Entrep: Chapter 2 Opportunity Seeking, Screening, and Seizing

Entrepreneurial mind frame

Entrepreneurial mind frame

see things in a very positive and optimistic light

Entrepreneurial heart flame

the entrepreneur is not easily disheartened, but is rather driven to persevere even more

Entrepreneurial gut game

this refers to the ability of the entrepreneur to sense without using the five senses

Macro Environmental Sources (SPEET)

• Socio-Cultural Environment • Political Environment • Economic Environment • Ecological Environment • Technological Environment

Industry Sources

• Rivals or competitors • Suppliers of input • Consumer market segments • Substitute products or services • All other support and enabling industries

Market Sources

• Increased or decreased demand • Higher or lower Supply • Threat of Price War

micromarket

• Specific target market segment of a particular enterprise

Consumer Preferences, Piques, and Perceptions

• Preferences refer to the tastes of particular groups of people • Consumer perceive the product • Arousing the customers’ interest to buy

Opportunity Screening

• The Personal Screening (Three Questions) • The Pre-Feasibility Study • The Feasibility Study

Market Potential and Prospects

based on the estimated number of possible customers who might avail the product or service

Segmenting the Market

Using a set of demographics (e.g., gender, age, place of residence, income class, etc.) will be the most basic approach in determining the target segment.

Assessing Competition

This process would determine how saturated the market is in the given area of coverage.

Estimating Market Share and Sales

Entrepreneur should assess the potential market share he or she can attract

Technology Assessment and Operations Viability

• Quantities Demanded • Quality Specifications Demanded • Delivery Expectations • Price Expectations

Quantities demanded

This would determine the needed capacity of operations.

Quality specifications demanded

Dictates the quality of input, quality assurance of the process transforming input to output

Delivery expectations

Knowing how much, how frequent, and when to deliver to costumers.

Price expectations

The selling price would be evaluated by the costumer.

Investment Requirements and Production/Servicing Costs

• Pre-operating Costs • Production/Service Facilities Investment • Working Capital Investment

Pre-Operating Costs

These are the costs related to the preparation for the launch of the business.

Production/Service Facilitate Investments

Long term investments for the actual business establishments

Working Capital Investments

includes the investment needed to operationalize the business, composed of cash, accounts receivable, and inventories

Financial Forecasts and Determination of Financial Feasibility

• Income Statement • Balance Sheet • Financial Ratios and Measurements

Income Statement

Measures an enterprise performance in terms of revenue and expenses over a certain period

Balance Sheet

Assets= Liabilities + Equity

Income Statement

Revenues - Expenses = Income or Profit (loss)

Assets

all the investments in the enterprise including the initial investments

Liabilities

represents the enterprise debts to suppliers, to banks, to government, to employees, and other financiers

Stockholders' equity

investors' investments in the stock (or shares) on the business

concept

investors' investments in the stock (or shares) on the business

Five Important Planning Choices

• Choose the correct technology • Choose the right people • Design the best possible operating workflow • Specify the systems and procedures that would govern the business enterprise • Design the organizational structure