SOURCES OF

ENTREPRENEURIAL
IDEAS
ENTREPRENEURIAL PROCESS

The entrepreneurial process of creating a new venture

Creation Identification
Opening of
of
of new entrepreneurial entrepreneurial
ideas opportunities venture
SOURCES OF ENTREPRENEURIAL
IDEAS

1. Changes in the environment

CHANGES IN THE ENVIRONMENT

Changes that happen in the external environment. External Environment

refers to the physical environment, and industry environment where the
business operates.
1. Physical Environment includes
a. Climate
b. Natural resources
c. Wildlife
CLIMATE

The entrepreneur must

consider the prevalent
climatic condition of
the area where they
intend to open a
business.
 SOCIETAL ENVIRONMENT

Societal environment is generally composed of social, political, cultural,

economic, legal, and technological forces.
Positive relationship
between
Favorable operating
Evaluation of the societal
performance of the
environment
entrepreneurial venture
SOCIOCULTURAL FORCES

Social forces 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.
Social forces include the following:
1. Values 4. Lifestyle patterns
2. Traditions 5. Religion
3. Literacy level 6. Customs and Beliefs
 POLITICAL FORCES / ECONOMIC

Political forces are the various elements usually comprising of the political parties, political
systems and other political groups that substantially influence the political stability of a country.
Political forces include the following;
Trade regulations
Taxation
Government stability
Unemployment
TECHNOLOGICAL ENVIRONMENT

• Technological forces basically refer to the trends and developments in computer

and information technology that have impact on business.
Technological forces may include the following;
1. Internet
2. Social media
3. E-commerce
4. Technological advancement
 INDUSTRY ENVIRONMENT

The industry environment is the external environment

environmental layer where the trends andchanges are easily and
immediately felt by the business. Industry forces include the
following:
a. Government
b. competitors
 INDUSTRY ENVIRONMENT

c. Suppliers
d. Customers
e. creditors
f. Employees
** succeeding lesson**
 INDUSTRY ENVIRONMENT

1. Government refers to the system or institution that handles

the affairs of a particular country. It promotes
entrepreneurial ventures through its thrusts, programs, and
priorities.
 support for small and medium enterprises (loans and grants)
 INDUSTRY ENVIRONMENT

2. Competitors The competitors are the forces existing in the industry

environment that produce, sell, or render products or services which
are similar to those of the business.
The two (2) classifications of competitors are:
a. Direct Competitors – produce and sell similar products or services.
b. Indirect Competitors – produce and sell substitute products
 INDUSTRY ENVIRONMENT

3. Suppliers
Suppliers refer to the individual persons or companies that
provide the required materials, parts, or services to the business.
 INDUSTRY ENVIRONMENT

4. Customers
The customers are the buyer of goods or services produced or
rendered by the business
 INDUSTRY ENVIRONMENT

5. Creditors
The creditors refer to banks, financial institutions, and financial
intermediaries engaged in the lending of money to the borrower
usually for a fee or charge in the form of interest
 INDUSTRY ENVIRONMENT

6. Employees
The employees are the workers of the business who are highly
responsible for the production ofgoods or delivery of services to
the customers. They are the backbone of the business.
TECHNOLOGICAL DISCOVERY AND
ADVANCEMENT

Technological progress refers to the discovery of

new and improved methods of producing goods
and services.
GOVERNMENT’S THRUST, PROGRAMS, AND
POLICIES

Government priorities, projects, programs and

policies of the government are also a good source
of entrepreneurial ideas.
PEOPLE’S INTEREST

Interests
Hobbies
Preferences of people
(Internet cafes, Bike Shops, Private Resorts)
PAST EXPERIENCES

Past experiences and exposures are also a good source of

entrepreneurial ideas. The expertise and skills developed
by a person may lead to opening a related business
enterprise.