12th Grade – Thomas Alva Edison

Entrepreneurship
Course Outline: Midterm
Lesson 1 – Overview and Fundamentals of Entrepreneurship
 What is an Entrepreneurship?
 Who is an Entrepreneurship?
 Common and Core Competencies in Entrepreneurship
 Entrepreneurship or Employment
 Careers in Entrepreneurship
Lesson 2 – Recognizing the Potential Market
 The Entrepreneurial Process
 Scanning the Marketing Environment
 Seeking, Screening, and Seizing
 Methods of Generating Ideas
 Macroenvironmental Sources: Example of Findings
Lesson 3 – Marketing Plan
 Value Proposition and Unique Selling Proposition
 Know Your Customers
 Customer Requirements
 Primary and Secondary Target Market
 Talking to your Customers
 The Marketing Mix: 7P’s of Marketing
Lesson 4 – Product Development, Operations and Financial Plan
 Fundamentals of Product Development
 The 4M’s of Operation
 The Business Model
 Factors Affecting Estimation and Revenue
 Computation of Gross Income
 Income Statement
 Balance Sheet
 Cash Flow Statement
What is Entrepreneurship?
 Proactive process of developing a business venture to make a profit
 Seeking opportunities for a market
 Establishing and operating a business out of the opportunity
 Assessing its risk and rewards through close monitoring of the operations
 It is an art of observing correct practices in managing and operating a self-owned
wealth creating business by providing goods and services that are valuable to the
customers.

Importance of Entrepreneurship in the Economy

 Produces more jobs
 Amplifies economic activities
 Introduces innovation
 Improves people’s living standards
 Disperses economic power
 Controls local wealth
 Reduces social conflicts
 Elicits economic independence

Who is an Entrepreneur?
 A unique individual who has the innate ability and extraordinary dedication to establish
and manage a business, acknowledging all the risk and reaping its rewards
 A person who organizes, operates, and assumes the risk of business venture.
 A person who strongly advocates and correctly practices the concepts and principles of
entrepreneurship in operating and managing the self-owned business venture.
 The term entrepreneur comes from the French word entreprendre which means to
undertake. It is a reference to individuals who have initiated the establishment of a
business enterprise.
It comes from two words “entre” means “between” and “prendre” means “to take”

Levels of Entrepreneurial Development

 Self-Employed
 Not comfortable with routinely desk jobs
 Do not conform with fixed working schedule
 Want to do things on their own way
  Manager
 Need to set up and ask some help from the people around them
 Hire potential employees to do the work

 Leader
 Enjoy seeing their people flourish
 Focus on the big picture and strategic direction of their business

 Investor
 Look for more opportunities
 Purchase one or more businesses that can add value to company
 Sell established business as franchise

 True Entrepreneur
- Aim for quality and excellence in their work
- Fully learned and practice the four-step process of thinking

4 Step Process of Thinking (True Entrepreneur)

 Idealization
 Visualization – creating plan to make the dream reality
 Verbalization – sharing ideas with other people
 Materialization – when vision becomes a reality

Technopreneur – It is an entrepreneur who puts technology at the core of his or her business

Social Entrepreneur – It is an entrepreneur that takes advantage of the social problems and turns
them to profitable institutions with the intention of helping the disadvantaged community.

Intrapreneur – It is an entrepreneur in a large company or corporation who is tasked to think,

establish, and run a new big idea or project.

Extrapreneur – It is an entrepreneur who hops from one company to another to act as the
innovation champion, providing creative and efficient solutions
TOPIC: Different Characteristic of an Entrepreneur
 Proactive
 Agents of Change
 Risk Taker
 Have Sharp Eyes for Opportunity
 Sociable
 Networkers
 Decisive
 Balanced

TOPIC: Core Traits of an Entrepreneur

 Leader
 Communicator
 Specialist
 Problem Solver

Importance of Entrepreneurship
A. Filipino People
1. It provides guidelines in their wealth-creating ventures
2. It helps improve their financial and social life
3. It helps broaden their creativity
4. It helps their lives be happy, fruitful, and successful

B. Local Community
1. It provides employment in the community
2. It creates new demand in the market
3. It makes substantial contributions to the raising and collection of taxes
4. It facilitates the movement of the factors of production
5. It creates new business opportunities
6. It promotes a peaceful and loving community
7. It increases constructive competition

C. Philippine Economy
1. It encourages competitiveness and thereby challenges entrepreneurs to keep
improving their products and services
 2. It helps find an entrepreneurial niche in the world market
3. It helps hasten the economic recovery process of the Philippines during financial
turmoil or crackdown
4. It facilitates the smooth flow of money in the local market
5. It assists the national government in its desire to have favorable economic ratings in
the world market.

Character Traits Common to Successful Entrepreneurs

A. Achievement Cluster
The achievement cluster consists of entrepreneurial character traits that are directly
related to the entrepreneur’s desire to be an achiever in the field of entrepreneurship.
Entrepreneurs are achievers by nature and they strive to achieve.
1. An opportunity-seeker
2. Committed
3. Persistent
4. A risk-taker
5. Efficient and quality-oriented

B. Planning Cluster
This is a set of characteristics of successful entrepreneurs that basically supports the
character traits in the achievement cluster.
1. A goal-setter
2. An information-seeker
3. Systematic in planning and monitoring

C. Power Cluster
The power cluster includes a ser of character traits that reflect the degree on interpersonal
relations maintained by successful entrepreneurs in the community.
1. A persuasive and positive networker
2. Self-confident

Skills and Core Competencies in Entrepreneurship

Skills are considered as the personal abilities to do things well. They come form the
totality of the knowledge, practice or experience, and aptitude of a person.
A. Cognitive Skills
It refers to mental ability of the entrepreneur to learn new things, generate new ideas, and
express knowledge in both oral and written forms.
 1. Ability to understand written materials
2. Ability to learn and apply new information
3. Ability to solve problems systematically
4. Ability to create new ideas
5. Ability to innovate new products and procedures or methods

B. Technical Skills
It relates to the knowledge and proficiency in a specialized field like computer
technology, accounting, marketing, operation research, engineering, medical fields, or
other related technical fields. It includes proficiency and ability in the following areas:
1. Information technology
2. Feasibility study and business plan preparation
3. Technical writing skills
4. Marketing
5. Management and finance

C. Interpersonal Skills
Interpersonal skills are basically about the relationship and interaction of the entrepreneur
with the workers, suppliers, creditors, prospective customers, and other members of the
business community.
1. Skills in verbal communication
2. Skills in non-verbal communication
3. Skills in listening
4. Skills in leading
5. Skills in negotiating

Entrepreneurship vs Employment
Pros and cons of entrepreneurship vs employment
Important Career Factors
Income
Entrepreneur
Income generated passively
even when the entrepreneur is
resting.
Opportunity income
unlimited, depending on the
success of the business
Employee
Income generated actively
Income usually fixed per
month and increases every
year depending on the
employer and the employee’s
performance

Income only earned when the Income earned whether the

business is successful business is successful or
 unsuccessful

Income earned whether the

business is successful or
unsuccessful
Provides jobs Seek for a job

Fully responsible for serving Has the goal of satisfying

Hiring and Firing, customers, and providing only the employer
Organizational Setup, and employee satisfaction
Major Key Result Areas Fully dependent on the
Has the power to disengage employer’s performance
non-performing employees
Can work for the current
Can venture into expansion of employer exclusively
business
Performs all necessary Has routine tasks and works
variable tasks to establish and on regular or normal hours
manage a start-up business
Daily Tasks Follows policies, procedures,
Prepares policies, procedures, and memoranda from the
and memoranda for the employer
business
Leisure Time and Vacations Has flexible schedule and can Has a limited number of
take unlimited number of vacation days imposed by the
vacation days employer
Taxation Taxed on the net income Taxed on the gross income
Comfort Level at Work Is comfortable in doing May be comfortable with
multiple challenging tasks routines and minimal risks
and takes accountability with
the risks and profits of the
business

Most Common Small Business in the Philippines

1. Sari-sari store
2. Rice retailing
3. Food cart business
4. Buy and sell business
5. Street food business
6. Flea market business or tiangge
design/blogging
7. Online selling business
8. Cellphone loading business
9. Laundry and dry-cleaning business
11. Hair styling and makeup business
12. Spa, gym, and nail care business
13. Video and photography business
14. Tutorial business
15. Baking business
16. Web site development and
17. Direct selling business
18. Car wash and car care business
19. Bar, café, and restaurant
 10. Printing business 20. Water station and LPG
TOPIC: Recognizing the Potential Market

Entrepreneurial Process

1. Opportunity spotting and assessment

 It is the beginning of the process and considered as the most difficult.
Entrepreneurs at this point take note of interesting trends in their environment.
 Opportunity seeking
 Opportunity screening
 Opportunity seizing
2. Developing a business plan
 Business plan is a comprehensive paper that details the marketing,
operational, human resource, financial, strategic direction, and tactics of the
business

3. Determining the capital needed

 In the entrepreneurial process, it is mandatory to calculate the resources
needed to establish the business and compare this against the entrepreneur’s
current resources
4. Running the business
 This is the part where the entrepreneur should use the resources allocated for
the new venture. The business plan prepared in step 2 should already have
been implemented.
Opportunity Spotting Developing a Determining the Running the Business
and Assessment Business Plan Capital Needed

Evaluate the identified Come up with a Calculate the intrinsic Practice leadership as
opportunity business description and extrinsic capital a way of life
and analysis needed
Conceptualize and Perform industry Calculate the existing Recognize critical
measure the analysis capital success
opportunity
Identify the perceived Come up with the Calculate the Employ risk-
value of the marketing plan difference between mitigating control and
opportunity to the the needed capital and monitoring systems
company and the the existing capital.
customers Choose the most cost-
efficient suppliers and
service providers
Match the opportunity Come up with the
with the financial plan
entrepreneur’s skills
 and objectives
Scan the strengths and Identify strategies and
weakness of tactics
competitors
Perform monitoring
and control

Scanning the Marketing Environment

Find the opportunity first before coming up with new product or service. An opportunity
is an entrepreneur’s business idea that can potentially become a commercial product or service in
the future.
1. Opportunity Seeking
 Macro Environmental Sources:
 STEEPLED – sociocultural, technological, economic, environmental,
political, legal, ethical and demographic factors. This represents the
general environment where the entrepreneur can identify business
opportunities from and where the future business is about to operate.

 Industry – source of current trend on what is happening in the industry

where the future business will belong to.

 New Discovery of Knowledge – new trends that can be the core

business model of a new venture

 Futuristic Opportunities – projected new opportunities that can

possibly affect the new business while it is running.

 Micro market
 Consumer preferences, interest, and perception
 Competitors
 Unexpected opportunities from customers
 Talents, hobbies, skills, and expertise
 Irritants in the marketplace such as deterrents, problems, complaints,
and delays
 Location

2. Opportunity Screening
It is the process of cautiously selecting the best opportunity. Entrepreneurs should
apply due diligence and independent judgement in selecting the opportunities that
have a potential and eliminate those that are not within the scope of the
entrepreneur’s risk appetite. Risk appetite refers to the entrepreneurs’ tolerance to
the business.
 The selection will depend on the entrepreneur’s internal intent (main objective
that the business will accomplish in the entrepreneur’s life) and external intent
(will address the compelling needs of the target market)

Important elements that are always present in a compelling opportunity:

a. Has a superior value to customers
b. Solves a compelling problem, issue, a need, or a want
c. Is potential cash cow
d. Matches the entrepreneur’s skills, resources, and risk appetite

3. Opportunity Seizing
This is the pushing through with the chosen opportunity. Entrepreneurs should
make the best out of this opportunity, and they should exert effort and full
dedication for the success of the new venture. Entrepreneur’s idea can be any type
of innovation.

Innovation is the process of positively improving an existing product or service.

 Breakthrough innovation
 Establish the platform for innovations
 Inventions in a certain area. It is protected by a patent, trade secret, or
a copyright
 Examples: internet, computer and airplane
 Technological Innovation
 Technological advancement of an existing product or service.
 Examples: Wi-Fi, laptop, and jet airplane
 Ordinary Innovation
 It is commonly origination from market analysis and technology pull.
This means that the market has a strong influence in the
implementation of an innovation.
 Examples: unlimited internet plans of telecommunication companies,
wireless mouse and airbus for economic travelers.
It involves refining and developing the opportunity. The refining process is called product or
service planning and development process. It has four key stages:
1. Idea stage – In this stage, the entrepreneur determines what are the feasible products
and/or services that will perfectly suit the opportunity.
2. Concept stage – In the concept stage, the developed idea will undergo a consumer
acceptance test.
3. Product development stage – In this stage, the entrepreneur leverages on the information
generated from the prospective customers via the concept stage.
4. Test marketing stage – This stage validates the work done from the first three stages to
measure success in the commercialization of the product or service.