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Entrepreneurship

1.Small Business and Entrepreneurship

Small business-It is an organization, ​partnership or sole proprietorship that has fewer
resources and annual revenue than a medium or large company.
Entrepreneurship-​It refers to the concept of developing and managing a business
venture to gain profit by taking several risks in the corporate world.

2. Characteristics of Entrepreneurship
Ability to take a risk-Starting any new venture involves a considerable amount of failure
risk. Therefore, an entrepreneur needs to be courageous and able to evaluate and take
risks, which is an essential part of being an entrepreneur.
Innovation-It should be highly innovative to generate new ideas, start a company and
earn profits out of it. Change can be the launching of a new product that is new to the
market or a process that does the same thing but in a more efficient and economical way.
Visionary and Leadership quality-To be successful, the entrepreneur should have a clear
vision of his new venture. However, to turn the idea into reality, a lot of resources and
employees are required. Here, leadership quality is paramount because leaders impart
and guide their employees towards the right path of success.
Open-Minded -In a business, every circumstance can be an opportunity and used for the
benefit of a company. For example, Paytm recognized the gravity of demonetization and
acknowledged the need for online transactions would be more, so it utilized the situation
and expanded massively during this time.
Flexible-An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace change in
a product and service, as and when needed.
Know your Product-A company owner should know the product offerings and also be
aware of the latest trend in the market. It is essential to know if the available product or
service meets the demands of the current market, or whether it is time to tweak it a little.
Being able to be accountable and then alter as needed is a vital part of entrepreneurship.

Types of Entrepreneurship
Small Business Entrepreneurship

These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter,
plumber, electrician, etc. These people run or own their own business and hire family
members or local employee. For them, the profit would be able to feed their family and
not making 100 million business or taking over an industry. They fund their business by
taking small business loans or loans from friends and family.

Scalable Startup Entrepreneurship

This start-up entrepreneur starts a business knowing that their vision can change the
world. They attract investors who think and encourage people who think out of the box.
The research focuses on a scalable business and experimental models, so, they hire the
best and the brightest employees. They require more venture capital to fuel and back
their project or business.

Large Company Entrepreneurship

These huge companies have defined life cycle. Most of these companies grow and
sustain by offering new and innovative products that revolve around their main products.
The change in technology, customer preferences, new competition, etc., build pressure
for large companies to create an innovative product and sell it to the new set of
customers in the new market. To cope with the rapid technological changes, the existing
organizations either buy innovation enterprises or attempt to construct the product
internally.

Social Entrepreneurship

This type of entrepreneurship focuses on producing product and services that resolve
social needs and problems. Their only motto and goal is to work for society and not
make any profits.

4. Importance of Entrepreneurship
Creation of Employment

Entrepreneurship generates employment. It provides an entry-level job, required for

gaining experience and training for unskilled workers.

Innovation

It is the hub of innovation that provides new product ventures, market, technology and
quality of goods, etc., and increase the standard of living of people.

Impact on Society and Community Development

A society becomes greater if the employment base is large and diversified. It brings
about changes in society and promotes facilities like higher expenditure on education,
better sanitation, fewer slums, a higher level of homeownership. Therefore,
entrepreneurship assists the organization towards a more stable and high quality of
community life.

Increase Standard of Living

Entrepreneurship helps to improve the standard of living of a person by increasing the

income. The standard of living means increases in the consumption of various goods
and services by a household for a particular period.

Supports research and development

New products and services need to be researched and tested before launching in the
market. Therefore, an entrepreneur also dispenses finance for research and development
with research institutions and universities. This promotes research, general
construction, and development in the economy.

5. Entrepreneurship Development

Entrepreneurship development is the means of enhancing the knowledge and skill of

entrepreneurs through several classroom coaching and programs, and training. The
main point of the development process is to strengthen and increase the number of
entrepreneurs. This entrepreneur development process helps new firms or ventures get
better in achieving their goals, improve business and the nation’s economy.

6. Risks of Starting a Small Business

Financial risk
● The biggest risks facing many small organizations are financial. Founders often
have invested their life savings or taken out significant loans to get the
organization off the ground, so there is a lot of pressure to be successful.
Strategic risk
● It can be hard to know what steps to take when your organization is brand new.
There are probably not formalize decision-making processes in place, and each
stage of the business life cycle comes with its own challenges.
Reputation risk
● Reputation risk is one of the most overlooked risks. A company’s reputation is its
single, most important asset. This is particularly important for small businesses
because they need to create a good reputation in order to grow: if nobody has
heard of your organization or only knows bad things about it, they're not likely to
become a customer.
Liability risk
● While all organizations are subject to liability risk, you're most vulnerable at a
small size, in part because of reputation risk. You also may not have the resources
to effectively pay for damages without risking cash flow.
Business interruption risk
● Your organization can be disrupted at any time.
Security risk
● Cyber risk is the threat of financial loss, disruption, or reputational damage to an
organization due to some sort of failure from its IT systems. Hackers are
becoming increasingly skilled and sophisticated. At the same time, organizations
are collecting more personal data from their customers.

7. Starting a Business

Do Your Research
Most likely you have already identified a ​business idea​, so now it's time to
balance it with a little reality. Does your idea have the potential to succeed?
You will need to run your business idea through a ​validation
process​ before you go any further.
Make a Plan
You need a plan in order to make your business idea a reality. A ​business
plan​ is a blueprint that will guide your business from the start-up phase
through establishment and eventually business growth, and it is a
must-have for all new businesses.
Plan Your Finances
Starting a small business doesn't have to require a lot of money, but it will
involve some initial investment as well as the ability to cover ongoing
expenses before you are turning a profit.
Choose a Business Structure
Your small business can be a sole proprietorship, a partnership, a limited
liability company (LLC) or a corporation. The ​business entity​ you choose
will impact many factors from your business name, to your liability, to how
you file your taxes.
Pick and Register Your Business Name
Your business name plays a role in almost every aspect of your business,
so you want it to be a good one. Make sure you think through all of the
potential implications as you explore your options and ​choose your
business name​.
Get Licenses and Permits
Paperwork is a part of the process when you start your own business.
​ mall business licenses and permits​ that may apply
There are a variety of s
to your situation, depending on the type of business you are starting and
where you are located. You will need to research what licenses and permits
apply to your business during the start-up process.
Choose Your Accounting System
Small businesses run most effectively when there are systems in place.
One of the most important systems for a small business is an accounting
system.
Set Up Your Business Location
Setting up your place of business is important for the operation of your
business, whether you will have a ​home office​, a shared or private office
space, or a ​retail location​.
Get Your Team Ready
 If you will be ​hiring employees​, now is the time to start the process. Make
sure you take the time to outline the positions you need to fill, and the job
responsibilities that are part of each position.
Promote Your Small Business
Once your business is up and running, you need to start attracting clients
and customers.

8. Writing a Business Plan

Executive summary
Briefly tell your reader what your company is and why it will be successful.
Include your mission statement, your product or service, and basic information
about your company’s leadership team, employees, and location. You should also
include financial information and high-level growth plans if you plan to ask for
financing.
Company description
Use your company description to provide detailed information about your
company. Go into detail about the problems your business solves. Be specific,
and list out the consumers, organization, or businesses your company plans to
serve. Explain the competitive advantages that will make your business a
success. Are there experts on your team? Have you found the perfect location for
your store? Your company description is the place to boast about your strengths.
Market analysis

You'll need a good understanding of your industry outlook and target market.
Competitive research will show you what other businesses are doing and what
their strengths are. In your market research, look for trends and themes. What do
successful competitors do? Why does it work? Can you do it better? Now's the
time to answer these questions.

Organization and management

Tell your reader how your company will be structured and who will run it. Describe
the ​legal structure​ of your business. State whether you have or intend to
incorporate your business as a C or an S corporation, form a general or limited
partnership, or if you're a sole proprietor or LLC. Use an organizational chart to
lay out who's in charge of what in your company. Show how each person's unique
experience will contribute to the success of your venture. Consider including
resumes and CVs of key members of your team.

Service or product line

Describe what you sell or what service you offer. Explain how it benefits your
customers and what the product lifecycle looks like. Share your plans for
intellectual property, like copyright or patent filings. If you're doing ​research and
development​ for your service or product, explain it in detail.

Marketing and sales

There's no single way to approach a marketing strategy. Your strategy should

evolve and change to fit your unique needs. Your goal in this section is to
describe how you'll attract and retain customers. You'll also describe how a sale
will actually happen. You'll refer to this section later when you make financial
projections, so make sure to thoroughly describe your complete marketing and
sales strategies.

Funding request
 If you're asking for funding, this is where you'll outline your funding requirements.
Your goal is to clearly explain how much funding you’ll need over the next five
years and what you'll use it for. Specify whether you want debt or equity, the
terms you'd like applied, and the length of time your request will cover. Give a
detailed description of how you'll use your funds. Specify if you need funds to buy
equipment or materials, pay salaries, or cover specific bills until revenue
increases. Always include a description of your future strategic financial plans,
like paying off debt or selling your business.

Financial projections

Supplement your funding request with financial projections. Your goal is to

convince the reader that your business is stable and will be a financial success. If
your business is already established, include income statements, balance sheets,
and cash flow statements for the last three to five years. If you have other
collateral you could put against a loan, make sure to list it now. Provide a
prospective financial outlook for the next five years. Include forecasted income
statements, balance sheets, cash flow statements, and capital expenditure
budgets. For the first year, be even more specific and use quarterly — or even
monthly — projections. Make sure to clearly explain your projections and match
them to your funding requests. This is a great place to use graphs and charts to
tell the financial story of your business.

Appendix

Use your appendix to provide supporting documents or other materials were

specially requested. Common items to include are credit histories, resumes,
product pictures, letters of reference, licenses, permits, or patents, legal
documents, permits, and other contracts.

9. Obtaining Funding

Venture capital
he business of ​venture capital​ is frequently misunderstood. Many startup
companies complain about venture capital companies for failing to invest in new
ventures or risky ventures.
Angel investment
 angel investment​ is much more common than venture capital, and usually is much
more available to startups, and at earlier growth stages too.
Commercial lenders
Banks are even less likely than venture capitalists to invest in, or loan money to,
startup businesses. They are, however, the most likely source of financing for
established small businesses.
The Small Business Administration (SBA)
The ​SBA​ guarantees ​loans to small businesses and even to startup businesses​.
The SBA doesn’t make loans directly; it guarantees loans so commercial banks
can safely make them. They are normally applied for and administered by local
banks. You normally deal with a local bank throughout the process of getting an
SBA loan.
Other lenders
Aside from standard bank loans, an established small business can also turn
to ​accounts receivable specialists​ to borrow against its accounts receivables. The
most common accounts receivable financing is used to support ​cash flow​ when
working capital is hung up in accounts receivable.
Friends and family funding
If I could make only one point with budding entrepreneurs, it would be that you
should know what money you need and understand that it is at risk. Know how
much you are betting, and don’t bet money you can’t afford to lose.

10. Partnering and Strategic Networking

11. Entrepreneurship Skills

Curiosity
Great entrepreneurs are tasked to discover new problems, reveal potential niche
opportunities, refactor their original business process, and innovate.
Time management
Careful priority planning, defining milestones, execution, and iteration are all
important.
Strategic thinking
 Learning to decompose a problem to its core and reveal opportunities for growth.
Efficiency
You need high performance when it comes to solving a problem. Applying the
80/20 rule and other techniques for yielding higher results in less time.
Resilience
Handling rejections, stress, burnouts, lack of focus, slow progress. Determination
and eagerness to fight the same dragon every morning are instrumental when it
comes to building a business from scratch.
Communication
Crisp and concise communication is paramount for each and every interaction
with clients, partners, peers, clients, prospects.
Networking
Growing a network facilitates business opportunities, partnership deals, finding
subcontractors or future employees.
Finance
Finance management will make or break a business.
Branding
Building a consistent personal and business brand tailored to the right audience.
Sales
Being comfortable doing outreach and creating new business opportunities.
Finding the right sales channels that convert better and investing heavily in
developing them.

12. Careers in Entrepreneurship

13. Agencies that make business legitimate entities

BIR (Bureau of Internal Revenue)

DTI (Department of Trade and Industry)
SEC (Security and Exchange Commission)
City Hall
Local Barangay