Accountancy Business and Management

Applied Entrepreneurship

Entrepreneurs who plan to enter any business endeavor must have a business plan/Feasibility
Study on hand to guide them throughout the process. Different business plans are prepared for different
purposes.

A business plan, as defined by Entrepreneur, is a “written document describing the nature of the
business, the sales and marketing strategy, and the financial background, and containing a projected
profit and loss statement.” However, your business plan can serve several different purposes

A business plan has two primary purposes

 First, and foremost, it should be used to help run your company with a more cohesive vision. It
is your roadmap. By truly analyzing your plan for marketing, sales, manufacturing, website
design, etc., you greatly improve your chances for success.

Importance of Business Plan/Feasibility Study

 Serves the entrepreneurs who must set a navigational course
 Serves investors and cautious financiers
 Serves the managers and staff of the organization so that they will know the strategies
and programs of the enterprise

Feasibility Study Format

1. Title Page
2. Acknowledgement
3. Project Summary – contains everything that is relevant and important to the business audience.
It is the synthesis of the entire plan.
 The business proponents and their partners
 The enterprise organization and its capabilities
 The technology providers and their expertise and experience
 The suppliers and all the major service providers
4. Table of Contents
5. Background of the Study
6. Marketing Aspect – market analysis and forecasting exercise should lead to a quantification of
the current and prospective size of the market. Both the current potential consumptions should
then be disserted.
 Who are the competing enterprise in the industry and what are their comparative
advantage and disadvantages? What business models and strategies are they
employing?
 Who are the suppliers in the industry and what are their capabilities and bargaining
power?
 What are the channels of distribution being used by the industry? How effective are
these channels?
7. Management Aspect
8. Technical Aspect
9. Financial Aspect contains the capital structure and financial offerings of the enterprise including
some discussions on who are the investors, the financers, and the partners of the enterprise.
 Return calculations on expected return on sales
 Expected return on assets or investments
 Expected return on stockholder’s equity
10. Socio Economic Aspect – discuss the major trends and changing patterns in the micro and
macro environment, which would have significant impacts on the relevant industry and the
behavior of the consumers
 Social environment includes the demographics and cultural dimensions that govern the
relevant entrepreneurial behavior.
  Political environment define the governance system of the country or the local area of
the business. It includes the laws, rules, and regulations on allowable and disallowable
business practices.
 Economic environment is mainly driven by supply and demand forces. It is the same
factor that drives the interest and foreign exchange rates to fluctuate with the
movement of the market forces.
 Ecological environment includes all natural resources and the ecosystem that defines
the habitat of man, animals, plants and minerals
 Technological environment makes or breaks competing participants in any industry.
New scientific and technological discoveries often lead to the launch and
commercialization of new products with superior attributes or to rendering the old ones
obsolete.
11. Bibliography
12. Appendices
13. Curriculum Vitae

Four Areas of moneymaking which the business model must address:

1. How will the business raise? What critical factors will cause the revenues to materialize?
2. What will be the costs of the enterprise products and other costs of doing business? How ill
these costs be managed to ensure comfortable profits?
3. What will be the major investments of the enterprise? What will these investments give the
enterprise a competitive edge?
4. How will the enterprise finance the investments? How will the enterprise fund its growth?

Four types of stakeholders

 Resource mobilizers and financial backers
 Technology providers and applicators
 Governance and top management
 Operating and support team

Target customers
 Must be of sufficient size, sufficient paying capacity and have sufficient interest to purchase the
products being offered by the enterprise.

OPPORTUNITY SEEKING

Entrepreneurs are innovative opportunity seekers. They have endless curiosity to discover new
or different ideas and see whatever these ideas will work in the marketplace.

Entrepreneurs create value by introducing new products or services or finding better ways of
making them.

Opportunity seekers must have:

1. Entrepreneurial Mind Frame allows the entrepreneurs to see things in a very positive and
optimistic light in the midst of crisis or difficult situations
2. Entrepreneurial Heart Flame commonality between an inventor and an entrepreneur, it is their
surging passion. They drawn to find fulfillment in the act and process of discovery.
3. Entrepreneurial Gut Game the ability of the entrepreneur to sense without using the five
senses. It is Known as intuition.

Five main sources of Opportunities

1. Socio cultural environment
2. Political environment
3. Economic environment
4. Ecological environment
5. Technological environment
Industry sources of opportunities
1. Rivals or competitors in a particular type of business
2. Suppliers of input
3. Consumer market segments being served by rivals or competitors
4. Substitute products or services, which customers shift or turn to
5. All other support and enabling industries

OPPORTUNITY SCREENING
In opportunity screening, the entrepreneur first has to consider his or her preferences and
capabilities by asking three basic questions:
1. Do I have the drive to pursue this business opportunity to the end?
2. Will I spend all my time, effort, and money to make the business opportunity work?
3. Will I sacrifice my existing lifestyle, endure emotional hardship, and forego my usual comforts to
succeed in this business opportunity?

12 R’s of Opportunity Screening

1. Relevance must be aligned with what you have as your personal vision, mission and objectives
for the enterprise you want to set up
2. Resonance must match the values and desires virtues that you have or wish to impart
3. Reinforcement of entrepreneurial interests opportunity resonate with the entrepreneurs
personal interests, talents, and skills
4. Revenues to determine the sales potential of the products or services you want to offer
5. Responsiveness to pursue addresses the unfulfilled and undeserved needs and wants of
customers, then you have a better chance of succeeding.
6. Reach opportunities that have good chances of expanding through branches, distributorships,
dealerships, or franchise outlets in order to attain rapid growth
7. Range opportunity can lead to a wide range of possible product or service offerings , thus
tappings, many market segments of the industry.
8. Revolutionary Impact if you think that the opportunity will most likely be the” next big thing” or
even a game changer that will revolutionarize the industry.
9. Returns it is a fact that products with low costs of production and operations but are sold higher
prices will definitely yield the highest returns on investments.
10. Relative ease of implementation
11. Resources required requiring fewer resources from the entrepreneur my be more favored than
those requiring more resources
12. Risks

Seven basic questions must ask in preparation for any major market research
1. WHY purpose and objective for conducting the market research
2. WHAT determines the scope and the limitations of the market research to be conducted
3. WHICH determines which segments of the market must be studied; this must be the market
segment that the entrepreneur is eyeing.
4. WHO identifies who among the members of the selected market segment will participate in the
market research.
5. WHEN determines the time and timing of the research. This is critical for entrepreneurs whose
product or service will be offered to a time constrained market such as office workers.
6. WHERE pinpoints the relevant location of the market research
7. HOW determines the methodology to be used for the market research (survey, focus group
discussion, observation)

STEPS in conducting a survey Research

1. Develop the research objectives what you want to know

2. Determine your sample identify who and what kind of people you will interview and where you
are going to find them.
3. Choose the interviewing methodology (face to face)
4. Create your questionnaire identify the key information you will have to ask from your
respondents
 5. Pre-test the questionnaire determine a similar profile of target respondents and test the
questionnaire.
6. Conduct interviews and enter the data plan and execute the implementation of your survey
well (including areas to go to, routes to take, time to conduct the interviews)
7. Analyze the data Organize the questionnaires for more orderly processing. Tabulate, use
graphs, and do the statistics. Write result and including the insights.

Market Segmentation Customers with similar needs and wants and similar willingness and ability to pay
can be grouped into one customer segment.

Market Aggregation
 Marketing of standardized goods and services to large population of people that have similar
needs.
 “mass marketing” strategy that treats all customers as a single group that is handled
homogenously.

Market Mapping is to provide the market analyst a better understanding of the market as a whole and
to paint a clearer picture of where the different competitors are relative to the different market
segments.