Entrepreneurship

Jack Ma or Ma Yun

– is a Chinese business magnate, investor, and philanthropist
– he is the co-founder and former executive chairman of Alibaba Group, a multinational technology conglomerate.

September 10, 1964

When was Jack Ma born?

Alibaba Group

a Chineses multinational technology conglomerate

Entrepreneurship

– process of creatively converting ideas into goods and services which can be marked to obtain profit and to contribute in improving the people’s quality of life.

– designing a business
– launching a company
– running a new organization

Entrepreneurship (3)

• Innovation
• Opportunity seeking and exploitation
• Resource mobilizing
• Encountering risks and uncertainties
• Economic and personal rewards

Common Elements of Entrepreneurship

1. Creates employment
2. Develops new market
3. Increase innovation
4. Generates new sources of materials
5. Stimulates investment interest
6. Improves the quality of life
7. Serves as a role model
8. Brings social benefits to people
9. Utilizes and mobilizes indigenous resources
10. Provides more alternatives for consumers

Role of Entrepreneurship and Entrepreneurs in Economic Development and Society

1. Personal Competencies
2. Interpersonal Competencies
3. Entrepreneurial Competencies

Three Levels of Competencies

Personal Competencies

– it refers to the key characteristics that a successful entrepreneur should have in order to be successful.

Interpersonal Competencies

– the appropriate and effective management of interaction among people.

Entrepreneurial Competencies

- means the area of expertise, skills, ability, efficiency, updated technology regarding organization and business processes of a firm.

Core Competencies

– a unique ability that a company acquires.
– resources and/or strategic advantages of a business.
– what the company does best.

1. Business Consultant
2. Sales
3. Research and Development
4. Not-for-profit fundraiser
5. Teacher
6. Talent Recruiter
7. Business Reporter

Career Options

Business Plan

– is a written document that describes your business.
– it covers objectives, strategies, sales, marketing and financial forecasts.

1. Executive Summary
2. Market Analysis
3. Company Description
4. Management and Organization
5. Marketing and Sales Management
6. Product or Service Line
7. Request for Funding
8. Financial (Statements)
9. Appendix

9 Essential Parts of Business Plan

Executive Summary

– is an overview of the entire business plan.
– it summarizes a longer report or proposal or a group of related reports.

Market Analysis

– is basically a business plan that presents information regarding the market in which you are operating in.

• Description of the Industry
• Description / Information of Target Market
• SWOT Analysis

Parts of Market Analysis

Strengths

– are based on internal factors and viewed as helpful to your organization. What are your competitive advantages?

Weaknesses

– are based on internal factors and viewed as harmful to the organization. What aspects of the business are holding you back?

Opportunities

– are based on external factors and viewed as helpful to your organization. What macrotrends are creating opportunity for you?

Threats

– are based on external factors and viewed as harmful to the organization. How can your weaknesses create a threat to your objective?

Strengths
Weaknesses
Opportunities
Threats

SWOT

Company Description

– is a professional introduction of the business and aims to inform the audience about its products and services.

• Name of The Business (Company Name)
• Target Market / Customers
• Product or Services Provided
• Business Goals
• Business Location
• Business Operation
• Competitive Advantage/s
• Business Structure

The Company Description should include:

Name of The Business (Company Name)

– explain where did you get the name of your business and include a short business description.

Target Market / Customers

– describe your specific target customers.

Product or Services Provided

– describe your product/s or services.

Business Goals

– identify your Vision, Mission and Objectives.

Business Location

– state your business address and describe your location.

Business Operation

– specific date to implement/open your business.

Competitive Advantage/s

– explain why you are set apart from the competition.
– what is your edge to the other company?

Business Structure

– what type of business structure will you form?

Management and Organization

– details about ownership of company, as to how these individuals fit into the organizational structure.

• Organizational Chart / Structure
• Job Description or the Roles and Responsibilities (Position)

Parts of Management and Organization

Organizational Chart / Structure

– includes the full name, position and pictures of the members.

Job Description or the Roles and Responsibilities (Position)

– a written narrative that describes the general tasks, or other related duties, and responsibilities of a position.

Marketing and Sales Management

– describe the marketing strategy and how you intend to drive sales.
– 7P’s of Marketing Mix

Product
Price
Place
Promotion
People
Physical Evidence
Process

Parts of Sales and Marketing Management:

Product or Service Line

– discusses your product or service, why they're needed by your market, and how they compete with other businesses selling the same or similar products and services.

Request for Funding

– is for loan that requires collateral, document what you have to offer.
– explain how this new funding would help you reach your goals.

Financial (Statements)

– are formal records of the financial activities and position of a business, person, or other entity
– financial statements share information to collectively present financial information.

Appendix

– is the place to include any additional documents that you want to use to give your reader a feel for your product, marketing, services and so on.

Marketing

– creating and accumulating customers.

Product

– it is the tangible goods or intangible service that the enterprise offers to its customers in order to satisfy their needs and to produce their expected results. Identified by brand names.

Marketing Mix

– foundation model for business
– talks about the product, marketing strategy.

Breakthrough Products

– offer completely new performance benefits.
– marketing breakthrough products need a higher level of customer education and orientation.
– newly invented, give customers education & awareness.

Differentiated Products

– try to claim a new space in the mind of the customer different from the spaces occupied by existing products.
– existing products given a new purpose, offers variation.

Copycat Products

– a product that has been designed, branded or packaged to look exactly like that of a well-established competitor; a cheap imitation.

Niche Products

– do not intend to compete directly with the giants. Product with lower reach, lower visibility, lower prices, and lower top of mind. Brandless.

Place

– best access to customers

1. Image and location conditions.
2. Exact fit to target customers.
3. Clustering of competitor establishments.
4. Future area development.
5. Fiscal and regulatory requirements.

Final choice of location:

Geography Determinants

– prefer places where there is a large concentration of target customers.

Atmosphere Determinants

– it refers to the state or condition of the environment, which affects the mind and mood of customers, either in a positive or negative way.

People

– are the ultimate marketing strategy; competent employees

1. To create customer awareness.
2. To arouse customer interest.
3. To educate customers as they evaluate their buying choices.
4. To close the sale and deliver the products.

Marketing efforts of people are organized at four levels:

Promotion

– is the explicit communication strategy adopted by an enterprise to elicit the patronage, loyalty, and support from its customers and significant stakeholders. (Examples: Advertisements, Social media, Free tastes, Sales, Discounts, Flyers, Tarpaulins, etc.)

Price

– business objectives set by the enterprise.
– major factor for the customer in buying a product.

Process

– step by step procedure to achieve an outcome. Procedure of product and how to avail the product.

Physical Evidence

– in a marketing comprises tangible services/material comfort for consumers. Ex. Restaurant Ambience, Airlines, Websites

1. Product/Services – describe your products/services.
2. Price/Fees – estimated price of your product/services.
3. Promotion – identify the different promotional strategies.
4. Place/Access – distribution options are there for customers to experience the products/services. (ex. Online, in store, etc.)
5. People – people inside the organization (employees).
6. Process – step by step procedures in creating your product/services. Include pictures and citation.
7. Physical Evidence – physical settings of the company or store. (ex. Impressive buildings, well trained staff, ambiance, etc.)

Format for 7P’s:

Product/Services

– describe your products/services.

Price/Fees

– estimated price of your product/services.

Promotion

– identify the different promotional strategies.

Place/Access

– distribution options are there for customers to experience the products/services. (ex. Online, in store, etc.)

People

– people inside the organization (employees).

Process

– step by step procedures in creating your product/services. Include pictures and citation.

Physical Evidence

– physical settings of the company or store. (ex. Impressive buildings, well trained staff, ambiance, etc.)

Financial Statements

– provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.

Revenue

– is the income that a business has from its normal business activities, usually from the sale of goods and services to customers.

Appendices / Appendix

– used to provide supporting documentation for key components in your business plan, such as financial statements or market research.

Some of the documents that might include in the Business Plan Appendix:

• Supplementary Information
• Legal Documents
• Organizational and Personnel Details
• Additional Financial Documents
• Achievements, Testimonials, and News Stories

Supplementary Information

– you can include additional information to support and expand whatever you have mentioned in other sections of your business plan.

- Charts, graphs, and tables
- Marketing material
- Market research
- Competitor information
- Illustrations of products
- Property designs

Examples of Supplementary Information

Legal Documents

– you can include documents that are relevant or act as evidence of the information or claims present in your business plan.

- Incorporation papers
- Licenses, permits, patents, and trademarks
- Important contracts
- Pending contracts
- Leases and rental agreements
- Vendor/supplier agreements
- Equipment documentation

Examples of Legal Documents

Organizational and Personnel Details

– include your organizational process and details of the people involved in your company.

- Organizational chart
- Executive members’ resume
- Affiliates such as attorneys, accountants, etc.
- Details of your key employees and their roles

Examples of Organizational and Personnel Details

Additional Financial Documents

– include some exclusive documents for your investors and banks.

- List of assets within the business
- Credit history
- Tax returns
- Spreadsheets of financial projections

Examples of Additional Financial Documents

Achievements, Testimonials, and News Stories

– include information that advocates your company’s credibility.
- Media and press clippings
- Customer or expert endorsements
- Awards and achievements

4M’s

Operations safely carried out with all task organized in the best-known sequence and by using the most effective combination of resources. As a result, the production process will be faster.

Abbreviation of 4M’s

• Manpower
• Machine
• Method
• Material

Manpower

– what skills
– how many
– how the position adds value to the customer and to the company
– must be trained and performance observed: there is no such thing as “one and done” when it comes to training.

Machine

– state-of-the-art machines and equipment facilitate the processing of raw materials into finished products. In some public and private institutions, machines record, sort, and interpret volumes of data in real time, fast-tracking the completion of multiple transactions.

Method

– refers to the system and step by step process in the business.
– the art of doing
– set of procedures and instructions

Material

– a steady and sufficient supply of quality raw materials to ensures the continuous production of goods and eventually, their sale to end users.

Market Research

– is an organized effort to gather information about target markets or customers.
– it is a very important component of business strategy.

1. Why
2. What
3. Which
4. Who
5. When
6. Where
7. How

7 Basic Questions of Market Research

Market Research Methodologies

– the gathering of important and relevant market information.

a. Primary Research: Surveys, Focus Groups, Interviews, Observation, Experiments, Field Trials

b. Secondary Research: Articles, Journals, Websites

Types of Market Research Methodologies

1. Sales Data Mining
2. Focus Group Discussions
3. Observation Technique
4. Survey Research
5. Customer Profiling

Scientific Approaches:

Sales Data Mining

– is the process of sorting through large data sets.
– process used by companies to turn raw data into useful information.

Focus Group Discussions

– involves gathering people from similar.
– backgrounds or experiences together to discuss a specific topic or interest.

Observation Technique

– is a social research technique that involves the direct observation of phenomena in their natural setting.

Primary Research

– going directly to participants; collecting data directly.

Secondary Research

– using existing information or data as references.

Demographics

– age, gender, income

Psychographics

– behavior, preferences

Technographics

– expertise on the product