials
in the locality before opening a new business.

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 c. Wildlife - The entrepreneur must ensure that his or her business contributes to the preservation
of the ecological system of the local community.

2. Societal Environment – forces or factors in the society that affect businesses

a. Social Forces – These are elements in society resulting from human interactions that can
influence the thoughts, behavior, attitude, actions, and even the beliefs and customs of the people.
Examples are values and consumer psychology.

b. Cultural Forces – These are the integrated characteristics of a group of people or ethnic group
in a particular society. Examples are religion, language, beliefs, customs, and education.

c. Technological Forces – These are the trends and developments on computer and information
technology that have impact on business. Examples are internet, social media, e-commerce, and
research and developments.

d. Economic Forces – These are factors that are primarily caused by changes in the Philippine
economy. Examples are inflation rates, monetary policies, exchange rates, and employment.

e. Environmental Forces – The businesses comply with the environmental standards or will just
be hazard to nature. Examples are climate change, laws regulating environment pollution, and
waste management.

f. Political Forces – These are the various elements usually comprising of the political parties,
political systems, and other related political groups. Examples are trade regulations, taxation,
and election practices.

g. Legal Forces – These are the elements and bodies that are directly involved in the legislation and
interpretation of laws and ordinances. Examples are control on pricing, health and safety of the
workers, advertising, and laws governing employment practices like the Labor Code of the
Philippines.

h. Ethical Forces – These are a guide on how to be ethical in running the business. Examples are
ethical advertising and sales practices provided in the Consumer Act of the Philippines, attitude
toward development and well-being of employees, and food safety practices and measures.

i. Demographic Forces – These are characteristics of the people in the target market. Examples
are population growth rate, age distribution, gender distribution, social classes, and family size
and structure.

3. Industry Environment - This is the external environment layer where the trends and changes are
easily and immediately felt by the businesses.
a. Government – This is the system or institution that handles the affairs of a particular country.

b. Suppliers – These are individuals or companies that provide the required materials, parts, or
services to the business.

c. Customers – These are the buyers of the goods and services produced or rendered by the
business.
Target markets - possible customers of the entrepreneur’s business

d. Employers – These are the workers of the business who are highly responsible for the production
of goods or delivery of services provided to the customers. Employers set several qualifications
for workers such as age, gender, physical attributes like height, educational background,
experiences, and character.

e. Creditors – These are the ones who can provide funds to the business by extending credit instead
of the owner investing resources. Examples are commercial banks and cooperatives.

S2 – SCREENING the opportunity

• Opportunity screening is the process of cautiously selecting the best opportunity.

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 • The entrepreneur should apply due diligence and independent judgment in selecting the opportunities that
have potential and eliminate those that are not within the scope of the entrepreneur’s risk appetite.
Risk appetite - the entrepreneur’s tolerance of business risks
• Opportunity Attractiveness Test (OAT) – It aims to assist entrepreneurs in ensuring that the
opportunity that they will venture into is an attractive and feasible prospect.

S3 – SEIZING the opportunity

• Opportunity seizing is the “pushing through” with the chosen opportunity.
• Types of Innovation
a. Breakthrough - inventions that had massive impact to people and occur infrequently; examples are
computers, internet, and printing press
b. Technological – technological advancements of an existing product; examples are laptop and
wireless fidelity (Wi-fi)
c. Ordinary - originates from the daily needs and wants of the market

Frameworks or tools used for Environmental Scanning

1. PESTEL analysis
• used to scan the societal environment of the business
• an acronym for the different forces or factors affecting business, namely Political, Economic, Social,
Technological, Environmental, and Legal
• a tabular framework of the trend and developments on the different forces in the external environment
• there are three variations of it - PEST, STEEPLE, and STEEPLED

2. SWOT analysis
• developed by Albert Humphrey in the 1960
• both used as a simple icebreaker and in a more complex way like a serious business strategy
• Strengths and Weaknesses are internal factors while Opportunities and Threats are external factors
• Strengths and Opportunities are considered positive while Weaknesses and Threats are negative
factors

• Steps in Conducting SWOT analysis

Step 1 – Assign a group facilitator.
Step 2 – Designate a secretary.
Step 3 – Introduce the SWOT analysis and its purpose.
Step 4 – Divide the group into sub-groups.
Step 5 – Give each group 20-30 minutes to brainstorm and fill out their own SWOT chart.
Step 6 – Reconvene the group at the agreed-upon time for results. Collect and organize the differing
groups’ ideas.
Step 7 – Discuss and record the results. come to a consensus about the most important items in each
category.
Step 8 - Prepare a written summary of the SWOT analysis.

3. Michael Porter’s Five

• Five Forces of Competition:
a. Competitive rivalry
b. Threats of new entrants
c. Powers of suppliers
d. Power of buyers
e. Threat of substitutes

Product/Service Planning and Development Process

STAGE 1: Idea Stage
• Entrepreneurs determine what are the feasible products and/or services.

STAGE 2: Concept Stage

• The entrepreneur makes a consumer acceptance test - getting the initial reactions of the target market
through conversational interviews.

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STAGE 3: Product Development Stage
• Entrepreneurs conduct a consumer panel where the actual product samples or actual services samples
will be given to the panel of potential customers for feedback and suggestions.
• To know the customers’ satisfaction level

STAGE 4: Test Marketing Stage

• Actual results will be the foundation of the consumers’ acceptance level.

STAGE 5: Commercialization
• The production and distribution of the product are done on a limited basis.

Value Proposition (VP)

• states why a customer should buy a certain product/service
• the major driver in customer purchase or service availment

• How to Create an Effective VP

a. Prepare a situation analysis.
b. Make your value proposition straight to the point, simple, and specific.
c. Highlight the value of your product or service.
d. Adapt to the language of your market.
e. Add credibility-enhancing elements.
f. Differentiate your value proposition with your competitors.

Unique Selling Proposition (USP)

• how you will sell the product or service to your customers
• addresses the customers’ wants and desires
• gauges on how well an entrepreneur know his/her product

• How to Create an Effective USP

a. Identify the uniqueness of the product or service.
b. Be very specific.
c. Keep it short and simple (KISS).

Examples of VP/USP:
1. “Empowering the world to design” – Canva
- Implies a platform that is highly usable and has been universally embraced, reinforcing the message
that the service caters to a wide range of users who find it easier to use than alternative products.

2. "Bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete." –
Nike
- By saying that its mission is to bring inspiration and innovation to every athlete in the world, it
targets an audience. It widens the buyer persona to not just athletes but basically anyone; signifies
affordable prices at athlete-level quality; shows the company’s stand in supporting athletes and any
sports activity.

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