ENTREP REVIEWER PDF

Module 1: Introduction to Entrepreneur What is Entrepreneur? -​ comes from a French word “Entrepende” which means to to do something, or to undertake -​ a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk...

Module 1: Introduction to Entrepreneur What is Entrepreneur? -​ comes from a French word “Entrepende” which means to to do something, or to undertake -​ a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk takers Entrepreneurship -​ is a process of creating, launching, and managing a business operation. Entrepreneur vs. Business Individual An entrepreneur doesn't satisfied with current performance. They always find ways to improve and grow and are creative and innovative. The goal of an entrepreneur is customer-oriented. A business individual just follows existing ideas. A businessman's objective is to earn a profit from producing, buying, and selling goods. Business Individual -​ they just follow existing ideas Businessman -​ their objective is to earn a profit from producing, buying and selling goods Mindset -​ a mental attitude or perceptions Business Plan -​ a written document describing the nature of the business, the marketing strategy, containing a projected profit and loss statement Learner’s Dream Book -​ a physical materialization of the learners’ dreams or goals -​ it includes pictures of the dream they want to achieve.  -​ Constructing the dream book, is like a life planning. Life planning is a guided process by which an individual clarifies goals and challenges, and identifies the steps needed to move forward Entrepreneurial Skills a. Marketing Skills ❖​ It is the ability to introduce your product and business to the customers b. Sales Skills ❖​ It is the ability to convert prospect into paying customers c. Finance Skills ❖​ It is the ability to strategies, create income than losses d. Planning Skills ❖​ It is the ability to plan and set goals e. Basic Management Skills ❖​ It is the ability in managing a business by providing suitable and effective solutions f. Leadership Skills ❖​ It is the ability to lead people effectively g. Communication Skills ❖​ It is the ability to interact with different people Core Competencies in Entrepreneurship: 10 Qualities of an Entrepreneur 1.​ Opportunity Seeking > Entrepreneurs seek opportunities, they always look at every situation as an opportunity 2.​ Persistence > describes the ability to push toward the finish line, even if the finish line seems out of reach 3.​ Commitment to Work > Entrepreneurs are committed of what they’ve said 4.​ Demand Efficiency and Quality > Satisfying the client’s needs and demands which will achieve through efficient service and good quality products is a key for a successful entrepreneur 5.​ Risk Taking > Knowing when to take the opportunity and weigh the risk to avoid the possibility of losses 6.​ Goal Setting  > Successful entrepreneurs set goals accordingly and open themselves to more possibilities 7.​ Information seeking > An entrepreneur never stopped on seeking important information that lead to its success and great innovations 8.​ Systematic Planning and Monitoring > Every entrepreneur had these in mind. Without definite goals, plans can be confusing and without regular monitoring of goals, outcome of plans cannot be achieved 9.​ Persuasion and Networking > Entrepreneurs build relationships with the customers. They must know “when” they should pursue potential clients 10.​ Self-confidence > It is about having trust in what you know and your abilities to handle the unexpected events in your life. > It is also a belief that you are the one in control of your life and goals ---------------- END OF THE MODULE ------------------ Module 2: Career Opportunities Institutionalizing Entrepreneurship Education as Part of K to 12 ​ To provide sufficient time for mastery of concepts and skills, develop lifelong learners, and prepare graduates for tertiary education, middle-level skills development, employment, and entrepreneurship ​ As one of its salient features the K to 12 is designed to nurture holistically developed Filipino that allows for graduates to be prepared to pursue any of the different paths they wish to pursue, may it be education, employment or entrepreneurship  Youth Entrepreneurship in the Philippines ​ Every person may have the capacity to build a business, but to be an entrepreneur, entails adopting a go-getting and winning mindset. By capacitating skills and talents, one can build a business, and if we couple skills for and knowledge in business with the right attitude, one truly becomes an entrepreneur. Through entrepreneurship, believe that “YOU CAN BE ANYTHING”. Job -​ is the work that you do to earn a salary to support your basic needs and wants -​ are typically full-time or part-time and can be a shortterm position of a few years or less -​ usually consists of an hourly wage -​ some jobs don't need experience or previous training and expect you to perform in your duties for regular payment Career -​ is a long-term journey in your professional life that you prepare for depending on your passions -​ is a path you choose to achieve your lifelong goals and ambitions. It may require sufficient education and training to achieve them -​ If you're pursuing a career, you're typically looking for a position with a consistent salary and benefits like medical plans or bonuses > A good career frequently includes other benefits like work satisfaction, professional development and growth. People who embark on a career may do so for a long term and it may comprise multiple jobs throughout the career CAREER OPPORTUNITIES: Rewards in Business 1.​ Higher possibilities for greater income. You can set your target income freely and work hard for it. Because you are the one who manages your own business 2.​ “Be your own boss”. You are the boss of your own business. You set the time, making decisions, setting goals, and everything. So as an entrepreneur, it is a challenge for you to lead your business at your own risk. 3.​ Opportunity to stretch and use your capacity and creativity. Yourself is the one who brings out the inner drive you possess to offer great ideas  4.​ Opportunity to help others. Through your business you can partner and help with social enterprise, suppliers from the community and provide job opportunities to people out there, neighbors and even to your family members. 5.​ Build an entrepreneurial legacy. Inspires other people to achieve more through their right attitude and discipline. The legacy they have made will be transferred to their next generations. CAREER OPPORTUNITIES: Risks in Business 1.​ Possibility of Failure. As an entrepreneur, there are times that you will experience failures and it is a challenge to you to face problems and use it as an opportunity, learn from your mistakes and start over again. That’s what makes a successful entrepreneur 2.​ Unpredictable state in industry. Time to time the supply and demands are quickly changing. But as an entrepreneur, problems are great opportunities to seek possibilities. 3.​ Longer time of working hours. It requires you longer hours in a day to work than a regular employee does. But sooner or later, you will gain the pain through the reward that your business may give you back. 4.​ Wider range of responsibilities. In a newly start up business, you are the one who will be responsible in everything from planning, marketing, managing sales, finance and people ---------------- END OF THE MODULE ------------------ Module 3: Opportunity Seeking ENTREPRENEURS ARE INNOVATIVE OPPORTUNITY SEEKERS ​ They create value out of new potential products and services, flexible in applying new technology, and creates new market arena or improve an existing one Essential to an entrepreneur’s opportunity seeking ❖​ MIND FRAME -​ allows the entrepreneur to see things in a very positive and optimistic light in the midst of crisis or difficult situations ❖​ HEART FLAME -​ Driven by passion, they are drawn to find fulfilment in the act and process of discovery. Passion is that great desire to attain a vision or fulfil a mission ❖​ GUT GAME -​ refers to the ability of the entrepreneur to sense without using the five senses. This is also known as intuition. It also connotes courage or, in the local dialect, “lakas ng loob” (strong intestinal fortitude). It is the confidence in one’s self. ​ MIND FRAME – OPTIMISM AND COURAGE ​ HEART FLAME – PERSONAL PASSION ​ GUT GAME – COURAGE AND LAKAS NG LOOB  Macro Environmental Sources of Opportunities 1. Socio-cultural Environment -​ reflecting changing societal values, beliefs, lifestyle trends, demographics, and cultural norms 2. Political Environment -​ defines the governance system of the country or the local area of business -​ includes all the laws, rules, and regulations that govern business practices as well as the permits, licenses and approvals necessary to operate the business 3. Economic Environment -​ Involves the economic factors like supply and demand, interest rates, and currency exchange rates that influence business. It also considers factors like income levels, purchasing power, and industry competitiveness 4. Ecological Environment -​ Covers natural resources, ecosystems, and the environment where humans, animals, and plants live. Growing awareness of environmental issues is making this more important for businesses and countries 5. Technological Environment -​ Refers to advancements in science and technology that create new products or make old ones obsolete, forcing businesses to invest in new technologies to stay competitive Many Sources of Opportunities 1. Industry Sources of Opportunities -​ After the macro environment, the next biggest sources of opportunities are the industry and the market, define who are the relevant customers, who are the direct and indirect competitors, and what are the critical characteristics of the market as to the quality of products or services to be delivered Participants in an Industry include 1. Rivals or competitors in a particular type of business. True rivals or competitors are those competing for the same or similar markets. Examples: Jollibee vs. Mc Donald’s Coca-Cola vs. Pepsi Apple’s iPhone vs. Samsung Galaxy 2. Consumer market segments being served by rivals or competitors 3. Substitute products or services, which customers shift or turn to 1.​ Market Sources of Opportunities -​ Opportunities can be identified from changes in demand (higher or lower) or changes in supply (more or less available) Micromarket -​ This is the specific target market of a business—its immediate customers who are currently buying the products or services from the business and its direct competitor Suppliers -​ provides businesses materials they need to carry out their business activities Employees -​ a person who is hired by a company or individual to perform a service or job  -​ if a business employs staff without motivation, skills or experience it will affect customer service and ultimately sales Indirect Competitors -​ offers different product but with similar benefit Direct Competitors -​ offers exactly the same product Public -​ any group that has an actual or potential interest in or impact and company’s ability to achieve its objective Customer -​ the people who buy and use a firm’s product and services are an important part of external micro-environment Note: Customers have different preferences and dislikes ---------------- END OF THE MODULE ------------------ Module 4: Opportunity Screening Opportunity Screening -​ is the process of evaluating which market offers the best opportunity The ultimate goal of doing the opportunity screening is to NARROW DOWN the many opportunities into one or two most attractive ones. The next step is to conduct a PRE-FEASIBILITY STUDY to ascertain the viability of the opportunity FACTORS that are contained in a prefeasibility study: ​ Market potential and prospects ​ Availability and appropriateness of technology  ​ Project investment and detailed cost estimates ​ Financial forecast and determination of financial feasibility Market Potential and Prospects ✓ For a more realistic number, it would help to narrow down your estimation to the relevant population or target customers in the area where you want to operate your business ✓ Narrow down based on the estimated number of possible customers who might avail of the product or service. ✓ Narrow down based on the estimated number of possible customers who might avail of the product or service. ✓ Estimate the amount of money your client can expect to make from the product or service you plan to market Prospect -​ Somebody who a salesperson believes has a good chance of turning into a paying customer THE FACTORS THAT CONSUMERS CONSIDER BEFORE THEY MAKE THEIR FINAL CHOICE ON WHAT TO BUY 1. INCOME ​ How much money does your customers earn for his living? ​ Income is the money he earns from his work or investment 2. ACCESSIBILITY TO THE GOODS OR SERVICES ​ Is the product available anywhere? Is it easy to find and locate whenever the customer needs it and wherever the customer is? 3. DESIRES/PREFERENCES ​ Customers taste in a product he/she will choose 4. AGE GROUP ​ Who are your target customers? ​ Remember we all belong to different generations and each generation have different taste, personality and perception to what an entrepreneur is trying to introduce in the market 5. Gender 6. Season of the Year 7. TREND ​ Fashion, latest, popular at a certain time 8. LIFESTYLE PREFERENCES ​ This can be expressed in both work, behavior, leisure, social patterns what we repeatedly do Market Estimation -​ is the most difficult task of the entrepreneur because of the many ways customers can be divided and segmented Market Potential -​ is also affected by the number of establishments supplying and serving your target customers ❖ Segmenting the Market ✓ The most basic approach in determining the target segment is by using a set of DEMOGRAPHICS. (AGE, GENDER, RESIDENCE, PLACE, INCOME) ✓ THIS will be the most basic approach in determining the target segment. Market potential is also affected by the number of establishments supplying and serving your target customers ❖ Assessing Competition ✓ This process would determine how saturated the market is in the given area of coverage. The more suppliers and competitors there are within a confined area, the greater the level of saturation ❖ Estimating Market Share and Sales ✓ After estimating the number of target market or segment, the next thing that the entrepreneur should assess is the potential market he/she can attract Market Share -​ refers to the portion or percentage of a market earned by a company or an organization. In other words, a company’s market share is its total sales in relation to the overall industry sales of the industry in which it operates CUSTOMER EXPECTATIONS AFFECTING THE SCALE AND COMPLEXITY OF AN ENTERPRISE’S OPERATIONS 1. Quantities demanded – needed capacity of operations 2. Quality specifications demanded – from input, process, output and outcome of the raw materials. 3. Delivery expectations – knowing how much, how frequent, and when to deliver to customers. 4. Price expectations – the selling price of the product or service would be evaluated by the customers according to the value they would receive THREE INVESTMENT THAT NEED TO BE FUNDED 1. Pre-Operating Costs – costs related to the preparation for the launch of the business. 2. Service/Production Facilities Investment – it refers to the long-term investment for the actual business establishment, including investment in land, buildings, machinery, computers, equipment, software, furniture, vehicles, etc. 3. Working Capital Investment – this includes the investment needed to operationalize the business, composed of cash, accounts receivables, and inventories (work-in-process, raw materials and finished goods). FACTORS CONTAINED IN PRE-FEASIBILITY STUDY Four critical financial statements -​ refer to the monetary transactions that the business is expected to engage in. The end result of the financial forecasts will indicate the feasibility of the enterprise. > Income Statement. The income statement is a financial statement that measures an enterprise’s performance in terms of revenue and expenses over a certain period REVENUE – EXPENSES = INCOME OR PROFIT (LOSS) > BALANCE SHEET. ★​ Assets represent all the investments in the enterprise including the initial investments that you considered in the pre-feasibility. ★​ Liabilities represent the enterprise’s debts to suppliers, to bank, to government, to employees, and other financiers. ★​ Stockholders equity represents the investors’ investments in the stock (or shares) of the business ASSETS = LIABILITIES + EQUITY > FINANCIAL RATIOS AND MEASUREMENT. In any business endeavor, the investor or the entrepreneur himself or herself will always be interested in knowing the PAYBACK PERIOD or how long will it take for him or her to get back what he or she has invested in the enterprise  PAYBACK PERIOD = TOTAL INVESTMENT / ANNUAL NET INCOME AFTER TAXES > RETURN ON SALES (ROS). Ratio where the entrepreneur calculates how much profit the enterprise is earning for each peso sold RETURN ON SALES = NET PROFIT AFTER TAXES / SALES x 100% > RETURN ON ASSETS (ROA) or (ROI) RETURN ON INVESTMENTS. If the entrepreneur is interested to know the return on the investments made Feasibility Study -​ is more comprehensive and detailed as compared to a pre-feasibility study. It is a means to convince the investors to put money into the business opportunity ---------------- END OF THE MODULE ------------------ Module 5: Opportunity Seizing Opportunity Seizing -​ is the final stage. -​ is the stage where an entrepreneur must be able to determine the critical success factors that enable other players in the same industry to succeed while being vigilant Positioning -​ refers to the place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors -​ companies may emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) > CRAFTING A POSITIONING STATEMENT ❖​ Details such as their major buyers, the attributes or features of the product that gives the entrepreneur an idea. ❖​ Customer profiling is needed their characteristics and traits, behavior and usage pattern, preferences and dislikes > CONCEPTUALIZING THE PRODUCT OR SERVICE OFFERING ❖​ A concept is an idealized abstraction of the product or service to be offered to the preferred market of the entrepreneur DESIGNING. means that the entrepreneur must render the concept and translate it into its very physical and very real dimensions (measurement) PROTOTYPE. Prototyping involves creating a preliminary version of the product or service to test its functionality, usability, and market viability TESTING. Testing involves conducting various evaluations and experiments to assess its functionality, usability, performance, and market fit Note: From conceptualization, the entrepreneur proceeds to the design, prototyping, and testing of the concept. > FINANCING, IMPLEMENTING, and ORGANIZING ❖​ People and physical resources are dictated by the sales volume targeted, the technology to be utilized, and the capabilities needed by the workforce. ❖​ The sales volume would then determine the quantities of materials, supplies, power, space, people, operating expenses, and other requirements. ---------------- END OF THE MODULE ------------------ Module 6: Getting to Know the Market MARKET RESEARCH METHODOLOGIES -​ to help the entrepreneur in gathering relevant market information > Focus Group Discussion -​ one of the most common qualitative research tools. This method can also be used for generating initial insights -​ There are four key decisions to be made: (1) respondent selection; (2) sample size; (3) data gathering; and (4) data analysis -​ number of respondents per group should range from six to eight, depending on the skill of the facilitator and the topic being discussed -​ objective of the FGD must be addressed and conclusive insights must be drawn to help the entrepreneur improve his or her business > Observation Technique -​ is probably one of the best ways of gathering data about customers in their natural setting without having to interact or talk to them ❖​ Human observation – humans observe the events as they happen ❖​ Mechanical observation – mechanical devices are used to record events for later analysis > Survey Research  -​ is the most preferred instrument for in-depth quantitative research. The respondents are asked a variety of questions which are often about their personal information, their motivations, and their behavior -​ There are three important concerns in planning a survey: (1) Sampling techniques; (2) Getting the sample size; and (3) Designing the questionnaire Customer Profiling -​ is the process of creating detailed descriptions of your ideal customers. -​ These profiles help you tailor your marketing and sales strategies to better connect with and serve your target audience 1.​ Demographics ❖​ Income levels. Determine the purchasing power of customers (expensive = rich people; cheap = average people). ❖​ Ethnic Backgrounds. and religious beliefs affect the cultural beliefs of people ❖​ Social classes and reference groups. Often dictate what acceptable or unacceptable behavior is. These classes or groups often include family, friends, neighbors, fellow workers, and societal affiliations ❖​ Occupations. Such as those of factory foreman, doctors, taxi drivers, nurses and teachers also determine what kinds of goods and services these people would buy ❖​ Domiciles or habitats. Or areas of residence and environmental surroundings, oftentimes, define and limit the choices available to customers 2. Psychographics ❖​ Motivation. Goes to the roots of customer’s needs and wants. This can be classified into physiological and psychological. Physiological needs and wants refer to the customer’s personal likes and dislikes and include the satisfaction of thirst, hunger, and shelter ❖​ Lifestyle classifications that talk about what people value most in their lives 3. Technographics -​ classifies people according to their level of expertise in using a product or a service Market Research -​ is a systematic process of collecting, analyzing and interpreting information Customer Profile -​ is a model of the customer Market Segmentation -​ process of dividing a heterogeneous market into smaller more homogeneous segments based on various criteria to similar needs Market Aggregation -​ is a strategic approach in which multiple individual market are combined or group together to form a larger, more encompassing market segment -​ appeal to broader market Market Mapping -​ refers to grouping customers and products according to certain market variables -​ to provide the market analyst a better understanding of the market as a whole and to paint a clearer picture of where the different competitors are relative to the different market segments ---------------- END OF THE MODULE ------------------ Module 7: 7P’s in the Marketing Mix Price -​ amount that a customer pays to a product or service Product -​ an item that is produced to satisfy the needs of a certain group of people Packaging -​ the way you identify, describe the product -​ features and benefits Promotion -​ refers to how a business creates awareness in the market People -​ responsible for every element of marketing -​ activities Place -​ represents the location where the buyer and seller exchange good services Positioning -​ is how you will present a product that is different from other competitors Marketing -​ based on thinking about the business in terms of customers needs -​ strategic functions / appeal / features -​ creating and accumulating customers (loyalty) Marketing Plans -​ are designed to capture market share and defeat competitors Marketing Mix - 7P’s ✓ These are the set of controllable ✓ Variables / Elements that a company uses to ✓ Meet the customers needs and wants in a most effective and efficient way 1. Product -​ is the tangible good (physical production) or the intangible good (do not have a physical production form) ➔​ Service - needs ​ Breakthrough Products -​ offer complete new performance benefits -​ double the performance at the half cost -​ much more convenient and easier to use -​ ex. Cash, gcash, card ​ Differentiated Products -​ try to claim a new space in the mind of the customer -​ additional benefits  -​ ex. Powder like tide, pride, ariel ​ Copycat Products -​ will not make much impression -​ ex. Nutella and Goya ​ Niche Products -​ do not intend to compete directly the giants -​ ex. Pet Shop and Healthy Options 2. Positioning -​ is developing a product and brand image in the mind of the customers 3. People -​ they sell and push the product to find the right market Marketing Efforts of People are Organized in 4 Levels a.​ To create customer awareness b.​ To arouse customer interest c.​ To educate customers as they evaluate their buying choices d.​ To close the sale and deliver the products 4. Price -​ major factor -​ should be high enough to make a profit, and low enough to encourage people to buy it 5. Place -​ let the participants think of different possible locations for their businesses 6. Promotion -​ is the explicit communication strategy 3 Critical Factors of an Effective Promotion ➔​ The message of the communicator ➔​ The credibility and the medium of the message ➔​ The receptiveness of the audience to all that is being communicated 7. Packaging -​ it provides easy brand identification of the consumer Types of Packaging 1. Plastic - most common but the most difficult to dispose 2. Metal - appropriate for foods 3. Carton - ideal for transporting storage  4. Cardboard - ideal for material wrapping / white cork 5. Glass - ideal for foods, especially liquids Closing the sale, demands that the product must be: 5A’s a.​ Available b.​ Accessible c.​ Adequate d.​ Acceptable e.​ Affordable ---------------- END OF THE MODULE ------------------