Entrepreneurial Management PDF

ENTREPRENEURIAL MANAGEMENT Contributor an Year of Contribution to Entrepreneurship According to Peter Drucker, a management guru said that Contribution and/or The Entrepreneurship Entrepreneurship is a dis...

ENTREPRENEURIAL MANAGEMENT Contributor an Year of Contribution to Entrepreneurship According to Peter Drucker, a management guru said that Contribution and/or The Entrepreneurship Entrepreneurship is a discipline that can be learned. "Most of Thought Contributed what you hear about entrepreneurship is all wrong, it is not magic, is not mysterious and it has nothing to do with genes. Jean Baptiste Say Refers to the shifting of It's a discipline and like any discipline it can be learned." 1800 economic resources out of an area of lower and into higher productivity and greater yield. The Concept of Entrepreneurship Entrepreneurship started in France after the French Carl Menger Involves in obtaining information, Revolution. It was the start of capitalism and 1871 calculation, an act of will and supervision. feudalism (20th century) The word entrepreneur was coined by Jean Baptiste Joseph Schumpeter The finding and promoting new Say – a renowned French economist 1910 combinations of productive factors. It promotes doing something different (new) rather than making the existing better. Harvey Liebenstein The reduction of organizational Joseph Schumpeter believed that entrepreneurship 1970 inefficiency. provides a dynamic disquilibria brought about by the innovative entrepreneur that brings a healthy Israel Kirzner The identification of market economy. 1975 arbitrage opportunities. Entrepreneurship By definition: Albert Shapiro Involves a kind of behavior that 1975 includes initiative taking, Economists – organizing, and recognizing “...consists in doing things that are not generally done in the social mechanism to turn ordinary course of business routine; it is essentially a resources and situations to practical account and the phenomenon that comes under a wider aspect of leadership. acceptance of risks and failures. — Cantillon, 1725 W. Ed Mc Mullan and The building of new growth for “entrepreneurship, rigorously defined, refers to the creation of Wayne A. Long organizations. a new economic entity centered on a novel product or service 1990 or, at the very least, one which differs significantly from products or services offered to elsewhere in the market” The pursuit of opportunity Howard Stevenson beyond the resources currently — Joseph Schumpeter, 1934 1992 under one's control. The Evolution of Entrepreneurship Jeffrey Timmons The ability to create and build a 1994 vision from practically nothing. Peter Drucker The process of starting one's 1998 own, new and small business. It is also the process of innovation and new venture creation through four major dimensions - individual, organizational, environmental, process - aided by the collaborative networks in government, education and institutions. Robert Hisrich Involves the creation process, 2001 requires the devotion of the necessary time and effort, assumes the accompanying financial, psychic and social risks and receives the resulting rewards of monetary and personal satisfaction and independence. The Role of Entrepreneurship in Economic Growth societies have been involved in different social Economic Growth experiments in various economic, political, religious or social aspects of life. Is the increase in value of goods and services produced by an economy. 4. Racial Heritage – the belief that one race is superior to another on the basis of color, build and other It is measured as the percent rate of increase in real genetic heritage has been around for a long time. gross domestic product or GDP. 5. Climate conditions – Ellsworth Huntington, wrote the In economics, economic growth refers to growth of most of the great civilizations flourished in the tropics potential output (production) at full employment, which or the far north. He maintained that the most is caused by growth in demand, or output. stimulating climate for man involves an average temperature range between winter and summer of 40 Contributions of Entrepreneurship to the Economy to 60 F with moderate rainfalls and frequent mild Entrepreneurship employs the various resources storms. present in the economy. 6. Challenge of the natural environment – advanced Entrepreneurs need manpower for the business by A,J. Toynbee, it traces economic and cultural operations. changes to a combination of natural (geographic) It is said that Entrepreneurship is the backbone of the phenomena and socio-psychological pressure of economy. stimuli. An entrepreneur is in their ability to innovate goods ECONOMIC EXPLANATIONS and services. 1. Technology improvements and division of labor – An entrepreneur is their ability to gain international Adam Smith, believed that the intervention of better popularity and prestige for their country. machines and equipment brought about increased Their willingness to take risk, risk that society will productivity, which together with specialization or otherwise be hesitant to take. division of labor made economic growth possible. Although many people do not recognize it, 2. Neo-classical growth model – develop by Robert entrepreneurs also profoundly inspire budding and Solo and Paul Samuelson in the 1950’s, this model potential entrepreneurs. assumes that countries use their resources efficiently and that there are diminishing returns to capital and Theories that Explain how Economies Grow labor increases. Theories of economic growth maybe classify into three broad 3. Endogenous Growth Theory – included a theory of groups: technological advancement. These models also 1. Consists of theories viewing economic growth as a incorporated a new concept of human capital, the natural and inevitable process. skills and knowledge that make workers productive. 2. Explains economic development as a rational process 4. Big Push Theory – one popular theory in the 70’s brought about when men respond to opportunities in was that of the “Big Push” which suggested that the environment to promote their own self-interest or countries needed to jump from one stage to another material welfare. through a virtuous cycle in which large investments in infrastructure and education coupled to private 3. Views economic development as a result of investment would move the economy to a more economically irrational yet psychologically and productive stage. sociologically satisfying activities of enterprising men. 5. Population Changes – according to David Ricardo, population increases eventually lead to stagnation or GENERAL EXPLANATIONS a final stationary state of the economy. However, 1. Law of nature – in 1932, Spengler explained according to John Maynard Keynes, the capitalist or economic development by likening a culture or society entrepreneurs are most likely to invest their resources to a living organism that grows, lives, and dies; it is a when there is demand for the commodity. part of life and is something to be expected. 6. Entrepreneurship – economist recognized that for production to take place, someone had to mobilize all 2. Invisible Hand – 18th century, Adam Smith advanced resources ( land, labor, and capital). the principle. According to Smith, any society including a very underdeveloped one can be made to SOCIO - PSYCHOLOGICAL EXPLANATIONS prosper with little or no intervention from government 1. Sociological Factors – sociologist explain economic because economic is brought about as a natural growth in terms of social or cultural values, norms and course of things. other structures that differentiate modern and 3. Cultural Diffusion – Anthropologist introduced the traditional economies. idea that over the ages and across the years,  a. Modern Societies Benefits of Entrepreneurship i. Unemotional Creates employment ii. Interested in themselves Improves quality of life iii. Able to relate to others (social roles Contributes to more equitable distribution of income as buyers, sellers, qualities and therefore eases social unrest middlemen, etc.) iv. Known for accomplishments Risks of Entrepreneurship v. Able to relate to others Risk of failure b. Traditional Societies Unpredictable i. Emotional ii. Interested in the general welfare of Long hours of work the economy Unwanted or unexpected responsibilities iii. Relate to others in terms of unique qualities Rewards of Entrepreneurship iv. Known for who they are (status, position in the organization, etc.) 1. Have unlimited opportunity to make money v. Tie-up economic relationship (such 2. Be your own boss as specific employer-employee, 3. Overcome challenges and feel fulfilled economic terms, defined manufacturer and limited by a labor 4. Be creative contract) Essentials to entrepreneurial abilities: 2. Psychological Factors – identified positively as one, Entrepreneurial mind frame which enterprising individuals seek to fulfill in the need to achieve. As a product of individual human ○ entrepreneurial mind frame allows the behavior, that is, of a person’s decision thoughts and entrepreneur to see things in a very positive actions. and optimistic light in the midst of crisis or difficult situations. What is Entrepreneurship? ○ Instead of being discouraged, the The act of building and creating a business entrepreneur is able to use these enterprise. problematic situations as inspiration in creating something innovative. A process of doing something new (CREATIVE) and something different (INNOVATIVE) for the purpose of Heart flame creating wealth for the individual and adding value to ○ If there is one commonality between an society. inventor and an entrepreneur, it is their surging passion or the entrepreneurial heart Idea Pitching flame. Choose 3 ideas Prepare short elevator pitch 2 mins ○ Driven by passion, they are drawn to find ○ What is the idea fulfillment in the act and process of ○ What need does it address discovery. ○ Why will the market buy it Gut game ○ How will you sell it ○ Where will you source raw mat, where will you sell ○ This refers to the ability of the entrepreneur ○ Who is the ™ to sense without using the five senses. ○ Also known as intuition. CATEGORIES OF ENTERPRISES ○ Somehow, the entrepreneur just knows Micro-Enterprise whether something will work or not without ○ Asset Size: less than P3 Million necessitating logical, systematic, and Small Enterprise sequential thinking. ○ Asset Size: Over P3M to P15M ○ Also connotes courage. It is simply confidence in one's self and the firm belief Medium Enterprise that everything is within reach so long as you ○ Asset Size: Over P15M to P100M aspire for it Large Enterprise ○ Asset Size: Over P100M ASSET SIZE EXCLUDES THE VALUE OF LAND 5 Essential Characteristics of the Entrepreneurial Mind without the weight of worrying about where 1. Creative the results may lead. a. Ability to observe, digest, analyze, and b. Most people are comfortable testing new execute on big ideas differently and uniquely. products or systems with a range of one or two possible outcomes, but those with this b. New products or new processes, key characteristic can experiment in the entrepreneurs are emboldened by the unknown. uncanny knack to recognize holes in the marketplace and devise innovations to fill c. Entrepreneurs bring something new and them. novel to the marketplace. c. Business owners with the characteristics for d. Experimentation can be truly transformative, an entrepreneurial mindset ask the “what ifs” revolutionary, and industry disrupting. that drive inquisitiveness. e. Removing expectations and letting the d. Let go of what they already know in order to results lead you in completely new directions source fresh information and new ways of is an attribute that marks a truly thinking about an opportunity or problem. entrepreneurial mindset. 5. Humble 2. Trusting a. Egos can get in the way of and potentially a. Remain undaunted by the typical predictors destroy the very best ideas. that may put off the fainthearted. b. Business owners who are humble, authentic, b. Many successful business owners never and self aware are committed to solving a relied on a business plan. problem or reinventing a product or service. c. Entrepreneurs know that creating something c. May constantly generate and promote their new is truly an evolutionary contest. own ideas, but they think and act d. No one knows the outcome, but those who collaboratively and are staunchly exemplify an entrepreneurial mindset are solutions-focused. gifted with a brand of thinking that frees them so that they can begin to build, test, and Entrepreneurs may be categorized into the following: refine. 1. Small Business Entrepreneur e. People with this quality understand that their a. A small business is independently owned egos are only useful in moving an idea and operated and doesn’t have plans to forward, not dictating outcomes or wrestling expand into a large company. According to to make results conform to a preconceived the U.S. Small Business Administration notion. (SBA) f. They may constantly generate and promote b. Local restaurant that you take visitors to their own ideas, but they think and act when they come to town collaboratively and are staunchly solutions-focused. c. Favorite coffee shop 3. Risk-Taking 2. Large Business Entrepreneur a. Uncertainty is the very essence of a. A large business entrepreneur refers to the entrepreneurship. leaders of large companies and corporations such as Jollibee and Cebu Pacific. These b. Turning the idea that risk is a negative into a types of entrepreneurs are often C-level positive creates healthy skepticism around executives like a CEO. prediction and analysis. b. Its goal is to expand by developing new c. Entrepreneurs with this characteristic are products or services—or even buying comfortable existing in that space between smaller companies—to meet consumer raw idea and successful product. demand. d. Determination and solution-based thinking that replaces the fear of failure. 3. Startup Entrepreneur e. Those with an entrepreneurial mindset thrive a. A startup entrepreneur is the founder of a in the wide middle ground of scalable company. Startups are often experimentation, revision, and testing. technology focused and are either bootstrapped or rely on funding from outside 4. Experimental investors. a. Ability to think big and iteratively test b. Examples of startups include Canva, Airbnb, products, processes, and outcomes, all Square, and Uber, to name a few. 4. Solo Entrepreneur 7. Social Entrepreneur a. A solo entrepreneur, or solopreneur as a. This type of entrepreneur strives to make a they’re often referred to, is someone who difference with their company, on either a operates a one-person business. Similar to a small scale or a global one. small business entrepreneur in that they are b. Leaders at nonprofits are great examples of independently owned, a solopreneur doesn’t social entrepreneurs. work with partners. These types of entrepreneurs often run service-based 8. Buyer Entrepreneur businesses like consulting, coaching, or a. Rather than building a business, a buyer freelancing. entrepreneur either buys or funds another b. freelancers currently make up 36% of the business to help them grow. workforce and the personal coaching b. This type of entrepreneur typically has industry is valued at over $1 billion. extensive experience building companies c. A great example of a solopreneur is Inge throughout their career and uses that Hunter, an Instagram marketing specialist. expertise to improve the companies they buy. 5. Innovator Entrepreneur c. Warren Buffet, the CEO of Berkshire a. Apple. Google. Amazon. Tesla. What word Hathaway, is a buyer entrepreneur. comes to mind when you think of these 9. Hustler Entrepreneur companies? Innovation. a. They are driven, highly-motivated, and hustle b. The brains behind these brands — Steve hard to get to the top. These types of Jobs, Larry Page, Jeff Bezos, and Elon Musk entrepreneurs are often a natural when it — are examples of innovator entrepreneurs. comes to sales and will pitch their product or c. But what exactly makes them innovators? service to anyone and everyone they meet. And how can you tell if you’re an innovator b. Spanx founder Sara Blakely is the definition entrepreneur? of a hustler entrepreneur. The self-made d. To start, ask yourself these questions: billionaire built Spanx from the ground up — i. Do you have a product or service from creating the first prototype of the that’s unlike anything else that’s on now-famous shapewear to personally the market? reaching out to major retailers to get them to carry her clothing line. ii. Are you solving a problem with your product or service? c. Are you the type of person who doesn’t flinch at a rejection email, always has your elevator iii. Are you addressing a market or pitch ready to go, and will stop at nothing to customer that no one else is? get your business in front of the right iv. If you find yourself nodding along to people? these questions, then you may be an innovator entrepreneur with a 10. Researcher Entrepreneur groundbreaking business on the a. They have in-depth expertise about the horizon. product or service they offer and are motivated to share that knowledge with their 6. Imitator Entrepreneur customers. a. These types of entrepreneurs take an b. Christy Harrison, a registered dietician, existing business, product, or service, and certified intuitive eating counselor, and make it better. author, is a great example of a researcher b. Many entrepreneurs fall into this category. entrepreneur. Harrison uses her background There can only be a few true innovators, and expertise to offer private coaching after all — most businesses are usually an and online courses around an anti-diet iteration of something that already exists. perspective. Through her membership c. Whitney Wolfe Herd, the founder of Bumble. business, Harrison is able to use her After co-founding the dating app Tinder, she research-driven offerings to educate her went on to create a new dating app that community about topics that are important to addressed a different market and focused on them. empowering women. Today, Bumble has around 45 million active users and is valued at over $3 billion. Entrepreneurial Process MODULE 2: SOCIAL ENTREPRENEURSHIP SOCIAL ENTREPRENEURS ARE NOT CONTENT JUST TO GIVE A FISH OR TEACH HOW TO FISH. What is Social Entrepreneurship? It is the process by which individuals, startups, and entrepreneurs develop and fund solutions that directly address social issues. A social entrepreneur, therefore, is a person who explores business opportunities that have a positive impact on their community, society, or the world. citizens build or transform institutions to advance solutions to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuses, and corruption, to make life better for many. BOTTOM LINE Social Return on Investment (Social Impact) Financial Return on Investment (Profitability) Quantifiable Impact of the Venture SOCIAL ENTREPRENEURSHIP IN THE PHILIPPINES According to a study by ADB, as of July 2019, there were 164,473 social enterprises in the Philippines. That’s 17% of the total registered businesses in the country. Furthermore, 71% of the social enterprises are micro, small, and medium-sized businesses. The remaining 23% are NGOs and 6% are coops. ANNA MARIA WILK Anna Maria Wilk is the Co-Founder and President of Gandang Kalikasan Inc, makers of Human Nature, one of the largest social enterprises of natural personal and home-care product line in the Philippines. Through Anna’s leadership, Human Nature is focused on providing gainful employment to low skilled workers, developing high value agricultural products among partner communities and setting an example among traditional businesses to increase the legal minimum wage. Among many awards and recognitions, Anna has received the Beauty Industry Award, Woman of the Year 2017, Asia Society Fellow and Social Entrepreneur of the Year 2011 by Ernst & Young. TYPES OF SOCIAL ENTREPRENEURSHIP Traditional Business Criteria Nonprofits with income from products/services Feasibility of business model in the chosen supplemented by external support and subsidies marketplace Nonprofits with income from products/services not Marketability of product or service to customer base supplemented by external support and subsidies Potential for financial return For-profit company that pursues financial return and Attractiveness for funding from additional investors simultaneously generates social outcomes Management team strength, experience, and Nonprofits with income from products/services readiness supplemented by external support and subsidies Sophisticated understanding of risk and contingency Wai’anae Organic Farmers Cooperative plans Wai’anae Community Re-Development Corporation www.waianaeorganic.com Social Enterprise Track Criteria Integration of the venture’s social and financial 3 elements of Waianae Organic Farms missions Mission – Operate a youth leadership development — Is it reasonable to expect that the financial and training program for low-income and at-risk youth social goals can be achieved simultaneously? Do using agriculture as the teaching methodology. these goals make sense together? Social Return on Investment – Educate community on health and wellness, distribute organic fruit and Social Return on Investment vegetables via farmers markets, Café in Waianae — How does the enterprise serve a social purpose serving organic foods, teach young men and women — Are socially responsible core values expressed how to farm the land-Quantifiable. throughout the venture — What is the venture’s potential to meet its social Nonprofit with income from products and services that are goals provided or produced and are not supplemented by — What is the social impact both monetized and external support and subsidies non-monetized of this enterprise? Goodwill Industries of Hawaii www.higoodwill.org CLASSIFYING A SOCIAL ENTERPRISE SIX DEFINING CHARACTERISTICS AND VALUES OF 3 elements of Goodwill Industries of Hawaii SOCIAL ENTERPRISE (PEARCE, 2007): Mission – Provide training, job placement, and 1. Having a social purpose support services to people with barriers to 2. Engaging in trading activities to achieve social employment since 1959 purpose (at least in part) Social Return on Investment – Served 6,470 people, 3. Not distributing profits to individuals placed 1,079 in employment-quantifiable 4. Holding assets and wealth in trust for community For-profit company that pursues financial return and benefit simultaneously generates social outcomes 5. Democratically involving members of its constituency Greyston Bakery in the governance of the organization www.greystonbakery.com 6. Independent organization with accountability to defined constituency & and wider community 3 elements of Greyston Bakery Mission – Part of Greyston Foundation’s integrated THE SOCIAL ENTREPRENEUR AND BECOMING ONE system of nonprofit and for-profits that offer a wide Social Entrepreneurship array of community development programs including job training, housing, and child care. Use of the techniques that start-up companies and other entrepreneurs use to develop, fund, and Social Return on Investment – Actively recruit and implement solutions to social, cultural, or hire employees who have difficulty finding environmental issues. employment in the past. Management services provided by Greyston Foundation. Greyston THE HUMBLE BEGINNINGS Foundation is sole shareholder.- Quantifiable Social Entrepreneurship is relatively a new term. It TO JUDGE THE SOCIAL ENTERPRISE TRACK ENTRANTS, came in to notice just a few decades ago. But its ONE HAS TO CONSIDER TRADITIONAL BUSINESS usage can be found throughout history. CRITERIA AS WELL AS SOCIALLY SPECIFIC ASSESSMENTS  In fact, there were several entrepreneurs who Areas where Social Entrepreneurs can create an impact established social entrepreneurs to eliminate social Employment Development problems or bring positive change in the society. ○ The first major economic value that social Vinoba Bhave, the founder of India’s Land Gift entrepreneurship creates is the job and Movement employment Estimates ranges from one to ○ He took donated land from landowner seven percent of people employed in the Indians and gave it away to the poor and social entrepreneurship sector. landless, for them to cultivate. Then after Innovation / New Goods and Services 1954, he started to ask for donations from ○ Social entrepreneurs develop and apply whole villages in a program he called innovation important to social and economic Gramdan. He got more than 1000 villages by development and develop new goods and way of donations. services. Issues addressed include some of Robert Owen, the founder of the cooperative the biggest societal problems such as HIV, movement mental ill-health, illiteracy, crime and drug ○ A Welshman who made his fortune in the abuse which, importantly are confronted in cotton trade, Owen believed in putting his innovative ways. workers in a good environment with access Equity Promotion to education for themselves and their ○ Social entrepreneurship fosters a more children. equitable society by addressing social Florence Nightingale, founder of the first nursing issues and trying to achieve ongoing school and developer of modern nursing practices sustainable impact through their social might be included in this category. mission rather than purely ○ As a nurse, politician, and manager, she was profit-maximization. Another case is the effectively a prominent social American social entrepreneur J.B. Schramm entrepreneur who, despite her who has helped thousands of low-income non-conformity, took on a fearless and high-school students to get into tertiary visionary stance in solving social and health education. problems. “STOP DREAMING AND START DOING” ○ She organized professional training for nurses, wrote the first nursing textbook SOCIAL ENTREPRENEUR (“Notes on Nursing”) , and took public positions in favor of health care and is somebody who takes up a pressing social problem philanthropic funding. and meets it with an innovative or path breaking solution. They had established such foundations and organizations in the 19th century that is much before Since profit making is a secondary objective, the concept of social entrepreneurship used in therefore they are people who are passionate and management. determined about what they do. They possess a very high level of motivation and are visionaries who aim Social Entrepreneurs’ Areas of Focus at bringing about a change in the way things are. a person‘s ability to improve her or his economic QUALITIES OF A SOCIAL ENTREPRENEUR well-being and personal dignity through opportunity. Ambitious Harness aid to be more accountable, transparent and solutions-oriented, for lasting development. ○ Social Entrepreneurs tackle major social issues, from increasing the college Enable access to and ensure the use of reliable, enrollment rate of low-income students to affordable and appropriate healthcare in fighting poverty. They operate in all kinds of disadvantaged populations. organizations: innovative nonprofits, social- Address issues of sustainable productivity not purpose ventures, and hybrid organizations beneficiary by beneficiary, but system-wide. that mix elements of nonprofit and for-profit Lay the foundation for peace and human security. organizations. Harness the capital and consumer markets that drive Strategic change by considering all costs and opportunities. ○ Like business entrepreneurs, social Transform the way water is managed and provided, entrepreneurs see and act upon what others long-term, for both people and agriculture miss: opportunities to improve systems, create solutions and invent new approaches that create social value.  Result-Oriented THE SOCIAL ENTERPRISES ○ Social entrepreneurs are driven to produce These are businesses whose primary purpose is to measurable returns. These results transform create a positive community impact rather than to existing realities, open up new pathways for generate profits for individual shareholders. They the marginalized and disadvantaged, and apply the power of the marketplace to advance social, unlock society‘s potential to effect social cultural and/or environmental agendas. Thus, they change measure success with the attainment of both economic and social value. Mission Driven ○ Generating social value—not wealth—is the Is the Social Enterprise the right business model? central criterion of a successful social Social enterprises have a mission to address social, entrepreneur. While wealth creation may be environmental, or cultural challenges by reinvesting part of the process, it is not an end in itself. profits above operational expenses back into their Promoting systemic social change is the missions and using a triple bottom line (people, real objective. planet, profit) to measure their success. Resourceful Social enterprises take many forms, including sole ○ Because social entrepreneurs operate within proprietorships, non-profits, and co-operatives to a social context rather than the business name a few. Social Entrepreneurs are people who world, they have limited access to capital see a social, environmental, or cultural problem in and traditional market support systems. As their community and want to solve it. a result, social entrepreneurs must be A social enterprise is the ‘vehicle’ that a social skilled at mobilizing human, financial and entrepreneur uses to deliver their solution to the political resources. problem. Social enterprise is somewhere in the middle between ENTREPRENEUR SOCIAL ENTREPRENEUR commercial businesses and registered charities. Social enterprises use a blended return on investment (people, planet, profit) to measure their success. THE ROLE OF TECHNOLOGY The Internet, social networking websites and social media have been pivotal resources for the success and collaboration of many social entrepreneurs. STEPS IN CREATING A SOCIAL ENTERPRISE: Using wiki models or crowdsourcing approaches, for 1. The first step is talking with people who have example, a social entrepreneur organization can get first-hand experience with the issue(s) you are trying hundreds of people from across a country (or from to resolve. multiple countries) to collaborate on joint online 2. What community is your social enterprise serving (or projects will it serve)? Is it a municipality, a First Nation, a region or a province? Or is it a community of interest PROBLEMS FACED BY SOCIAL ENTREPRENEUR 3. Knowing which community you intend to serve is 1. Funding important to the creation of your business concept 2. Strategy and Long-term Focus and structure. 3. Remaining True to the Mission THE SIGNIFICANCE OF WORKING WITH A COMMUNITY 4. Lack of Skilled Workforce The goal of community engagement is to include 5. Social and Cultural Effect individuals’ voices in the process of planning a social 6. Lack of Government Support enterprise. Gathering as many voices together as possible will make sure the social enterprise responds  to community needs. A briefing on how USLS TYPES OF SOCIAL ENTERPRISES conducts community engagement will be done next Leveraged non-profit ventures meeting. ○ The entrepreneur sets up a non-profit Community engagement can look different depending organization to drive the adoption of an on the issue you are interested in exploring and who innovation that addresses a market or you want to talk to about that issue. government failure. Respect, flexibility, patience, and sincerity are four key ○ In doing so, the entrepreneur engages a values that guide all community planning and cross section of society, including private activities. and public organizations, to drive forward the This will ensure everyone feel that they have had the innovation through a multiplier effect. opportunity to speak and that their opinions are ○ Leveraged non-profit ventures continuously valued. depend on outside philanthropic funding, but A social enterprise has the opportunity to promote a their longer term sustainability is often under sense of community. It also has the opportunity to question given that the partners might take advantage of and boost existing networks. It is change / lose interest / be unable to keeping equally important to know the community you are funding the venture. serving and their needs. This way, you will have a ○ Fundraising Oriented bigger impact on your community Hybrid non-profit ventures Who can be involved in the community? ○ The entrepreneur sets up a non-profit Try to include a wide range of people (youth, elders, organization but the model includes some low-income, women, working/unemployed etc.) so that different degree of cost-recovery through the sale of perspectives can be explored and inform your process goods and services to a cross section of institutions, public and private, as well as to People interested in the topic your social enterprise is target population groups. addressing ○ To be able to sustain the transformation Community Leadership (Municipal Mayor & Council; activities in full and address the needs of First Nation Chief and Council; Other Political clients, who are often poor or marginalized Leaders) from society, the entrepreneur must mobilize Organizations Working in this Sector (Not-for-profits, other sources of funding from the public Co-operatives, For-profit Businesses, Collectives) and/or philanthropic sectors. Such funds can Educational Institutions (Elementary and High be in the form of grants or loans. Schools, Colleges, Universities, and Vocational ○ Quality oriented Schools) Social business ventures Community Engagements ○ The entrepreneur sets up a for-profit entity or business to provide a social or ecological product or service. ○ While profits are ideally generated, the main aim is not to maximize financial returns for shareholders but to grow the social venture and reach more people in need. ○ Wealth accumulation is not a priority and profits are reinvested in the enterprise to fund expansion. The entrepreneur of a social business venture seeks investors who are interested in combining financial and social returns on their investments. ○ Marketing Oriented COMPARE AND KNOW WHERE YOU ARE STANDING social enterprises with a proven business model and significant financing needs. At the moment, four social stock exchanges with trading activities are being incorporated. High-net-worth individuals and foundations have started to rethink their funding strategies adopting venture capital techniques for their funding strategies. This new form of financing in the social sector is known as Venture Philanthropy, High Engagement Philanthropy or Social Venture Capital. The term is used differently across the world, but can be defined as having the following characteristics (John, 2006): High engagement Tailored financing Multi-year asupport Non-financial support Organizational capacity-building Performance measurement ○ Thus, social investors concentrate their funding, and support only a limited number of social enterprises. Venture Philanthropy funds also support the social enterprise on a INSTITUTIONS IN SOCIAL CAPITAL MARKETS non-financial basis with management Value banks have the same role as commercial consulting or pro bono services. banks in traditional capital markets. They take Investment funds act as intermediaries between deposits from savers and give loans to individuals demand and supply by bundling funds from investors and companies. Since Value Banks focus on the that they subsequently invest in certain asset social sector, they have a better understanding of the classes. This approach reduces the transaction costs business models and the specific needs and and the risk through diversification effects. Social requirements of social enterprises. In addition, the investment funds apply the same principle in the savers sometimes accept a lower interest rate, which social sector. They collect funds from individuals or can be passed on to the social enterprise. foundations that they invest in a given sector such as microfinance or the solar industry. The traditional role of investment banks is the financial advisory of corporate clients and the Rating and research agencies publish ratings and matching of supply and demand. Social investment research reports on publicly listed companies to advisers take over the same role in the social sector. support investors in their capital allocation decisions. They support the social enterprise in setting up an In the social sector, funding consultancies play this appropriate financing structure and finding the right role. They publish research reports on different investors. sectors and advise funders on which organizations to support. ○ Funding platforms are similar to social stock exchanges as they provide a platform A stock exchange is an efficient public platform to to match demand and supply, but without match supply and demand. On stock exchanges, active trading. companies can issue shares or bonds which are then traded continuously. Companies have access to a large capital pool and investors can sell their shares or bonds without delay at any time. A social Stock exchange can be an attractive financing option for WHY BUILD A SOCIAL ENTREPRISE? INTELLECTUAL PROPERTY RIGHTS Social enterprises contribute to vibrant economies. In addition Intellectual property rights refer to the legal rights associated to creating new jobs and enabling non-profits organizations to with creations of the mind, which include inventions, literary sustain their services, there are many areas where social and artistic works, designs, symbols, names, and images used enterprises are positively impacting on healthy and sustainable in commerce. These rights are designed to prevent communities. unauthorized use and exploitation by others, thereby incentivizing creativity and innovation. Stimulating community economies: In some communities, social enterprise can employ people Types of IPR: who otherwise may to migrate or endure long commuting times. Communities that embrace social Patents protect inventions for a limited time. enterprises are supporting jobs and helping to build Trademarks safeguard brand identity and recognition enduring local economies indefinitely as long as they are used. Stimulating community economies: In some Copyrights cover creative works automatically upon communities, social enterprise can employ people creation. who otherwise may to migrate or endure long commuting times. Communities that embrace social These intellectual property rights play crucial roles in enterprises are supporting jobs and helping to build encouraging innovation and protecting creators' interests in enduring local economies various fields. Environment & biodiversity: Upcycling, recycling, food production, composting, eco-tourism, nature Intellectual Property wildlife and preservation sanctuaries can all be set up which includes patents, trademarks, copyrights and to tackle climate change and social impact. trade secrets- represents important assets to the Inclusivity: In many communities, social enterprise entrepreneur and should be understood even before can help bridge the gaps between young and old, or engaging the services of an attorney. settled and Travelling communities, or new immigrants into smaller towns and villages. Patents, Copyright & Trademarks Overcoming social exclusion: Social enterprises PATENT can work with those more vulnerable or overlooked in A patent has a term of protection of twenty (20) years society by providing apprenticeships, training, skills, providing an inventor significant commercial gain. resources and related opportunities for a living wage; In return, the patent owner must share the full offer affordable housing and offer the support needed description of the invention. This information is made to assist those in difficulty. available to the public in the form of the Intellectual Community and Business: Social enterprises can Property Official Gazette and can be utilized as basis often play a vital role in bridging businesses with for future research and will in turn promote innovation communities and offering companies the chance to and development. invest or purchase in a more socially responsible manner. TRADEMARK A trademark is a tool used that differentiates goods and services from each other. It is a very important marketing tool that makes the public identify goods and services. A trademark can be one word, a group of words, sign, symbol, logo, or a combination of any of these. Generally, a trademark refers to both trademark and service mark, although a service mark is used to identify those marks used for services only. Infringement Cases COPYRIGHT Copyright is the legal protection extended to the owner of the rights in an original work. “Original work” refers to every production in the literary, scientific and artistic domain. Among the literary and artistic works enumerated in the IP Code includes books and other writings, musical works, films, paintings and other works, and computer programs. TYPES: a. Dramatic or dramatic-musical compositions; choreographic works or entertainment in dumb shows b. Musical compositions, with or without words c. Works of drawing, painting, architecture, sculpture, engraving, lithography or other work of art; models or designs for works of art d. Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art e. Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science f. Drawings or plastic works of a scientific or technical character g. Photographic works including works produced by a process analogous to photography; lantern slides h. Audio visual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings i. Pictorial illustrations and advertisements j. Computer programs k. Other literary, scholarly, scientific and artistic works.