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COURSE SUBJECT : ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY

COURSE DESCRIPTION : This course describe the skills, knowledge and performance
outcomes required to plan and develop a feasible Business Plan by understanding the nature
and scope of entrepreneurship, scanning the market of potential entrepreneurial venture
opportunities, and identifying and evaluating the methods of venturing into business
including but not limited to starting one’s own business, buying existing businesses and the
process of franchising. It also emphasizes on assessing the possible characteristics and
mindset of entrepreneurs, analyzing typical entrepreneurial venture challenges, errors, and
rewards, identifying effective strategic management, developing product and service
innovations and introducing the concepts of environmentally sustainable practices, social
entrepreneurship and intellectual property management.

COURSE OBJECTIVES : At the end of the course, the students would be able to:

1. Develop goals and objectives for a new business venture

2. Research and develop a marketing and advertising strategy for a hospitality business.
3. Write a business plan for a hospitality business venture
4. Describe factors that must be assessed in buying a business
5. Analyze the role of risk management in developing a new business

COURSE CONTENT :

I. Entrepreneurship: Concept, Theory & Perspective

II. Entrepreneurs, Capitalist & Manager Differentiation
III. 5 Levels of Entrepreneurial Development
IV. Contributions and Roles of Entrepreneurship to the Economic Development
V. Socio-Economic Benefits from Entrepreneurship
VI. Determinants of Successful Entrepreneur
VII. Major Mistakes of Entrepreneurs
VIII. Search for Business Opportunity Ideation, Creativity & Innovativeness
IX. Factors to Consider in Evaluating Entrepreneurial Resources
X. Business Plan: Planning, Managing & Organizing Hospitality & Tourism Enterprise
XI. Environmental and Industry Analysis
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ENTREPRENEURSHIP: CONCEPTS, THEORY & PERSPECTIVE

The Philippines was a slave of three colonial masters: the Unites States, Japan and Spain.
Nevertheless, the Chinese dominated the retail trade even before the Spaniards came. The
Spanish rule introduced the tobacco monopoly and galleon trade for the benefits of top ranking
Spanish citizens. Similarly, the Americans exploited our agricultural economy. Japan completely
ruined Philippines’ economy.

The Philippine government got its political independence in 1946, but not economic
independence from the United States. The import control program of President Carlos Garcia
gave breathing space for Filipino entrepreneurs. However, this did not last. The U.S. had its
own way in dominating the Philippine economy.

Poverty has remained a serious problem in the country. This has been spawned not a few social
problems like unemployment, hosing, prostitution, robbery, and other allied social crimes.
Many are squatters in their own country. Thus, the national government, in its effort to
alleviate poverty, has been promoting the growth of entrepreneurship. It has several financial
and technical assistance programs for the poor who are interested in putting up their micro
business.

The creation of a country’s wealth and dynamism depends upon the competitiveness of its firms
and in turn, relies fundamentally on the capabilities of its entrepreneurs and managers.

The essence of the modern firm lies in the specialization of functions. The businessman that
manages economic activities are both manager and entrepreneur, the latter in the double
sense: the individual businessman (independent) and the corporate entrepreneur, who without
participating insignificantly in terms of capital, controls the firm.

Studying offers of business capabilities requires the differentiation between the functions of
entrepreneur, manager and capitalist, although in many cases, the same person may perform all
three.

ENTREPRENEUR CAPITALIST MANAGER

Discover and exploits Capital owner – shareholders Administrates and managers
opportunities Controlling shareholder resources
A creator who initiates Passive shareholder An administrator
Characterized by and motivates the process
of change
Accepts risks Aversion to risk-taking Aversion to risk-taking
Uses intuitions, is alert, Assesses alternatives “Rational” decision-maker;
explores new business Choice of venture assets explores business
Identifies business Creates and maintains
opportunities competitive advantage
Behavior Creation of new enterprise creates trust to enhance
cooperation
Supervision of administrative
process
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Entrepreneurship is the most important aspect of economic development in the last period of
business history. Worldwide, these heroes of the new economy changed the business
environment and their companies play an increasingly important role in the global economy. In
an almost unbelievable pace, small business entrepreneurs have to show new products and
services surpassed the old frontiers of the old technologies have created new jobs, opened new
markets.

ENTREPRENEURSHIP DEFINED

Entrepreneurship may be defined as the visualization and realization of new ideas by insightful
individuals, who are able to use information and mobilize resources to implement their vision.
Entrepreneurship is the ability of a person to translate ideas of commencing a business unit into
reality by setting up a business on ground to serve the needs of society and the nation, in the
hope of profits.

CHARACTERISTICS OF ENTREPRENEURSHIP
1. Identification of opportunities.
2. Introduction of new products.
3. Gathering resources or introducing new methods of production.
4. Developing new markets.

TYPES OF ENTREPRENEURSHIP
1. Based on Risk
a. Innovative Entrepreneurship.
b. Imitative Entrepreneurship
c. Fabian Entrepreneurship
d. Drone Entrepreneurship
2. Based on type of Business
a. Agricultural Entrepreneurship
b. Manufacturing Entrepreneurship
c. Trading Entrepreneurship
3. Based on use of Technology
a. Technical Entrepreneurship
b. Non-Technical Entrepreneurship
4. Based on Ownership
a. Corporate entrepreneurship
b. Private Entrepreneurship
c. State Entrepreneurship
d. Joint Entrepreneurship.
5. Based on size of Enterprise
a. Micro Enterprises
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b. Small-Scale Entrepreneurship
c. Medium-Scale Entrepreneurship
d. Large-Scale Entrepreneurship
6. Based on Gender. Women Entrepreneurship. A business enterprise which is owned,
managed and controlled by women having a minimum financial interest of 51 per cent of
the capital and giving at least 51 per cent of employment generated in the enterprises to
women. Schumpeter defines women entrepreneurship as, “based on women’s
participation in equity and employment of a business enterprise.”
7. Based on Social Problems. Social Entrepreneurship focuses on social problems and
environmental problems aiming at bringing about transformation. This obligation of
contribution to social well-being is primary and in a way, profit takes a back seat or is
more or less secondary but essential to the survival.

FIVE (5) LEVELS OF ENTREPRENEURIAL DEVELOPMENT

1. Self-employed
2. Manager
3. Leader
4. Investor
5. True entrepreneur

CONTRIBUTIONS and ROLES OF ENTREPRENEURSHIP TO THE ECONOMIC DEVELOPMENT

1. Entrepreneurship employs the various resources present in the economy – discovery of
new materials.
2. Entrepreneurs need manpower for the business operation.
3. Entrepreneurship is the backbone of the economy.
4. Entrepreneurs have the ability to innovate goods and services
5. Entrepreneurs have the ability to gain international popularity and prestige for their
country.
6. Entrepreneurs have willingness to take risks where individuals are hesitant to take.
7. Entrepreneurship offers an economical and faster method of distributing good and
services that accelerates economic development
8. Entrepreneurship introduces new technologies

SOCIO-ECONOMIC BENEFITS FROM ENTREPREBNEURSHIP

1. Promotes self-help and employment
2. Mobilizes capital
3. Provides taxes to economy
4. Empowers individual
5. Enhances national identity and pride
6. Enhances competitive consciousness
7. Improves quality of life
8. Enhances equitable distribution of income and wealth – eases social unrest
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Entrepreneurship directly affects the social and economic development of a people. The more
society engages in entrepreneurial undertakings, the more it is likely to develop economically
and socially.

DETERMINANTS OF SUCCESSFUL ENTREPRENEURSHIP

1. Ability to conceptualize and plan
2. Ability to manage time and to learn
3. Ability to manage self and others
4. Ability to adapt to changes – agility ad innovativeness

BARRIERS TO ENTREPRENEURSHIP
1. Environmental Barriers
a. Raw Material
b. Labor
c. Machinery
d. Land and building
e. Infrastructure support
2. Financial Barrier
3. Personal Barrier
a. Lack of confidence
b. Lack on dependability on others
c. Lack of motivation
d. Lack of patience
e. Inability to dream
f. Sense of pride or embarrassment
g. Sociatal Barrier
h. Political Barrier – government incentives, facilitating socio-economic setting, interest
in economic development of society
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SEARCH FOR BUSINESS OPPORTUNITY IDEATION, CREATIVITY & INNOVATIVENESS

Customers’ taste, needs and preferences are continually changing and entrepreneurs need to
think new ideas and better methods of running a business in order to satisfy the customers.

FACTORS TO CONSIDER IN EVALUATING RESOURCES:

1. Markets
2. Individual interests
3. Capital
4. Skills
5. Suppliers of inputs.
6. Manpower
7. Technology

IDEATION. The beginning of business endeavor is ideation. The best sources of ideation are the
consumers. Ideation should be the first investment of anybody who seeks to be an
entrepreneur. A good idea that is worth exploring or converting into a business option is aloft
to some people who does not bother to research or look around his immediate environment.
For resourceful, creative and research-oriented individuals, ideas could be searched or it may
come out from an inventive, innovative and creative mind.

ENTREPRENEURIAL CREATIVITY. Creativity, innovation and entrepreneurs are inseparable.

Creativity is an essential part of innovativeness, the starting point of a process which is skillfully
managed, and brings an idea into innovation where social environment can influence the level
and frequency of creating behavior.

INNOVATION is doing something different, capacity to create and develop usable products or
services.
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Business Plan. A written document prepared by entrepreneur which describes all relevant
external and internal variables involved in starting a new venture. It should be comprehensive
enough to give any potential investor a complete picture and understanding of the new venture
and help the entrepreneur to clarify his thinking about the business.

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 to:
a. determine the viability of the venture in a designated market.
b. provides guidance to the entrepreneur in organizing planning activities.
c. serves as an important tool in helping to obtain financing.

ENVIRONMENTAL AND INDUSTRY ANALYSIS. Assessing the external and internal variables that
may impact the business plan.

Environment Factors:
a. Economy
b. Culture
c. Technology

Industry Analysis:
a. Industry demand
b. Competition
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OUTLINE OF A BUSINESS PLAN/BUSINESS FEASIBILITY STUDY

Executive Summary

I. Summary of the Proposed Business

A. Objective of the Study
B. Background of the Study/Plan
C. Name and address of business and its owners
D. Location of business (map)
E. Nature of business
II. Market Study
A. Proposed product design
B. Market Analysis
B.1 Industry overview
B.2. Target Market
B.3. Competitors
B.4. Pricing and Forecast
C. Marketing Strategies & Programs (3 year plan)
III. Management Study
A. Form of ownership and organizational chart
B. Roles and responsibilities of members of organization
C. Organizational Policy
IV. Technical Study
A. Description of Product or Service
B. Physical plant layout
C. Manufacturing Process (Product)
D. Raw Materials & Supplies (Product) with computation
E. Machinery & Equipment (Product) with computation
F. Office Equipment, Furniture & Fixtures with computation
G. Utilities (Electricity, water, fuel etc) with computation
H. Direct Labor Requirements with computation (salary, sss, philhealth, pag-ibig)
V. Financial Study
A. Sources of Financing
B. Total Projected Cost Before Operation
C. Financial Statements
C.1. Projected Balance Sheet
C.2. Projected Income Statement
D. Financial Analysis
D.1. Profitability Ratios
D.2. Return of Investment
E. Socio-Economic Contribution

Appendices
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Pagination
- Bottom Center
- Roman Numeral
- Title page is numbered but does not reflect the Roman numeral

Business Plan Main Content

- Top right
- Hindu Arabic
- Chapter page is numbered but does not reflect the Hindu Arabic numeral

Font Size and Font Type

- Font Size: 11
- Font Type: Arial

Margin and Spacing

- Top: 1.5 inches (with header – school logo and address)
- Left: 1.5 inches
- Bottom/Right: 1 inch
- Double space in the textual discussions
- Three single-line spaces before starting a subtopic in the chapter

Paper Type
- Bond Paper substance 20
- 8.5” x 11” (short bond paper)
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Executive Summary. It summarizes key elements of the entire business plan which include
business concept, financial features, and current business position. It describes the business
opportunity and vision of the proposed business, prospective investors, current and future
employees. (one-page)

Chapter I Summary of the Proposed Business

Objective of the Study. Stating the main goal of the proposed business is to achieve and list the
objectives that must be accomplished to reach the company’s goal which include how each
objective is to be accomplished. (5-10 sentences)

Background of the Study/Plan.

- 1st paragraph – it describe and discuss in detail the plan or study (5-10 sentences)
- 2nd paragraph – discusses when and why the business or company was formed (5-10
sentences)
- 3rd paragraph – describe the nature and uniqueness of the services and/or products
provided, and review the general development of the company. (5-10 sentences)
- 4th paragraph – projection of where can be the proposed business or company should be
going in the next few years (5-10 sentences)

Name and address of business and its owners. It describe the backgrounds of the owners or
managers that would qualify them to run the business which include education, experience
and any other relevant information

Location of business. Proposed location of the physical store or manufacturing building

showing the map.

Nature of business. Identifying the type of business which describes how the proposed
business operate. (sole-proprietorship, partnership, corporations, and limited liability
companies.)

Chapter II Market Study

Market Study or Plan. Describes the market conditions and strategy related to products and
services distribution, pricing and promotion which helps in forecasting of sales, budgets and
appropriate controls.

Proposed Product Design. Presenting, explaining and illustrating the product design and
packaging which include graphics.

Marketing Analysis. (can be presented with SWOT Analysis)

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A. Industry Overview. (Future outlook and trends of the proposed products or services).
Give the current trends, project how the market may change and present plans for
keeping up with future trends
B. Target Market. Listing down the major consumers of proposed product or services,
identifying their characteristics and their needs with information such as demographics
C. Analysis of competitors. List down indirect and direct competitors of the proposed
business. Evaluate indirect and direct competitors in terms of location, market, and
business history.
D. Pricing & Forecast. Include pricing strategy
a. List out the goods and services to sell
b. Estimate how much of each is expected to sell
c. Define the unit price of each good or service sold
d. Multiply the number sold by the price
e. Determine how much it will cost to produce and sell each good or service
f. Multiply this cost by the estimated sales volume
g. Subtract the total cost from the total sales

Marketing Strategies & Programs (3-year plan). Presenting a long-term plan to achieve
company's goals by understanding the needs of customers and creating a distinct and
sustainable competitive advantage which encompasses everything from determining the
customers and deciding what channels to use to reach those customers.

Chapter III Management Study

Form of ownership and organizational chart/structure. Presenting the type of legal entity (e.g.,
corporation, LLC, partnership, sole proprietorship, etc.).

Roles and responsibilities of members of organization. Describe their job qualifications, job
description and job responsibilities including the employees as members of the proposed
business.
 Presenting the number and type of employees, hours of work and projected salaries

Organizational Policy. Presenting guidelines, rules and regulations employees must follow to
keep business running smoothly.

Chapter IV Technical Study

Description of Product or Service.

 Product. Describe the proposed products. Tell briefly about the manufacturing process
which include information on suppliers and availability of materials. List down future
products that would be available and provided in the next 5 years.
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 Services. Describe the services that will be provided by the proposed business. List
down future services that the proposed business plan to provide and will be available in
the next 5 years.

Physical plant layout. Presenting the location and arrangement of facilities, equipment and
personnels.

Production or Manufacturing Process (Product). Illustrating the production method or

procedures that creates goods by combining supplies, ingredients or raw materials using a
formula or recipe.

Raw Materials & Supplies (Product) with computation. Listing down all raw materials and
supplies needed and to be used in producing or manufacturing the product which include the
quantity purchased, pricing and total cost.

Machinery & Equipment (Product) with computation. Listing down all machinery and
equipment needed and to be used in producing or manufacturing the product which include
the quantity purchased, pricing and total cost.

Office Equipment, Furniture & Fixtures with computation. Listing down all office equipment,
furniture and fixtures needed and to be used in producing or manufacturing the product
which include the quantity purchased, pricing and total cost.

Utilities (Electricity, water, fuel etc) with computation. Listing down all utilities needed and to
be used in producing or manufacturing the product which include the consumption costs.

Direct Labor Requirements with computation (salary, sss, philhealth, pag-ibig). Computation
of salaries and wages with based on the corresponding government labor requirements.

Chapter V Financial Study

Sources of Financing. Discusses where the owners’ capital came from (personal or loan) to fund
their business activities and operational requirements.

Total Projected Cost Before Operation. Listing down all expenses incurred during the process
of creating a new business.

Financial Statements (Projected Balance Sheet & Projected Income Statement)

 Projected Balance Sheet (3 years). Presenting and showing the estimation of the total
assets and total liabilities of the proposed business.
 Projected Income statement (3 years). Presenting and showing the projected or
forecasted sales, cost of sales and expenses during operation of the proposed business.
It illustrates how much money the business have by selling products or services and how
much profit it gained out from these sales.
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Financial Analysis (Profitability Ratios & Return of Investment)

 Profitability ratio. Measure and evaluate the ability of the proposed business to
generate income (profit) relative to revenue, balance sheet assets, operating costs,
and shareholders’ equity during a specific period of time.
 Return of investment (3 years). Measure of the profit earned from an investment
relative to the amount of money invested. It is generally expressed as a percentage and
is typically used to compare different investments or to compare the efficiency of an
investment over time.

Chapter VI Socio-Economic Contribution. Discussing the possible socio-economic

contribution of the proposed business in improving, developing and giving health
and wellbeing, sustainable wildlife harvesting, land access and use, protection of
heritage and cultural resources, business and employment opportunities,
sustainability of population, services and infrastructure, ample sustainable
income and lifestyle, etc.

Appendices
 PERSONAL RESUMES
 OWNERS' FINANCIAL STATEMENTS. A statement of personal assets and liabilities.
For a new business owner, this will be part of your financial section.
 CREDIT REPORTS. Business and personal from suppliers or wholesalers, credit
bureaus, and banks.
 COPIES OF LEASES, MORTGAGES, PURCHASE AGREEMENTS, ETC. All agreements
currently in force between the proposed business and a leasing agency mortgage
company or other agency.
 LETTERS OF REFERENCE. Letters recommending the proposed business as being a
reputable and reliable businessperson worthy of being considered a good risk. (Both
business and personal references)
 CONTRACTS. Includes all business contracts, both completed and currently in force.
OTHER LEGAL DOCUMENTS. All legal papers pertaining to the proposed business’
legal structure, proprietary rights insurance, etc. Limited partnership agreements,
shipping contracts, etc.
 MISCELLANEOUS DOCUMENTS. All other documents which have been referred to,
but not included in the main body of the plan. (For example, location plans,
demographics, competition analysis, advertising rate sheets, cost analysis, etc.)
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