Entrepreneurship - 1st Periodical Examination

What is Entrepreneurship?

The word "entrepreneur" came from the French word "entreprendre," which means "to undertake." During the Middle Ages, traveling merchants and artisans would visit different kingdoms to offer goods and services in exchange for payment. This practice was common and played an essential role in the economy of the time. These merchants and artisans were known as "tradespeople" and often specialized in a particular trade or craft.

Who are the Entrepreneurs?

Entrepreneurs are people who take on the risks and challenges of starting new businesses. They introduce new goods, services, or concepts to the market to make a profit.

As highlighted by Jonathan Scott (2022) in his book "The Entrepreneur's Guide to Building a Successful Business," owning a business offers numerous advantages

The ability to work flexible hours, make independent decisions, be free from obligation to others, and have complete autonomy and power.

Importance of Entrepreneurship in the Society

• Employment Creation

• Economic Development

• Technological Advancement

• Market Dynamics

• Socio-Cultural Changes

Types of Entrepreneurship

Agripreneurship

Buyer Entrepreneurship

Ecopreneurship

Imitator Entrepreneurship

Intrapreneurship

Large Business Entrepreneurship

Scalable Startup Entrepreneurship

Small Business Entrepreneurship

Social Entrepreneurship

Technopreneurship

Agripreneurship

Deals with the production and selling of various agricultural goods and inputs. The most profitable agribusiness ideas include crop cultivation, production and processing, aquaculture, animal health and feeds, agro-bio products, biotechnical service, energy-saving, and ecological agro-production systems.

Buyer Entrepreneurship

Involves business individuals who possess substantial capital and utilize it to acquire established companies or merge with smaller businesses. These acquired companies or small businesses have an established brand, customer base, and approved revenue-generating activities.

Ecopreneurship

Involves people who want to create a "green" business. It comes with opportunities to save the Earth while making a good profit.

Imitator Entrepreneurship

Creates a business by copying or adapting an existing business concept or a successful product or service in the market.

Intrapreneurship

Is the act of being an entrepreneur within a company or organization. It involves taking risks, being innovative, and developing new ideas to improve the company's products or services.

Large Business Entrepreneurship

Involves taking calculated risks to develop new market offerings to remain competitive and better respond to changing markets and customer needs.

Scalable Startup Entrepreneurship

Involves launching a small-scale enterprise intending to quickly expand and transform into a highly lucrative company. It is focused on disruptive innovation and can continue or renew itself indefinitely.

Small Business Entrepreneurship

Involves starting a business on a smaller scale rather than expanding it into a large corporation or opening multiple branches. It is easy to manage because it employs minimal employees or is often just a one-person team.

Social Entrepreneurship

Focuses on innovating and creating novel solutions to address pressing social issues. Thus, they play an essential role in having innovative approaches to social issues, such as poverty, education, and healthcare.

Technopreneurship

Solves complex business problems and brings uniqueness and novelty to the business process by combining entrepreneurial skills and technology.

Types of Ownership

Sole Proprietorship, Partnership, Corporation, Cooperative

Sole Proprietorship

It is initiated, organized, owned, and managed by a single person

Advantages:

• Easily created and terminated

• Ownership and rewards in one person

• Flexibility to changes

• Minimum regulation and taxation

Disadvantages:

• Unlimited personal liability

• Limitations in capital

• It ends when the owner dies or becomes seriously ill

• Limited skills and capabilities

Partnership

Two (2) or more partners who co-own a business to make a profit.

Advantages:

• Pooling of resources

• Ability to obtain capital

• Incentive for each partner

• Limited regulation and taxation

Disadvantages:

• Unlimited liability - solitarily liable

• Termination can happen

• Difficult in reconciling personal or business interests

• Problems in share liquidation

Corporation

Exist in contemplation of law; the business has its own identity separate and distinct from stockholders

Advantages:

• Limited liability for stockholders

• Legal entity protected by law

• Ownership is transferrable

• Obtaining capital is easier

• Employee benefits

• Right to vote for a significant decision

Disadvantages:

• Legal formality and regulations

• Costly and time-consuming

• Separate taxation

• Owner's potential loss of control in the business

Cooperative

A duly registered group of persons with a common interest to voluntarily join to achieve a lawful social and economic end.

Advantages:

• Open and voluntary membership

• Democratic control by members

• Education is mandated

• Cooperation among members

• Direct benefits to members and community

• Tax privileges

Disadvantages:

• Limited interest in shares

• Inequality of profit distribution

• Pro-poor bias might deviate from the profit orientation

Core Competencies that Entrepreneurs Need

Leadership, Articulate, Sociable, Adaptable, Collaborative, Multifaceted, Resilient, Proactive, Innovative, Risk-taker, Creative, Passion

2 Types of Motivation

Extrinsic Motivation, Intrinsic Motivation

Extrinsic Motivation

It is about motivating individuals to complete a task by offering rewards such as money, gifts, or treats. However, this type of motivation fades away when the reward is absent or not at par with their interest.

Intrinsic Motivation

People do the task at hand because they are passionate about the business. The following are the categories of intrinsic motivation:

• Achievement motive - Have a strong motivation to succeed, achieve greatness, and conquer any difficulties and hurdles in the quest for objectives.

• Power motive - The desire for control, influence, and the ability to impact others and change circumstances.

• Affiliation motive - The act of pursuing, upholding, or revitalizing an emotional connection with others.

Idea Generation

Is the creative process of generating new methods to solve problems and improve the product's or company's conditions. It is based on factors like idea development, group discussions, choosing the best alternative, and implementing the idea in real-world scenarios. The idea does not need to be practical but can also be a mere thought (David, 2022).

Generating Business Ideas

1. Dreamer Stage - In this stage, ideas can flow freely without fear of criticism or judgment from others. It encourages individuals to explore new possibilities, breaking free from the constraints of conventional thinking.

2. Designer Stage - It provides an opportunity to analyze ideas and explore their feasibility

3. Detailer Stage - In this stage, potential problems are thoroughly looked for and identified. This step is crucial in ensuring that all aspects of the project have been considered and addressed before executing the plan. Identifying potential problems early on can save time, money, and resources in the long run.

Core of Entrepreneurial Ideas

• Entrepreneurial Mind Frame - equips the entrepreneur to be optimistic during a crisis. Even if entrepreneurs are aware that businesses are risky, they do not get easily discouraged.

• Entrepreneurial Heart Flame - shows the passion of an entrepreneur in fulfilling their vision and mission. Entrepreneurs devote themselves to the venture they decide to pursue.

• Entrepreneurial Gut Game - exhibits an entrepreneur's intuitive side. Entrepreneurs have a good sense of whether something will work without necessitating logical, systematic, and sequential thinking. It brings out the confidence and courage of an entrepreneur.

Ways to Generate Ideas

• Imitate the successful ideas of others

• Address the existing problems and find practical solutions for them.

• Transform waste into valuable goods or solutions through recycling

• Pay attention to what business professionals, prospective customers, rivals, and collaborators have to say.

• Indulge in daydreaming and allow imagination to take over.

• Improve a product or service by maximizing its advantages and overcoming its limitations.

• Transform a hobby into a profitable business venture.

• Make new connections and socialize outside the normal circle of friends.

Opportunity Seeking

1. Environmental changes - It can significantly impact the rest of the world. These changes can occur naturally or as a result of human activities such as climate change, deforestation, pollution, and biodiversity loss, which can have wide-ranging and long-lasting effects on ecosystems, wildlife, and human health.

• Physical Environment - encompasses elements such as the climate, natural resources, and wildlife.

• Social Environment - has various influential factors, such as the Political, Economic, Sociocultural, and Technological environment. These forces drive progress and bring about new inventions and technological innovations.

• Business Industry Environment - comprises a range of critical stakeholders, such as competitors, customers, creditors, employees, the government, and suppliers.

2. Technological progress - A person with a keen interest in entrepreneurship can explore countless business opportunities, make groundbreaking discoveries, and take advantage of cutting-edge technology.

3. Government's initiatives and policies - The government's priorities, projects, programs, and policies can also provide valuable sources of inspiration.

4. People's interest - Knowing what interests and hobbies a person has can inspire potential entrepreneurial ideas. Understanding their preferences can help identify potential areas of market demand and guide product or service development.

5. Experiences - The knowledge and abilities acquired by someone who has worked in a specific field. This area holds immense promise for facilitating the creation of integrated commercial enterprises.

The 12 Rs of Opportunity Screening

• Relevance - Entrepreneurs should aim for an opportunity that aligns perfectly with their business's vision, mission, and goals, ensuring a solid foundation for success.

• Resonance - The opportunity should be perfectly harmonious with the values and virtues that the entrepreneur desires for the business.

• Reinforcement of Entrepreneurial Interests - Entrepreneurs should seize opportunities that perfectly match their interests, talents, and skills.

• Revenues - Verify if the products or services possess a market with substantial potential for growth and sales.

• Responsiveness - The opportunity should effectively meet the needs and desires of customers.

• Reach - Entrepreneurs should use opportunities to grow their businesses by creating branches, franchises, distributors, and dealerships. This will help them achieve consistent and ongoing growth.

• Range - Opportunities abound for creating a wide range of products and services to meet the diverse needs of various markets.

• Revolutionary Impact - The entrepreneur must visualize the business as a revolutionary force of the future.

• Returns - The opportunity should offer a low initial investment with the potential for substantial returns upon selling at a higher price.

• Relative Ease of Implementation - Entrepreneurs should find it simple to seize this opportunity, as there are only a few obstacles to overcome.

• Resources required - Entrepreneurs should choose opportunities that require fewer resources.

• Risks - Entrepreneurs should be able to recognize high-risk opportunities with clarity and confidence.

Opportunity Seizing - PESTEL Analysis

A. PESTEL Analysis. This tool helps identify the external forces that can positively and negatively impact the business.

• Political - These factors determine the influence of government and its policies on a particular business or industry. It includes trade, fiscal, and taxation policies, among others.

• Economic - These factors determine the impact of the economy and its performance on a business and its profitability. It includes interest rates, employment or unemployment rates, raw material costs, and foreign exchange rates.

• Social - These factors determine the social environment and emerging trends affecting business profitability. It includes changing family demographics, education levels, cultural trends, attitudes, and lifestyle changes.

• Technological - These factors determine the impact of technological innovation and development on a particular market or industry. It includes digital or mobile technology changes, automation, research, and development.

• Environmental - These factors determine the influence of the surrounding environment and ecological aspects' impact on a market or industry. It includes climate, recycling procedures, carbon footprint, waste disposal, and sustainability.

• Legal - These factors determine the importance of understanding legal laws and procedures in a given territory where a business operates. It includes employment legislation, consumer law, health and safety, and international and trade regulations and restrictions.

Opportunity Seizing - Competitor Analysis

B. Competitor Analysis - Conducting a competitive analysis is a crucial component of any successful business plan. By studying the competition, the entrepreneur can develop effective strategies to rival and secure a significant share of the competitors' markets.

Entrepreneurs could use the following questions in analyzing their competitors:

• Who are the competitors?

• What products or services do they sell or offer?

• What is each competitor's market share?

• What are their past strategies?

• What are their current strategies?

• What type of media is used for marketing their products or services?

• How many hours per week must they advertise to capture the market?

• What are the competitor's strengths and weaknesses?

• What potential threats do your competitors pose? • What potential opportunities do they make available for you?

Opportunity Seizing - SWOT Analysis

C. SWOT Analysis - SWOT analysis is usually performed before the enterprise is in operation. Strengths and weaknesses are Internal factors, while opportunities and threats are external (Friesner, n.d.)

• Strengths: Strengths refer to the internal factors within an organization that give it a competitive advantage or contribute to its success. These could include a strong brand reputation, a dedicated and skilled workforce, a superior product or service offering, efficient operations, an extensive distribution network, or unique technological capabilities.

• Weaknesses: Weakness in SWOT analysis refers to internal factors or characteristics of a business or individual that put them at a disadvantage or undermine their overall performance. It represents areas where the entity may lack skills, resources, or competitive advantages, which could impede its ability to achieve its goals. Weaknesses can include issues such as inadequate market knowledge, limited financial resources, deficiencies in infrastructure, ineffective marketing strategies, or an absence of technological expertise

• Opportunities: Opportunities in SWOT analysis refer to external factors that have the potential to positively impact an organization's performance or strategic objectives. They are favorable conditions or trends in the external environment that the organization can leverage to its advantage.

• Threats: Threats refer to external factors or challenges that may impede the success or progress of a business or project. They can negatively impact the performance or competitiveness of an organization. Threats can arise from various sources, such as competitors, changing market trends, new regulations, economic conditions, technological advancements, or even natural disasters.

Innovation

Although "business innovation" is often used to describe technology, the real meaning of business innovation is increasing income. Most businesses know the need to innovate to keep up with the market's rate of change. All industries are being disrupted by technology, so companies must innovate to stay current and avoid falling behind. An emphasis on design thinking, brainstorming, or creating an innovation lab may fuel business innovations (David, 2022).

The main benefit of innovation is that it increases business income and enhances the bottom line. Potential avenues for improvement in a company may involve introducing updated goods or services, amplifying sales and driving growth. Alternatively, streamlining existing procedures can effectively reduce costs and enhance operational efficiency. Addressing urgent company issues can save valuable time and resources (Hayes, 2023).

3 Major Types of Innovation

1. Process Innovation - Is a change in how a product or service is manufactured, created, or distributed to achieve greater efficiency. The following are examples of process innovation in different sectors: implemented selfcheckout systems, Online booking services, Robotic automation

2. Product or Service Innovation - involves creating and implementing new ideas, concepts, or technologies to enhance customer value and differentiate a company's market offerings.

3. Disruptive Innovation introduces a new value proposition. It either creates new markets or reshapes existing markets. There are two (2) types of disruptive innovations:

A. Low-end disruptive innovations. This happens when products and services are too expensive because they are considered very high quality.

➢ Budget airlines like Southwest Airlines and Ryanair are an example of low-end disruptive innovation. They transformed the airline sector by providing affordable flights without extra services, attracting cost-conscious travelers.

➢ Xiaomi and Oppo introduced low-cost smartphones as affordable alternatives to high-end smartphones with similar capabilities.

B. New-market disruptive innovations. This occurs when the features of a product restrict its accessibility or confine its usage to inconvenient, centralized venues.

➢ GoPro is causing significant disruption in the camera market with its action cameras.

➢ WhatsApp is changing the telecommunications industry with its free messaging app.

Risks Involved in Innovation

A. Economic risk - refers to erratic economic changes that can decrease sales, revenue, or profits. The 60% drop in airline revenue in 2020 due to the COVID-19 pandemic is a prime example of economic risk. Business owners must always prioritize monitoring the economy, identifying emerging risks, and developing solid plans to minimize damage in different scenarios. Economic risks are constantly present due to global crises.

B. Financial risk - in essence, refers to internal and external circumstances that directly impact a company's profits. For instance, if a company defaults on its loans and does not have enough cash to manage its debt payments properly, it may be in financial trouble.

C. Risks of security and fraud - In today's rapidly evolving business environment, an increasing number of individuals rely on e-commerce, online shopping, and business to adapt to changing circumstances.

D. Compliance Risk - Businesses must abide by local laws and regulations restricting various business processes, regardless of their business type. Compliance risk refers to the potential for a company to face legal penalties, financial loss, and material consequences due to violating external laws and regulations or internal standards.

E. Human risk - Simply put, employees' failure or inability to carry out their essential responsibilities at work can result in human risks for businesses. An employee may make workplace mistakes due to alcohol or drug abuse, which can lower productivity and harm the company's overall reputation.

F. Risk of Reputation - A good business reputation is essential to running a successful business because it demonstrates honesty and trustworthiness. A company's reputation is in jeopardy, and reputational risk can negatively affect profits and shareholder confidence.

G. Competitive Risks

Intellectual Property

A. Patent - A patent is a property right granted to an invention by a government agency, like the U.S. Patent and Trademark Office. The invention, which could be a design, a process, an improvement, or a physical invention like a machine, is granted exclusive rights by the patent. Innovation and programming businesses frequently have licenses for their plans.

B. Copyrights - The exclusive right to use, copy, and duplicate original content is granted to authors and creators by copyrights. Both authors of books and musicians are protected by copyright. Copyright also says that the original creators can let anyone use the work by signing a license agreement.

C. Trademarks - A trademark is a recognizable symbol, phrase, or logo that distinguishes a product legally from other products. A company can only use or copy a trademark because it is exclusively assigned to that company. A company's brand is frequently associated with a trademark. The Coca-Cola Company, for instance, owns the "Coca-Cola" logo and brand name.

Market Research

Is crucial to understanding the potential success of a new product or service. It involves conducting research with potential customers to determine its viability. This process helps businesses decide whether to launch a product or service and how to market it to potential customers best

Two (2) Types of Market Research

1. Primary Research - Primary research is essential for businesses as it involves direct interaction with consumers or third-party entities to conduct pertinent studies and gather valuable data. This research allows businesses to gather direct insights and information from their target audience, helping them better understand consumer preferences and needs.

2. Secondary Research - Secondary market research uses data and insights from other sources rather than collected directly. This information can be utilized to guide product positioning and decision-making processes effectively.

Various Ways for Primary Research

A. Quantitative research is a systematic research approach that focuses on analyzing numerical data. It uses statistical methods, enables researchers to make objective, data-driven decisions, and provides insights into cause-and-effect relationships.

B. Qualitative research aims to provide insight into the underlying reasons or motivations behind a particular phenomenon, correlation, or behavior. By exploring the "why" behind these aspects, qualitative research helps uncover human experiences' complexities and meanings.

Quantitative Research Methods

• Customer Surveys - Conducting surveys through various channels such as in-person, smartphones, online forms, polls, and survey software can provide valuable insights. The list of questions is designed to provide valuable insight that can be used to improve and provide a better overall customer experience.

• Binary or Rating Scale Questionnaires - A questionnaire is an effective research tool that comprises carefully constructed questions created to gather valuable information from participants.

• Sampling - This method affects the reliability and validity of research results by helping researchers conclude the larger population based on the sample's characteristics. Random or probability sampling minimizes bias and increases the likelihood of unbiased estimates while ensuring diversity in the sample.

Qualitative Research Methods

• Focus Group Discussion - It involves gathering a small group of individuals who respond to online surveys sent to them. This study stands out for its impressive capability to remotely gather data from groups of 6 to 10 individuals, thereby eliminating the need for in-person interaction with the participants.

• Individual interviews - This process consists of an interview, during which the researcher interacts personally with the respondent by asking a series of questions to collect data.

• Ethnographic Research - This method involves conducting thorough research in the actual environments where the respondents are situated. This approach entails observing consumers in their own homes. Observing individuals using products can provide a more comfortable and honest environment for researchers, although it requires a significant amount of time.

• Case Study Research. This approach helps explain, describe, or explore a specific issue, event, or phenomenon in detail within its everyday real-life context.

• Open-ended Quetionnaires. An open-ended question cannot be answered with a yes or no response. Instead, questions are phrased as a statement that requires a more extended response.

Sources for Secondary Research Design

A. Public Sources - Using public sources is the most convenient and cost-effective approach to collecting a vast amount of valuable information. These include government departments and public libraries, providing the researcher free information.

B. Commercial Sources - Newspapers, magazines, television media, and journals are excellent commercial information sources for secondary research.

C. Company Websites - Numerous companies make their business data and information accessible through their websites or share this valuable information with dedicated business platforms.

D. Other Sources. There are numerous alternative sources available to gather information for research. These are published market studies, analyst reports, customer emails, customer feedback, recorded meetings, public interviews, and published blogs.

Market Research Steps

• Step 1: Define the Problem - The first step of the market research process is to identify and define a specific problem or objective that needs to be addressed. It involves thoroughly understanding the issue and clearly outlining what needs to be researched or investigated.

• Step 2: Define Buyer Persona - The buyer persona concept involves creating a fictional representation of an ideal customer. These profiles retain the distinctive attributes of the model customer and provide insight into potential recurring behaviors. Collecting data from the right population is essential for any organization to avoid wasting valuable resources.

• Step 3: Prepare Questions and Conduct Research - Ensure the interview is structured to build a comprehensive understanding, with prioritized questions and time managed effectively to cover all

• Step 4: List Major Competitors - A comprehensive list of major competitors is recommended based on the information gathered from primary and secondary research sources.

• Step 5: Analyze the Results - Once all the steps mentioned above have been completed, conducting a thorough analysis will be highly effective in finding solutions.

• Step 6: Develop a Research Report - After analyzing the results, create a market research report and share the insights with the team, marketing managers, and executives.

2 Types of Customer Requirement

1. Service Requirement (Service): An intangible thing or product cannot be physically touched but still provides a sense of fulfillment to the customer. Several vital elements should be considered when considering service requirements, such as timely delivery, friendly customer service, and convenient payment options.

2. Output Requirements (Output/Goods): Physical objects or visible entities. Consumers expect products to have specific characteristics like features, performance, quality, reliability, and durability. Consumers also look for attributes such as size, weight, speed, compatibility, and user-friendliness.

Cost

Is all the money spent to manufacture a product or provide a service. (Tuovila, 2023).

Costing

Is the process of allocating costs to various aspects of a business. It includes allocating variable costs, which change according to a particular activity, like sales or the number of employees.

Product Cost

Is the cost associated with making a product to be sold. Product costs consist of three (3) main components: direct material, direct labor, and manufacturing overhead. These costs are essential in determining the total expenses of producing a product.

Product Costing

A. Direct materials are the raw materials or components used directly in the production process of the final product. Examples of direct materials include wood, metal, plastic, fabric, and chemicals.

B. Direct labor refers to the cost of labor involved in producing a product. It includes wages, salaries, and benefits of employees.

C. Overhead costs are the expenses related to the production of a product. These costs include the cost of machinery and the cost of operating the machinery. Manufacturing overhead costs include indirect costs like:

• Indirect materials refer to supplies and materials used in the production process but are not a visible part of the final product. Examples are items like glue, oil, tape, and cleaning supplies.

• Indirect labor refers to the work performed by individuals not directly engaged in producing goods, such as security guards, drivers, and legal advisers. The wages and benefits they receive would fall under indirect labor costs.

• Other Overheads. Other overhead costs include any additional factory overhead costs that do not fit the abovementioned categories. Electricity expenses cannot be categorized as either material or labor costs.

The formula for Calculating the Product Cost:

Product Cost = Direct Materials + Direct Labor + Overhead Costs

The formula for Calculating the Product Cost per Unit:

• Product Cost per Unit = Total Product Cost / Number of Units Produced

Service Costing

Or operating costing, is a method used to determine the cost of providing a specific service. It involves identifying all the costs related to the resources used in delivering the service.

Fixed Costs

are those expenses that do not change regardless of how much activity the business is doing. Fixed costs include rent and lease payments, salaries, utility bills, insurance, and loan repayments.

Semi-variable costs

consist of both fixed costs and variable costs. Labor costs are usually divided into semi-variable expenses, such as fixed costs for monthly salaried employees and variable costs for hourly employees.

Variable Costs

are subject to change depending on the number of units produced. The costs mentioned here are materials, labor based on productivity, production supplies, commissions, delivery charges, packaging materials, and credit card fees.

Unit of Measurement

Refers to the standard method used to measure the quantity or volume of a particular service provided. The unit of measurement can vary depending on the nature of the service being offered. It could be based on time, such as hours or minutes, where the service is billed per hour or minute.

Objectives of Pricing

• Competition-Based Objective

• Cost-Based Objective

• Customer-Value Objective

• Market Share Objective

• Sales Orientation Objective

• Customer-Driven Objective

Cost-Plus Pricing (Markup)

This method involves calculating all the costs associated with manufacturing a product or delivering a service and then incorporating a predetermined markup to determine the appropriate selling price. Cost-plus pricing ensures that all costs are covered and allows for a good profit margin.

Predetermined Markup Percentage

Is a percentage added to a product or service's cost to determine its selling price.

Most Common Pricing Strategies

1. Premium Pricing. The price of a product or service is set to a high price point to create a perception of higher quality.

2. Economy Pricing. The price of a product or service is relatively low and affordable, targeting customers who want to save as much money as possible on whatever good or service they purchase.

3. Price Skimming. The initial price of the product or service is deliberately set high to generate maximum consumer interest. As more competitors enter the market, the prices are lowered, creating even greater appeal.

4. Penetration Pricing. The initial price of the product or service is intentionally set at a low level to swiftly enter a competitive market, gain a loyal customer base, and generate rapid sales, with the plan of increasing the price later.

5. Psychological Pricing. The price of a product or service aims to influence consumer perception and behavior by using specific price points.

6. Bundle Pricing. This pricing strategy is where multiple products or services are offered together at a discounted price. This technique is commonly used to create the illusion of a good deal and increase sales

7. Dynamic Pricing. The price of a product or service adjusts in response to changing market conditions. It uses algorithms and real-time data to set prices based on various factors such as demand, competition, and customer behavior.

Assets

are valuable properties owned by a business that can be utilized to bolster the production of goods and services.

Hard Services

Refer to physical modifications and adaptations to a building or its structure. Fire safety is a typical example of hard service. It involves installing water sprinklers, fire alarm systems, fire extinguishers, CCTV cameras, theft alarms, electrical systems, air-conditioning systems, and other mechanical services.

Soft Services

play a vital role in enhancing the overall environment of the workplace, making it more enjoyable for all.

Business Location

A. Controllable factors

• Proximity to the Market

• Supply of Materials

• Transportation Facilities

• Infrastructure Available

• Labor wages and the laws that govern it

B. Non-controllable factors

• Government policies

• Climate and environmental conditions

• Supporting industries

Types of Workplace Structure

A. Virtual Office. Start-up entrepreneurs widely utilize virtual workspaces due to their ability to enhance efficiency, reduce commuting costs, and provide increased flexibility.

B. Physical Office. Office layouts have changed from cubicles to open, spacious areas that promote collaboration and increase employee visibility.

C. Manufacturing / Plant. Manufacturing businesses like Apple, Samsung, Panasonic, and Sony, among others, have a range of selections to choose from when it comes to designing their production layouts; this, of course, depends on the total size of the equipment, products, and employees they have to work with. (Ingram, 2016).

Types of Physical Office Design

• Open Office Design - A workplace layout that is characterized by minimal walls or barriers between employees. It promotes a collaborative and open environment for communication and teamwork.

• Cellular Office Design - A workplace layout that incorporates private, individual workspaces known as “cells” or offices. The design typically features enclosed rooms or cubicles for each regular employee.

• Co-Working Space Design - A workplace layout consists of open work areas with shared desks. It promotes collaboration, flexibility, and a productive environment among employees.

• Combination Office Design - A workplace layout tailored to the organization's specific needs and preferences. This combination can create a dynamic and versatile office environment that supports productivity and collaboration

Types of Manufacturing/Plant Design

• Product or line layout - In this layout, only one (1) product type is made in each area. The product is standardized and produced in large quantities. Raw materials are supplied and processed through one line to the finished product. It is commonly used if there is a need to produce more product quantity.

• Process or functional layout - This layout is helpful if there is a low production need. In this type of layout, machinery and equipment are positioned according to the nature or type of operations.

• Fixed position layout - In this type of layout, the products are built in a fixed location, with all the necessary materials and equipment brought to that place. It is because the products are too heavy or the equipment needs to be permanently installed.

• Combination type of layout - It is a layout that utilizes a combination or a mix of other layouts. This type is possible if an item being made has different types and sizes. In such cases, machinery and equipment are positioned in a process layout.

Target Market

Is a specific group of consumers or organizations a business wants to sell to. It is a clearly defined part of the larger market based on demographics, psychographics, behaviors, and needs.

The Variety of Customer Segmentation

• Demographic Segmentation – Age, gender, income, education, marital status • Geographic Segmentation – Country, state, city, municipality, town

• Psychographic Segmentation – Personality, values, attitude, interest

• Technographic Segmentation – Mobile used, desktop used, apps and software used

• Behavioral Segmentation – Tendencies and frequent actions, habits, features, or product use

• Needs-based Segmentation – Products or service must-haves, needs of specific groups

• Value-based Segmentation – Economic value of a particular customer group

• Firmographic Segmentation – Group customers based on shared organization attributes

8 P's of Marketing

Product, Price, Place, Promotion, People, Physical Evidence, Process, Positioning

Types of Promotions

A. Advertising - It is a method of mass communication that is used to get people to do something, usually about a commercial product or service.

• Print Advertising - Newspaper, magazines, catalog mail

• Broadcast Advertising - Television, radio, podcast

• Public/Outdoor Advertising - Billboards, transit advertising, street walk ads

• Digital Advertising - Online display ads, search engine marketing, social media ad placement

Selling

Also known as personal selling, is a face-to-face selling technique by which a salesperson uses interpersonal skills to persuade a customer to purchase a particular product by highlighting various features.

Direct Marketing

Any marketing that communicates or distributes directly to individual customers rather than through a third party like the mass media.

Sales Promotion

A sales promotion is a marketing strategy in which a company uses short-term campaigns to get people interested in a product, service, or other offer and make people want it (Kelwig, 2022).

Public Relations

The set of techniques and strategies for managing how information about an individual or company is disseminated to the public, especially the media

The Media Framework

A. Paid Media

B. Earned Media
C. Owned Media

Paid Media

is when companies use public relations, marketing, and promotional activities they create and pay for themselves.

Earned Media

consists of news articles, blogs, and social network discussions that mention a brand. This media type provides word-of-mouth and PR benefits to a business without needing direct payment.

Owned Media

refers to any online platform a business possesses and has complete control over, such as a blog, website, or social media channels.

Market Positioning - Value Proposition (VP)

Captures why a consumer should purchase a company's product or utilize its service. There are numerous competitors in the market striving to assert their dominance. Entrepreneurs should actively seek out alternative solutions and carefully assess their potential for enhancing effectiveness.

Market Positioning - Unique Selling Proposition (USP)

refers to a distinctive quality that sets the business apart from the competition. The business differentiates itself from competitors by highlighting its product or service's unique qualities and advantages. Conducting marketing research is essential to identify the distinct selling proposition.

Market Positioning - Branding

The process of branding involves the creation of a unique brand identity for a company. This process also creates essential elements for a company's brand, like a logo, tagline, attractive design, firm tone of voice, social media captions, billboard colors, and packaging materials.

Start-up costs

Refer to the expenses a business incurs before its operations. These costs include the various bills and expenditures that must be covered in preparation for the business's grand launch. Every business has its unique start-up costs to consider.

Start-up Expenses

These expenses or upfront costs occur before the business's launch and before any revenue is generated. The expenses should be categorized into two groups: one–time and ongoing.

A. One–time expenses

• Necessary equipment like cash registers, machinery, or vehicles
• Permits and licenses, such as city, county, and state licensing
• Computer or technology equipment
• Down payment for office or store
• Initial inventory
• Initial office supplies
• Signage and office renovation
• Office or business furniture and fixtures

B. Ongoing expenses

• Accounting services
• Taxes and legal services
• Business Insurance
• Payroll and employee benefits
• Office Supplies
• Website hosting and maintenance
• Travel expenses such as flight fees or gasoline
• Utilities like electricity, gas, water, phone, and internet
• Marketing materials
• Ongoing inventory
• Loan or credit payments

Start-up Assets

These costs refer to the expenses incurred when acquiring long–term assets to initiate the business.

• Starting inventory
• Computers or other technological equipment
• Office equipment
• Office furniture
• Vehicles

Capital Funding Strategies

• Personal investment
• Love money
• Venture Capital
• Loans
• Angels
• Business Incubators
• Crowdfunding
• Grants and Subsidies

Personal Investment

A person invests and manages financial instruments, such as stocks, bonds, real estate, and others, as a personal investment. Individual investors must create investment plans and frameworks based on their unique characteristics.

Love Money

It is money given to a spouse, parents, friends, or other loved ones. It is commonly known as "patient capital," which will be repaid as your business's profits rise.

Venture Capital

Investors provide venture capital, private equity, and financing to small and startup businesses that they believe have long–term growth potential. Wealthy investors, investment banks, and other financial institutions typically provide venture capital in exchange for shares of stocks.

Loans

Are the most common form of funding for small and medium-sized businesses. A sum of money is advanced to the borrower by the lender, typically a government agency, financial institution, or corporation. The borrower agrees to a set of conditions in return, including any finance charges, interest, and repayment date.

Angels

Are typically wealthy individuals or retired executives who make direct investments in privately held small businesses. In addition to their experience and extensive network of contacts, they frequently serve as leaders in their respective fields and contribute technical and managerial expertise. In exchange for putting their money at risk, they reserve the right to oversee the management practices of the business.

Business Incubators

Future businesses and start-ups are frequently invited to share incubator spaces and technical, administrative, and logistical resources with other established businesses. An incubator, for instance, might let other businesses use its laboratory so that a new business can develop and test its products for less money before starting production.

Crowdfunding

Involves a business asking the general public for money, typically in exchange for equity in the business. Most of the time, it involves a private business requesting many people for small donations. It contrasts the standard method of raising capital through venture capitalists or angel investors, in which a small group of actors invests enormous amounts of money in the business.

Grants and Subsidies

Grants can be used for specific things and can be paid without repaying. On the other hand, subsidies are defined as direct contributions, tax breaks, and other special assistance governments provide to businesses to offset operating costs.

The Four (4) Financial Statements

A. Income Statement - The income statement is a financial statement that shows a company's revenues, expenses, and net profit over a specific period of time.

B. Statement of Owner’s Equity (Retained earnings) - A statement of owner's equity is a financial statement that shows the changes in the owner's equity during a specific period of time.

C. Balance Sheet (Statement of Financial Position) - Based on the definition provided by Riccio (n.d), The balance sheet shows a company's financial position at a specific point in time. It provides a snapshot of its assets, liabilities, and shareholders' equity.

D. Statement of Cash Flow. According to Stobierski (2020), It shows how cash is generated from operating activities, investing activities, and financing activities over a specific period.

Elements of Financial Statement

A. Assets
B. Liabilities
C. Equity
D. Revenue
E. Expenses

Assets

Are resources owned or controlled by an individual, company, or organization. It can provide future economic benefits, generate income, or be used in business operations.

Current Assets

These assets can be converted to cash within one business operation year. They are useful for covering operational expenses and investments of the business.

• Cash – Physical money in the form of coins and banknotes.
• Accounts receivable – Unpaid amount for products or services a company delivers to its customers.
• Inventory – The stock of goods or materials that a company holds.
• Prepaid Expense – Expenses that are paid in advance.