Entrepreneurial Mind PDF

ENTREPRENEURIAL MIND Flexibility is the ability to move quickly in Entrepreneurship is a key driver of our economy. response to changing market needs. It is being - The 1987 Philippine Constitution recognizes tr...

ENTREPRENEURIAL MIND Flexibility is the ability to move quickly in Entrepreneurship is a key driver of our economy. response to changing market needs. It is being - The 1987 Philippine Constitution recognizes true to a dream while also being mindful of entrepreneurship as an engine of economic growth. market realities. - Article XII Section 1 highlights the role of private Leadership is the ability to create rules and to enterprises in supporting equitable distribution of set goals. income and wealth, sustaining production of goods Passion is what gets entrepreneurs started and and services and expanding productivity, therefore keeps them there. raising the quality of life. Self-confidence comes from thorough Entrepreneurship is more than just an economic planning, which reduces uncertainty and the term — it is a way of thinking. level of risk. - People exposed to entrepreneurship frequently “Smarts” consists of common sense joined express that they have more opportunity to exercise with knowledge or experience in a related creative freedoms, higher self- esteem, and an business or endeavor. overall greater sense of control over their own lives. Entrepreneur - Entrepreneurship is a way of inspiring creative Required Education individuals to pursue opportunities despite its risks. - educational requirements for entrepreneurs are Personal Attributes nonspecific Creativity is the spark that drives the - all entrepreneurs need capital, so the ability to development of new products or services or write an effective business plan is vital ways to do business. It is the push for Required Skills innovation and improvement. - tolerance for risk taking and a willingness to leave Dedication is what motivates the entrepreneur the security of a conventional and tedious job to work hard. Planning of an ideas must be - the ability to multitask is a key joined by hard work to succeed. Career Outlook Determination is the extremely strong desire to - earnings for entrepreneurs vary drastically, and achieve success. It includes persistence and the income is often unstable, especially in the early days ability to bounce back after rough times. of a new business. Entrepreneurship Carl Minger (1871) - is the process of creating something different with - Entrepreneurship involves obtaining information, value by devoting the necessary time and effort, calculations, an act of will and supervision assuming the accompanying financial, psychic, and Harvey Leibenstein (1970) social risks, and receiving the resulting rewards of - Entrepreneurship is the reduction of organizational monetary and personal satisfaction. inefficiency. Evolution of Entrepreneurship Joseph Schumpeter (1910) Entrepreneur or Entrepreneurship - Entrepreneurship is in its essence, the findinh and - originated in Europe sometime in the Middle Ages. promoting new combinations productive factors. Entrepreneur Israel Kirzner (1975) - originated from the French word “Entreprendre” - Entrepreneurship is identification of market arbitage which means to undertake. opportunity. Entrepreneurs are made not born… Albert Shapiro (1975) Entre means enter - Entrepreneurship involves a kind of behavior that Pre means before includes initiative taking, organizing and recognizing Neur means nerve center social mechanism to turn resources and situations so Entrepreneurship practical account, and the acceptance of risk and - the ability of the individual to determine and come failures. up with the proper combination of the resources Karl Vesper (1980) available in his environment and transform this into - Entrepreneurship is the dynamic process of an output of either goods or services, and obtain a creating incremental wealth. fair profit at the price the entrepreneur sets. W. Ed Mc Mullan and Wayne A. Long (1990) Contemporary Views on Entrepreneurship - Entrepreneurship is the building of new growth Jean Baptiste Say (1800) organization. - Entrepreneurship refers to the shifting of economic Howard Stevenson (1992) resources out of an area of lower and into higher - Entrepreneurship is the pursuit of opportunity productivity and greater yield. beyond the resources currently under one’s control.  Innovation and Entrepreneurship Jeffrey Timmons (1994) Innovation - Entrepreneurship is the ability to create and build a - i.e., doing something new or something different, is vision from practically nothing. a necessary condition to be called a person as an Peter Drucker (1998) entrepreneur. - Entrepreneurship is the process of starting one’s Entrepreneurs own new and small business. It is also the process of - are constantly on the lookout to do something innovation and new venture creation through four different and unique to meet the customers’ changing major dimensions - individual, organizational, requirements. environmental, process - aided by collaborative Risk-Bearing and Entrepreneurship networks in government, education and institutions. - Starting a new enterprise always involves risk, and Robert Hisrich (2001) trying to do something new and different is also risky. - Entrepreneurship involves the creation process, - An entrepreneur needs to be bold enough to requires the devotion of the necessary time and assume the risk involved in the enterprise. effort, assumes the accompanying financial, psychic - Entrepreneur needs to be a risk-taker, not a and social risks, and receives the resulting rewards risk-avoider. of monetary and personal satisfaction and - “Fall seven times, stand up eight.” Japanese independence. proverbs Entrepreneurship as a Process and Approach 3 Traits of an Entrepreneurial Mindset Approach Solutions-oriented - The entrepreneur considers the opportunity to solve An entrepreneurial mindset is resilient, resourceful, the problem rather than solving the problem itself. and solutions-oriented, self-directed, action-oriented, Process highly engaged. - Entrepreneurship is a dynamic process of Adaptable innovation and new - venture creation through the An entrepreneurial mindset embraces change, five major dimensions: individuals, organizations, ambidextrous leaders. environment, process and intuitions. Anti-fragile Despite the prefix, anti-fragile is a positive condition Competency among entrepreneurs plays a and quality of an entrepreneurial mindset. critical role in achieving excellent performance to Anti-fragility has Four Parts ensure a continuous growth and success of 1. Heart — The confidence to say when change abusiness amongst competitive enterprise occurs that it’s not something to survive, but rather environment. “this is what we were built for,” A well-known research on human behavior is 2. Head — The understanding that when done by McClelland and McBer and is able to change happens, it’s time to act and have a plan of identify 10 behavioral patterns grouped into what you’re going to do. three general clusters: the achievement, 3. Hand — “It’s not enough to know what to do planning, and power clusters. The when we go into battle,” “We must be able to do it.” entrepreneurial qualities, more known as the It’s converting the head’s knowledge into the Personal Entrepreneurial Competencies (PECs) capability to get things done. are as follows: (1) Opportunity Seeking, (2) 4. Home — Building a community that can help Persistence, (3) Commitment to Work Contract, you get resources, particularly those beyond your (4) Risk-taking, (5) Demand for Efficiency and control. Know what to do, can do it, “then have to be Quality, (6) Goal Setting, (7) Information able to marshal the resources very quickly to do it.” Seeking. (B) Systematic Planning and APPRAISING YOURSELF FOR AN Monitoring, (9) Persuasion and Networking, (10) ENTREPRENEURIAL CAREER Self-Confidence. ASSESSING YOUR PERSONAL The term “Entrepreneurial Competencies” refers ENTREPRENEURIAL COMPETENCIES to the key characteristics that should be According to Alusen (2016). Entrepreneurial possessed by successful entrepreneurs in order competency is one of the main aspects of a to perform entrepreneurial functions effectively. business program that must be conveyed to the Achievement Cluster students for them to know what is the difference Opportunity Seeking characteristic quality of entrepreneurs to Persistence posses. Commitment to work  Contract Risk-Taking Be grateful for what you have Demand for Efficiency and Quality Be aware of what information you allow in Planning Cluster 2. Expand your knowledge Goal Setting - To grow and innovate, continuously expand your Information Seeking knowledge and stay curious. Read widely, including Systematic Planning and Monitoring books about and beyond your industry, and learn Power Cluster from the experiences of leaders and trailblazers. Persuasion and Networking 3. Locate blind spots and bottleneck Self-confidence - analyze your processes, seek feedback, use data, DEVELOPING YOURSELF FOR conduct root cause analysis, and experiment with ENTREPRENEURSHIP different approaches. This helps uncover Entrepreneurship inefficiencies and areas for improvement. - is more than just starting a business; It’s about 4. Overcome your Fears building a mindset and skill set that prepares you for - Overcoming fears is a key part of personal the challenges and opportunities of running a development. Acknowledging and understanding successful venture. your fears, such as fear of failure or not being HERE ARE THE 5 STEPS TO PERSONAL respected, is essential for personal and business DEVELOPMENT FOR ENTREPRENEURS: growth. Self-awareness is crucial for progress. 1. Have the right mindset 5. Understand your “why” - you need a mindset that embraces risk and - Personal development for entrepreneurs requires discomfort. Stepping outside your comfort zone, deep self-awareness and understanding your core despite the chance of failure, helps you learn and motivation, or "why." This driving force, whether it's grow in ways you wouldn’t in a more familiar or supporting family, creating a legacy, or providing for comfortable setting. loved one guides your decisions and keeps you Here are a few ways to improve your mindset: motivated, even when caught up in daily operations. Meditate SEARCH FOR BUSINESS OPPORTUNITY Exercise IDEATION, INNOVATION AND CREATIVITY Eat a good breakfast to start your day SEARCH FOR BUSINESS OPPORTUNITY  Refers to a situation where a person or 2. SWOT Analysis organization identifies a need or demand in the 3. Innovation Brainstorming market that can be met through a new business 4. Market Research venture or expansion of an existing one. 5. Social Listening & Monitoring Opportunities for a business involve a specific Ideation product, service, or niche that has the potential The beginning of a business endeavors is for profit ideation. Identifying business opportunities requires a This should be the first investment of anyone keen eye for changes in the environment and an who seeks to be an entrepreneur, and to be understanding of the needs of society. called an entrepreneurial business opportunity, Entrepreneurial Business Opportunity such idea has to be new, or if not, should be Social Changes: What’s Happening Around You? innovative. Changing Demographics The Best source of ideas are the consumers or Cultural Trends the market in general, since they are the ones Health and Wellness Trends who are in need for a certain product or service. Digital Transformation For creative person, ideas are in him, in his Factors to Consider for Identifying your Next mind, but for those deprived with creative Business Opportunity thinking, they can get ideas through reading 1. Availability of raw materials books and talking to someone with creative 2. Internal demand analysis thinking. 3. Market size Ideas that are worth a business should be the one 4. Management skill set that has market now and in the future. This could be 5. Access to customers a product, a service system, and the like, which 6. Need for financing could fall in any of the following categories: 7. Passion a. Need/want drives Methods of Analyzing and Evaluating A Business b. Time-saving drives Opportunity c. Money savings 1. Environment Scanning d. Unique or incorporating strong competitive b. Patents advantages c. Trademarks e. Link to personal interest, preferably passion d. Copyrights The most common way of developing ideas ENTREPRENEURIAL CREATIVITY are as follows: is the ability to develop new ideas and solutions 1. Recognizing the need. Develop an idea or a to problems product that can satisfy a need, and respond to the It is the ability to see into the future and generate need by establishing a business concern. ideas, solutions and innovations before they are 2. Improving an existing product. The result needed of consumer dissatisfaction to the existing product it is the ability to solve your customer’s or client’s could open the door to introducing innovations or problems before they even realize the problem improvements. exists. 3. Recognize trends. Entrepreneurs should be able HOW TO BE MORE CREATIVE to recognize the opportunity to develop a product Have a growth mindset and set trends that can make them leading Be open to new ideas entrepreneurs. Practice creative thinking 4. Be aware of everything. There is no other way to Take risks know about what is happening around you, but to Think outside the box research and read. THE CONCEPT AND IMPACT OF INNOVATION 5.Questions and assumptions. Anybody can The word “innovation” is derived from the Latin question the relevance or quality of any product or verb innovare, which means to renew. service, provided or services, provided, that there is Innovation is a process by which a domain, a an effort to improve the product. product, or a service is renewed and brought up to 6. Naming it first, then, develop it. If you have date by applying new processes, introducing new an idea, study it and develop it into something that is techniques, or establishing successful ideas to worth a business. create new value. Ways of protecting your ideas: ADVANTAGES OF INNOVATION: a. Confidentiality Agreements HIGH COSTS AND RISKS  RESISTANCE TO CHANGE - (SAN MIGUEL INC.)HE IS THE PRESIDENT AND INTELLECTUAL PROPERTY ISSUES CHIEF EXECUTIVE OFFICER (CEO) OF TOP IMPLICATIONS FOR ETHICS FRONTIER INVESTMENTHOLDINGS, INC., THE DISADVANTAGES OF INNOVATION: LARGEST SHAREHOLDER OF SAN MIGUEL HIGH COSTS AND RISKS CORPORATION. HE IS ALSO THE PRESIDENT RESISTANCE TO CHANGE AND CEO OF SMC AND THE CHAIRMAN OF INTELLECTUAL PROPERTY ISSUES CYBER BAY CORPORATION AND EAGLE IMPLICATIONS FOR ETHICS CEMENT CORPORATION. ENTREPRENEURS TRENDS AND ISSUE TONY TAN CAKTIONG Entrepreneurship Trends - (JOLLIBEE FOODS) THE CHEERFUL TAGLINE Internet Businesses “LANGHAP SARAP” – A JOLLIBEE TRADEMARK – Service Businesses IS WELL KNOWN AMONGFILIPINOS. TONY TAN Home-based Businesses CAKONG, ANOTHER CHINESE IMMIGRANT, IS Green Businesses THE BRAIN BEHIND THISPOPULAR FOOD CHAIN. Social Entrepreneurship HIS FAMILY MAINTAINED A CHINESE Focus on Technology RESTAURANT IN MANILA AT THE TIME, WHICH Outsourcing ENABLED HIM TO FINISH COLLEGE. Strategic Alliance HENRY SY Cooperative Ventures - SHOE MART, OR SM FOR SHORT, IS ONE OF Entrepreneurship Issues THE COUNTRY’S RETAIL BEHEMOTHS, AND FAR Time Management MORE THAN JUST A MALL. HENRY SY. GREW UP Cash Flow Shortages IN JINJANG, XIAMEN, CHINA, IN A LOWINCOME Building a Team HOUSEHOLD.DUE TO THE CHALLENGES IN Financial Problems THEIR HOME COUNTRY, THEY MOVED TO THE Competitors PHILIPPINES IN 1936 AND OPEN A TINY Successful Entrepreneurship CONVENIENCE SHOP IN MANILA. RAMON ANG BUSINESS OWNERSHIP AND ORGANIZATION Business Ownership - refers to having legal and financial authority over a Unlimited Liability Partnership business entity. Advantages; Access to partners knowledge Business Organization Easy to set up and run - is the legal setup of your business. Better fundraising capacity Types and Composition of Business Ownership: Division of labor Sole Proprietorship Disadvantages; - Perfect Ownership for Low-Risk small businesses. Unlimited Liability - A sole proprietorship is an unincorporated business Lack of Autonomy that one person owns and manages. Potential Conflicts Advantages, Limited Liability Company(LLC) Easy to set up - A Perfect Type of Ownership for High-Risk Small Pass-through Taxation Businesses. Total control over the business - A limited liability company combines the Easy liquidation of assets advantages of a single proprietorship and a Disadvantages; corporation. High legal risks Advantages; Difficulty in raising funds Limited liability Difficult in selling the business Tax options Business death after owner’s demise Credibility Partnership Simplicity - Best Ownership for Business Partners Disadvantages; - A partnership is an unincorporated relationship Difficulty in Raising Capital between two or more individuals working together to Limit to Personal Liability Protection progress mutual business interests. Cooperative Types; - Best for Individuals and Businesses with Similar General partnership Interests. Limited Liability Partnership - A cooperative is a privately-owned organization of BUSINESSES REGISTRATION IN THE like-minded business owners that pool resources PHILIPPINES WITH 4 EASY STEPS together for its members’ advantage. STEP 1 CHOOSE YOUR BUSINESS STRUCTURE Advantage; Sole proprietorship Unity among members Partnership Access to funding Limited Liability Company (LLC) Lower corporate tax Cooperative Disadvantage; Corporation Bureaucracy in Decision-making STEP 2 Corruption REGISTER YOUR BUSINESS NAME AND OR Corporation CORPORATE NAME - a corporation is a legal entity whose investors Department of Trade and Industry purchase shares of stock as evidence of their (DTI) ownership interest in it. Securities and Exchange Commission Types; (SEC) S corporation STEP 3 C corporation APPLY FOR A CERTIFICATE OF REGISTRATION Advantages; WITH THE BUREAU OF INTERNAL REVENUE Limited liability (BIR) Source of capital BIR FORM 1901: For sole proprietors Ownership transfers BIR FORM 1903 Perpetual life STEP 4 Pass through APPLY FOR A BUSINESS PERMIT Disadvantages; Requirements: Double taxation DTI/SEC Registration Excessive tax filings Locational Clearance Independent management Least Contract  Barangay Clearance IPO - IT IS AN INITIAL PUBLIC OFFERING. IN AN IPO, A PRIVATELY OWNED COMPANY LISTS ITS SHARES ON A STOCK EXCHANGE, MAKING THEM AVAILABLE FOR PURCHASE BY THE FINANCING THE VENTURE GENERAL PUBLIC. FINANCING THE VENTURE THE PROCESS OF IPO - IT IS A TYPE OF PRIVATE EQUITY INVESTING 1. SELECT AN INVESTMENT BANK. SPECIFIC TO EARLIER – STAGE BUSINESSES 2. DUE DILIGENCE AND REGULATORY FILINGS. THAT REQUIRE CAPITAL. 3. PRICING CAPITAL REQUIREMENTS 4. STABILIZATION 1. FIXED CAPITAL 5. TRANSITION TO MARKET COMPETITION. - THE MONEY NEEDED TO PURCHASE FIXED DEALING WITH INVESTMENT BANKERS, RISK IN ASSETS OR CAPITAL GOODS. GOING PUBLIC AND BORROWING FROM THE 2. WORKING CAPITAL BANKS - NEEDED TO FUND THE DAY-TO-DAY RISK IN GOING PUBLIC OPERATIONS. ENTREPRENEURS MAY LOSE SOME FOCUS 3. GROWTH CAPITAL AND DIRECTION IN LIFE, FOCUS THAT HAD – NEEDED WHEN AN EXISTING BUSINESS BEEN PROVIDED BY OWNING A COMPANY. NEEDS TO EXPAND, DIVERSITY OR CHANGE. MANAGING THE LIQUIDITY RESULTING SOURCES OF CAPITAL FROM THE COMPANY SALE BECOME 1. FORMAL AND INFORMAL BURDEN FOR SOME. 2. OWNERS EQUITY BORROWING FROM THE BANKS 3. LONG – TERM BORROWINGS - THE BANKS EXIST TO LEND MONEY AND THIS 4. SHORT – TERM CREDITORS IS UP FOR ENTREPRENEURS TO GRAB. 5. NON – GOVERNMENT ORGANIZATIONS ( THE C'S OF CREDITS NGOs) 1. COLLATERAL – ALL FORMAL SOURCES 6. LENDING INVESTORS OF FUNDING GENERALLY REQUIRE A COLLATERAL IN THE FORM OF REAL ESTATE, EQUIPMENT, OR ANY OTHER FORM SALEABLE PROPERTY. 2. CAPACITY – REFERS TO THE CAPACITY OF THE ENTREPRENEUR OR BORROWER TO PAY THE LOAN. 3. CHARACTER – MORE OF THE PERSONAL STANDING OF THE ENTREPRENEUR OR BORROW IN HIS COMMUNITY, AS WELL AS HIS OWN PERSONAL CAPABILITY. 4. CONTRACT – EACH LOAN OR BORROWINGS TRANSACTIONS HAS TO HAVE CONTRACT OR AGREEMENT DEFINING THE OBLIGATIONS OF THE CONTRACTING PARTNERS. 5. CONDITIONS – FORMING PART OF MAJOR CONTENT OF THE CONTRACT OF THE TERMS AND CONDITIONS SET FORTH IN THE CONTRACT OR AGREEMENT. USING SOMEONE ELSE'S MONEY - IT IS THE CONVENTIONAL PROSPECTIVE OF ENTREPRENEURS TO SHELL OUT PERSONAL CAPITAL IN PUTTING UP THE BUSINESS, RATHER THAN BORROWING FROM SOMEONE ELSE.