Entrepreneurship

LET Competencies:
Identify Entrepreneurial Competencies
Explain parts of the business plan
Analyze production and marketing
processes
Explain the basic principles of office
and business management
Observe business ethics

Personal Entrepreneurial Competencies

(PECs) refer to the desired traits, which enable an
entrepreneur to do what is expected of him/her
and succeed in business.

Three Clusters

Achievement Cluster
Planning Cluster
Power Cluster

1. Opportunity-seeking
Perceives and acts on new business
opportunities
Seizes unusual opportunities to obtain

financing, equipment, land,

workspace or assistance.
2. Persistence
Takes repeated or different actions to overcome
obstacles
Makes sacrifices or expends extraordinary effort to
complete atask
Sticks to own judgment in the face of opposition or
disappointments

3. Commitment to work contract

Accepts full responsibility for problems encountered
Helps own employees to get the job done
Seeks to satisfy* the customer

4. Risk-taking
Takes calculated or studied risks
Prefers situations involving moderate risks

5. Demand for quality and efficiency

Always strives to raise standards
Aims for excellence
Strives to do things better, faster, cheaper

6. Goal-setting
Sets clear and specific short-term objectives
Sets clear long-term goals

7. Information-seeking
Personally seeks information on clients, suppliers,
and competitors
Seeks experts for business or technical advice
Uses contacts or networks to obtain information

8. Systematic planning and monitoring

Develops logical, step-by-step plans to reach goals
Looks into alternatives and weighs them
Monitors progress and shifts to alternative strategies
when necessary to achieve goals.

9. Persuasion and networking

Employs deliberate strategies to influence or persuade
others
Uses business and personal contacts to accomplish
objectives.

10. Self-confidence
Believes in self
Expresses confidence in own ability to
complete a difficult task or meet a challenge.

Business Plan: vital tool for any business; a

document that is a valuable tool that can act
as a blueprint for business; and essential for
getting a business loan.

Parts of the Business Plan:

1. Letter of transmittal
it officially introduces your business plan to reader
explains reason for writing the plan
gives a title to plan or business name
outlines major features of interest.

2. Title Page
provides identifying information about you and
proposed business
name, address, phone number of business and same
information about yourself -date plan was
finalized/submitted

3. Table of Contents
Lists major headings and subheadings-provides a
quick overview

4. Executive Summary and Fact Sheet

considered the most important part
it captures attention of reader
it should concisely explain current business status,
describe products and services and their benefits to
customers
provide overview of objectives, market prospects,
and financial forecasts
if seeking financing, it should state the amount
needed, explain how money will be used and state
benefits to prospective lender/investor

Fact Sheet
a separate page at back of executive summary

1. Company Name
2. Location and Telephone /Fax/ Internet
3. Type of business and industry
4. Form of Business (sole proprietor,
partnership, corporation)
5. Principal product or service line
6. Registered patents, trademarks
7. Number and name of
founders/partners/shareholders
8. Length of time in business
9. Current and/or projected market share
10. Funds invested in the business to date
and their source
11. Additional Financing required

5. (BODY OF PLAN)
the longest component-a detailed story of business
proposition
should be broken down into major divisions using
headings and each division divided into sections with
subheadings

A. COMPANY AND THE INDUSTRY (Include

vision, mission statement and values)
Background-date started, form of
organization, location, founders, how key
products/services chosen, success to date
Current Situation-how you have identified
market opportunity, assessed the
competition and developed some unique
factor that will make your business stand out
Future Plans-goals and ambitions for
business strategy to achieve goals

THE INDUSTRY
Principal Characteristics-current status
of industry-size-total sales-typical
standards, seasonal patterns
Major Participants-who, market share.
strength/weakness -how will you
compete
Industry Trends -growing? Stable?
What will happen in 5/10 years -any
economic/social technological
regulatory trends

 B. PRODUCT/SERVICE OFFERING

Description
describe the product/service you plan to sell in detail
explain unique characteristics or advantages
indicate stage of development of product
include pictures if possible

Potential
outline market opportunity and how to take advantage
of it
describe key success factors and how you will exploit
them

C. MARKET ANALYSIS
describe the total market for
product/service
what segment is the market broken
into
explain the segment you will go
after and the share you will reach

 Information is based on:

1. Market studies from research
companies/government agencies
2. Statistics
3. Information from trade associations
and publications
4. Surveys/ informal discussions with
dealers, distributors, sales reps,
customers and competitors

Target Market and Customers

identify primary target market
break this target into groups with common identifiable
characteristics: Demographics/Geographic
Who are they? What are the primary bases for
purchase decisions?
How can product service be used? What benefit is
there to purchase your product versus competitions?
Identify and major buyers

Market Size and Trends

estimate size of current total market-identify trends

Competition
identify principal competitors
access services and products of each
major competitor (price, quality, service
support, warranties, other features)
what market share does each competitor
have
Estimated Sales and Market Share
estimate share of each segment of
market -use a table

D. MARKETING PLAN
describes what has to be done, when, how and
who as far as sales strategy, advertising,
promotion pricing policy, channels of distribution
Pricing
summarize the financial characteristics of your
business and industry at large
explain typical gross and net margins for
products/services
discuss prices you plan to charge for various products
services
detail any product mark up
indicate how long it will take to break even

Sales and Distribution

indicate methods used to sell and distribute
product/service

Advertising and Promotion

Describe program you plan to use to create awareness
What consumers are you seeking?
What media?-radio, television, newspapers?

How much will be spent and where?

What plans do you have to get free publicity?

Service and Warranty Program

indicate warranty and service plans and how they
compare to competitors

E. PRODUCTION/OPERATIONS PLAN
outlines plant location, facilities needed, space
requirements, equipment and labor
requirements
Location
describe planned location (advantages &
disadvantages) in terms of cost, proximity to
customers access, zoning

Facilities and equipment

describe factory space/office space/selling
space
Lease? Own?

Manufacturing Plans and Costs

breakdown total costs into raw material,
parts, labor, overhead
inventory requirements

Labor
describe number of employees and their
qualifications
How much will each be paid?

F. MANAGEMENT TEAM
Description of Management Team/Directors
outline duties and responsibilities of each
member-a brief resumequalifications/experience

Management /Directors Compensation

List names. titles, salary

Shareholders
indicate shareholders and number of
shares/% and amount paid for shares
Professional Advisors
names and addresses of all advisors
and fees paid to each

G. IMPLEMENTATION SCHEDULE AND

RISKS ASSOCIATED
Milestones
Summarize significant goals-what still
needs to be done?
Who will do these things? When?

Schedule
develop a schedule of significant
events and priority for completion

Risks and Problems

summarize problems to date and how
resolved
identify risks and how they will be dealt
with

H. YOUR FINANCIAL PLAN

Funding requested

indicate type/amount of funding needed

how will money be used
give overview of financial structure of company
Outline proposed terms of investment

Current Financial Statements

Financial Projections
1. Profit and loss forecasts
2. Pro forma Balance Sheets
3. Projected cash flow statements
4. Breakeven analysis

6. Appendixes (Back-up information)

product specifications/photos
detailed resumes of management
prospective customer list
names of suppliers
job descriptions of management
team
consulting reports/surveys
legal documents
letters of reference
relevant trade/journal/newspaper
articles

Production Process: responsible for

creating goods and services offered by the
business organization. There are three
main parts to the production process as
can be seen in the diagram:

 A business organization must purchase all the

necessary inputs and then transform them into the
product (outputs) that it wishes to sell.
How well-organized the organization is at
undertaking this transformation process will
determine its success.
This is known as the productive efficiency of a firm
and it will want to be as efficient as possible in
transforming its inputs into outputs (i.e. using the
minimum number of inputs as possible to achieve a
set amount of output). This will reduce the cost per
unit of production and allow the firm to sell at a lower
price.

 Ultimately, the objective of the

production process is to create goods
and services that meet the needs and
wants of customers. The needs and
wants of customers will be met if a
business can produce the correct number
of products, in the shortest possible time,
to the best quality and all at a competitive
price.

Marketing Process: consist of selling and/or

promoting the goods or services of the
organization
The Marketing Process
Situation Analysis: viewed in terms of the
external environment and internal analysis
of the business organization itself;
identification of opportunities to satisfy
unfulfilled needs; understanding own
capabilities and the environment in which it
is operating.

 Situational Analysis Frameworks

5 C Analysis: company, customers, competitors,
collaborators, climate.
PEST Analysis: for macro-environmental
political, economic, societal and technological
factors. A PEST analysis can be used as the
climate portion of the 5 C framework
SWOT Analysis: strengths, weaknesses,
opportunities and threats for the internal and
external situation; used to condense the
situation analysis into listing the most relevant
problems and opportunities and to assess how
ell the business organization is equipped to deal
with them.

 Marketing Strategy: pursuing for the

opportunity of the identified unfulfilled
needs.
Segmentation: identification of portions of the
market that are different from one another; it
allows the business organization to better
satisfy the needs of its potential customers (
needs are identifiable, accessible, substantial,
unique and durable/stable)
Targeting (target market selection)
Value proposition to the target market

 Marketing Mix Decisions: detailed tactical

decisions
Product development: specifying, designing
and producing the products/services.
Pricing decisions
Distribution contracts
Promotional campaign development

Implementation and Control: marketing plan

has been developed and the product has been
launched, results of the marketing effort should
be monitored closely to accommodate market
changes

Basic Principles of Office and Business

Management
Establish office and business management
routines and stick to them.
Set up clearly delineated responsibilities.
Keep updated business records.
Take a walk through the office and have a sit.
Schedule the scut work (trivial, unrewarding,
tedious, dirty, and disagreeable chores).
Delegate and outsource.
Make business planning a priority

Business Ethics
Form of applied ethics that examines ethical
principles and moral or ethical problems that arise
in a business environment. It applies to all
aspects of business conduct and is relevant to the
conduct of individuals and business organizations
as a whole.
Knowing the difference between right and wrong
and choosing to do what is right.

Ethical Principles
Honesty: saying things that are false,
deliberately misleading consumer; open and
free to share information about the
product/service.
Promise-keeping: keeping commitments;
true to deliver the expected product/service.
Fairness: create and follow a process and
achieve outcomes that a reasonable person
would call just.

 Respect for others: open and direct in

communication, and receptive to influence;
honor and value the abilities and contributions
of others; embrace the responsibility and
accountability for every action.

Compassion: maintain an awareness of the

needs of others and act to meet those needs
whenever possible; minimize harm whenever
possible; and act in ways that are consistent
with commitment to social responsibility.
Integrity: live up to ethical principles, even
when confronted by personal, professional and
social risks, as well as economic pressure.