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ESSENTIALS OF ENTREPRENEURSHIP 


UNIT 1: ENTREPRENEURIAL THINKING AND DEVELOPING BUSINESS PLAN


MODULE 1: BECOMING AN ENTREPRENEUR


THE ENTREPRENEURIAL MINDSET

Defined as a way of thinking, reasoning, and having a perspective on seizing an opportunity, adopting a holistic approach, and building on leadership.


ENTREPRENEUR-usually described as an individual who establishes a business to make a profit, runs it even through the risks, and enjoys most of the rewards. It is also a person or a group who creates something new such as a new idea, a new product or service, or new possibilities. 

NOTE: Other individuals who are not entrepreneurs can also think and act in an entrepreneurial manner.


ENTREPRENEURSHIP- Is a proactive process of developing a business venture to make a profit 

  • It involves seeking opportunities for market

  • Establishing and operating a business out of the opportunity 

  • Assessing risks and rewards through close monitoring of operations


SOCIETAL AND ECONOMIC BENEFITS OF ENTREPNEURSHIP


  • Produces more jobs that equate to an increase in national income— it creates job and wealth

  • Amplifies economic activities of different sectors of society

  • Introduces new and innovative products and services

  • Improve people’s living standards

  • Disperses the economic power and creates equality

  • Controls the local wealth and balances regional development 

  • Reduces social conflicts and political unrest 

  • Elicits economic independence and capital formation


ENTREPRENEURS HAVE COMMON COMPETENCIES:


  • 1st, they constantly seek opportunities and act on them. They always look for business prospects or ways to grow and improve themselves as well as others. They continue to search for business prospects and growth.


  • 2nd, they recognize and prepare for risks and uncertainties. They try to figure out potential risks and prepare for them. But they are also aware that they cannot possibly foresee all types of uncertainties

  • 3rd, they maintain flexibility or resiliency. When things suddenly go wrong or do not happen as expected, they look for ways to remedy the problem

  • Lastly, they develop and maintain social relations and networks. They value human relationships in businesses through respect, trust, and care for other people.




DEEPER INTO THE CORE COMPETENCIES OF ENTREPRENEURS

Their core competencies lie in their set of skills. These are patterns of how they think and act, which are essential habits.

Entrepreneurship is not a fixed formula of traits but is a lifelong skill that is continually learned and practiced.


HERE ARE THE CORE COMPETENCIES OR MOST ESSENTIAL SKILLS THAT YOU MUST LEARN AND PRACTICE IN BECOMING AN ENTREPRENEUR:


THE SKILL OF REFLECTION- reflection is examining how you observe, think, feel, react, reason out, make assumptions, draw conclusions, evaluate outcomes, and act upon what you believe. It makes you aware of your thoughts, feelings, and what your bodily senses tell you. 

NOTE: The skill of reflection is not commonly practiced, It is often taken for granted by most people despite its benefits. Reflection skills are essential for an entrepreneur to effectively discern what is going on around him or her and to ponder how he or she could better respond to various stimuli.


SELECTIVE PERCEPTION- It’s the tendency for individuals to pay attention to things in their environment that are consistent with their own expectations or assumptions

NOTE: Selective perception may cause you to commit a misperception or a bias in your observation


THE SKILL OF EXPERIMENTATION- Involves taking a concrete action to test an approach or several possible approaches. Experimentation is a learning-by-doing approach. You go through the experience of testing things out, then gain knowledge from these experiences, and finally form the basis for developing on your next attempt or experiment. You take action to test or try out a given strategy, product, or practice in a real-life situations

  • EXPERIMENTATION- Is trying out an approach or a solution and then learning from it. You may get overwhelmed when you think of all possible solutions and approaches and not act on any of them (often called “ANALYSIS PARALYSIS”)

NOTE: Entrepreneurs never get tired of experimenting with new ideas, processes, and tactics even though it could take a long time for them to see a favorable outcome, which could sometimes be totally unexpected from what was originally conceived


THE SKILL OF CREATIVITY- This allows you to innovate so as to differentiate your product or service. In that way, you secure your competitive advantage over your rivals or competitors. Cultivating the skill of creativity will be further discussed in the succeeding topic on design thinking

  • CREATIVITY- being open to new perspectives or other ways of looking at things that are better or of higher quality. It is about unleashing your ideas, concepts, or approaches that have not been tried before, or perhaps not obvious to many

  • STEVE JOBS (APPLE CO-FOUNDER)- said, “Innovation distinguishes between a leader and a follower.” Create individuals innovate because they usually want to make things better for other people’s lives

NOTE: Innovation does not always mean a breakthrough or a radical invention. Innovation can also be incremental or made in small ways, which eventually would give you an edge over other products or service offerings. Creativity and Innovation require leadership because one must be willing to go into a path that has not yet been tried 


THE SKILL OF EMPATHY- This skill is important to understand the actual conditions of other people, to know their real needs, and to respond to those unmet needs. Empathy skills enable you to tailor your product or service offerings to the needs and wants of your customers. This also helps you to become more attuned to what other entrepreneurs are going through so that you could better adapt or stimulate their experiences to learn from them

  • EMPATHY- Is the ability to put yourself in the shoes of another person to understand how that other person thinks and feels, enabling you to better relate to that person


THE SKILL OF PLAY- Involves injecting some fun, excitement, and joy in what you are doing as you go through your tasks. It is about cultivating a sense of wonder and enjoyment in the midst of performing your duties. This skill helps calm your mind, maintain your focus and improve your well-being. It is about appreciating and developing a sense of fun and adventure as you pursue your goals


CREATIVITY THROUGH DESIGN THINKING

Design thinking will enable you to learn the approach to unleash and develop your creativity. Design thinking is defined as a thinking process commonly used by designers to solve certain problems related to products and services. It involves exploring alternative features and ways of doing things. It is creating something new or something better than the ones currently available to better satisfy the users or costumers need. Design thinking, as an approach will guide you in exploring different ways to make your product or service satisfying to your costumers to make them come back to buy again from you (called repeat purchases). This will motivate you to create a better product or service and make you run your business more efficiently and systematically


AS AN APPROACH TO CREATIVITY OR INNOVATION DESIGN, DESIGN THINKING INVOLVES THE FOLLOWING PRINCIPLES OR PROCESSES:


  1. EMPATHIZE- The starting point of your business venture should be human needs. Design thinking, therefore is human-centered. You need to view your potential product or service offering from the perspective of the persons who will consume or use it in their daily lives

  2. DEFINE- Your chosen business should inspire you to identify and solve a problem. It should also serve as an opportunity to help you identify the needs and preferences of people. Identifying a specific need for a particular group is called a design challenge. You have to think of how to solve a specific problem that they have, or to respond to what they felt they need to improve their living conditions.

  3. IDEATE- This phase of design thinking process involves generating and developing new ideas to address the needs of people. This is through collaborative discussion among groups of people from different backgrounds on how to solve their identified problem in the design challenge

  4. PROTOTYPE- This phase of the design thinking process involves creating a sample product or service offering that incorporates features and qualities desired by the target users or costumers

  5. TEST- You will now try out or sell the sample product or service to an initial group of users or costumers. Gather their feedback about their experiences un using the prototype product or service that you created


CAREERS IN ENTREPRENEURSHIP

Entrepreneurship is not just about individuals establishing business start-ups, but it is also referring to those who think like entrepreneurs


In general, entrepreneurship may be classified into 2 types: 


  1. COMMERCIAL ENTREPRENEURSHIP- Refers to income-generating enterprises that are established mostly for the purpose of generating profits. It is accountable mainly to the owners or shareholders of the business entity

  2. SOCIAL ENTREPRENEURSHIP- Refers to income-generating enterprises that are established with more emphasis on social impact for the poor and other disadvantaged groups social enterprise accountable to multiple stakeholders such as the beneficiaries, volunteer groups and partner institutions


THE FOLLOWING ARE THE TYPES OF ENTREPRENEURIAL CAREERS:


  1. CORPORATE ENTREPRENEURSHIP- Also called “ intrapreneurship” involves creating new products, ventures, or organizational renewal within large organizations. It is carried out by employees and managers working in their own departments to create and test innovative product or processes within their organization. “Inside entrepreneurs” aim to create something with value, be it a product, a process, or an initiative. Because entrepreneurship is a mindset, those in the corporate world may also be entrepreneurs.


  1. START-UP ENTREPRENEURSHIP- Involving the creation or setting up of a new small business. The start-up entrepreneur marshals resources to seize a business opportunity to offer a product or a service for the purpose of generating a profit (as a commercial enterprise) or generating both profit and creating a social impact (as a social enterprise)


  1. BUYING A FRANCHISE- Involves a franchise that minimizes some business risks for an entrepreneur. Franchising involves a plan of distribution where an individually owned business is run as a part of large chain. The products and services offered are standardized

  • FRANCHISE- A license purchased by an entrepreneur allowing one to trade  under the name of that established business 


  1. BUYING A SMALL BUSINESS-  Is to buy an existing small business. There are certain advantages to buying an existing business. For instance, it is the only way to get a good location in the area where you want to run a business. You can also lessen some of the anxieties, time, and work that go into the startup phase of developing the business. And often, you save some money as you are able to make use of the seller’s invested capital


  1. SOCIAL ENTREPRENEURSHIP- Uses the business methods of a commercial enterprise to generate profit but is more concerned in helping social causes or improving the welfare of disadvantages groups, such as the unemployed, farmers, fisherfolk, urban poor, and others. Social Entrepreneurship is engaged in a process of social change by acting on the important social needs, and its financial benefits are not directed to benefit the entrepreneur but to the sustainability of the underprivileged groups