ENTREPRENEURSHIP - an individual who plans, organizes, and

operates a business, taking grater than

CONCEPT OF ENTREPRENEURSHIP
normal financial risks, psychic and social
- first established in 1700s
risks.
- most people think it means putting up
- willing to work long hours to ensure that
business
every part of the business is running
Economists- believe that is it more than simply
smoothly
starting it
- someone who creates or looks for ideas for
Entrepreneur- someone who is willing to bear
business, which is then implemented to
and take risk of creating a new venture if there
become a business
is a substantial potential for growth and profit
- an entrepreneur needs to have passion
- entrepreneur’s role is to be the innovator of
NOTE: Implementation is the key
new products and services that delivers
PRODUCTS- created because of a birth of an
customer’s needs and demands
idea, which is then turned into either a physical
Joseph Schumpeter (1883-1950)- studied how
or non-physical product
entrepreneurs are motivated to look, innovate
Theodore Roosevelt- said that “It’s hard to fail,
and create new and better ways of doing
but it is worse never to have tried to succeed.”
business in 20th Century
CELEBRITY ENTREPRENEURS
Peter Drucker (1990-2005)- a business expert
1. Jody Sta. Maria- Rue Borbon and Happy
who described an entrepreneur as someone
Barn Shake
who searches for things to change, responds to
2. Karylle – Center Stage and Family KTV Bar
it by researching and taking new ideas and
3. Jolina Magdangal- Memory Lane Country
trends, and exploits these charges as an
Diner
opportunity to create and deliver something
4. Angel Locsin- Fuel Up Bar
better
5. Lucy Torres- Gomez- Felix Restaurant
Entrepreneurship- necessary component in
6. Marvin Agustin- Sumo Sam and Johnny
encouraging economic growth
Chow
- gives employment opportunities to the
ENTREPRENEURIAL COMPETENCIES
increasing work force and helps resolve
Entrepreneurial Competencies- fundamental
poverty in society
characteristics and traits possessed by
WHAT IS ENTREPRENEURSHIP?
successful entrepreneurs that made them
ENTREPRENEURSHIP- the process of creating
succeed in their chosen enterprise
something new whether be it a product or
1. Initiative- look for new and better ways of
service that brings value by devoting the
doing things, getting ahead of others and
necessary time and effort considering the
aims to lead in their chosen industry or line
financial, psychic and social risks and receiving
in business
the resulting rewards of monetary and personal
Examples:
satisfaction and independence
 Greeting and thanking customers who are
- requires and demands a lot of hard work
visiting your shop
ENTREPRENEUR/ BUSINESSMAN- someone has
 Extending and serving more customers by
to be able to create something new that can
opening outlets in new areas
offer value to its chosen market to be able to
 creating new products and services by
get something in return and convert it into
proactively researching what most market
profitable business
needs
2. Sees and acts on opportunities- open your
eyes for new opportunities and most
importantly acting on them
Examples:
 Apple started as company that manufacture
computers but they expanded their
business by creating iPads, iPhones and
even iTunes
 Jollibee started as an ice cream parlor but
found out that Filipinos wanted burgers
offered by Mcdo so they created their own
3. Persistence- to be able to persist in aiming
and taking actions for the firm’s growth by
getting the greatest number of customers
Examples:
 KFC new products come every three
months and test how the customers accept
it
 Samsung getting head to head competition
with Apple in providing electronics and
technology products
4. Information Seeking- make sure to get the
appropriate and significant information
Examples:
 Augmented realities being introduced
through Virtual Reality (VR)
 Consulting industry experts in getting
relevant and up to date information
 Seeking information or asking questions to
clarify customer’s needs and concerns
 doing market research, analysis or
investigation
5. Concern for Work Quality- always strive to
improving and enhancing the products or
service to deliver the best for consumers
Examples:
 Strong yearn to produce and sell a top or
best quality product or service
 Jollibee having a standard from
measurement of every ingredient up to
number of minutes a meal should be served
6. Commitment to Work Contract- always
have in mind that company’s reputation
builds by delivering great products and
service to customers and delivering on time
80/20 Rule- Pareto Principle; states that the last
20% of the task needs the 80% effort
Examples:
 doing all extraordinary effort to complete a
job to satisfy customers
 accepting full responsibility for problems
and therefore ready to provide resolution
 having a customer service hotline for
customers complaints
 real concern for satisfying customers
7. Efficiency Orientation- always find ways of
doing things more efficiently and effectively
with fewer resources and at lower cost as
possible
Examples:
 Using internet to sell products rather than
opening a physical store
 using video presentations product write-ups
and posted on social media platforms as
marketing tools
 Jollibee using video contents
8. Systematic Planning- failing to plan is
planning to fail; develop a logical, timely,
step-by-step plan to reach the company
goals
Examples:
 making formulation plan of actions
 anticipating expenses
 evaluating alternatives
 taking a logical and systematic approach in
executing activities
 having back-up plans
9. Problem Solving- know how to solve
problems
Examples:
 Changing strategies in case of problems
to reach organizational goals
 generating new ideas or innovative
solutions
 looking at problems as an opportunity
10. Self Confidence- have strong belief in self
and own abilities
Examples: 4. can cause a lot of emotional and
 show confidence in one’s abilities to psychological stress
perform tasks 5. unforeseen event
 persist with own judgement
1.1 Assertiveness- have the courage in looking ENTREPRENEURSHIP AS A CAREER
for solutions and find for resources - to be able to be successful in the career of
Examples: entrepreneurship, one must have a heart to
 communicate to others what they have to continue even if everything doesn’t fall into
do and not to place
 reprimand those failing to perform and - one of the best things about being
inform them of the possibilities for entrepreneur is the wide-open possibilities
continuance of the behavior - managing cash flow is difficult most
1.2 Persuasion- influencing others reach especially to the ones that has limited funds
company goals - the opportunities in entrepreneurship are
Examples: ultimately endless
 Convincing someone to buy a product AVAILABLE OPPORTUNITIES FOR BUSINESS
or service Bakeshops Dress Shops
 Convince a firm to provide financing Barber Shop Drug Stores
1.3 Use of Influence Strategies- learn how to Boarding House Exporter
work with influential people to reach Coffee Shops Fast Food Outlets
business goals Computer Shops Food Catering
Constructions Franchise
Collaboration- one of great way of expanding a
Consultancy Gasoline Stations
business
Dental Clinic Grocery
Examples:
Hardware Stores Preschool
 uses influential people as champions to
Importers Producers of Crafts
accomplish objectives Internet Shops Real Estate Brokerage
 uses a strategy to influence or persuade Laundry Shops Repair Shops
others towards organizational goals Machine Shops Resorts
Rewards of Entrepreneurship Restaurants Transportation
1. Money/ Financial Reward- ultimate reward Services
of being an entrepreneur Rice Retailers Travel Agencies
2. Freedom- entrepreneurship is ticket to Spa Tutorial Services
freedom; you have freedom to work at your Sports Venues Veterinary Clinic
own place and decide on how to grow a Tarpaulin Layouts Event Center
business FAMOUS TIPS FROM SUCCESSFUL BUSINESS
3. Psychological Rewards- it is equally a great LEADERS OF THE COUNTRY
feeling to be able to help customers by  John Gokongwei Jr.- chairman; JG Summit
providing products that they need or Holdings
service that help them better their lives “Success is not necessarily connections or
POSSIBLE PROBLEMS FACE BY cutting corners or chamba…..”
ENTREPRENEURS  Lucio Tan- Chairman and CEO LT Group Inc.
1. Usually business demands more hard work “The more bitter the lesson, the greater the
2. it also demands long working hours future success.”
3. requires a lot of sacrifice
 Manny V. Pangilinan- Chairmanl Metro
Pacific Investments Corporation
“I was born poor, but poor was not born in me.”
 Henry Sy- Chairman and CEO; SM
Investments Corporation
“There is no such thing as overnight success or
easy money….”
MARKET POTENTIALS
Identify the market needs- identify what the
market needs and not what you believe is the
problem
Problem- a condition when consumers have the
requirement for a solution that either exist or
not
Henry Ford- “A market is never saturated with a
good product, but it is very quickly saturated
with a bad one.”
Needs as the motivation for buying products-
consumers buy products because of needs that
requires satisfaction
Maslow’s Hierarchy of Needs
1. Physiological Needs- basic needs are the
requirements for human existence; most
vital and therefore should be first met
2. Safety needs- include personal security,
health and well-being
3. Social needs- stage for love and
belongingness
4. Esteem needs- includes:
- self-esteem - achievement - confidence
- respect - recognition - accomplishment
5. Self-actualizing needs- highest level of
Maslow’s hierarchy; pertains to what a
person’s optimum potential is and realizing
that potential
Planning the Business
Planning- getting into the details of what the
organizational goals and how to attain them
MANUFACTURING BUSINESS SETTING
INVOLVES PLANNING FOR:
1. PRODUCT PLANNING- involves
determining:
a. how long the product meets customer’s
needs
b. how long it takes for the product to make
and to be marketed
c. total cost to the customer
2. Process Planning- determining the specific
technologies, procedures and systems
required to produce products or create
services
3. Facility location planning- identification of
the place where the manufacturing process
will be located and services will be offered
Criteria for facility location planning are:
a. proximity or appropriate distance to target
customers
b. business climate and the market
environment
c. total costing
d. transportation facilities and infrastructure
e. quality of labor
f. supplies
g. location of the company’s other facilities
h. peace and order condition
i. government laws, rules and regulations
j. environmental regulations
k. host community
l. competitive advantage
4. Facility layout planning- involves the
placement of departments, workstations,
machines and inventory storage within the
factory to ensure smooth work flow
Factors to consider in facility layout planning:
a. Objectives and purposes of the system
in increasing productivity
b. demand for product and service
c. number and volume of operations
d. space availability
5. Job planning or job design- function of
specifying work assignments of each
employee and group in an organization; to
develop job structures
Areas to consider in job planning or job design:
a. Tasks to be done
b. Qualification of worker
c. Physical location
d. working time
 e. reason for hiring
f. performance measurement
g. motivation
h. training
PRODUCT PRICING
- before setting the price for a product or
service, it is important to know the costs of
running the entire business
BASIC RULES OF PRODUCT PRICING
1. All prices must cover costs and profits
2. the most effective way to lower prices
is to lower costs
3. review prices recurrently to make sure
that they reflect the dynamics of cost,
market demand, response to the
competitors, and profit objectives
4. prices must be established to assure
sales
PRRICES ARE GENERALLY ESTABLISHED IN ONE
OF FOUR WAYS:
 COST PLUS PRICING- pricing that most
manufacturers use
- make sure that the plus figure does not only
cover all overhead costs but makes the
percentage of profit you require as well
 DEMAND PRICING- determined by the
combination of volume and profit
- products are priced depending on the
source
 COMPETITIVE PRICING- used when there’s
an established market price for a particular
product or service
- widely used within markets with
commodity products, which are difficult to
differentiate from another
- know the product competitor has
established
 MARKUP PRICING- commonly used by
manufacturers, wholesalers and retailers
Markup- computed by adding a set amount or
percentage to the cost of a product
PRICING BASICS
- entrepreneur should be aware with pricing
structures
- it was mentioned that every product’s
service must be priced to cover production,
wholesale cost, overhead etc.
OTHER THINGS TO CONSIDER IN PRICING A
PRODUCT OR SERVICE
1. OVERHEAD EXPENSES- all non-labor
expenditures required to operate a
business; either fixed or variable
a. FIXED EXPENSES- fixed and scheduled
which must be met month to month
- includes mortgage payments or rents,
depreciation on fixed assets such as delivery
vehicles office equipment, salaries etc.
- do not change whatever the company’s
status is in terms of revenue
b. VARIABLE EXPENSES- expenses that
fluctuate from month to month which
are affected by sales and other factors
like promotions, seasonal change, and
variation of prices of supplies and
services
- includes expenses for telephone and
communication, office supplies, printing,
mailing, packaging and advertising
2. COST OF GOODS SOLD- also known as cost
of sales; cost to purchase products for
resale or to your cost to manufacture
products
FACTORS THAT AFFECT CONSUMER’S DECISION
TO PURCHASE PRODUCTS:
1. PRICE- probably one that gets the highest
consideration
2. Product quality- consumers always look for
product with worthiest quality
3. Convenience- availability
4. impact of promotion- affects customer’s
decision
 CUSTOMER DEMOGRAPHICS- defining
your target market
 ACCESSIBILITY- business being
reachable by your customers
  COMPETITION- look for location where 6. non-government organizations
you can still have a piece of pie for your RULES FOR FINANCING
business to grow and be sustainable an entrepreneur should be guided by sound
 POPULATION DENSITY- place your financing rules such as:
location where there is a ready 1. know the cash requirements
community of clients are available 2. know the best terms
 ALLOWANCE FOR FUTURE GROWTH- 3. know how and when to pay
part of planning long term for the 4. owner’s investments should be more
business than the borrowings
HOME BASED BUSINESS 5. if borrowing are needed for fixed assets
- business operated at home or working capital
- there should be clear physical and time SOURCES OF BUSINESS IDEAS
boundaries between the business and the 1. Surveys
home 2. trainings
FINANCIAL REQUIREMENTS 3. experience
- funding of the business will depend upon 4. hobbies
the nature of the enterprise and of the 5. talents
product 6. market gaps
THE FINANCIAL PLAN WILL CONSIDER THESE 7. events
CAPITAL REQUIREMENTS FOR: 8. media
1. FIXED CAPITAL- for land, building, 9. shows and exhibitions
rental deposits, improvements, 10. merging businesses
machinery, equipment, furniture MARKET ANALYSIS
2. WORKING CAPITAL- day to day - A market analysis is quantitative and
operations until the cash comes from qualitative evaluation of a market. The goal
regular business is to look into the size of the market both
3. ORGANIZATION COST OR EXPENSES- volume and in value.
cost of putting up the legal business HOW TO DO THE MARKET ANALYSIS?
entity - The objectives of the market analysis are to
- amount paid to lawyers and accountants in make sure that everything about the
the writing of contracts or agreements and market is clear and that the business if
fees paid to the government offices to feasible and it is large enough to build a
register the business sustainable business.
4. CONTINGENCIES OR UNFORESEEN These are the recommended for market
COSTS- estimated amount for reserve analysis:
for contingencies or unforeseen events  Demographics Segmentation.
FUND OR CASH SOURCE  Target Market
Cash may come from any of the following:  Market Need
1. personal money of the entrepreneur  Competition
2. loans from relatives and friends Demographic Segmentation
3. loans from banks and other lending - Dividing the total of people in the market
institutions based on the customer demographics.
4. investors Target Market
5. government assistance programs
- A target market is a group of customers Idea Stage
that a business has decided to aim its - Ideas for products or services in this stage
marketing efforts towards. are filtered in order for the company to
Recognizing the Target Market maximize its resources for the ideas that
- To build a solid foundation for a business, are most viable.
the entrepreneur must identify first the Concept Stage
business target market. - After a new product/service idea has
Steps in Defining Target Market passed evaluation in the idea stage, it
1. Analyze the product or service should be further developed through
- Write a list of the product or service interaction with customers.
features and benefits to the customer. Product Development Stage
2. Choose specific target demographics - In the product development stage,
- Determine not only who has a need for your consumer reaction to the physical product
product or service, but also who is most or service is determined.
likely to buy it. Test Marketing Stage
 Age - This is the last in the evaluation process;
 Location this provides actual sales results, which
 Gender indicates the level of acceptance of
 Income Level consumers.
 Education Level
 Marital or Family Status
 Occupation
 Ethnic background
3. Consider the psychographics of your
target.
- Psychographics are the more personal
characteristics of a person.
 Personality
 Attitudes
 Values
 Interests/hobbies
 Lifestyles
 Behaviour
Market Need
- Customers are the ones buying form a
business.
Research your Competition
Competitors are like each companies enemies
who always want a bigger portion of the market
share.

The Product Planning and Development

Process