ENTREPRENEURSHIP

LESSON3:
CREATING AN ENTERPRISE – PART 2

TEACHER:
MS. HAZEL N. ROSALES
TOPIC

• IDENTIFYING BUSINESS OPPORTUNITIES

OBJECTIVE:

• Students will learn to identify and assess

entrepreneurial opportunities in a variety of
contexts.
 REVIEW

ENTREPRENEURIAL ACTIVITIES – CREATING

AN ENTERPRISE PART 1:
• TRADING
• MANUFACTURING
• SERVICE
TOPIC:
IDENTIFYING BUSINESS OPPORTUNITIES

• Start a New Business

• Buy an Existing Business
• Take Over Family Business
• Buy a Franchise
TOPIC:
START A NEW BUSINESS

START-UP
- Means creating a new NEW
business from scratch or zero.
Start-ups could be a business
that provides customers with FRESH
products that do not exist or
businesses that provide
customers with improvements UNIQUE
on existing products.
TOPIC: START A NEW BUSINESS
Reasons for Starting your Own Business:
o Inventions of new products or services that STYLE
necessitate a new type of business.
STRATEGY

o Freedom to select the ideal location,

INDEPENDENCE
equipment, products or services, employees,
suppliers, and bankers.

o Avoidance of undesirable policies, FREE WILL

procedures, and legal commitment of the
existing firms.
TOPIC: START A NEW BUSINESS
TYPES OF START-UP IDEAS:
o Type A Ideas – providing customers with a
product or service that does not exist in their IDEAS
market but already exists somewhere else
(New Market).

o Type B Ideas – a technically new process

(new technology).

o Type C Ideas – these are concepts for

performing old functions in new and improved
ways (new benefit).
TOPIC: START A NEW BUSINESS
SOURCES OF PRODUCT IDEAS:
o Random Happenings – like strolling in the CHANCE HAPPENING
park, jogging, fetching kids from school.
o Hobby that turns into business. PERSONAL INTEREST / HOBBY

o Interaction, support, and exchange of ideas FRIENDS & RELATIVES

and experiences from family or friends.
o Early exposure to a family-owned business. FAMILY BUSINESS
o Recommendations of people around you. SUGGESTIONS
o Applying theories learned from school. EDUCATION OR COURSE
o Experience from previous job or work. WORK EXPERIENCE
TOPIC: START A NEW BUSINESS
SOURCES OF PRODUCT IDEAS:

o Product Development and Improvement. RESEARCH & DEVELOPMENT

o New Innovation. CREATIVE PROBLEM SOLVING

o Shared Ideas from Experts. FOCUS GROUP DISCUSSION

o Group of Individuals meet and stimulate each BRAIN STORMING

other through freewill discussion.
o Ideas resulted from consumer surveys. PROBLEM INVENTORY ANALYSIS
o Other means like NEED. OTHER MEANS
TOPIC: START A NEW BUSINESS
SPOTTING OPPORTUNITIES:
o Be observant and keen in determining the MARKET NEED
needs of the people in the community.
o Your place is always a possible source of LOCATION
opportunity.
o What people do in the community could also HOBBY OF THE PEOPLE
be a business opportunity.
o Availability of resources in the community. AVAILABLE MATERIALS

o Evaluate yourself – your interest, knowledge, YOUR INTEREST &

and skills. KNOW-HOW
TOPIC: BUY AN EXISTING BUSINESS
BUY-OUT:
This means that the entrepreneur simply buys an existing
business for sale on which he introduces innovations and
improvements.
Reason for Buying an Existing Business:
STABLE
o To reduce some uncertainties and unknowns that must be
faced in starting a business from the ground.
FUNCTIONAL
o To acquire a business from ongoing operations and
established relationships with customers and suppliers.

o To obtain an established business at a price below what it ESTABLISHED

would cost to start a new business.
TOPIC: BUY AN EXISTING BUSINESS
ADVANTAGES OF BUY-OUT:

o A successful business may continue to be successful.

o An existing business may already have the best location.
o Employees and suppliers are in place.
o Types of equipment are already installed, and productive capacity is known.
o Trade credit has been established.
o The new business owner can use the experience of the former business
owner.
o Finding financing is usually easier.
o Potentially, it could be a bargain.
TOPIC: BUY AN EXISTING BUSINESS
DISADVANTAGES OF BUY-OUT:

o The previous owner may have created ill-will.

o Employees inheriting the business may not be possible.
o The business location may have become unsatisfactory.
o Pieces of equipment and facilities may be obsolete or inefficient.
o Change and innovation may be difficult to implement.
o Inventory may become outdated & obsolete.
TOPIC: TAKE OVER FAMILY BUSINESS
FAMILY BUSINESS:
One of the more successful routes to entrepreneurship. Running
and passing on family businesses thrive on the principle “when it
works right nothing succeeds like a family firm. The flash of the SUCCESSION
fast buck is replaced by long-term plans. Tradition counts.”

ADVANTAGES OF A FAMILY BUSINESS

o Strength of Family relationship. INHERITANCE
o Willingness of family members to make sacrifices for the good
of the firm.
o Demonstrations of a high level of concern for employees (family
orientation). FAMILY
TRADITION
o Ability to plan for the long-term.
o Emphasis on quality and values.
TOPIC: TAKE OVER FAMILY BUSINESS
MODEL OF SUCCESSION OF FAMILY BUSINESS:
o Stage 1: Pre-Business – The children become aware of some KINGDOM
facets of the firm or industry. Orientation of the children by family
members is very informal.
o Stage 2: Introductory – The children are exposed to business PLAYGROUND
jargon, business employees, and the business environment.
o Stage 3: Introductory Functional – Children start to work as part- TRAINING
time employees. Work gradually becomes more difficult. Usually,
training includes education and sometimes works for other firms. GROUND

Entry of Successor:
o Stage 4: Functional – Potential successor assumes managerial BATTLE
positions, which includes all management positions before
becoming President/General Manager of the business enterprise. GROUND
TOPIC: TAKE OVER FAMILY BUSINESS
MODEL OF SUCCESSION OF FAMILY BUSINESS:
Transfer of Leadership:
o Stage 5: Functional – Successor assumes HEIR
Presidency or General Manager position. This
already includes the period in which the successor
becomes de jure (rightful entitlement or claim)
head of the company.
o Stage 6: Mature Succession – The successor SUCCESSOR
becomes the de facto (in fact or actual) head of
the company.
TOPIC: BUY A FRANCHISE
FRANCHISING:
- is a marketing system revolving around a two-party
legal agreement whereby the Franchisee conducts
business according to terms specified by the Franchiser. EASY
FRANCHISEE – an individual who purchases the rights
to use a company’s trademarked name and business
model to do business. MONEY
FRANCHISER OR FRANCHISOR – owns the overall
rights and trademarks of the company and allows its
franchisees to use these rights and trademarks to do FAMOUS
business.
FRANCHISE CONTRACT – this is the binding and legal
agreement between the franchiser and the franchisee.
TOPIC: BUY A FRANCHISE
ADVANTAGES OF BUYING A FRANCHISE:

 Established business name.

 Free training for the employees.
 Free advertising.
 Financial assistance.
 Technical assistance.
 Continuous supply of materials
TOPIC: BUY A FRANCHISE
DISADVANTAGES OF BUYING A FRANCHISE:

 Franchise fees could run into millions of pesos.

 The investment cost includes the renovation to jibe (agree)
with the concept of the franchisor.
 Royalty payment for the use of the name.
 Shared payment for the advertising/promotion fee.
 False expectations.
RECAP: CREATING AN ENTERPRISE 2
OPPORTUNITY FOR BUSINESS:
The Philippines is a free enterprise system, any person is free to go into
business. The main purpose of business opportunity is to serve as the basis for
any action that results in profit and business growth. Opportunities allow
businesses to create and implement ideas, and innovations and improve their
performance.

Entrepreneurs are energizers of business, it involves the sale or any lease of

product, service, and equipment that will enable the purchaser-licensee or
franchiser to begin a business.

All franchises are business opportunities but not all business opportunities are
franchises, it could be a new business, buying a business, or a family business.
ACTIVITY: ASYNCHRONOUS 3
PANDEMIC PROOF BUSINESS IDEA:

Give one (1) example of a business idea you can start in the middle
of a pandemic and explain briefly why you think it is a good business
opportunity.
NEXT LESSON:
GLOBAL OPPORTUNITIES

THANK YOU FOR WATCHING!

REFERENCES:

Banastao, Cristina B., Frias, Solita A., “Entrepreneurship” Katha Publishing Co. Inc., 2010

Pereda, Pedrito R., Pereda, Purisima P,

Agustin-Acierto, Marife., “Entrepre Pinoy Introduction to Entrepreneurship” Purely Books Trading and Publishing Corporation,
2012

Azarcon, Ernie Roy S., et al., Entrepreneurship Principles and Practices (A Modular Approach) Second Edition, 2
2008

Edralin, Divina M., Entrepreneurship, 2016

De Guzman, Ines Alcantara., Phd., The Young Entrepreneur, 2016