STUDY NOTES WEEK 1-4 (ENTREPRENEURSHIP)

WEEK 1 – ENTREPRENEURSHIP

NOTES

ENTREPRENEURSHIP

 The term “entrepreneur” comes from the French word entreprendre which means “to undertake”.
 An entrepreneur is a person who organizes and operates a business or businesses, taking on greater than normal financial
risks in order to do so.
 An entrepreneur is an individual who starts their own business based on an idea they have or a product they have created
while assuming most of the risks and reaping most of the rewards of the business.
 Entrepreneurs have been instrumental in spurring social change and improving the way people live and work. They help raise
the standard of living for everyone by creating jobs and making products safer, less expensive, and more functional.
 Through their business venture, entrepreneurs introduce to the market innovations in the form of new products, new
processes, new markets, and new organizations.
 The process of setting up a business is known as entrepreneurship.
 “Entrepreneurship is the mindset that allows you to see the opportunity everywhere”. -Preeti Sriratana

 MEGA ENTREPRENEUR- Individual who have generated substantial value and profits from innovations in a very short
period of time.

-Willing to absorbs huge risk using enormous amounts of capital in their business
-Rapid Economic Progress
-Huge amout of value-added
-Attract numbers of competitors & Imitators.

 MICRO ENTREPRENEUR -Individuals who initiates business enterprise, but value-added and profits they make are
limited

• Profits are limited

•Contributions are minimal
•Attract few competitors & Imitators
•Short in fund and inadequate in skills
•Cannot undertake huge capital, sophisticated technology and extensive risks.
•Engage in micro and small business as an alternative to formal employment.

CHARACTERISTICS OF AN ENTREPRENEUR

While the entrepreneurial process is important in the success of business ventures, many entrepreneurship scholars have argued and
presented evidence that entrepreneurial traits are likewise important in the performance of a business venture. In this section, we
present the effects of these personality characteristics on entrepreneurial performance based on two criteria. The first pertains to how
personal traits connect with the way entrepreneurs create 'value-added' and the second involves the link between these personal
qualities and the formation of entrepreneurial intentions.

Entrepreneurial Traits and Creation of Value-added

The characteristics of an entrepreneur will vary depending on whether they are in the developed countries pursuing Schumpeterian
entrepreneurship or in developing countries operating small enterprises. The level of education, employment status, wealth, and risk
appetite of entrepreneurs differ depending on the amount of value added or profit created by their enterprises. As discussed previously,
there are differences between mega entrepreneurs and microentrepreneurs.

LEVEL OF EDUCATION.

 Studies have shown that entrepreneurs need some formal education to be able to seize the opportunities presented by
inventions. innovations, and other technological developments. This may be true for mega entrepreneurs since they need
some degree of technological know-how to understand the commercial potentials of modern inventions and innovations. In
developed countries, like the United States, some of the more successful entrepreneurs are engineers who are able to
 recognize business opportunities being offered by the latest developments in Information and Communication Technology
(ICT).
 On the other hand, since entrepreneurship in developing countries is more often being used as an alternative to formal
employment, many micro entrepreneurs usually have limited educational qualifications. In addition, engaging in small
enterprises does not require high levels of schooling. These small enterprises use simple technology, and do not require
technical sophistication from workers.
 Thus, the degree of human resource qualifications will depend on the type of business ventures that are being established by
entrepreneurs. For microenterprises, which are meant for employment and economic survival, formal schooling is probably
not required. For bigger and more sophisticated businesses, however, more education and training is required from the
entrepreneur.

EMPLOYMENT STATUS

 Individuals who become entrepreneurs in developed countries are usually former employees of companies in the formal
sector.
 These entrepreneurs usually get their business ideas and concepts from the operations of companies they formerly worked
for. Knowing the ins and outs of a company's operations. including flaws and weaknesses, they become aware of business
opportunities. Once they discover business opportunities, they convert their business ideas into business ventures.
 On the other hand, micro entrepreneurs are usually drawn from the pool of the unemployed or underemployed. They see
their small business ventures as an option for making a living.
 In fact, many microentrepreneurs in developing countries are involved in several activities at the same time. For example,
someone who is manning the store is also doing carpentry or doing repairs of consumer durables.

ENTREPRENEUR'S WEALTH
 the wealth of the entrepreneur is also an important factor. Usually mega entrepreneurs source their funds from their own
wealth and from their families. Some generate capital for their business from the wealth they have accumulated from their
past employment. They can also borrow money from their wealthy parents. Since they have existing wealth at their disposal,
they can use some of these assets as collaterals in securing credit from banks.
 This is not the case for micro entrepreneurs, who have very limited funds. Many of them are too poor to have substantial
savings to finance a big business venture. In addition, because of their limited human and nonhuman resources they cannot
avail of credit from financial institutions.

RISK APPETITE

 Risk is also an important factor in undertaking any business venture. Risks are associated with uncertainties in business
operation. These uncertainties can threaten the survival and stability of a business enterprise, Usually, entrepreneurs are risk-
takers. Otherwise they will not engage in business and will just be comfortable with the certainties of being formally
employed.
 mega entrepreneurs are more willing to take risks compared to microentrepreneurs. Their educational qualifications, as well
as their work experience, give them an edge in preparing for, and managing these risks . mega entrepreneurs can pursue
business ventures that are riskier but that can generate higher returns.
 On the other hand, micro entrepreneurs take risks by default if they want to survive and escape the consequences of
unemployment. But their appetite for risk is not as much. Since microentrepreneurs have limited wealth and have difficulties
in getting credit, they have weak defenses against the impact of uncertainties. As a result, they engage in ventures that are
relatively safe but with limited returns.

Entrepreneurial Traits and Entrepreneurial Intentions

Every individual who sets up a business venture started out by intending to do so. Thus, we examine entrepreneurial
intentions, which are planned actions formulated in the mind of individuals which are geared toward the objective of establishing a
business venture from potential business opportunities.

INTERNAL FACTORS

 include mainly the qualities of individuals such as demographics, personal traits, psychological characteristics, individual
skills, prior knowledge, and social ties.
  Demographics refer to gender, marital status, age, and employment status of individuals who are likely to form
entrepreneurial intentions.
 Personal traits, there are theoretical bases for the contributions of self-confidence, determination, and enthusiasm and other
positive human qualities in influencing entrepreneurial intentions.
 Psychological traits include a host of qualities, including need for achievement, risk appetite, acceptance for vagueness, self-
efficacy, and goal setting.
 knowledge and skills learned from prior employment are valuable in setting up a business. Thus, vocational know-how,
supervisory and managerial skills acquired from work experience can also predict entrepreneurial intentions and behavior.
 Since a business enterprise is a socioeconomic institution, its operation will require the entrepreneur to deal with a lot of
people. Thus, having social ties might be an important consideration for setting up a business or not.

EXTERNAL FACTORS

 Among the external factors are environmental support and environmental influence. For environmental support, many
studies have affirmed the positive effects of government, financial institutions, and training institutions in setting up
businesses. An individual will be inclined to pursue entrepreneurship if support from various government agencies are
forthcoming. (EXAMPLE: the availability of credit provided by financial institutions can encourage individuals to pursue
business. Potential entrepreneurs might also be motivated to pursue their intent if technically adept workers and other human
resources produced by schools and other training institutions are readily available.)
 Environmental influence, on the other hand, includes regulatory structure, patents, protection of property rights, and
competitive environment. Government regulations are important particularly in promoting public interest like addressing
information asymmetry (labelling and proper disclosure), limiting negative externalities (taxing business enterprises polluting
the environment), and others. However, overregulation and heavy taxation from the government can discourage potential
entrepreneurs. In addition, protection of intellectual property rights, respect for contracts, promotion of rule of law, and
presence of an even playing field can create a positive competitive environment, which can also influence entrepreneurial
intentions.

ROLES OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT AND SOCIETY

Globally, the level of entrepreneurial activity has contributed significantly to the national level of economic growth of many
countries. The increase in entrepreneurial activities has also initiated changes in the structure of business and society. Specifically,
entrepreneurship has these contributions to the economy and society.

• CREATES EMPLOYMENT. When entrepreneurs put up their businesses, they employ people who possess different competencies
and personal values to help them operate the enterprise.

• DEVELOPS NEW MARKETS. Entrepreneurs are opportunity-seekers, creative, and resourceful. They seek new buyers or
customers of their products or services. They go beyond the existing places where their products are sold and look for other people
who will be interested.

• INTRODUCES INNOVATION. Entrepreneurs innovate. Innovations can be something ordinary or technological or breakthrough.
This innovation is done for the product, service or technology towards commercialization and generates economic wealth. Due to
innovation, other businesses fold, while others will open or flourish. Some even restructure, through merging or buying-out of firms,
to respond to the changes that are required in order to become sustainable in the business.

• GENERATES NEW SOURCES OF MATERIALS. Entrepreneurs are always in constant search for better and cheaper sources of
materials they need. Finding new material providers helps in the economic growth of the place.

These could be sourced from because of the value creation.

• STIMULATES INVESTMENT INTEREST IN THE NEW BUSINESS VENTURES BEING CREATED. When entrepreneurs
engage in a new business, it stirs curiosity for other people to invest in the business because of the benefits it offers.

This new investment contributes to economic growth.

• IMPROVES THE QUALITY OF LIFE. The new products and services developed by the entrepreneur contribute to the increase
in the personal benefit and convenience of people in society. The use of automatic gadgets in cooking or washing clothes, mobile
phones, internet services, agricultural machines, and many other innovations leads to a better quality of life.

• SERVES AS ROLE MODELS. Entrepreneurs are people to be emulated by younger generations in the community and society at
large. The atti-tude, behavior, and personality traits, like proactiveness, opportunity recognition, risk-taking, alertness, and creativity,
are some of the characteristics that will also make them successful entrepreneurs in the future.
• BRINGS SOCIAL BENEFITS TO THE PEOPLE. Entrepreneurs pay taxes for every product or service sold in the market. They
also pay for the permits and licenses to operate their businesses. The income derived from all these taxes by the government are then
used for the people, especially the poor, to have more access to social services such as education and health, as well as improvement in
infrastructure facilities, such as roads and bridges, for faster and safer transportation of people to and from various destination.

• UTILIZES AND MOBILIZES INDIGENOUS RESOURCES. Small and medium enterprises will always look for cheaper and
local materials to supply their needs. They also make use of idle or unused resources to meet their needs. This saves much in terms of
foreign currency as local enterprises patronize their own resources and they do not become dependent on imported materials.

• PROVIDES MORE ALTERNATIVES TO CONSUMERS. The stiff competition in the market for quality and cheaper products
and services requires the entrepreneurs to come up with more products and services consumers can choose from. Entrepreneurs also
become more concerned about the welfare of their consumers, and ethical in producing and selling their products or services, in order
that consumers will prefer them over the other enterprises selling the same.

STUDY NOTES WEEK 2 – ENTREPRENEURSHIP

ENTREPRENEURIAL COMPETENCY-is a set of skills and behavior needed to create, develop, manage, and grow a business
venture.

10 ENTREPRENEURIAL COMPETENCIES

1. ABILITY TO ADAPT CHANGE

-Change occurs frequently. When you own a business, you should cope with and thrive on changes. Capitalize on
positive changes to make your business grow.
2. PROFIT-ORIENTED

-An entrepreneur enters the world of business to generate profit or additional income. The business shall become
your bread and butter. Therefore, you must see to it that the business can generate income.

3. HARDWORKING
-Working diligently and being consistent about it.
4. DISCIPLINE
-Entrepreneurs sticks to the plan and fight the temptation to do what is unimportant and knows what is good and
right.
5. DECISION MAKING
-having the ability to think quickly and to make wise decisions towards a pre-determined set of objectives. No one
can deny that the ability to make wise decision is an important skill that an entrepreneur should possess.

6. CREATIVE
-being creative and innovative is having an edge over the competitors.
7. COMMITTED
-accepts full responsibility of everything in his/her business. He/she gives full commitment and solid dedication to
make the business successful.

8. PLANNER
-involves strategic thinking and goal setting to achieve objectives by carefully maximizing all the available
resources. A good entrepreneur develops and follows the steps in the plans diligently to realize goals.

9. SELF-CONFIDENCE
-Entrepreneurs have self-reliance in one’s ability and judgement. They exhibit self-confidence to cope with the risks
of operating their own business.
10. PEOPLE SKILL
-People skills refer to effective and efficient communication and establishing good relationship to the people
working in and out of your business.

COMMON COMPETENCY

• are the set of skills and knowledge that are required to start, run and grow a successful business.
• focuses on the skill that an entrepreneurs must possess.

CORE COMPETENCY
 • is defined as the combination of entrepreneurial concepts and principles, entrepreneurial character traits and entrepreneurial
skills that provide and become the ultimate source of competitive advantage of the entrepreneur.

• make a business stand out from the competition.

• comprises the strategic advantages of a business.

6 CORE COMPETENCIES OF A BUSINESS

1. Greatest Quality Products. This core competency means the company's products are most durable, long-lasting, and most
reliable.

2. Most Innovative Technology. This core competency means the company is an industry leader in its sector. The company
will likely have invested heavy amounts of capital into research & development, physical assets and hires experts in
respective fields.

3. Best Customer Service. This core competency means customers have the greatest experience during (and after) their
purchase

4. Strongest Company Culture. This core competency promotes the internal atmosphere of the business. The company aims to
attract the best talent by investing heavily in employee recognition, development, or collaborative, fun events.

5. Fastest Production or Delivery. This core competency means the company is able to make or ship items the fastest.

6. Highest Degree of Flexibility. This core competency allows the company to quickly pivot in response to business
opportunities or challenges.

Career Opportunities of Entrepreneurship

1. Business Consultant - with the expertise of in the field of entrepreneurship, he can be a very good source of advices to
other entrepreneurs and to own business.\
2. Teacher - a graduate of an entrepreneurship can use his knowledge in teaching.
3. Researcher - the entrepreneur can be employed as a researcher by an enterprise.
4. Sales - the entrepreneurship graduate can apply as a salesman.
5. Business Reporter - the entrepreneur being expert in the field, can be employed as a business reporter.

STUDY NOTES FOR WEEK 3 – ENTREPRENEURSHIP

RECOGNIZING A POTENTIAL MARKET

• Why do we need to analyze the market need?

In order for us to know what product or services we will offer to the market or to our target customer and place.

MARKET NEEDS

- Is a marketing concept that relates to the functional need or emotional needs or desires of a target market.

- FUNCTIONAL NEED refers to the products/services that customers purchase in order to fulfill a task or function. (ex:
Printer to produce hard copy of documents.; Water hose to easily do the watering in your garden rather than manually
fetching water in the faucet.)

- EMOTIONAL NEED refers to the products that satisfy the emotional need of the customer. This pertains to what customer
feel when using/having the services/products. (ex: Entertainment services such as Cinema, playground, and game
station.; ex: Using the water hose the customer finds joy and relieve stress while doing the task.)

- A successful company identifies when a segment of customers is not effectively served by existing providers and develops
and promotes products or services to match.

CUSTOMER NEEDS ANALYSIS

 • helps you to evaluate and understand the expectations of your target audience. It allows you to explore the minds of your
target audience and uncover their needs.

Needs analysis could lead to PRODUCT DEVELOPMENT, ENSURES PRODUCTS PROVIDES VALUE
AND BENEFITS and ANSWERS THE REQUIREMENT OF A CUSTOMER FOR A
PRODUCT/SERVICES.

TARGET MARKET

- Answers the question, “who is your target audience for the product or services that you’re going to offer?”.

- Refers to the potential buyers/customers.

- MASS MARKETING meaning refers to the process of promoting a product or service to the widest range of consumers and
does not limit to a particular group of consumers. (ex: COCA COLA, anyone can drink and buy coca cola regardless of age,
gender and etc.)

- MARKET SEGMENTATION seeks to identify targeted groups of consumers to tailor products and branding in a way that
is attractive to the group. This has particular group of consumers for products/services to be offered. (ex: MAKE UP
PRODUCTS, the mainly target consumers are women.) (TOYS, the target audience are the kids.)

There are 3 strategies you can use to identify those needs and those are all effective ways to gain those valuable insights.

 Reflecting on your experiences,

 observations and
 conducting customer interviews.

STUDY NOTES FOR WEEK 4 – ENTREPRENEURSHIP

SCREEN THE PROPOSED SOLUTIONS THROUGH THE CHARACTERISTICS OF THE PRODUCTS WHEN IT COMES
TO VIABILITY, PROFITABILITY AND CUSTOMER REQUIREMENTS.
(refers to the success of the solution)

• Viability - refers to a situation in which a business is surviving or the product that will be introduced to the market will be
successful. This survival is linked to financial position and performance.

• Profitability – it is measured with income and expenses. The product should be profitable. A company’s profitability is the
extent to which its total revenue exceeds its total expenses for any given period to generate profit.

• Customer Requirements - Refer to the specifications or features of a product or service that are deemed necessary by
customers. To determine customer requirements, companies can research their target market to understand their desires and
needs.

STRATEGIES IN SCREENING THE PROPOSED SOLUTIONS are:

 FEASIBILITY STUDY – A feasibility study analyzes a proposed project or idea to determine if it is viable, practical, and
economically feasible.
 DEMAND ANALYSIS – Demand analysis is the research conducted by companies that aim at understanding customer
demand for a certain product
 SWOT ANALYSIS - SWOT analysis is a strategic planning and strategic management technique used to help a person or
organization identify Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning