ENTREPRENEURSHIP

Governor Pack Road, Baguio City, Philippines 2600

Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

The Entrepreneurial process

Learning Objectives:
At the end of this module, the learners are expected to:
a. Discuss the types of environment of the entrepreneurial venture;
b. Identify the market problem to be solved or the market to be met;
c. Propose solutions in terms of products and services that will meet the need using techniques
on seeking, screening and seizing opportunities;

The Entrepreneurial Process

The entrepreneurial process is a step-by step procedure in establishing any kind of business
that an entrepreneur has to undergo. It is composed of the process below:

I. Opportunity III. Determining

II. Developing a IV. Running the
Spotting and the capital
business plan Business
Assessment needed

Figure 1: Steps in Entrepreneurial Process

I. OPPORTUNITY SPOTTING AND ASSESSMENT

The most difficult part of every task is to determine when and how to start. Hence, this stage is
considered as the most difficult and the most time consuming. At this point, entrepreneurs take note
of the interesting trends in their environment. The main source of opportunity information needed is
the customers because they are the components of the business market. Aside from the customers,
opportunity information can also be taken from the environment, problems encountered by co-
entrepreneurs, new trends, processes, and developments in the environment.

In this stage, the toughest part is the carefully assess the opportunity through estimation of
opportunity length, capitalization required, threats, profitability, and calculation of real and
perceived value. Entrepreneurs must also assess if the opportunity is aligned with their personal goals
and attributes.

Seeking, Screening, and Seizing (3S of opportunity spotting)

i. S1 (Seeking the opportunity)

In order to spot and assess opportunity, an entrepreneur must scan and understand the firm’s
environment. In this module, three environments will be discussed which includes the physical
environment, societal environment, and the industrial environment. All of these environments are
important in every business venture.

1. The Physical environment/ natural environment

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

It houses the natural elements that are inherent to Earth: Climate, Physical resources, and
wildlife

➢ Climate- The climatic condition in a particular region in the Philippines where the
business will be established must be evaluated. Some feasible businesses may be
applicable to one region but not to the other region due to climate differences.
➢ Physical Resources- The entrepreneur must critically assess the availability of raw
materials in the locality before opening a new business. An entrepreneur must evaluate
if the available raw materials to be used for production is sufficient for long-term since
the availability of the raw materials will affect the pricing and production or offering of
the products or services.
➢ Wildlife- The entrepreneur must ensure that his/her business contributes to the
preservation and not the destruction of the ecological system of the local community
and the country in general. If you wish for additional readings on Wildlife Resources
Conservation and Protection Act, read on REPUBLIC ACT NO. 9147.

2. The Societal Environment

According to Wheelen and Hunger (2010), the changes in physical environment have an
impact on the societal environment in terms of resource availability and costs, and later, on the
industry environment in terms of growth or decline of particular industries.

Since the business is directly affected by the changes in the societal environment, the
following different factors comprising it should be evaluated first:

➢ Social Forces- elements in society resulting from human interactions that can influence he
thoughts, behavior, attitude, actions, and even the beliefs and customs of the people. Social
forces includes: Values, Traditions, Literacy level, consumer psychology, time orientation,
lifestyle patterns and professional career roles.

➢ Cultural Forces- there is a thin line separating culture from societal forces. Thus, some
combines the two into sociocultural force. Cultural force refers to the integrated
characteristics of a group of people or ethnic group in a particular society. It includes: religion,
language, beliefs, customs, and education.

The presence of different ethnic groups with different languages in the various islands of the
Philippines is a clear manifestation of the existence of cultural diversity. It is common that what is
acceptable practice in one particular ethnic group is prohibited in others and what is considered
delicacy in one ethnic group is a taboo for others. The entrepreneur must evaluate the prevailing
culture of the local community where the proposed venture will be established

➢ Technological Forces- this refers to the trends and developments on computer and
information technology that have impact on business. These occur almost every day. These
includes: internet, social media, e-commerce, technological advancement, and
technological infrastructure.

➢ Economic Forces- these factors are primarily caused by changes in the Philippine economy
that have direct or indirect effects on the entrepreneurial venture. This includes: interest rates,
inflation rates, fiscal policies, monetary policies, income, exchange rates, employment, and
consumer confidence.

➢ Political Forces- the various elements usually comprising of the political parties, political
systems, and other related political groups that substantially influence the political stability of
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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

the country. This includes: Trade regulations, taxation, government stability, unemployment,
worker’s benefits, election practices.

➢ Legal Forces- the elements and bodies that are directly involved in the legislation and
interpretation of laws and ordinances directly affecting the business including: product
control on pricing and labeling, health and safety of the workers, administration of election
process, advertising and promotion, exercise of profession and education administration and
fees.

Societal Environments Scanning Approach

Environmental Scanning refers to the gathering, critical evaluation, and utilization of

information on events and activities and their relationships with physical, societal and industry
environments.

In scanning the environment, the entrepreneur may use PESTEL analytical approach.
The PESTEL analysis is a tabular framework of the trend and developments on the different forces in
the external environment. The following are the variations of PESTEL Analysis:

1. PEST Analysis which disregards the ecological and legal forces

2. STEEPLE Analysis to which ethics is an additional factor

3. STEEPLED analysis is similar to STEEPLE but with the addition of demographic factors

Political Forces Economic Sociocultural Technological Ecological Legal Forces

Forces Forces Forces Forces

Instability of Highest interest Low level of Readily Abundant raw Frequently-

the Philippine rates given by education available materials changed tax
government commercial among public internet and laws
banks school social media
graduates

Table 1: Template for PESTEL Analysis

3. The Industry Environment

The industry environment is the external environment layer where the trends and changes are
easily and immediately felt by the businesses. It is considered the immediate environment of the
business where it conducts its various operational activities. This includes the following:

➢ Government-refers to the system or institution that handles the affairs of a particular country.
➢ Suppliers- the individuals or companies that provide the required materials, parts, or services to
the business. They can adversely affect the production process by delaying the delivery of the
required raw materials and supplies or services, or by providing defective material or inefficient
services.
➢ Customers- the buyers of the goods and services produced or rendered by the business. They
are the main source of profit by the business. Thus, they should be constantly evaluated and
their change in behavior, tastes and preferences, inclinations, and even future activities
should always be taken into consideration
➢ Competitors- forces existing in the industry producing or rendering products and services
which are similar to those of the businesses. Competitors are classified as direct or indirect
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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

competitors. Competitors producing the exact same product or services are direct
competitors while those produce substitute products are considered as indirect competitors.
➢ Employees- these are the workers of the business who are highly responsible for the production
of goods or delivery of services provided to the customers.
➢ Creditors- These are the ones who can provide funds to the business by extending credit
instead of the owner investing resources. Creditors include banks, financial institutions, and
financial intermediaries.

Industry Analysis scanning Tools

The micro or internal environment of the business, including the forces operating on such
environment, must be evaluated and studied.

In conducting the internal environmental scanning, the common tool applied id the SWOT analysis:

Strength- Weakness-Opportunities-Threats (SWOT) Analysis

Within the business Environment

Controllable
Strengths Weaknesses

Strong attributes or Poor attributes or

capabilities of the deficiencies that give
business that provide disadvantages to the
great advantage in business
exploiting the
business opportunity.
Ex. Dilapidated
Ex. Qualified working
machineries and
Positive/ force Negative/
equipment
beneficial harmful to
for the Opportunities Threats the
Business business
Business situations in Possible external
the form of products events in the
or services that must environment that
be exploited may provide harm to
because of their the business.
potential in terms of
profit and growth
Ex. Stiff government
Ex. New programs of
regulations
the government

Outside the Business

Uncontrollable

In conducting external environment scanning, the common tool used is Forces of Competition
model:

Forces Competition Model/ Porter’s Five

The business must identify the intensity of competition within its industry environment since the
level of intensity is primarily dependent on the competitive forces existing within the industry.

The five forces competing within the industry are as follows:

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

1. Potential new entrants

2. Bargaining Powers of Buyers
3. Threat of Substitute products
4. Bargaining Powers of Suppliers
5. Rivalry among existing firms

After identifying the competitive forces of the business venture, these are plotted into the
competitive forces matrix, by which the entrepreneur can view the total perspective of the
competition within the industry where the business operates. The effects and intensity of the threat
can be high, moderate, or low. Refer to the example below:

Five Barriers to the Effect of the Effects of Threats to the Business

competing force barriers to the
forces Force (High,
High Moderate Low
medium, low)
Potential new Huge capital High
/
entrants requirement
Bargaining Several High
Powers of suppliers
/
Buyers available in
the market
Threat of Product Medium
Substitute differentiation
/
products is hardly
noticeable
Bargaining The switching High
Powers of cost is high /
Suppliers
Rivalry among Low number of Low
existing firms competing /
firms

ii. S2 (Screening the opportunity)

Opportunity screening is the process of cautiously selecting the best opportunity. The
selection is based on the entrepreneur’s internal and external intent. Internal intent is the
main reason that the entrepreneur would like to put up the business venture. External intent
addresses the compelling needs of the target market. The entrepreneur should apply due
diligence and independent judgment in selecting the opportunities that have potential and
eliminate those that are not within the scope of the entrepreneur’s risk appetite. Risk
appetite is the entrepreneur’s tolerance of business risks.
Detailed here are the most important elements that are always present in a compelling
opportunity. An entrepreneur should say no to an opportunity if it does not contain any of
these business opportunity elements:
• Has superior value to customers
• Solves a compelling problem, issue, a need, or a want
• Is a potential cash cow
• Matches with the entrepreneur’s skills, resources, and risk appetite

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

iii. S3 (Seizing the opportunity)

Opportunity seizing is the “pushing through” with the chosen opportunity. The
entrepreneur’s idea can be any type of innovations below:
• Breakthrough innovation- This may include inventions and occur infrequently as
these establish a platform on which future innovations in an area are developed.
These are types of innovations that must be protected by a patent, a trade
secret, or a copyright.
• Technological innovation – this occur more frequently that the breakthrough
innovation. These innovations are technological advancements of an existing
product or service. These innovations may also be protected.
• Ordinary innovation- This type of innovation occur ordinarily. These kinds of
innovations commonly originate from market analysis and technology pull
instead of a technology push. This means that the market has a strong influence
in the implementation of an innovation. Ex. Unlimited internet plans and a
wireless mouse.

II. DEVELOPING A BUSINESS PLAN

Entrepreneurs should formulate a business plan when they have already spotted and assessed
the opportunities for a market. A Business Plan is a comprehensive paper that details the
marketing, operational, human resources, financial, strategic direction, and tactics of the
business. The business plan will be the core guide and direction of the entrepreneur in calculating
the resources needed, assessing how to obtain these resources efficiently, and running the
business sustainably.

Guidelines to Remember in Making a Business Plan

➢ Keep the plan respectively short

-Ideally, the plan should no more than 25-page long, excluding appendix.
➢ Organize and Package the Plan Appropriately
➢ Orient and Plan Toward the Future
-Entrepreneurs should attempt to create an air of excitement in the plan by developing trends
and forecasts that describe what the venture intends to do and what the opportunities are for
the use of the product or service.
➢ Avoid Exaggeration
-Sales potentials, revenue estimates, and the venture’s potential growth should not be inflated.
Many times, a best-case, worst-case, and probable-case scenario should be developed for
the plan. Documentation and research are vital to the plan’s credibility.
➢ Highlight Critical Risks
-The critical-risks segment of the business plan is important in that it demonstrates the
entrepreneur’s ability to analyze potential problems and develop alternative courses of
action.
➢ Give Evidence of an Effective Entrepreneurial team
-the management segment of the business plan should clearly identify the skills of each key
person as well as demonstrate how all such people can effectively work together as a team to
manage venture.
➢ Do not over-Diversify
-Focus the attention of the plan on one main opportunity venture. A new business should not
attempt to create multiple markets or pursue multiple ventures until it has successfully
developed main strength.
➢ Identify the Target Market

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

-Substantiate the marketability of the venture’s product or service by identifying the particular
customer niche being sought. This segment of the business plan is pivotal to the success if the
other parts. Market research must be included to demonstrate how this market segment has
been identified.
➢ Keep the Plan Written in the Third person
-Rather than continually stating “I”, “we”, or “us”, the entrepreneur should phrase everything
as “he”, “she”, “they”, “them” or other third person pronouns. This is to avoid personalizing the
plan, and keep writing objective.
➢ Capture the Reader’s Interest
-Use the title page and executive summary as key tools to capture the reader’s attention and
create a desire to read more.

In this course, you will be completing the Business Plan below:

A. Title Page 6. Personnel requirements

7. Administrative operation
B. Table of Contents
J. Organizational Plan
C. List of Tables
1. Form of Business Organization
D. list of Figures
2. Liability of the owner/s
E. List of Appendices 3. Organizational structure
4. Roles and responsibilities
F. Introduction 5. Salary requirements
1. Proposed name of the business K. Production Plan
2. Address of the business
3. Name of the owner/s 1. Production schedule
4. Description of the business 2. Production process
5. Location of the business 3. Processing plant and equipment
6. Funding requirements and sources 4. Sources of materials
5. Production Cost
G. Executive Summary
L. Operation plan
1. Vision, Mission, goals and objectives of
the business 1. Evaluation of supplier
2. Business Model 2. Materials requisition and receiving
3. Business and Product positions procedures
4. Wealth improvement approaches 3. Storage and inventory control system
5. Parties supporting the business 4. Shipment system and control
5. Functions of support services
H. Environmental Analysis
M. Marketing Plan
1. SWOT Analysis
2. Competitive Forces Matrix 1. Product
3. PESTEL Analysis 2. Place
3. Price
I. Business Description 4. Promotion
1. Nature of the organization 5. People
2. Product or service that it plans to 6. Packaging
produce or serve 7. Positioning
3. Various plant and office equipment N. Financial plan
4. Size of the proposed business
5. Future parties with whom contracts may 1. Major Assumptions
be necessary 2. Projected SCI

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: HUMSS 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 2 – ENTREP Subject Teacher:

3. Projected SCE 6. FS Analysis

4. Projected SFP
O. Appendix
5. Projected SCF

Note: The format and content may change during the completion of the business plan.

III. DETERMINING THE CAPITAL NEEDED

A big idea can never be translated into reality if the entrepreneur’s resources are limited.
Therefore, it is mandatory in the entrepreneurial process to calculate the resources needed to
establish the business and compare this against the entrepreneur’s current resources. Caution must
be applied in computing the complete set of resources needed and include only those items that
are considered as the real needs in the venture creation. Allowance must be considered as well
because there will be times that resources will be inadequate or unsuitable.

IV. RUNNING THE BUSINESS

This is the part where the entrepreneur should use the resources allocated for the new venture.
The business plan prepared in step 2 should already have been implemented. All aspects of the
business plan should be critically observed from operations, marketing and sales, human resources,
finance, and strategy implementation. The entrepreneur should have a control and monitoring
system to serve as a check and balance of the formulated plans.

References:
BAL 338.04
Kuratko, D. (2012). Entrepreneurship: An Introduction. Pasig City: Cengage
K9654
2012 Learning Asia Pte. Ltd.
BAL 658.421 Batisan, R. (2016). Entrepreneurship. Makati City: Diwa Learning Systems Inc
B3208
2016

BAL 658.421
Aduana, N. (2016). Entrepreneurship in Philippine Setting. Quezon City: C&E
B3208
Publishing,
2016 Inc.

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