The Entrepreneurial Mind PDF

THE ENTREPRENEURIAL MIND Entrep – it means business. Entrepreneur - A person who creates, organizes, and manages a business. - They play a vital role in the community by generating income for the society or themselves. - They help the community by providing job opportunities and meeting t...

THE ENTREPRENEURIAL MIND Entrep – it means business. Entrepreneur - A person who creates, organizes, and manages a business. - They play a vital role in the community by generating income for the society or themselves. - They help the community by providing job opportunities and meeting the needs of communities. Must have: 1. Attitude – patience 2. Relationship – good communication 3. Creativity – uniqueness 4. Organization – management Characteristics: 1. Must be open-minded and innovative 2. Sees vision and direction 3. Listen to people's opinions 4. Communication 5. Smell what sells 6. Action-oriented 7. Passionate 8. Risk-taker 9. Tough and perseverance Common and Core Competencies of Entrepreneurship 1. Cognitive Skills 2. Technical Skills 3. Interpersonal Skills Competitive Advantages of Entrepreneurship 1. Customer Focus 2. Quality Performance 3. Integrity and Responsibility 4. Innovation 5. Niche Markets Stages of Entrepreneurship 1. Self-employment 2. Manager 3. Leader 4. Investor 5. True Entrepreneur Fields of Expertise 1. Technopreneur 2. Social Entrepreneurship 3 P’s (People, Planet, and Profit) 3. Intrapreneur – inside entrepreneur or employed by a certain company. 4. Extrapreneur – outside entrepreneur Entrepreneurship - It is a process of starting a business or other organizations. - More than economic terms, it is a way of thinking. It teaches us to: 1. Create opportunity 2. Ensures social justice 3. Instill confidence 4. Stimulates the economy 5. Takes risk 6. Persevere What makes someone an entrepreneur? Personal Attributes: 1. Creativity – spark to develop new products and push for innovation. 2. Dedication – motivate the person to work hard. 3. Determination – a strong desire to achieve success and the ability to bounce back from a setback. 4. Flexibility – the ability to move quickly in response to changing times. 5. Leadership – the ability to create rules, regulations, and set goals. 6. Passion – what gets entrepreneurs to start and keep them working. 7. Self-confidence – comes from thorough planning which reduces uncertainty and level of risk. 8. SMARTS – consist of common sense, knowledge, and experience in anything related to business. Why should becoming an entrepreneur be any different? 1. Required Education – to become an entrepreneur. 2. Required Skills – willing to take risks and willing to leave their comfort zone. 3. Career Outlook – income varies drastically, and income is unstable. A soft opening or a trial and test water. Career Opportunities in Entrepreneurship 1. Business Consultant – provide advice to businesses. 2. Management Analysts – financial advisor who evaluates a business system, operations, and procedure. 3. Sales – someone who works, and runs the department. Should be well dressed as they represent the business. 4. Research and Development – understand the concepts, procedures, and practices. 5. Not-for-profit-fundraiser – to be able to raise funds you need to understand the business and network relationship. REVIEWER Midterms 3. Consumer Goods Business - Those which are intended for & -Enterprise in a trade used directly by the final -Carried out: consumer. By the people 4. Industrial Goods With the people - Goods used by other industries For the people - Used of machinery is indispensable -directly affects the daily life of the people. 5.Service Business (ex. Sari-sari store/ dental supplies) - These offer important services to the people. (ex, Dentistry) TYPES OF BUSINESS TYPES OF BUSINESS ACCORDING TO SIZE 1. Merchandising (divided into 2) 1. Micro - 1-9 employees Retail trading business (Retailer) 2. Small Business - 10-49 employees - retailers doesn't usually buy large 3. Medium - 50- 249 employees stocks of products, 4. Large - 250+ employees - Does Not have sufficient capital to buy large portions of the product. TYPES OF BUSINESS ACCORDING TO - Buy the goods from a wholesaler. OWNERSHIP Wholesale trading business (Wholesaler) 1. Sole Enterprise - Buys big quantity of products - Owned by only 1 person - Buys directly from the producer of - Registered under (DTI/BIR) the product - Easy to set up and it has the - Wholesalers will enjoy a discount least cost. from purchasing large quantities of Disadvantage: Unlimited Disability/liability product. (ec. When owner dies) - Take care of transporting the goods to the retailer. 2. Partnership - Owned by 2 or more person 2. Manufacturing who contribute resources - Registered under (SEC) - Buys new products - Two types: - Makes good in the form that we want them. - Involves the creation of the utilities Industrial Managerial - Conversion of raw materials into Partner Partner finished product - Transformation of products Offers skills They run the without capital whole business They are the ones who makes decisions  3. Corporation - Separate legal entity from the owner - Enjoys limited liability - Registered under (SEC) Needs 5 people to run the business: 1. CEO (Chief executive officer) 2. Secretary 3. Chairman 4. Financials - more on resources 5. Extraman - remains neutral in conflicts Needs to shell out 5M pesos each. Board of directors - Elected from stockholders - Does Not have to be in relation to the other 5 - Controls the activities of the company 4. Cooperative - Owned by group of individuals operated for their own mutual benefit - Aren't called employees instead called “Members” - Does not function for profit. ACRONYMS: SEC - Securities and Exchange Commission - to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. DTI - Department of Trade and Industry - provide it with a legal identity and gain the rights to use your business name. BIR - Bureau of Internal Revenue - collection of all internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and fines The Entrepreneurial Mind Opportunity Seeking - The Sources of Opportunity 1. Entrepreneurial Mind Frame o Allows entrepreneurs to see things in a very positive and optimistic light. 2. Entrepreneurial Heart Frame o The surging passion to find fulfillment in the act and process of discovery. o Devote time to the project/business. 3. Entrepreneurial Gut Game o Total involvement of the entrepreneur in the exciting game of business, demanding the keenness of intuitive judgment. Macro Environmental Factors - Outside of the Business 1. Social and Cultural Factors o Trends in society, traditions, customs, and demographics (where the business is to be set up). 2. Political and Legal Factors o Business practices, permits (e.g., DTI for dental clinics). 3. Economic Factors o Supply and demand (e.g., shortages lead to price increases). o Import/export (e.g., rice in the Philippines). o Foreign Exchange Rate: when money is brought into the country, you pump the economy. 4. Ecological Factors o Focused on environmental considerations. 5. Technological Factors o Leads to the commercialization of products. o Use of technology may reduce human contact and affect certain professions. o Technology speeds up production, enabling businesses to meet demand more efficiently. Micro Environmental Factors - Resource Availability and Usage 1. Suppliers o Provide raw materials needed for the business. 2. Employees o An entrepreneur who employs unmotivated staff risks business failure due to poor customer service. o Employees are the biggest asset of a business. 3. Competitors o Indirect Competitors: Different products with the same benefits (e.g., milk tea vs. Coke, napkin vs. tampon, tawas vs. deodorant). o Direct Competitors: Offer the same products. Industry & Market 1. Industry Sources o Industries provide many opportunities, which can be analyzed by function. 2. Value Chain o Identifies opportunities by tracing the industry from raw materials to final products (e.g., yarn for crochet). 3. Market Sources of Opportunities o Conduct market trend analysis by determining critical variables affecting the future direction of the industry. o Analyze market traits, characteristics, and behavior to match products with customer demand. 4. Public o Can significantly impact a company’s success. 12 R’s of Opportunity 1. Relevance to VMO o Aligns with the vision, mission, and objectives (VMO) to achieve your goals. 2. Resonance o The opportunity matches your values. 3. Reinforcement o Choose an opportunity that aligns with your hobby and enhances your competencies. 4. Revenues o Is the revenue worth your effort? 5. Responsiveness o The chosen opportunity should meet customer needs and unfulfilled desires. 6. Rich o Refers to how big a market you can tap (geographically). 7. Range  o The wider the product range, the more attractive the opportunity. 8. Revolutionary Impact o Will the opportunity be the next big thing? (e.g., content creators like BINI). 9. Returns o Return on investment (ROI). Avoid using personal savings for risky investments. 10. Relative Ease of Implementation o Is it easy to implement, and difficult for others? 11. Resources Required o Consider the raw materials needed for production. 12. Risk o Higher risks make an opportunity less attractive. Opportunity Screening 1. Pre-feasibility Study o Assess market potential, prospects, and technology availability. o Soft opening. 2. Market Potential o Estimate how many customers will patronize your product in a specific location. 3. Segmenting the Market o Not everyone will be your customer. 4. Assessing the Competition o The number of establishments serving the same market affects competition. 5. Estimating Market Share and Sales o Make an educated guess about the number of potential buyers. The Feasibility Study 1. Testing 2. Market Testing 3. A rigorous, more comprehensive, and demanding version of the pre-feasibility study. Seizing Opportunity A. Creating a Positioning Statement o Valuable for an entrepreneur to look at the competition and compare attributes. o Consider factors like location, aesthetics, price, and environment. B. Conceptualizing a Product/Service o Designing: Rendering the concept and translating it into its physical and real dimensions. o Prototyping: Built based on the design and used for actual testing. o Testing: Using the prototype for focus group discussions, surveys, etc. Technology Assessment and Operative Viability 1. Quantities Demanded o Capacity of operations to meet demand. 2. Quality Demanded o Specifications of raw materials and final products. 3. Delivery Expectations o Determine how much, how frequently, and when to deliver. 4. Price Expectations o Selling price should reflect the value received by customers. Investment Requirements 1. Pre-operating Costs o Costs incurred before the business begins operations. 2. Production or Service Facilities o Long-term investments required for the business. 3. Working Capital o Capital needed to keep the business running.  FINALS Economic Theory of Entrepreneurship Entrepreneurship and economic growth take place when economic conditions are favorable. Economic incentives are the main motivators: 1. Taxation Policy - If the tax system is favorable, more businesses will be established. 2. Industrial Policies - Policies encouraging industries to lead to business growth. 3. Sources of Finance and Raw Materials - Accessibility and affordability of materials and funding. 4. Infrastructure Availability - Availability of facilities for setting up businesses. 5. Investment and Marketing Opportunities - Look at the market condition of the country and use of technology (social media). Social media is a popular platform for marketing. 6. Access to Information - Easy access to information promotes entrepreneurship. An entrepreneur acts as an agent who buys factors of production at certain prices and combines them to create value. Sociological Theory of Entrepreneurship Entrepreneurship is likely to get a boost in a particular social culture. Entrepreneurial behavior is influenced by: 1. Societal Values - in a certain society, if something isn’t allowed, it won’t be permitted. 2. Religious Beliefs 3. Customs and Traditions 4. Taboos Innovation Theory of Entrepreneurship Entrepreneurship is closely linked to innovation. An entrepreneur is someone willing and able to convert new ideas or inventions into successful innovations. o An entrepreneur innovates when they: 1. Introduce a new product. 2. Introduce a new production method. 3. Open a new market. 4. Find a new source of raw material supply. 5. Introduces a new organization in any industry. Psychological Theory of Entrepreneurship Entrepreneurship gets a boost when society has a sufficient supply of individual with necessary psychological characteristics: Ability to face opposition. 1. A Vision. 2. High standards of excellence. 3. Self-reliance. Theory of Achievement Motivation Emphasis on the importance of achievement motivation in entrepreneurship. Key motivators include: 1. Need for Achievement. 2. Need for Affiliation. 3. Need for Power. Two characteristics of Entrepreneurship: o Doing things in new and better ways. o Decision-making under uncertainty. Stressed individuals with high achievement orientation are more likely to become entrepreneurs. Status Withdrawal Theory A class which lost its previous prestige or a minority group tends to show aggressive entrepreneurial drive. Four events that can lead to status withdrawal: 1. Displacement of a traditional elite group by physical force. 2. Denigration of values and symbols. 3. Inconsistency of static symbols. 4. Non-acceptance of expected status on migration to a new society. Theory of Social Change Ethical Value System Protestant ethic and the spirit of capitalism. The spirit of rapid industrial growth depends upon:  1. Rationalizing technology. 2. Acquisition of money. 3. Rational use of money for productivity. 4. Multiplication of Money. Theory of Social Behavior Behavioral Model Explains how individuals perform various activities of some of which are accepted by society while others are not. Four societal structures that influence behavior: 1. Limitation Structure - Everything should have limits to maintain order. 2. Demand Structure - Supply should meet demand to avoid shortages and price increases. 3. Opportunity Structure - Take advantage of opportunities when they arise. 4. Labor Structure - Employment availability determines societal behavior; unemployment often leads to dissatisfaction. Theory of Leadership Entrepreneurship is a function of managerial skills and leadership. Social conditions must ensure the development of enterprise-oriented personalities. Key aspects: o How you act - Leadership behavior impacts success. o Grabbing opportunities - If an opportunity is offered, seize it. Theory of Model Personality The Sociological Theory of Entrepreneurial Supply emphasizes how cultural and societal factors shape entrepreneurial behavior. An entrepreneur’s performance is influenced by: 1. Attitude toward occupation - How one views one’s role impacts performance. 2. Role expectations held by the sanctioning group - Society’s expectations guide behavior. 3. Operational requirements of the job - Includes factors such as: ▪ Hours of work. ▪ Knowing how to operate necessary tools or systems. ▪ Confidence in understanding tasks—if you know what you’re doing, you’ll perform well.