Why is entrepreneurship important in a global society?

- Entrepreneurship is important, as it has the ability to improve

standards of living and create wealth, not only for the entrepreneurs
but also for related businesses. Entrepreneurs also help drive change
with innovation, where new and improved products enable new
markets to be developed.
Why entrepreneurship became a social movement today?
- Having social impact built into your business model adds a plus to
your business and the people involved in it. It's connecting your
brand's 'why' to 'how' it can be used to help make the world a better
and more equal place
How does globalization impact entrepreneurship?
- Globalization may also create a demand for new, more diversified
products through cross-cultural exposures and for higher end goods
and services through increased prosperity. This change in demand
may help form new market niches and create new entrepreneurial
opportunities

Slide 42
Setting Goals
- If you're in business, it goes without saying that you want to be a
success. But what is the definition of success? To decide that, you
need to set yourself goals. But not just any goals. You need SMART
goals.
- A SMART goal is used to help guide goal setting. SMART is an
acronym that stands for Specific, Measurable, Achievable, Realistic,
and Timely. Therefore, a SMART goal incorporates all of these
criteria to help focus your efforts and increase the chances of
achieving your goal.
Explanation:

S-pecific (Goals should be specific and answer the questions, “What?”,

“Why?” and “How?”)

- Before you do your business, you should first ask yourself these
questions: What do I Want to accomplish? Or What am I trying to
achieve? Why do I want to accomplish this goal? What’s the purpose
of the goal? And, How will I achieve this goal?

● What would I sell?

● Where would I sell it?
● To whom would I sell it?

- In setting your goal, you should be precise, specific and detailed . For
example, a general goal would be “I want to get in shape.” A more
specific goal would be “I want to obtain a gym membership at my
local community center and work out four days a week to be
healthier.”

An example of a SMART goal, with respect to the specific feature,

could be: “I want to sell more high quality sports products in my 4
 stores located in malls to take advantage of the effect of a sports
festival that will happen in my city.”

- It goes without saying that your goal is to make a profit, or to sell more,
these are general goals, not examples of SMART goals in companies.
Because A “Smart Goals” should answer the 5 W’s and 1 How’s questions.

Additional Information:
It's not enough to declare that you want to increase your turnover or
open two new branches. That's vague thinking. The truth is, the best
goals in business are SMART goals.Clearly, SMART is an acronym. It
stands for Specific, Measurable, Achievable, Relevant and Time-bound.

SMART goals are strategically designed to give any business project

structure and support and to set out more clearly what you want to
achieve – and by when.With SMART goals, you get to track your
progress and stay motivated. Assessing your progress keeps you
focused, helps you hit your deadlines, and creates a sense of
excitement when you get nearer to hitting your targets. SMART goal-
setting can also stop you feeling overwhelmed by the enormity of a
project.Let's look more closely at each of those five elements.

M-easurable (Goals should establish ways to measure your progress)

- A SMART goal must have criteria for measuring progress. If there are
no criteria, you will not be able to determine your progress and if you
are on track to reach your goal. To make a goal measurable, ask
yourself: Will the project take a few weeks to complete or more? How
much do I need to spend on this? How do I know if I have reached
my goal? And What is my indicator of progress?
- For example, building on the specific goal above: I want to obtain a
gym membership at my local community center and work out four
days a week to be healthier. Every week, I will aim to lose one
pound of body fat.
- Hence, making goals measurable ensures that they’re more tangible
and attainable. It gives you a way of evaluating progress.

Additional Information:
A- attainable (Goals should not be too far out of reach)

- A SMART goal must be achievable and attainable. This will help you
figure out ways you can realize that goal and work towards it. The
achievability of the goal should be stretched to make you feel
challenged, but defined well enough that you can actually achieve it.
Ask yourself:
● Do I have the resources and capabilities to achieve the
goal? If not, what am I missing?
● Have others done it successfully before?
- Goals are designed to motivate you, to get you out of bed each day
determined to move one step closer.

R-ealistic (Goals should represent things to which you are willing to commit)

- A SMART goal must be realistic in that the goal can be realistically

achieved given the available resources and time. A SMART goal is
likely realistic if you believe that it can be accomplished. Ask yourself:
1. Is the goal realistic and within reach?
2. Is the goal reachable, given the time and resources?
3. Are you able to commit to achieving the goal?

T-ime Bounded (Goals should have a timeframe for achievement)

- A SMART goal must be time-bound in that it has a start and finish

date. If the goal is not time-constrained, there will be no sense of
urgency and, therefore, less motivation to achieve the goal. Ask
yourself:
1. Does my goal have a deadline?
2. By when do you want to achieve your goal?
 For example, building on the goal above: On August 1, I will obtain a
gym membership at my local community center. In order to be healthier, I
will work out four days a week. Every week, I will aim to lose one pound of
body fat. By the end of August, I will have realized my goal if I lose four
pounds of fat over the course of the month.

THE IMPORTANT OF SMART GOAL SETTING

https://www.tonyrobbins.com/career-business/the-6-steps-to-a-smart-goal/

- SMART goals set you up for success by making goals specific,

measurable, achievable, realistic, and timely. The SMART method
helps push you further, gives you a sense of direction, and helps you
organize and reach your goals.

- There are many reasons businesses fail, from neglecting the

importance of constant innovation to resisting the growth mindset
necessary to push through hard times. The bottom line is that these
companies failed to reach their goals, likely due to problems with the
goals themselves. Failed businesses didn’t create SMART goals that
would have facilitated success.

- It’s time to use SMART goals to change your mindset. Because of

their effectiveness, SMART goals are commonly used in business,
but you can also use them in your personal life, from creating fulfilling
relationships to mastering a new skill. No matter which area of your
life you want to improve, this strategy saves you the wasted time of
not knowing precisely what you want or how to get it. SMART goals
can help you “ladder up” to the bigger goals you set when you identify
your purpose. Being purposeful and living with intention is what
SMART goals are all about.

Slide 43
 Strategic objectives are usually split into two categories: financial
objectives and non-financial objectives. The financial objectives are the
ones that most people think of for companies and they involve profits, costs
and so on. Everything else falls into the category of non-financial
objectives.

First, let’s talk about “Financial Goals”.

Financial planning for a business involves many elements and is
essential for a business's success. Creating financial objectives is one of
the most important parts of this process. Businesses should know what
their financial goals are in order to properly manage their money and track
their progress

What is F.G? www.indeed.com/career-advice/career-

development/objective-of-finance

- According to indeed.com, a financial goal is a goal that businesses

set for success and growth. And there are many different types of
financial objectives, and which ones a business sets may depend on
what type of products and services it offers, how it operates and what
its current needs are. Financial goals typically focus on increasing a
business's profits or sales, but they may also focus on investments
and economic stability. Financial goals are often measurable goals
that businesses can track and reach. These objectives typically focus
on long-term success.

Financial Goals
● Financial goals should be:
● Realistic
● Measurable
● easily attainable in the time allotted

Examples:
 - Emergency fund- In a fragile job market, emergency funds are
essential. Emergency funds are commonly used to fix a surprise car
repair, pay for a hospital stay, the mortgage, and a variety of other
unforeseen issues.
- Save for retirement -

Additional Information:
Many small-business owners start a company based on the fact that
they have expertise with a particular product or service, not because they
are general business experts. Focusing your efforts on creating a great
product is key to your success, but you’re in business to make money, and
the way you handle the financial side of your business is as important to
your success as the quality of what you sell. Take the time to set realistic
financial goals and monitor them to ensure that your business meets its
potential.
● Increased Revenue - One of the most obvious financial goals for any
business is increased revenue. Revenue differs from sales in that sales
refers to units, while revenue refers to amounts. For example, you can
increase your revenues without increasing your sales by raising your
prices. Forecast your revenues and set goals every year using a variety of
tools, including past performance, marketplace analysis, industry research,
and feedback from your staff. Don’t set a generic goal of increased sales --
work to set specific revenue goals, and review and adjust them each
quarter, as necessary.
● Decreased Costs - Many small-business owners fail because they
don’t control their costs. The difference between profit and loss is
often not sales volume, but cost control. Review your expenses to
learn if you can cut your utility costs, reduce waste, negotiate better
contracts, decrease interest payments, and find other efficiencies you
haven’t considered. Simply bidding out contracted services, such as
insurance, information technology, accounting or marketing, can help
you identify ways to trim your budget each year.
● Improved Margins - Another way to improve your profits without
increasing sales or revenues is to set a goal for improving your profit
margins. You can do this by reducing your cost of production and
overhead expenses and by raising your prices.
● Cash Flow Planning - Knowing how much you will need to pay your
expenses is an important part of financial planning, and a master
 budget helps prevent surprises. Many small business owners make
the mistake of not tracking when they will owe money, leading to
temporary shortages and cash flow problems. Create a cash flow
budget that lets you see the exact amount of money you might take in
and owe each month, in addition to creating a budget that shows your
monthly averages. Cash flow planning helps you avoid a lack of cash
that could stall or shut down your business when you can’t pay your
bills, even temporarily.

Why are financial goals important?

Financial goals are important because they help you make a plan to
improve your business. With financial goals, you can track your
progress and see whether you have met your objectives within the
time frame you set.
Creating financial objectives is an especially important part of building
a new business or making substantial changes to an existing
business. These goals are something to work toward, and they
influence how a company operates and what decisions it makes.

- Building wealth is simple but it does take time and a little effort.
Like any activity, be it growing a business or learning a new
skill, you need to decide early on what your long-term
objectives are. It’s exactly the same when you are building
wealth, it is important to set financial goals. If you know what
your financial goals are, you can start working to accomplish
them. And working out what those goals are is the very first
step.

Slide 44
Nonfinancial Goals -. Non-financial goals also play an important role in
improving the overall performance and turnover of the company. These
goals help even out a business’s strengths in areas like production quality,
customer and employee satisfaction etc.
 Having goals in place helps focus the management team on the
operational steps it must take and the resources it needs to meet
these targets. Reaching key non-financial goals improves the
company's chances of achieving important financial targets such as
revenue and profitability.
● Nonfinancial goals may include:
● personal satisfaction - (customer service and employee
engagement and satisfaction)
A. Customer Service - This is one of the most important
non-financial aspects of a business. Providing customers
with quality products and services is not enough. You
must aim to provide them with a positive experience every
time they interact with your business. When the customer
feels valued, it encourages them to give your company
additional business in the future. Customer service can be
improved through employee training and by setting high
expectations. You could monitor employee interactions
with customers and identify areas that can be improved.
(https://www.northantsaccounting.co.uk/financial-non-
financial-objectives-make-business-successful/ )
B. Employee engagement and satisfaction - By
concentrating more on employee satisfaction, businesses
can create a work environment of loyal and engaged
employees. Not to mention with an increase in employee
morale comes better effort and attendance. Also, when
you aim to enhance the work environment for employees,
it shows that you care about them more rather than
simply making profits. Objectives related to employee
engagement and satisfaction usually involves
appreciating exceptional work, giving employees greater
responsibility, promoting teamwork, creating a positive
workplace and interacting openly.
● serving a community need - Non-financial aims of a business
often include contributing time and financial support to
improving the quality of life in their community – being a good
corporate citizen. This support could include sponsoring charity
events and encouraging employees to get involved in worthy
 causes. Any efforts to get involved can enhance the company's
reputation and give its brand name additional exposure.
● enjoying personal independence

SUMMARY:
Financial Objective Examples
● To increase turnover to over $5 million in the next 8 years
● To increase total revenue by 15% annually for the next 5 years
● To decrease marketing expenses by 5% annually for the next 7 years
● To increase net profit by 15% annually

Non-Financial Objective Examples

Some organizations are not focused on profit - such as non-
profit organizations. Some non-financial objectives relate to the
current customers, potential customers or customer services, as
follows:
● To expand sales to existing customers (current customers)
● To increase customer loyalty to the weaker brands (current
customers)
● To develop new products for current and potential customers (current
and potential customers)
● To become international by setting up an online ordering service
(current and potential customers)
● To improve customer satisfaction with customer services (customer
services)
Other non-financial objectives might relate to other areas, such as
technology (for example, when a hotel chain increases efficiencies with
security and virtual technology) or the organization's people (for example,
when a software developer aligns performance and rewards management
with corporate core values).

Slide 46 & 47 (Next lesson)

Lesson 1.4
 Problem Solving for Entrepreneurs
Goals (The following are the objectives of this lesson)
● List the six steps of the problem-solving model.
● Describe ways to improve your problem-solving skills.
Terms
● brainstorming
Slide 48
Use the Problem-Solving Process

1. Define the problem - Defining the problem is a crucial step that

involves digging deeper to identify what it is that needs to be
solved. The more clearly a problem is defined, the easier you’ll
find it to complete subsequent steps.

● write down what the problem is

● define why it is a problem
● quantify or measure the problem (ex, is the problem easier to solve or
not? Or Does the problem need a large cost to be solved?)
2. Gather Information
● collect information that can help solve the problem

3. Identify various solutions

● Identify all the possibilities before selecting a particular solution.
● Brainstorming techniques are useful tools in this stage of
problem solving.
● Brainstorm creatively — ask lots of questions about the who,
what, where, when, and how of the causes to point to various
possibilities. Don’t limit yourself by considering practicalities at
this stage; simply record your ideas.

4. Evaluate Alternatives and Select the Best Option

- After you have identified your various solutions , you will now
have to evaluate your alternatives and select the best option. In
evaluating your ideas, more options could present
themselves. You could do this by quantifying or rating each
possible solution you came up with in step 3 according to
criteria such as how effective it will be, how much time or
effort it will take, its cost, and how likely it is to satisfy
stakeholders.

5. Take Action (slide 52; not included)

- Implement the solution
- During this step, you determine what steps must be taken,
designating tasks where necessary. And you decide on
deadlines for completing the actions and estimate the costs of
implementing them. You also create a contingency plan in case
of unforeseen circumstances so that if anything goes wrong
with your plan, you have a “plan B” in place.
 - Typically, this stage involves narrowing down the possible ways
to implement the solution you’ve chosen, based on any
constraints that apply. You also should draw up an action plan.
The complexity of the plan will depend on the situation, but it
should include the who, what, and when of your proposed
solution.
6. Evaluate the Action - This is an ongoing process. You need to
ensure the required resources remain available and monitor
progress in solving the problem; otherwise, all the work you’ve
done might be for nothing.
- implementing the solution while at the same time monitoring its
effectiveness.

The Effectiveness/Importance of Problem-Solving Model

The six-step problem-solving model, and the tools it provides, is an

effective, systematic approach to problem solving. By following each step
consciously, you can ensure that generating solutions is a fact-driven,
objective, and reliable process.

It encourages you to dig deeper to the root cause, allows you to get input
from others, to be creative when finding solutions, and to monitor your
solutions to make sure they’re working. So by following this model you’re
more likely to come up with good, original, lasting solutions.

To solve problems effectively, you need to use a good problem-solving

model. The six-step model is a tried-and-tested approach.

CHAPTER 2: PRACTICING ENTREPRENEURSHIP (slide 45-55)

Slide 45:
Terms
Slide 46:
How Much Is Enough?
Supply
- how much of a good or service a producer is willing to
produce at different prices
- In simple terms, supply describes the total amount of a
specific good or service that is available to consumers
A. Law of Supply - states that the higher the price of the
goods, the higher the quantity will be supplied.
Producers are ready to supply more at a higher price
and the reason for the same being selling a higher
quantity at a higher price will increase their revenue.
Demand
- An individual’s need or desire for a product or service at a
given price
- In other words, demand refers to the number of goods that
consumers want to buy and have the purchasing power to
afford at a range of prices.
B. Law of Demand - says that, if all other factors remain
equal , the higher the price of a product or goods, the
lesser the people will demand that product or goods.
Speaking differently, the higher the price of the good,
the lower the quantity will be demanded.
Slide 47:
Here is a graphic representation of the supply curve. As we
can see on the graph, as the price rises from 10 to 50 dollars, the
quantity supplied rises, too. Therefore, Suppliers are willing to
supply more of a product or service at a higher price. So, there is
a direct relationship between product price and quantity of a
product that a seller is willing and able to supply.
However, if the price falls, so does supply too.
Slide 48:
Here, we have a graph representation of the demand curve.
As we can see, as the price of a product falls, the demand
increases. Therefore, individuals are willing to consume more of a
product or service at a lower price. So, there is an “inverse”
relationship between product price and quantity demanded. This
means that when you plot the schedule on a graph, you get a
downward-sloping demand curve
But price is an obstacle to purchasing, so if the price rises
again, less will be demanded.

Slide 49:
Demand Elasticity
 - when the demand of a product is affected by its price
- refers to how sensitive demand for a good is compared to
changes in other economic factors, such as price or income.
It is commonly referred to as price elasticity of demand
because the price of a good or service is the most common
economic factor used to measure it.
For example, a change in the price of a luxury car can
cause a change in the quantity demanded. If a luxury car
producer has a surplus of cars, they may reduce their price
in an attempt to increase demand. The extent of the price
change will determine whether or not the demand for the
good changes and if so, by how much.

Additional Information:

Income Elasticity of Demand

The income elasticity of demand is also known as the income
effect. The income level of a given population can influence the
demand elasticity of goods and services.

For example, suppose that an economic event leads to many

workers being laid off. During this time period, people may decide
to save their money rather than upgrading their smartphones or
buying designer purses. This would lead to luxury items becoming
more elastic. In other words, a slight change in income level
would lead to a significant change in the consumption of luxury
goods.

Elastic demand
- when a change is price creates a change in demand (PPT)
 - In other words, A product or service is said to have elastic
demand when a change is when the change in quantity
demanded is large when there is a change in price.
- For instance, Soft drinks and many other nonessential
items have highly elastic demand. It is elastic demand
because there is competition among every brand and type of
soda, and there are many substitutes for the entire category
of soft drinks.
Another example is airline tickets. Airline tickets are
sold in a fiercely competitive market. Buyers can easily
compare prices, and buyers experience the services
provided by competitors as being very similar. Buyers can
often choose not to travel if the cost is too high or substitute
travel by car or train.

Inelastic demand
- when a change in price creates very little change in demand
(PPT)
- Products and services have inelastic demand when the
change in quantity demanded is small when there is a
change in price.
- In other words, Inelastic demand is a term economists use to
refer to a situation where demand for an item remains the
same no matter how far its price rises or falls.
Example:
Gasoline- is an inelastic demand example because the amount
of gas people buy remains roughly the same, even when prices
increase.
Cigarettes – People who smoke become addicted so willing to
pay a higher price

Medical Procedures - Essential medical procedures have

inelastic demand. The patient will pay what she can or what she
must. In general, products that significantly affect health and well-
being have inelastic demand.
Concert Tickets - Only Taylor Swift can offer a Taylor Swift
concert. She holds a monopoly on the creation and delivery of
that experience. There is no substitute, and loyal fans are willing
to pay for the experience. Because it is a scarce resource and the
delivery is tightly controlled by a single provider, access to
concerts has inelastic demand.

Slide 50 & 51:

When Supply and Demand Meet
Equilibrium price and quantity
- the price at which supply equals demand
- The equilibrium price is the only price where the plans of
consumers and the plans of producers agree—that is, where
the amount consumers want to buy of the product, quantity
demanded, is equal to the amount producers want to sell,
quantity supplied. This common quantity is called the
equilibrium quantity.
- The word equilibrium means balance. If a market is at its
equilibrium price and quantity, then it has no reason to move
away from that point. However, if a market is not at
equilibrium, then economic pressures arise to move the
market toward the equilibrium price and the equilibrium
quantity.
Here, we can see that there is no shortage or surplus of a product
in the market. Supply and demand intersect, meaning the amount
of an item that consumers want to buy is equal to the amount
being supplied by its producers. In other words, the market has
reached a perfect state of balance as prices stabilize to suit all
parties.

Slide 53,54 & 55:

Costs of Doing Business
Fixed costs (sunk costs)
- costs that must be paid regardless of how much of a good or
service is produced
- are predetermined expenses that remain the same
throughout a specific period. These costs are often time-related,
and do not vary with output or how the business is
performing. Some examples of fixed costs include; rent,
 telephone and internet costs, insurance, employee salaries
and loan payments.
For example, the rent of a building is a fixed cost that a small
business owner negotiates with the landlord based the square footage
needed for its operations. If the owner rents 10,000 square feet of space
at $40 a square foot for ten years, the rent will be $40,000 per month for
the next ten years, regardless of the profits or losses.
It is important to note that fixed costs are not constant in the long
run. Take the example above. The rent will be the same till the business
occupies the space or till the landlord decides to increase the rent after
the end of the lease agreement. If the owner decides to move to a
bigger facility or pay more, the business expense would obviously go
up.

Additional Information:
- Any small business owner will have certain fixed costs
regardless of whether or not there is any business activity.
Since they stay the same throughout the financial year, fixed
costs are easier to budget. They are also less controllable
than variable costs because they’re not related to operations
or volume.
Variable costs
- costs that fluctuate depending on the quantity of the good or
service produced
- Variable costs, however, change over a specified period and
are associated directly to the business activity. These are
based on the business performance and the volume of
services the business generates. Some examples of variable
costs include:
● Direct labor
● Commissions
● Taxes
● Operational expenses (cost of utilities like electricity,
gas or water)
 Since they are changing continuously and the amount you
spend on them differs from month-to-month, variable expenses
are harder to monitor and control. They can decrease or increase
rapidly, cut your profit margins and result in a steep loss or a
whirlwind profit for the business.

- Fixed costs will be incurred regardless of the level of sales.

Businesses with many fixed costs have a higher risk than
businesses with mostly variable costs.
Marginal benefit
- measures the advantages of producing one additional unit of
a good or service
- According to Evan Tarver (2021), a marginal benefit is the
maximum amount of money a consumer is willing to pay for
an additional good or service. It is also the additional
satisfaction or utility that a consumer receives when the
additional good or service is purchased. The marginal
benefit for a consumer tends to decrease as consumption of
the good or service increases.
- For example, imagine that a consumer decides she needs a
new piece of jewelry for her right hand, and she heads to the
mall to purchase a ring. She spends $100 for the perfect
ring, and then she spots another. Since she does not need
two rings, she would be unwilling to spend another $100 on
a second one. She might, however, be convinced to
purchase that second ring at $50. Therefore, her marginal
benefit reduces from $100 to $50 from the first to the second
good.

Marginal cost
 - measures the disadvantages of producing one additional unit
of a good or service
- Marginal cost refers to the additional cost to produce each
additional unit. For example, it may cost $10 to make 10
cups of Coffee. To make another would cost $0.80.
Therefore, that is the marginal cost – the additional cost to
produce one extra unit of output.

Additional Example:
- For example, a production line currently creates 10,000
widgets at a cost of $30,000, so that the average cost per
unit is $3.00. However, if the production line creates 10,001
units, the total cost is $30,002, so that the marginal cost of
the one additional unit is only $2. This is a common effect,
because there is rarely any additional overhead cost
associated with a single unit of output, resulting in a lower
marginal cost.

Importance of Marginal Cost

Marginal costs are important in economics as they help
businesses maximise profits. When marginal costs equal marginal
revenue, we have what is known as ‘profit maximisation’. This is
where the cost to produce an additional good, is exactly equal to
what the company earns from selling it. In other words, at that
point, the company is no longer making money.