Entrepreneurship
- Business
- if the business come from a unique idea
it is entrepreneurship.
- is one of the resources economists
categorize as integral to production;
 The Three Resources are:
- Land
- Labor, and
- Capital
Economy – production and consumption
 An entrepreneur combine these three
to manufacture goods or provide
services.
 They typically create a business, hire
labor, acquire resources and
financing, and provide leadership
and management for the business
Entrepreneurship is...
 The act of creating a business or
businesses while building and
scaling it to generate a profit.
 An important driver of economic
growth and innovation.
 What people do to take their career
and dreams into their hands and lead
it in the direction of their own
choice.
 About building a life on your own
terms. No bosses. No schedules. And
no one holds you back.
An entrepreneur is...
 A person who sets up a business
with the aim to make a profit and
creates a new business, bearing most
of the risks and enjoying most of the
rewards.
 An innovator, a source of new ideas,
goods, services, and business/or
procedures.
 Playing a key role in any economy,
using the skills and initiative
necessary to anticipate needs and
bring good new ideas to market.
Note: Understanding what an
entrepreneur is can help more people
recognize the value they contribute to the
world.
Common Elements of Entrepreneurship
(Edralin, D. M., 2016)
 Innovation
 Opportunity seeking and
exploitation
 Resource mobilizing
 Encountering risks and uncertainties
 Economic and personal rewards
Roles of Entrepreneurship and
Entrepreneurs in Economic Development
and Society
(Edralin, D. M, 2016):
o Creates employment
o Develops new markets
o Introduces innovation
o Generates new sources of materials
o Stimulates investment interest in the
new business ventures being created
o Improves the quality of life
o Serves as role models
o Brings social benefits to the people
o Utilizes and mobilizes indigenous
resources
o Provides more alternatives for
consumers
Three levels of competencies, which all
entrepreneurs need:
1. Personal competencies - These are
your abilities to ground yourself so that
you are secure and self- assured in
whatever situation you may find yourself.
Ex. creativity, determination, integrity,
self-criticism.
2. Interpersonal competencies - These are
your ability to lead, influence,
communicate, supervise, negotiate, and
control people at all levels. It is the ability
to get along with people and motivate
people to perform jobs. Entrepreneurs
must effectively manage people.
Ex. communication, engagement,
delegation
3. Business competencies -These are set
of particular abilities and knowledge that
sets a company apart from its
competitors. It also refers to the key
characteristics that successful
entrepreneurs should have in order to be
successful.
Ex. business vision, financial
management, networking.
Core vs. Common Competencies in
Entrepreneurship
entrepreneur possesses, which are
necessary to effectively perform
their functions and responsibilities
Entrepreneurial competencies
facilitate:
➤opportunity recognition,
➤help adapt rapidly to changes,
➤enhances business performance,
➤ strengthen the firm's competitive
position and stir the achievement of
organizational success.
Examples of Core and Common
Competencies in Entrepreneurship
Core Competencies:
1. Organizing and Planning
2. Cash Bow management
3. Personnel management
4. Operations and distribution
5. Customer Relations
6. Bookkeeping/Accounting

 Competencies in entrepreneurship 7. Premotions and Advertising

play a leading role in making
8. Resources Management
entrepreneurs successful
 Core competence is the foundation 9. Financial Management
for sharpening a company's
competitive edge and it guides brand 10. Information Management
reputation, business growth, and
marketing strategy Common Competencies:
 Common competence is one that 1. Analytical and critical thinking
describes the knowledge, skills and
abilities found in most or all 2. Decision making
position.
 Entrepreneurial competencies it is 3. Leadership
the sum total of the personality,
4. Communication
skills and knowledge that the
5. Computer Literacy
6. Human Relations
7. Managing Change
8. Creative Thinking
9. Time Management
10. Conflict Management
Entrepreneurship Career
Opportunities for the Academic Track
o Business Consultant
o Sales
o Research and development
o Not-for-profit fundraiser
o Teacher
o Talent recruiter
o Business reporter
o New venture creation
o Career in existing entrepreneurial
ventures
Job Opportunities for
Entrepreneurship as a Career
• If you're an aspiring entrepreneur, there
are different career paths you can take to
turn your dream into a reality. Which path
choose will depend on your experience,
skills, finances, and flexibility, as well as
your goals for the future Career
opportunities you might pursue according
to Michalowicz (2011) as cited.
Reasons why many would like to
become an entrepreneur:
1. Achievement, Challenge, & Learning
2. Independence & Autonomy - you can
set your own goals, pick their own
partners, and face the consequences of
your decisions.
3. Income Security and Financial Success
4. Recognition and Status
5. Family
6. Dissatisfaction with Current Work
Arrangements
7. Community and Social Motivation
Ways to spot an opportunity
A vast number of ways can be used for an
entrepreneur to spot, analyze and act on
an opportunity.
• Different articles, websites, videos and
books will suggest these various ways.
An entrepreneur may use the following
three steps to spot and act on an
opportunity.
• (1) The first step is to recognise an
opportunity which can be known as
opportunity seeking.
• (2) The second step is to analyze the
opportunity found which can be known as
opportunity screening.
• (3) The final step is to act on the
opportunity which can be known as
opportunity seizing.
• These steps should not be taken for
granted as they are not as simple as they
may seem. If these steps are followed
carefully the likelihood of success in a
project is much higher.
• Is Unique Selling Proposition (USP) and
Value Proposition (VP)? This part allows
the entrepreneur to prepare himself on
how to advertise and sell his product even
if it is similar to others.
Value Proposition (VP)
- is a business or marketing statement
that summarizes why a consumer should
buy a company's product or use its
service. This statement is often used to
convince a customer to purchase a
particular product or service to add a
form of value to their lives
In creating Value Proposition,
entrepreneurs will consider the basic
elements:
- Target Customer
- Needs/opportunity
- Name of the product
- Name of the enterprise/company
Unique Selling Proposition (USP)
- refers to how you sell your product or
services to your customer. You will
address the wants and desires of your
customers.
• As an entrepreneur, you should think of
marketing concepts that persuade your
target customers. You may ask the
following questions in doing this:
• What do the customers want?
• What brand does well?
• What does your competitor sell well?
Some for the entrepreneur on how to
create an effective unique selling
proposition to the target customers are:
• Identify and rank the uniqueness of the
product or services character
• Be very Specific
•Keep it Short and Simple (KISS)
•Readers get confused between value
proposition and unique selling
proposition.
•The two propositions are used to
differentiate the products from
competitors.
• For example, Jollibee is known to have
a Filipino taste burger. This brand has a
unique selling point because of its tagline
"Langhap Sarap"
•Unique Selling Proposition and Value
Proposition are two of the most famous
tools used to explain why prospect
customers buy each product and service.
Base on each definition, we learn that
USP and VP are frameworks of each
business industry.
• The two propositions are valuable for
the entrepreneurs. Make sure that you're
focusing on a solution that is a need, and
make sure that you are targeting a
customer segment that's large enough and
cares enough about your solution so that
you can build a viable business.
4 Aspects of Entrepreneurial Process
1. OPPORTUNITY SPOTTING AND
ASSESSMENT
• CONSUMERS- are reliable sources of
opportunity Information because market
needs originate from them.
• MAJOR SOURCES OF
OPPORTUNITY- glaring problems in the
environment, problems encountered by
co-entrepreneurs, new trends, and
developments in the environment.
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. This will be the core guide and
direction of the entrepreneur in
calculating the resources needed,
assessing how to obtain these resources e. Education
efficiently, and running the business
sustainably. f. Religion

3. DETEMINING THE CAPITAL g. Ethnic group

NEEDED
h. Family size
4. RUNNING THE BUSINESS
3. Psychological Segmentation-divided in
terms of how customers think and believe

In targeting a specific market Variables to consider

• Target marketing allows you to focus a Needs and wants

your marketing money and brand
b. Attitudes
message on a specific market that is more
likely to buy from you than other c. Social class
markets. Choose a product that is more
affordable, efficient, and effective to d. Personality traits
reach potential clients and generate
e. Knowledge and awareness
business.
f. Brand concept
Commonly used methods for
segmenting the markets are follows: g. Lifestyle
1. Geographic segmentation - the total 4. Behavioral Segmentation - divided
market is divided according to according to customers' behavior pattern
geographical location. as they interact with a company.
Variables to consider Variables to consider
a. Climate a. Perceptions
b. Dominant group b. Knowledge
c. Culture c. Reaction
d. Density (either rural or urban d. Benefits
2. Demographic Segmentation-divided e. Loyalty
based on consumers
f. Responses
Variables to consider
B. Customer Requirements
a. Gender
• Customer requirements are the specific
b. Age characteristics that the customers need
from a product or a service.
c. Income
There can be two types of customer
d. Occupation
requirements:
1. Service Requirement
2. Output Requirement
Output Requirements:
- Tangible thing or things that can be
seen. Characteristic specifications that a
consumer expects to be fulfilled in the
product. Costumers will avail services as
a product, then various service
requirements can take the form of output
requirements.
C. Market Size
• The entrepreneur's most critical task is
to calculate the market size, and the
potential value that market has for their
start-up business.
• Market research will determine the
entrepreneurs' possible customers in one
locality.
What is Market Size?
• Market size is like a size of the arena
where the entrepreneurs will play their
business. It is the approximate number of
sellers and buyers in a particular market.
In determining the market size, the
entrepreneur will conduct a strategic
marketing research from reliable sources
using the following method:
• The first step is to the potential market -
approximate number of customers that
will buy the product or avail your
services.
Potential market - is the part of the total
population that has shown some level of
interest in buying a particular product or
service. Potential market is also called
Total addressable market (TAM) (MBA
Skool Team, 2018).
Target Market - refers to a group of
potential customers to whom a company
wants to sell its products and services.
Target markets are generally categorized
by age, location, income, and lifestyle
(Kenton, W., 2019).
Penetrated Market - is a set of customers
or clients who are already using a
particular product or service.
Need - is a motivating force that compels
action for its satisfaction. Needs range
from basic survival needs (common to all
human beings) satisfied by necessities, to
cultural, intellectual, and social needs
(varying from place to place and age
group to age group) satisfied by
necessaries.
A Market - is a place where two parties
can gather to facilitate the exchange of
goods and services
Existing customers - are people who have
already purchased your product.
Prospects - are people who have not yet
purchased your product but are
considering it.
Market - A is a place where two parties
can gather to facilitate the exchange of
goods and services.
Target market users - are people in your
target market who are not currently
looking for a solution.
The size of a potential market
- helps a company understand the level of
investment it should make further in the
market, while taking into consideration
other factors.
Concepts about Product and Service
A product
• can be defined as anything that we can
offer to a market for attention,
acquisition, use or consumption that
could satisfy a need or want.
• broad definition of product includes
services, events, persons, places,
organizations or even ideas
Services
• are special form of product which
consists of activities, benefits or
satisfactions offered for sale that are
intangible and do not result in the
ownership of anything
• A service can thus include banking,
airline travel, communication services,
hotel services and so on.
Concepts about Product and Service
• A product is a tangible item that is put
on the market for acquisition, attention, or
consumption, while a service is an
intangible item, which arises from the
output of one or more individuals.
Identifying and Meeting Customer
Needs
• Customer needs are the named and
unnamed needs of customers when they
come in contact with the different
business establishments or when they
search for the solutions which businesses
provide.
• superior customer service means
meeting customers' needs by providing
them with the products and services they
want or by providing effective solutions
to their problems
"Identifying Customer Needs" Matters
1. Correctly identifying customers' needs
is essential for ensuring customer
satisfaction and loyalty.
2. Customers have unique needs.
3. Often, customers either aren't clear
about what they need or they don't really
know what they want.
4. Identifying clients' needs creates
satisfied customers, and satisfied
customers are less likely to have reason to
enter into disputes with the organization
or contemplate legal action.
• Innovation comes from identifying
customers' needs and providing solutions
that meet those needs.
Key Points:
1. To ensure customer satisfaction,
entrepreneurs must correctly identify
customers needs.
2. To identify needs, entrepreneurs must
both listen and ask the right questions
3. After Identifying needs, always check
for additional or related needs.
4. As an entrepreneur, use your
knowledge and experience to identify and
present the right products, services, and
solutions to meet your customers' needs.
How to Meet the Needs of Customers
1. Identify what the customers need
through keyword research, focus groups,
or social listening.
2. Distribute the information to relevant
stakeholders in the organization.
3. Craft product features or create content
that speaks to the customer's needs.
4. Collect customer feedback in order to
meet their expectations.
Market Research or Marketing
Research Process can be defined as...
- the process of gathering, analyzing and
interpreting the information about the
products or the services to be offered for
sale to the potential consumers in the
market (De Guzman, 2018, p. 25)
DATA COLLECTION - is the most
valuable tool in any type of research
study. Inaccurate data collection may
cause mistakes and ultimately lead to
invalid results. (Edralin, 2016, p. 80)
TIPS in COLLECTING DATA
• Organize collected data as soon as it is
available
• Know what message you want to get
across and then collect data that is
relevant to the message
• Collect more data
• Create more data
• Take note of interesting or significant
data
In this lesson, we will consider
the three different data collection
techniques - SURVEY (Questionnaire),
INTERVIEW and FOCUS GROUP
DISCUSSION and evaluate their
suitability under different circumstances
SURVEYS - are the most common way
to gather primary research with the use of
questionnaires or interview schedule.
These can be done via direct mail, over
the phone, internet (e.g. Google) or email,
face-to-face or on the Web (e.g. Skype or
Viber).
INTERVIEW - is one of the most reliable
and credible ways of getting relevant
information from target customers. It is
typically done in person between the
researcher/entrepreneur and a respondent
where the researcher asks pertinent
questions that will give significant pieces
of information about the problem that he
will solve.
• Interviews normally last from 15 to 40
minutes, but they can last longer,
depending on the participants' interest in
the topic. In a structured interview, the
researcher asks a standard set of questions
and nothing more. (Leedy & Ormrod,
2001, pp.38-39
Personal interviews - are the traditional
method of conducting an interview It
allows the researcher to establish
relationship with potential participants
and therefore gain their cooperation. It
generates highest response rates in survey
research. They also allow the researcher
to clarify indefinite answers and when
necessary, seek follow-up information.
(Leedy & Ormrod, 2001, pp.39)
Telephone interviews - are less expensive
and less time- consuming, but the
disadvantages are that the response rate is
not as high as the face-to-face interview,
but considerably higher than the mailed
questionnaire...
FOCUS GROUP DISCUSSION (FGD)-
is an excellent method for generating and
screening ideas and concepts. It can be
moderated group interviews and
brainstorming sessions that provide
information on user's needs and
behaviors.
The following are considerations in the
use of focus group discussions in
market research:
• The length of the session is between 90
and 120 minutes
• Conduct focus groups discussion with 8
to 10 participants per group
• Assign an expert moderator/facilitator
who can manage group dynamic
Developing a Business Plan: Screening
Proposed Solutions
Screening solutions based on
viability, profitability & customer
requirements
What is viability?
Viability is defined as the
ability to survive or persist; the quality
of being able to happen or having a
reasonable chance of success.
It also refers to the practical
potential of start-up business idea to
survive and grow in the marketplace.
Viability of the business is likewise
measured by its long-term survival and its
ability to sustain profits and continue
doing business over a period of time.
Entrepreneurs must give serious
considerations based on viability in the
following areas:
1. Objectives
2. Manpower or human resource 3.
Management must be capitalize in the use
of technology
1. Objectives - or goals of the business
serves as its direction. It must be clearly
set by the management in its Mission and
Vision as a guiding tool for its plans and
programs to motion the enterprise to
profitability.
2. Manpower or human resource - refers
to the people who work for the business
and the entrepreneur.
3. Management must capitalize in the use
of new technology - As it helps in easing
work for employees, speeds up work,
increase productivity, improves quality of
products or service better.
Things Test-Check Business Viability of
New Venture Ideas Question to ponder:
How viable is my business?
1. Uniqueness
2. Financing the venture
3. Customer
4. Competition
5. Economic Mood
6. Timing
7. Marketing goods and services
8. Continuing cash flow
9. Basic feasibility
1. Uniqueness
- How do you stand out from others? It
doesn't necessarily mean you have to
invent or create an entirely new idea for
your target market but, it should be
advantageously different and stand out
from your competitors.
2. Financing the venture
- How much would you need to finance
your new venture? You need to make
realistic estimation and know where to
obtain your budget. Have a good finance
understanding. The amount needed
could be from you own money, loan, or
from a willing investor.
Sources of Capital/Funds for the business
1. Internal source
a. Savings and assets (personal
properties) of a starting entrepreneur
b. Sources from internal operation
(business revenue)
c. Short-term sources of debt financing
(banks, investment/lending institutions)
2. External source
a. Long-term sources of debt financing
b. Bank loans
3. Other sources
a. Partners' contribution for partnership
organization
b. Stock options for Corporations/equity
financing
c. Liquidation of assets
3. Customer
- Who's going to buy? Knowing who
will be buying your product or service is
important for your business success
because you would know where to find
them. Who are your customers? Define
your customers whether they are
students, busy professionals, mothers,
teenagers, etc.
4. Competition.
- How can I do better than my
competitors? It is more expected than
not that you have competitors in the
market offering the same. Competitors
can be a great resource to you as an
upstart; you can see how much they
charge, what marketing strategy they
use and the location they choose.
5. Economic Mood
- Where are consumers' mind right now?
What are the concerns that affect their
spending behavior? Your business'
success can greatly depend on economic
mood. Gauge the state of the economic
environment and think of how it relates to
your new business venture. Are
consumers cutting expenses or
spending more?
6. Timing.
- Is your business seasonal or not? If you
expect your business to be seasonal, time
to open your business at the strongest
consumer demand.
7. Marketing of goods and services.
- What is your marketing strategy? In
step three you identified your customer.
At this point develop a marketing
strategy for your potential buyers for
them to know about your great new
business and on how to buy them.
8. Continuing Cash Flow.
- Do you have a proper financial plan?
Before you open up shop, prepare a
detailed financial plan. This is in
preparation if the business will already be
booming and more supplies and costs
will be needed to keep with the
demand.
9. Basic Feasibility.
- Is it legal? Can the product or service
work? There are legal requirements that
needs to be complied for opening a
business. Make sure that your business
idea will not violate government
requirements and proper documents can
be legally obtained.
Screening solutions based on viability,
profitability & customer requirements
Profitability is a business'
ability to gain profit from its business
activities and investment. Though profit
is closely related to profitability, the latter
is but, a measurement of business
efficiency - and ultimately it's success
or failure. A further definition of
profitability is a business's ability to
produce a return on an investment based
on its resources.
Return on Investment (ROI) also called
Return on Assets is a performance
measure used to evaluate the efficiency of
an investment or compare the efficiency
of a number of different investments. ROI
tries to directly measure the amount of
return on a particular investment,
relative to the investment's cost. To
calculate ROI, the benefit (or return) of
an investment is divided by the cost of the
investment. The result is expressed as a
percentage or a ratio.
To measure profitability
Payback period refers to the allotted time,
usually number of years that an
investment is recovered. Simply put, the
payback period is the length of time an
investment reaches a break-even point.
Payback period = Initial
Investment/Capital
Profit
Formula:
ROI = Net Income or Profit
Cost of Investment or Capital
Formula:
Operating Profit = Net Sales -Operating
Expense
Return on Sales = Operating Profit Net
Sales X 100%
Return on sales (ROS) also called as Net
Profit Margin measures the overall
operating results of an entity. The
measure considers all income recognized
and all expenses incurred during the
period. Return on Sales is a financial
ratio that shows how efficiently a
company is able to generate operating
profit from its revenue.
Profit is what is left of the
business income or sales after it pays all
expenses. Directly related expense to
revenue include wages, expenses in
producing a product, operating expenses,
debt-reduction payments and other
expenses related to the conduct of the
business activities.
Profit = Revenue or Sales - Expenses
what if there is no profit? nor loss after
deducting the expenses from revenue?
Break- even happens when there is no
profit nor loss after deducting expenses
from revenue.
Profit = Expense
Formula:
Operating Profit Net Sales-Operating
Expense
Return on Sales
Operating Profit Net Sales X 100%
What is Figure of Speech?
A figure of speech is a rhetorical device
or language feature that involves the use
of words in a way that deviates from
their conventional or literal meanings to
create a more expressive, vivid, or
imaginative effect.
There are various types of figures of
speech, including:
Simile: A comparison between two
unlike things using "like" or "as." For
example, "as brave as a lion" or "like a
bolt of lightning."
Metaphor: A direct comparison
between two unrelated things, stating
that one thing another. For instance,
"time is a thief" or "the world is a stage."
Customer Requirement refers to
characteristics or specifications that
should be present in a product for it to
be deemed desirable by the consumer.
SERVICE REQUIREMENT
- Intangible aspects of purchasing a
product that a customer expects to be
fulfilled.
It consists of elements like:
- on- time delivery,
- service with a smile,
- easy payment etc. It encompasses all
aspects of how a customer expects to be
treated while purchasing a product and
how
2 TYPES OF CUSTOMER
REQUIREMENTS
1. Service Requirement
2. Output Requirement
SERVICE REQUIREMENT
- It encompasses all aspects of how a
customer expects to be treated while
purchasing a product and how smooth his
buying process goes.
OUTPUT REQUIREMENT
- These are mostly the tangible
characteristics, features or specifications
that a consumer expects to be fulfilled in
the product.
It is important that as customer we set
requirements because it motivates the
customer to buy the product or service.
You will be convince to buy the
product or avail the service.
How are you going to convince your
customer to buy your product/service?
How are you going to convince your
customer
1. Provide clear and detailed description
of your product.
2. Mention concrete examples Of the
benefit of your product
3. Emphasize unique qualities of your
product or service
1. Provide a little of more than of what is
expected.
Three levels of customer requirements:
1. Must Haves
 It gives you an opportunity to make
right changes if there is a problem
and the right time to improve upon
the customer and meet their needs.
 Because excellent customer service
is a sure way to exceed customer
expectation as it creates loyal
customers for life.

2. Satisfiers

3. Delighters

Must Haves

- These are the bare minimum

requirements expected by the customers;
if fulfilled customers will be not show
any exceptional appreciation but if not
fulfilled, the customer will show
dissatisfaction.

Satisfiers

- There are the requirements that

customers express their desire for,
explicitly. If you offer better or more of
these satisfiers, then the customers will
appreciate it more and will be more
satisfied.

Delighters

- These are the extras or the add-ons.

Absence of these will not leave the
customer dissatisfied; in fact, the absence
of these characteristics might not even be
noticed. But adding these would increase
the customer's satisfaction greatly and
will leave them delighted. For ex, you
order a-la-carte in a restaurant and get
complimentary wine.

As a business owner, why do we need to

understand and be aware of the
requirement/s of our customers?