Entrepreneurship Exam

Entrepreneurship

Entrepreneurship

• is the process of creating something new of

  value by devoting (giving) the necessary time

  and effort. Robert D. Hisrich, M. Peters & D.A Shepherd

• by accepting and acknowledging the

  necessary financial, psychological, and social

  risks, and

• finally receiving the resulting rewards be it monetary and personal satisfaction and freedom to do what you want.

Entrepreneur

• an individual who actively forms or leads their own business and nurtures them for growth and

  prosperity. UiTM Entrepreneurship Study Group

• a person who creates and manages change by the recognition of opportunities (needs, wants, opportunities, problems, and challenges) and develops people and manages resources to take

  advantage of the opportunity and creates a venture (profitable business). Eston Kimani, MIT

• Innovation or newness

• Organization of resources

• Creation of new product or service

• Generation of wealth

• Taking risk in a business venture

• Preparation to face uncertainty

• Creating job opportunity

What are the possible outcomes of engaging in Entrepreneurship?

1. Curiosity

2. Willingness to Experiment

3. Adaptability

4. Decisiveness

5. Self-Awareness

6. Risk Tolerance

7. Comfort with Failure

8. Persistence

9. Innovative Thinking

10. Long-Term Focus

Give the 10 Characteristics of Successful Entrepreneurs

1. Exposing the local market to a wide range

   of foreign opportunities

2. Leader of the Whole Industry

3. Community Development

4. Diminishing Social Tension and Differences Amongst Youth

5. Balanced Rapid Economic Growth

6. Removal of Regional Disparities

7. Economic independence

8. Capital formation

9. Standard of Living

10. Backward and forward links

What are the roles of entrepreneurship in Economic Growth?

Entrepreneurial Process

• The process of pursuing (going after) a new

  venture or business,

• Whether it is a new product going into an existing market OR

• Existing product going into new markets OR

• The creation of a new organization.

• requires the commitment of the necessary time and effort.

• Appreciate and understand the importance of time and effort devoted to creating something new and making it workable

• Involves the enjoyment of the rewards (Freedom, monetary) after the effort, followed by personal satisfaction

Creation Process

Entrepreneurial Process

• creating something new of value

1. Identification and evaluation of the opportunity

2. Development of a business plan

3. Determination of the required resources

4. Management of the resulting enterprise

Give the Steps in an Entrepreneurial Process

• opportunity to create your destiny

• opportunity to make a difference

• opportunity to reach your full potential

• opportunity to reap extraordinary profits

• societal responsibility and recognition

• opportunity to engage in work of their choice

What are the Benefits of Entrepreneurship?

• uncertainty of income

• risk of losing one's entire investment

• long hours and hard work

• lower quality of life until the business gets established

• high level of stress

• complete responsibility

• discouragement

What are the Drawbacks of Entrepreneurship?

1. Management Mistakes

2. Lack of Experience

3. Poor financial control

4. Weak marketing efforts

5. Failure to develop a strategic and effective plan

6. Uncontrolled Growth

7. Poor location

8. Improper inventory control

9. Incorrect or unsuitable pricing

10. The inability to move into entrepreneurial thinking mindset from the previously secured permanent managerial position held

Give the 10 DEADLY MISTAKES of Entrepreneurship

• Know your business in depth.

• Develop a good, effective, and solid Business Plan.

• Manage your financial resources effectively.

• Have a thorough and complete financial statement.

• Learn to hire and manage people effectively.

• Keep physically fit, consume healthy foods, and avoid the addictive consumption of cigarettes and alcohol.

How can you avoid failure in an entrepreneurial business?

• Henry Sy Sr.

• SM(Shoe Mart)

What is the name of this Entrepreneur and what company did he start?

• Mariano Que

• Mercury Drug

What is the name of this Entrepreneur and what company did he start?

• Tony Tan Caktiong

• Jollibee

What is the name of this Entrepreneur and what company did he start?

• Socorro Ramos

• National Bookstore

What is the name of this Entrepreneur and what company did she start?

• John L. Gokongwei Jr.

• JG Summit Holdings, Inc.

What is the name of this Entrepreneur and what company did he start?

• Injap Sia

• Mang Inasal

What is the name of this Entrepreneur and what company did he start?

• Cecilio Kwok Pedro

• Lamoiyan Corporation

What is the name of this Entrepreneur and what company did he start?

• Alfredo Yao

• Zesto Corporation

What is the name of this Entrepreneur and what company did he start?

External Sources of Opportunities

• source of opportunities that come from the environment or outside the entrepreneur or the business.

Politics

External Sources of Opportunities

• includes all the laws, rules, and regulations that govern business practices as well as the permits, approvals, and licenses necessary to operate the business

• political relationships between two countries can impact the business of companies that serve on multiple continents

Economy

External Sources of Opportunities

• income level and employment rate

• rising prices of commodities affect the purchasing power of prospective clients

Social

External Sources of Opportunities

• customs, lifestyles, and values that characterize a society

• increase in the number of health-conscious individuals who tend to avoid sugary and oily foods

Technology

External Sources of Opportunities

• new inventions and technology innovations

• Increased usage of smartphones to disseminate

  important information

• e.g., news, weather, traffic updates

Legal

External Sources of Opportunities

• differences in taxation and tariffs, which

  the company must take care of to sustain

  in the market; they should follow the

  trade laws to avoid legal consequences

Environment

External Sources of Opportunities

• may be physical (climate, natural resources, wildlife) or industry (competitors, customers,

  creditors, employees, government,

  suppliers)

• Increased usage of eco bags and environmental-friendly containers

Competion

• the act or process of trying to get or win something

1. Buyers

2. Potential new entrant

3. Rivalry among existing firms

4. Substitute products

5. Supplier

What are the 5 FORCES competing within the industry?

Opportunity Seeking

3 S’s of Opportunity

• Entrepreneurs are innovative opportunity _______.

• They have endless curiosity to discover new or different ideas and see whether these ideas will work in the marketplace.

Mind Frame

3 S’s of Opportunity: Opportunity Seeking

• positivity & optimism amid a crisis

Heart Flame

3 S’s of Opportunity: Opportunity Seeking

• surging passion to achieve one’s mission-vision

Gut Game

3 S’s of Opportunity: Opportunity Seeking

• intuition

• risk-taking

Business Opportunity

• a situation or market gap that can be exploited for potential profit.

Business Idea

• a concept for a new product or service.

Internal Sources of Opportunities

• source of opportunities that come from within an entrepreneur or a business.

• Education

• Work Experience

• Crisis or Challenges

• Hobbies

• Talents

What are the possible Internal Sources of Opportunities for an Entrepreneur

Opportunity Screening

3 S’s of Opportunity

• It is the process of cautiously selecting the BEST

  opportunity.

• This will depend on the entrepreneur’s internal

  and external intent which will address the compelling needs of the target market.

Opportunity Screening Matrix(OSM0

• aims to assist the entrepreneur in concretizing the evidence that the chosen opportunity (or

  opportunities) is well worth pursuing.

Relevance

12R’s of Opportunity Screening Matrix(OSM)

• _________ to vision, mission and objectives of the entrepreneur

• The opportunity must be aligned with what you have as your personal vision, mission, and objectives for the enterprise you want to set up.

Resonance

12R’s of Opportunity Screening Matrix(OSM)

• _________ to values

• Other than vision, mission, and objectives, the opportunity must match the values and desired virtues that you have or wish to impart.

Reinforcement

12R’s of Opportunity Screening Matrix(OSM)

• _____________ of entrepreneurial interests

• How does the opportunity resonate with the entrepreneur’s personal interests, talents, and skills?

Revenues

12R’s of Opportunity Screening Matrix(OSM)

• Sales Potential

• In any entrepreneurial endeavor, it is important to determine the sales potential of the products or services you want to offer.

• Is there a big enough market out there to grab and nurture for growth?

Responsiveness

12R’s of Opportunity Screening Matrix(OSM)

• ______________ to customer needs and wants

• If the opportunity that you want to pursue addresses the unfulfilled or underserved needs and wants of customers, then you have a better chance of succeeding.

Reach

12R’s of Opportunity Screening Matrix(OSM)

• Opportunities that have good chances of expanding through branches, distributorships, dealerships, or franchise outlets to attain rapid growth are better opportunities.

Range

12R’s of Opportunity Screening Matrix(OSM)

• products that may tap many markets

• The opportunity can potentially lead to a wide _____ of possible product or service offerings, thus, tapping many market segments of the industry.

Revolutionary Impact

12R’s of Opportunity Screening Matrix(OSM)

• If you think that the opportunity will most likely be the “next big thing” or even a game-changer that will revolutionize the industry, then there is a big potential for the chosen opportunity

Returns

12R’s of Opportunity Screening Matrix(OSM)

• It is a fact that products with low costs of production and operations but are sold at higher prices will yield the highest returns on investments. low costs, high price = highest returns

• Returns can also be intangible; meaning, they come in the form of high-profile recognition or image projection.

Relative Ease of Implementation

12R’s of Opportunity Screening Matrix(OSM)

• Will the opportunity be relatively easy to implement for the entrepreneur or will there be a lot of obstacles and competency gaps to overcome?

Resources Required

12R’s of Opportunity Screening Matrix(OSM)

• fewer resource > more resource

• Opportunities requiring fewer resources from the entrepreneur may be more favored than those requiring more resources.

Risks

12R’s of Opportunity Screening Matrix(OSM)

• business-dependent

• some opportunities carry more _____ than others, such as those with high technological, market, financial, and people risks.

Opportunity Seizing

3 S’s of Opportunity

1. Breakthrough innovation

   • establishes the platform on which future innovations are developed, usually patented

   • airplane, internet, computer, Bluetooth

2. Technological Innovation

   • technological advances of an existing product or service

   • WiFi, laptop, jet airplane

3. Ordinary innovation

   • originates from market analysis and

     technology pull

   • unlimited internet plans, wireless mouse

1. Idea Stage

2. Concept Stage

3. Product Development Stage

4. Test Marketing Stage

What are the 4 STAGES of Opportunity Seizing?

Customer Persona

• is like a fictional character that represents the market segment.

• It will help you recognize key traits that affect your customer's decision to buy your product, such as:

  • Gender, age

  • Motivation for buying

  • Influences

  • Where they shop

  • What media platforms they use

• Gender, age

• Motivation for buying

• Influences

• Where they shop

• What media platforms they use

What are the key traits that should be in your Customer Persona?

Product-Driven

Way to create value proposition

• Look at product features and strengths, how it can help customers, and how it stands out from competitors.

Products and Sevices

Way to create value proposition: Product-Driven

• What are the products and services you can offer your customer so they can get their job done?

Gain Creators

Way to create value proposition: Product-Driven

• What can you offer your customer to help them achieve their gains?

• How do you outperform the current solution

• How will adoption by your customer be easier?

Pain Relievers

Way to create value proposition: Product-Driven

• How can you help your customer to relieve their pains?

• What problems can you eradicate?

• How do you fix current underperforming solutions?

• How do you eliminate risks your customers fear?

• How do you get rid of current barriers?

Customer-Driven

Way to create value proposition

• Look at customers' needs and behaviors, and use your observations to develop a product around what they need and want

Gains

Way to create value proposition: Customer-Driven

• What would make your customer happy?

• What would make their life and the job-to-done easier?

• What do customer’s dream about?

Pains

Way to create value proposition: Customer-Driven

• What is annoying or troubling your customers?

• What is preventing them from getting the job done?

• What is keeping your customer awake at night?

Job-to-be-done

Way to create value proposition: Customer-Driven

• What is the job your customer wants to get done in their life or work

• What are the functional, social, emotional jobs your customer wants to get done

Business Plan

• identifies key areas of your business so you can maximize the time you spend on generating income

• helps you start and keep your business on a successful path

• a written document that defines the goals of your business and describes how you will attain those goals

• sets objectives, defines budgets, engages partners, and anticipates problems before they occur

• looked at by Key Investors before they provide capital

1. to attract new investors

2. to see if your business ideas will work

3. to outline each area of the business

4. to set up milestones

5. to learn about the market

6. to secure additional funding or loans

7. to determine your financial needs

8. to attract top-level people

9. to monitor your business

10. to devise contingency plans

Why do entrepreneurs need a strong business plan?

Mini Plan

Type of Business Plan

• Less emphasis on critical details.

• Used to test your assumptions, and concept, and measure the interest of potential investors.

Working Plan

Type of Business Plan

• Almost total emphasis on details.

• Used continuously to review business operations and progress.

Presentation Plan

Type of Business Plan

• Emphasis on the marketability of the business concept.

• Used to give information about the business to bankers, venture capitalists, and other external

  resources.

Overview of the Business

Essential Components of Every Business Plan

• Describes the business, including its products and services.

The Marketing Plan

Essential Components of Every Business Plan

• Describes the target market for your product and explains how you will reach that market.

The Financial Management Plan

Essential Components of Every Business Plan

• Details the costs associated with operating your business and explain how you will pay for those costs, including the financing you may need.

The Operations and Management Plan

Essential Components of Every Business Plan

• Describe how you will manage the core processes of your business, including the use of human resources.

Executive Summary

Common Part of a Good Business Plan

• introduction to your Business Plan

• CRITICAL: many individuals (including venture capitalists) only read the summary

• INCLUDES:

  • Introductory Paragraph

  • Subsequent Paragraphs

  • Visuals

Introductory Paragraph

Common Part of a Good Business Plan: Executive Summary

• Business name and location

• Brief explanation of customer needs and products or services

• Ways that the product or service meets or exceeds the customer's needs

• Introduction of the team that will execute the business plan

Subsequent Paragraphs

Common Part of a Good Business Plan: Executive Summary

• provide key details about your business, including projected sales and profits, unit sales, profitability, and keys to success

Visuals

Common Part of a Good Business Plan: Executive Summary

• help the reader see important information, including highlight charts, market share projections, and customer demand charts

Business Concept

Common Part of a Good Business Plan

• shows evidence that a product or service is viable and capable of fulfilling an organization's particular needs

• OUTLINE:

  • articulates the vision of the company, how you plan to meet the unique needs of your customers, and how you plan to make money doing that.

  • Discusses feasibility studies that you have conducted for your products.

  • Discusses diagnostics sessions you had with prospective customers for your services.

  • Captures and highlights the value proposition in your product or service offerings.

Market Analysis

Common Part of a Good Business Plan

• defines the target market so that you can position your business to get its share of sales

• OUTLINES:

  • Defines your market.

  • Segments your customers.

  • Projects your market share.

  • Positions your products and services.

  • Discusses pricing and promotions.

  • Identifies communication, sales, and distribution channels.

Management Team

Common Part of a Good Business Plan

• Organizational Structure: Highlights the hierarchy and outlines responsibilities and decision-making powers.

• Highlights the track record of the company’s managers.

• You may also offer details about key employees including qualifications, experiences, or outstanding skills, which could add a competitive edge to the image of the business.

• Working Structure: Highlights how your management team will operate within your defined organizational structure.

• Expertise: Highlights the business expertise of your management and senior team.

  • You may also include special knowledge of

    budget control, personnel management, public relations, and strategic planning.

• Skills Gap: Highlights plans to improve your company’s overall skills or expertise.

• In this section, you should discuss opportunities and plans to acquire new information and knowledge that will add value.

• Personnel Plan: Highlights current and future staffing requirements and related costs.

Marketing Plan

Common Part of a Good Business Plan

• details what you propose to accomplish, and is critical in obtaining funding to pursue new initiatives.

• Explains (from an internal perspective) the impacts and results of past marketing decisions.

• Explains the external market in which the business is competing.

• Set goals to direct future marketing efforts.

• Set clear, realistic, and measurable targets.

• Includes deadlines for meeting those targets.

• Provides a budget for all marketing activities.

• Specifies accountability and measures for all activities.

Financial Plan

Common Part of a Good Business Plan

• Translate your company's goals into specific financial targets.

• Clearly defines what a successful outcome

  entails. The plan isn't merely a prediction; it

  implies a commitment to making the targeted

  results happen and establishes milestones for

  gauging progress.

• Provides you with a vital feedback-and-control tool. Variances from projections provide early warnings of problems. When variances occur, the plan can provide a framework for determining the financial impact and the effects of various corrective actions.

• Anticipate problems. If rapid growth creates a cash shortage due to investment in receivables and inventory, the forecast should show this. If next year's projections depend on certain milestones this year, the assumptions should spell this out

• Important Assumptions

• Key Financial Indicators

• Break-even Analysis

• Projected Profit and Loss

• Projected Cash Flow

• Projected Balance Sheet

• Business Ratios

• Long-term Plan

Common Part of a Good Business Plan: Financial Plan

What are the elements of a Financial Plan?

Short-Term Forecast

Common Part of a Good Business Plan: Financial Planning Options

• Projects either the current year or a rolling 12-month period by month.

• This type of forecast should be updated at least monthly and become the main planning and monitoring vehicle.

Budget

Common Part of a Good Business Plan: Financial Planning Options

• Translates goals into detailed actions and interim targets.

• Should provide details, such as specific staffing plans and line-item expenditures.

  • The size of a company may determine whether the same model used to prepare the 12-month forecast can be appropriate for ______ing.

  • In any case, unlike the 12-month forecast, a ______ should generally be frozen at the time they are approved.

Strategic Forecast

Common Part of a Good Business Plan: Financial Planning Options

• Incorporates the strategic goals of the company into the projections.

• For startup companies, the initial Business Plan should include a month-by-month projection for the first year, followed by annual projections for a minimum of three years.

Cash Forecast

Common Part of a Good Business Plan: Financial Planning Options

• Break down the budget and 12-month forecast into more detail.

• The focus of these forecasts is on cash flow, rather than accounting for profit, and periods may be as short as a week to capture fluctuations.

Operations and Management Plan

Common Part of a Good Business Plan

• outlines how your company will operate.

• It includes:

  • Organizational structure of the company.

  • Expense and capital requirements to support the organizational structure.

Organizational Structure of the Company

Common Part of a Good Business Plan: Operations and Management Plan

• Provides a basis for projected operating expenses and financial statements.

• Because these statements are heavily scrutinized by investors, the organizational structure has to be well-defined and realistic within the parameters of the business.

• Expense and capital requirements to support the organizational structure.

Common Part of a Good Business Plan: Operations and Management Plan

• Provides a basis to identify personnel expenses, overhead expenses, and costs of products/services sold.

• These expenses/costs can then be matched with capital requirements.

Brand Name

• is a name, symbol, or other feature that distinguishes a seller's goods or services in the marketplace.

  Pyu-Pyu, Mozzang, OA: Ol Awt of the

  Universe Ice Cream, Nomi, On Top!

Purpose

Branding Strategies

• "Every brand makes a promise. But in a market in which customer confidence is little and budgetary observance is great, it’s not just making a promise that separates one brand from another, but having a significant purpose," (Allen Adamson).

Consistency

Branding Strategies

• The significance of ___________ is to avoid things that don’t relate to or improve your brand.

• aids in brand recognition, which fuels customer

  loyalty.

Emotion

Branding Strategies

• There should be an _______al voice, whispering "Buy me".

• Find ways to connect more deeply and _______ally with the customers.

Flexibility

Branding Strategies

• According to Kevin Budelmann, "Effective identity programs require sufficient consistency to be identifiable, but sufficient variation to keep things fresh and human,” so if the old tactics don't work anymore, don't be afraid to change.

Employee Involvement

Branding Strategies

• It is equally important for your employees to be well versed in how they communicate with customers and represent the brand of your product.

Loyalty

Branding Strategies

• At the end of the day, the emphasis on a positive relationship between you and your existing customers sets the tone for what potential customers can expect from doing business with you.

Competitive Awareness

Branding Strategies

• Take it as a challenge to improve your branding strategy and craft a better value for your brand.

Marketing mix

• a business mechanism used for effective

  marketing of the products.

• It is a set of controllable and connected variables that a company gathers to satisfy a customer better than its competitor.

Product

7 P’s of Marketing and Branding

• refers to any goods or services that is produced to meet the consumers, wants, tastes and preferences.

• Goods can be categorized into business or

  consumer while services can be divided

  into customer or professional.

Consumer Goods

7 P’s of Marketing and Branding: Product

• direct demand

• purchase generally of small value

• there are a number of middlemen in the market

• reputation of the seller/manufacturer may not always be given importance in buying consumer goods