ENTREPRENEURSHIP LESSON 1.

1: ENTREPRENEURIAL INTRODUCTION-
DEFINITION, SKILLS AND COMPETENCIES
INTRODUCTION
What is COMPETENCY?
IMPORTANCE OF ENTREPRENEURSHIP
- capability, capacity, and ability of
Regional development
the learner in handling situations in
- when the industries are concentrated various areas in business operations.
in selected cities, development gets
ENTREPRENEURIAL COMPETENCIES
limited to these cities
Locus of control
Social Development
- knowledge in determining the state to
- entrepreneurs play an important role
which a person agreed that their
in social development of a nation.
actions can diretly affect the
Economic Development situation, or that they can control
the result.
- it is a highly dynamic process
characterized by continual and often > Internal – can influence events and
changes. outcomes

Employment Generation > External – blames outside forces

- entrepreneurs generate employment both Specific Goal Settings

directly and indirectly.
- motivation to set goals, specifically
Create Wealth business growth objective.

- the wealth created by the same play a Self-Efficacy

considerable role in the development
- belief in own reality: self-confidence
of nation.
Layers of Competency
Capital Formation
- some skills and competencies are
- entrepreneurs provide employment to
applicable to all, while some skills
people. The employees save a part of
and competencies are only applicable
their income.
to some.
Consumer Welfare
Need for Achievement
- due to innovative ideas, consumers can
- feel the need to succeed and take
enjoy new and better types of good and
responsibility for the outcomes of
service.
their actions.
Revenue to the Government
Ambition
- indirect revenue comes in the form of
- stay motivated, persistent, and
excise duty, custom duty, service tax,
persevere even in the face of a
etc.
difficult challenge.
Provides Satisfaction
Willingness to Learn
- does not only reward an entrepreneur
- pursue opportunities to acquire new
at financial levels but also in
skills and competencies.
personal level.
Strong Initiative
National Income
- always driven to work hard. They can
- domestic demand increases with
work independently to achieve the
increase in population and increase in
task.
standard of living.
Adaptability & Flexibility
- able to develop novel solutions to
complicated problems.
Willingness to Take Risk

- can accept consequences but they can

also identify, calculate, and manage
 risk and can take into account legal
actions.
Strategic Thinking
- knows that thinking using strategies
can help achieve goals in the
organization.
Commercial Aptitude
- keep themselves updated with their
surroundings.
Decisiveness
- able to resolve issues as they arise
in an unavoidable situation and are
able to respond flexibility to change.
Optimism
- perform in the hope of success, rather
than the fear of failure.
Customer Relation Service
- able to develop and build trust and
long-term relationship with their
customers.
People Centered
- can create commonality among
stakeholders and are able to inclusive
in decision making.
ENTREPRENEURIAL SKILLS
Creative/Critical Thinking
- able to generate innovative solutions
and use relevant information to
understand the greater picture.
Organizing
- can plan and prioritize work to ensure
that time is managed effectively.
Planning
- must be specific about the direction
of their venture and their strategy.
Business Principles
- must be well versed in market
knowledge, economic principle, and
ethical practices.
Computer Competency
- must be competent in the use of basic
computer hardware and software.
Workplace Competencies
- able to apply their skills, knowledge,
and values to job tasks and work-
related experiences.
High Growth High-Value Entrepreneurship
- offer incentive compensation, manage
business operations, build strong
entrepreneurial culture around
determination and high work ethic, and
from effective board of directors and
advisors.
Marketing
- competent in both executing strategies
that promote their products and
establish client/customer
relationship.
Interpersonal Skills
- can work well with people regardless
of their backgrounds. They are also
insightful on the behavior of people.
LESSON 1.2: THE ENTREPRENEURIAL MINDSET
THE ENTREPRENEURIAL MINDSET
Entreprendre
- French word means “to undertake”
- reference to individuals who have
initiated the establishment of
business enterprise.
TWO TYPES OF ENTREPRENEUR
Micro Entrepreneur
- individual who initiate business
enterprise, but the value-added and
profits are limited.
- contributors are minimal.
- short in fund and inadequate in
skills.
- cannot undertake huge capital,
sophisticated technology and extensive
risks.
Mega Entrepreneur
- individual who have generated
substantial value and profits from
innovations in a very short period of
time.
- willing to absorb huge risks using
enormous amount of capital in their
business.
- rapid economic progress.
- huge amount of value-added.
- attracts number of competitors and
imitators.
ENTREPRENEURIAL PROCESS
- system entrepreneurs follow to achieve
their goals.
- strategic process that includes an
articulation of plan on how this is
going to be implemented.
1. Discovery CHARACTERISTICS OF AN ENTREPRENEUR
- the recognition of business idea or Entrepreneurial traits & creation of
the detection of opportunities that value-added
could make money for the entrepreneur.
1. Level of education
2. Development of a Business Concept 2. Employment status
3. Entrepreneurs wealth
- give more details on how the general
4. Risk appetite
business idea can be realized.
- suggest a business plan. Micro Mega
Level of -limited -need some
business plan must also describe: education educational formal
> how the enterprise is going to be qualifications education to
organized -engaging in be able to
small seize
> how it is going to be manage. enterprise opportunities
does not presented by
> how business is going to be financed. require high inventions,
level of innovations,
3. Organizing Resources
schooling. and other
- the process of identifying, sourcing, -small technological
and financing human. non-human and enterprise development.
other resources needed for the conduct uses simple -need some
technology and degree of
of business.
do not require technological
MICRO technical know-how.
sophistication
- draw their resources including labor Employment -limited funds -sources their
from what is available in their wealth -limited human funds from
locality. (eatery) and non-human their own
- funds sourced from informal lenders, resources they wealth and
and remittances of relatives or family cannot avail from their
members working abroad. (5.6.) of credit from families.
financial -some generate
MEGA institutions. capital from
wealth
- highly educated, technologically, accumulated
savvy, and creative employees. from their
(google, apple) past
- they source their funds from the employment.
capital market or from venture Employment -drawn from -former
capitalist (banks) status the pool of employees of
unemployed or companies from
4. Implementation under- formal sector.
- the process of carrying out the employed. -professional
-they see development.
business plan.
their small -experience in
> management of human, physical, techn0- business business is
logical, and financial resources. ventures as an important to
option for the success of
> confronting actual and potential making a mega-
rivals. living. entrepreneurs.
Risk -take risks by -more willing
> responding to various opportunities, Appetite default if to take risks.
challenges and development. they want to
survive and
> managing growth and threats for the
escape the
survival of the business.
consequences
5. Reaping the Returns of
unemployment.
- pertains to strategies related to the -risk appetite
expansion of the business firm. is not much.
ENTREPRENEURIAL TRAITS & ENTREPRENEURIAL External Risks
INTENTION - are threats coming from various
environment outside the business firm
1. Internal factors
Internal Risks External Risks
> Demographics
• Liquidity and • Lethargic
gender, age, marital status, and
Financial Risks Economy
employment status of individual who are
• Failure to hire • Increased
likely to form entrepreneurial best talents Competition
intentions. • Damage to • Business
> Personal Traits reputation interruptions
-theoretical bases for the contributions • Failure to • Political Risks
of self-confidence, determination, and innovate
enthusiasm and other positive human LESSON 1.3: GENERATING IDEAS: HARNESSING
qualities. LOGIC AND CREATIVITY
> Psychological Traits
-includes a host of qualities including DEVELOPING BUSINESS IDEAS
need for achievement, risk appetite, SOURCES OF IDEAS FOR ENTREPRENEURIAL
acceptance for vagueness, self-efficacy VENTURES
and goal setting.
> Individual Skills & Prior Knowledge A. From the product
-vocational know-how, supervisory, and - Differentiates them from those
managerial skills acquired from work currently in the market
experience. - Can differentiate a product by
> Social Ties changing its shape, size, color and
-important in building networks that can contents.
complement the productivity of human and B. From the process of production and
non-human resources of business. distribution
2. External factors C. From the person
-environmental influence - Interests, hobbies, skills, dreams,
-includes regulatory structure, patents, and even his/her travels.
protection of property rights, and - Prior employment
competitive environment D. From relations
- From families and relatives.
PORTER’S FIVE FORCES OF COMPETITION
METHODS FOR GENERATING OR TESTING NEW
- A tool was created by Harvard Business IDEAS
School professor Michael Porter, to
analyze an industry's attractiveness Logical Thinking
and likely profitability.
- Systematic and rational way of
providing an answer to a question
✓ Statistical Analysis
- refers to a systematic analysis of
data generated from survey of
individuals.
• Market Analysis
- which is undertaken to know the
various factors that affect the demand
for a particular product or service.
- it can also determine how certain
socioeconomic and demographic groups
will react to the introduction of a
RISKS, COGNITIVE ADAPTABILITY, AND
new commodity or a change in existing
ENTREPRENEURIAL DECISIONS RISKS
products or services.
- are uncertain situations and
developments that can increase the • Swot Analysis
probability of loss or business - is usually describe the state of
failure competition within an industry.
Internal Risks
- pertains to danger coming from the • Delphi Technique
management of resources of a business - is the systematic way of generating
enterprise ideas from a select group or
individuals using various rounds of
consultations or sessions
 Creative Thinking
- Looks at things from different
perspectives
• Brainstorming
- refers to an unstructured discussion
of a group to elicit ideas.
• Problem Inventory Analysis
- it uses the group discussion method to
elicit ideas from the usual
brainstorming because it is directed
to identifying all possible problems
encountered with a specific product or
service.
• Free Association Method
- is another technique used in
discovering business ideas
- It is a method that has been used in
psychology to elicit the unconscious
thoughts of individuals by expressing
their thoughts associated with words
and ideas given by the therapist.
• Checklist Method
- is another creative way of obtaining
business ideas from target
participants by listing all the
possibilities
METHODOLOGIES THAT FOCUSED ON THE BUSINESS
ENVIRONMENT
• Porter’s Five Forces of Competition
• Swot Analysis
• Environmental Scanning
CREATIVITY: A NEW OF LOOKING AT THINGS
- The capacity of individuals to
originate new ideas from ideas the
individual has been previously
exposed.
Factors that influence CREATIVITY:
• Problem Solving Factors
- Provide an answer to a problem.
• Motivational Factors
- Internal and external factors that
stimulate desire and energy in people
to be continually interested and
committed to a job, role or subject,
or to made an effort to attain a
goal.
• Situational Factors
- Creativity of an individuals is
manifested when they are confronted
with concrete situations.
• Organizational Factors
- A creative person thrives in an
environment that is nurturing and not
threatening.
LESSON 1.4: RECOGNIZING, ASSESSING AND
EXPLOITING OPPORTUNITIES
Opportunity
- situation or occasion that makes it
possible to do something that you
want to do.
- an exploitable set of circumstances
with uncertain outcome requiring a
commitment of resources and
involving to risk.
STAGES OF OPPORTUNITY RECOGNITION
1. Precondition
- a preparatory stage, during which the
individuals assesses which his
knowledge of the market.
2. Conception
- this is the gestation phase, during
which entrepreneurial intentions and
ideas are generated, using logic,
creative thinking or both.
3. Visioning
- it provides the individual a hunch
that can serve as an opportunity for
business.
- this comes about as ideas become
clearer and how the logic of
connections leads the individual to a
new idea.
4. Assessment
- this stage involves the evaluation
whether the idea can be realized or
not.
5. Realization
- the last phase suggests the production
of a prototype.
- this is the stage when the mental
construct or idea is now felt in its
tangible or physical form.
FACTORS IN OPPORTUNITY RECOGNITION
1. Market Awareness (prior knowledge of
the market)
- refers to the personal exposure to the
market and its components including
customers and suppliers.
2. Entrepreneurial Readiness
(entrepreneurial alertness)
- refers to a variety of features of an
individual to start a business
venture.
3. Connections (networks)
- business opportunity recognition in
heightened when the individual has a
diversity of networks.
 OPPORTUNITY ASSESSMENT
Product or Service
- a business opportunity is primarily
the potential of introducing a new
product or service in the market.
Market Opportunity
- refers to the appraisal of the
characteristics of the market.
Costing and Pricing
- a product which may be considered
valuable by consumers may not be
affordable.
Profitability
- is the extent of profitability of a
product or service
Resource Requirements
- process production
two types used in the PRODUCTION:
✓ Intermediate Inputs
– also called raw materials that need
further processing.
✓ Factors Inputs
- processing inputs which include labor,
capital, and technology.
RISKS
- the uncertain situations that can
increase the profitability of loss or
failure of a business venture.
✓ Internal Risks
- emanate from the management of
resources, can be prepared and
controlled.
✓ External Risks
- arise from various environments
affecting business, can be managed.
Entrepreneurial Commitment
- the last element in the process of
entrepreneurial assessment relates to
the commitment of the individual to
pursue the realization of its business
idea.
OPPORTUNITY PATHWAYS
Rational Approach
- also called TRADITIONAL APPROACH
- uses systematic procedures in
proceeding with the implementation of
a business opportunity
Intuitive Approach
- starts with the recognition of an
opportunity and proceeds directly to
the grabbing of the opportunity after
sensing that it can be done.
PRODUCT PLANNING AND DEVELOPMENT PROCESS
Two main phases:
✓ PRECOMMERCIALIZATION PHASE
• Idea Stage
- refers to the formation of business
ideas.
- starts with an entrepreneurial
intent and proceedings with the
development of the business idea
using of logic and creativity.
• Concept Stage
- the refinement of ideas and
visualization of an idea that can
serve as business opportunity
- the initial customer evaluation
also happens during this stage; and
- feasibility study or market study
is used to determine if there is a
demand for the product or service.
• Product Development Stage
• Test Marketing Stage
- the product or service is
introduced in the marker after a
series of evaluation and feedback
from potential customers.
✓ COMMERCIALIZATION PHASE
LESSON 1.5: THE BUSINESS PLAN
Business Plan
- is a document that describes the
various external and internal elements
involved in starting a business or in
expanding as existing venture, amidst
dynamic business environment.
Entrepreneur
- allows to anticipate potential
business risks.
- serves as a road map for managing the
business.
- identifies the resources needed to
operate and grow the business.
- more crucial for him if he invests in
fixed assets, such as land, buildings,
and expensive equipment.
Lender
- allows to assess whether the
entrepreneur will be able to meet debt
and interest payment.
- provides information about collateral
or tangible assets that can be secured
for the loan.
- allows to assess the four C’s of
credit: character, cash flow,
collateral, and equinity contribution.
Investor
- allows the investor to gauge whether
projected returns are acceptable.
- provides information about the
character of the entrepreneur and
about the capability of the venture’s
management team.
Marketing Information Needs
• General Environmental Trends
• Specific Industry Trends
• Local Market Conditions
• Market Potential Demographic and/or
Psychographic Profile of Target Market
Operations Information Needs
• Location
• Manufacturing or Service Operations
• Equipment and/or Furniture Required
• Space Requirement
• Labor Requirements
• Raw Materials Needed and Potential
Suppliers
• Utilities
Financial Information Needs
• Rental Rates
• Cost of Equipment
• Cost of Utilities
• Personnel Costs
• Cost of Insurance
• Registration and License Fees
MAJOR SECTIONS OF BUSINESS PLAN
Introductory Page
- provides a brief summary of the
business plan’s content
• Business name and address
• Names and addresses of business
owners/entrepreneurs
• Natures of the business
• Statement of financing needed
• Statements of confidentiality of the
report (optional)
Executive Summary
- highlights of the business plan
summarized in two or three pages
Environmental and Industry Analysis
• Conditions of the general
environments
• Conditions of the specific
environment
Description of The Business
• Products and/or services
• Size of the business
• Mission statement and core values
locations of the business and its
major physical assets
• Background of the business
owners/entrepreneurs
Production Plan
• Manufacturing process
• Physical plant
• Machinery and equipment
• Suppliers of raw materials
• Future capital equipment needs
Operational Plan
• Descriptions of the company’s
operations
• Flows of orders for goods and
services
Marketing Plan
• Pricing
• Distribution
• Promotion
• Sales forecasts
Organizational Plan
• Form of ownership
• Principal shareholders or partners
• Organizational chart/lines of
authority
• Background of the management team
• Roles and responsibilities of
management team
Financial Plan
• Assumptions
• Pro forma balance sheet
• Pro forma income statement
• Cash flow projections
• Sources and uses of funds
• Breakeven analysis
Assessments of Risks

• Potential risks-internal or external

• Strategies for preventing or
minimizing risks
• Response to risks should they occur
Timetable/Milestones

• Formal registration of the business

• Completion of product or service
design
• Completion of prototypes
• Hiring of initial personnel
• Reaching agreements with suppliers
and distributors
• Actual productions
• Initial orders, sales and deliveries
Appendices

• Market research data

• Detailed financial projections
• Curriculum vitae of the management
team
• Price lists from suppliers
• Profile of competitors

- CC