Lesson 1: CONCEPT OF ENTREPRENEURSHIP
➢ The process of discovering a new venture with creativity and innovation.
➢ Entrepreneurship requires the assumption of risk and reaping of awards.
➢ It brings resources together and provides an option for self-employment to an
individual.
➢ It also creates employment opportunities for others.
➢ It is a complex term that’s often defined simply as running your own business.
➢ Entrepreneurship is the key driver of a dynamic company and involves the
recognition and evaluation of opportunities means increasing the value of an
existing product/services or creating mass markets with new technology.
Entrepreneurship is a science of converting processed ideas into a remarkable
business venture. “It is also a capacity for innovation, investment, and expansion in
the new market, products, and techniques.” - Fajardo (2009)
The different between Entrepreneur and Manager
Entrepreneur - employees work for someone else’s business. It stars their
businesses and work for themselves.
➢ An individual who is alert to profitable opportunities for the exchange of
goods/services.
➢ Is one who organizes, manages, directs, and assumes the risks of a
business/enterprise.
The Entrepreneurial Skills and Competencies.
The Entrepreneur as a Missionary
➢ is a missionary who perceives opportunities inherent in the exchange of goods
with a great desire for profit. It creates an environment in which success is
possible and the possibility of failure is controllable.
➢ He takes risks and invest his talents and resources to make something now or
different as customers like to buy new and improve products.
An Entrepreneur as Goal-Driven
➢ … and self-confident as he exercises the locus of control. He set high goals and
strives to attain the projected target and accomplishments.
➢ He extracts compliance with set goals and activities to avoid the risks he
foresees while planning the activities and programs in the operation of the
enterprise.
➢ He accepts challenges and responsibility for results. He makes sure that people
work based on specified work programs and schedules.
The Entrepreneur is a Marketing Mix
➢ Marketing environment is identified by the entrepreneur he marshals his
resources to pursue the opportunities and makes immediate action to exploit
his gain. The needs and wants of consumers are properly identified and these
are the propelling reason for him to take the opportunity.
The Entrepreneur Starts Small to Become Big
➢ They start small but with their managerial talents and persistence, the exploit
the opportunities available for their disposal.
➢ At early stage, their growth orientation is for expansion of their operation and
they persistently pursue approaches that differentiate them from other
managers.
Factors that Develop Entrepreneurial Activities
1. The Entrepreneur takes the Initiative
✓ … venturing into business, with his great interest to capitalize on the
opportunity at hand.
✓ He can operate the venture with minimum risk, with knowledge, armed with
vigor and vitality, he plunges a profitable operation.
2. Organization of Capital Resources
✓ Talent and ambitions are resources of the entrepreneur, financial and human
resources are important in the start of the organization.
✓ With savings and other financial resources, he starts operation on a small scale
together with trusted family members or friends.
3. The Development of Administrative Machinery
✓ Management is developed with an organizational structure based on the need
for operation.
✓ Specific duties and responsibilities are assigned to individuals with talents and
skills that fit their respective position. It is based on the individual capacity to do
the job.
4. The Development of Entrepreneurial Autonomy
✓ … in the autonomy in the operation of the enterprise as he takes the lead in all
the activities of the organization.
✓ His venture capitalized as he knows best the direction of the enterprise as he is
aware of the calculated risk involved.
✓ Locus of control must be in his hands.
5. The Development of Swot Analysis
✓ The entrepreneur must see the environment of the enterprise based on SWOT
analysis so that the risk involved could be seen before it happens. “Forecasting
environment events are an antidote to future business risk.”
Why be an entrepreneur?
➢ Control overtime, fulfillment, creation/ownership, control over compensation and
working conditions.
Benefits and Cost of becoming an entrepreneur
Benefits: Independence, Satisfaction, Financial reward, Self-esteem, and
Contribution to society.
Costs: Business failure, obstacles, loneliness, financial insecurity, long hours, and
the strain on personal relationship.
Lesson 2: CONCEPT OF ENTREPRENEUSHIP 2
Difference Between Entrepreneur and Manager
Entrepreneur - key persons in an enterprise that help in the organization,
management, control, and administration of the company.
➢ He is a person with an idea, skills, and courage to take any risk to pursue that
idea, to turn it into reality.
➢ Is a one-man show that runs entrepreneurship, has some unique attributes that
allow him to be successful in his endeavors.
➢ He is the initiator and a leader. He brings business ideas to fruition thus starting
his venture.
Manager - is the person who manages the operations and functions of the
organization.
➢ He is the one that is responsible for the management and administration of a
group of people or a department of the organization.
➢ His job is to manage and endure the organization runs smoothly.
➢ He must possess some of the qualities of an entrepreneur like leadership,
accountability, decisiveness, etc. He must be also a good manager of people
such as warmth and empathy.
Peculiar Characteristics of Manager in Solving Problem
1. He develops systems and procedures that are precisely based on current
practices in an industry.
2. The manager is interested in solving organizational problems rather than finding
other avenues in the solution of the problems.
3. The manager calibrates in the refinement of policies and procedures and tends to
revise them to solve existing problems.
4. He finds ways and means to provide solutions and compliance with routing
activities.
5. He is interested in details and sensitive to group cohesion and extracts group
cooperation as a means to group accomplishments.
Characteristics of an Innovator Entrepreneur in Solving Problems
1. He looks at the problem from different angles and finds means to circumvent the
same.
2. He discovers the roots of the problem and develops avenues to better solve the
problem. He formulates solutions and alternatives.
3. He develops basic assumptions and hypothesis related to current practices and
makes innovations based on careful analysis through SWOT.
4. The innovator entrepreneur is interested in the results rather than the means to
achieve it. He has little tolerance for details and routine work.
5. He capitalizes on people with bright ideas and talents and gets their opinion and
consensus and with the little regard for people with mediocre ideas.
The Development of Entrepreneurship
The making of a Filipino Entrepreneur
➢ A process of trial and error. The colonization for more than 300 years is a great
factor in the slow development of entrepreneurial activity in the country. (Sari-
sari store, small tailoring shop, repair shop, makes the person an entrepreneur)
➢ While this concept is true to a certain extent, entrepreneurship is more than
being self-employed and making a living out of the manager’s income to
support the family needs or wants.
The challenges for Entrepreneurship
➢ The new generations must look up the high standards of values and character
of entrepreneurs who got up the ladder of success. The success refers to inner
compulsion to achieve undeterred difficulties.
➢ The character of Juan Tamad has no place in the world of entrepreneurial
vocabulary.
a) The new entrepreneur must be a doer and willing to work hard until he achieves
the task, he wants for himself.
b) Personal attention and comprehensive awareness of the progress of the
business is not trusted on other people.
c) The new entrepreneur must have a high integrity that he stands firm on his
principle and ideas.
d) The built-in self-starring mechanism that drives an entrepreneur to success his
executive ability to manage people and resources. This refers to how he plans,
organizes, directs and controls the physical and material resources under his
disposal.
The starting point to Entrepreneurial Success
1) Start to be on your own
2) Explore the business environment
3) Be in control
4) Have a good accountant or trusted financial adviser
5) Seek the advice of professionals
Entrepreneurial Management Demands
1) The entrepreneur is alert to opportunities and perceptive to make things happen.
2) The entrepreneur is alert to opportunities and perceptive to make things happen.
3) The entrepreneur of flexibility and change.
4) The entrepreneur is self-assured.
5) The entrepreneur seeks other’s opinion or makes researchers.
Profile of a Successful Entrepreneur
They are people with great ambition and are alert to the environment that they can
explore towards successful venture. They possess an eagle’s eye that can see and
dive hundreds of feet down and make catch the prey of opportunities.
1) The entrepreneur has a strong desire for independence.
2) The entrepreneur develops a strong drive to succeed.
3) The entrepreneur has a strong determination in decision making.
4) The entrepreneur develops a feedback mechanism for results.
5) The entrepreneur is a result-driven individual.
Characteristics of Manager in Solving Problems
1) Identify and Define the Problem - once they see a potential issue, they
think if they can solve this problem and whether it will make a critical impact
on the team.
2) Analyze the Problem - they able to define the root cause of the issue
so that once it’s been resolved, its unlikely recur.
3) Develop solutions - they use techniques like brainstorming ideas, and
assess the situation and design a long-term solution.
4) Plan and act - once solution has been identified, a manger develop a
solid implementation plan. This include steps that will be taken to move
forward, as well as contingency plans that will help the manager handle
potential solutions.
An Innovator Entrepreneur in Solving Problems
An entrepreneur does not have the luxury of avoiding problems and
is often responsible for all problem in solving in a start-up or other form of
business.
Skills that Entrepreneurs possess that make them particularly good
problem solvers:
a) Critical thinking - they analyse the layers of a problem to find the core
of an issue facing a business.
b) Communication skills - entrepreneurs skills use to pool resources for
the purpose of investigating solutions leading to innovative problem solving
and competitive advantage.
c) Decisiveness - they must be productive even in the face of risk. They
ask what problem needs to be solved, think about solutions, and then
consider them necessary to implement an idea.
d) Ability to analyze data - entrepreneur involves understanding what has
happened and what is happening.
Lesson 3: ECONOMIC DEVELOPMENT OF ENTREPRENEURSHIP & ITS
COMPETENCES
Philippines Economic Landscape in the Present Time
The economy is currently growing at its potential, making a productive
investment in physical and human capital essential so that the economy can
continue to grow along its current growth trajectory.
➢ Investment growth hinges on the government’s ability to effectively and timely
implement its ambitious public investment program.
Factors in Determining Economic Growth
1. The Filipino values and culture
a) Love for imported products - the country’s colonization for centuries has
developed in the Filipino a culture of dependence and love for foreign products. We
still feel that imported products are superior in quality and our products as inferior.
b) Our values of BAHALA NA - a Filipino will not put his destiny in the hands
of the BATHALA. He must act with strong determination and push for the
development of his ideas.
c) Our Crab Mentality - is the act action of people to pull down others who are
about to get out of the verge of poverty and reach for their success.
d) The Manana Habit - mamaya na or bukas na, a culture that is brought us to
by the colonizers who were found of SIESTA after lunchtime. We take time in stride
wasting time.
e) The Value of time - lack of value for the precious time. We always late at
the start of the program, coming to our classes. We take all the time in our hands,
not thinking that the meaning of progress rest in our value of this precious gift of time.
f) Our values of HIYA - could be positive in dealing with the business
condition. It could be a propelling reason for us to create better services and proper
dealings in the business transaction.
g) Fiesta and Social Occasions - celebration of Fiestas of Saints that we
inherited from the Spanish colonizers could be another factor in the slow
development of our economy. People would have all their savings spent on a day of
the fiesta, entertaining guests, only to find out the next day that there is no more rice
to feed their children.
2. Job Opportunities/ Employment
a) Employment is one great factor in economic development - entrepreneur
provides the necessary work for people that propel the economic development
of the nation. the money helps local industries to develop new products and
services that generate more small and medium enterprises.
b) Income opportunity in the countryside is still subsistence in nature -
people dependent on the old farming and fishing system. Out vast shoreline
could be developed into a haven for fishery development if new methods and
technologies could have been put in place.
3. Availability of Needed Capital
a) Republic Act 6977 - Magna Carta for Small Enterprises provided the
necessary funds for the development of entrepreneurs in the countryside.
b) Republic Act 6810 - establishing the Magna Carta for Countryside and
Barangay Business Enterprises, granting exemptions from any government
rules and regulations and other incentives and benefits and for other purposes.
Entrepreneur and Socio-Economic Development
The development of national economic activity is the making of small and
medium enterprises mostly located in the countryside.
➢ they contribute to the economy of big corporation as they are also consumers of
their production.
➢ It is the entrepreneur who develops new products and makes innovation that
becomes the backbone of more economies.
The following are the contribution of the Entrepreneur in our socio-economic
development:
✓ The entrepreneur provides employment.
✓ The entrepreneur pays taxes.
✓ The entrepreneur provides a new lifestyle and pleasures.
✓ The entrepreneur improves the capital base of the economy.
✓ The entrepreneur creates people’s empowerment and social mobility.
✓ The entrepreneur provides healthy competition.
Lesson 4: ECONOMIC DEVELOPMENT OF ENTREPRENEURSHIP & ITS
COMPETENCIES
Entrepreneurial Skills - refer to the activities or know-how that can establish and
operate an enterprise successfully.
➢ Skills refer to the possibility of learning and adopting exclusive characteristics
that are essential for performing entrepreneurial tasks that involve interactions
within a social and material environment.
Entrepreneurial Competences - specific set of quality characteristics that
represent the capability of an entrepreneur to perform a job.
Managerial Skills that make a Successful Entrepreneur
1. The ability to plan and conceptualize - conceptualization and planning to go
together. Good concepts need to be put in the planning table to avoid the risk factor.
➢ He must be able to visualize the direction of the business towards successful
takeoff. He must see the products/services, pricing strategies, investment.
2. The ability to organize the resources of the enterprise - a good business
organization is based on people and resources. An entrepreneur works with others
and needs people with the same values and working ability.
➢ The material and physical resources must be put in place. Waste time and
money have no place in good organization. The entrepreneur must be able to
give specific direction and work activities that will redound to the efficient
delivery of the necessary services to customers and clients.
3. The ability to direct and motivate people in his organization - they need
proper compensation and motivation for them to deliver the necessary output.
Compensation and benefits are no guarantee for effective performance while it may
serve as important ingredients.
➢ The entrepreneur must be able to communicate ideas and plans to his
subordinates with a sense of humility.
4. The ability to control - safeguard and control mechanism could put in place with
carefully crafted and procedures such as policies and procedures.
➢ Controlling cost and none essential expenses will save important profits that
could be invested in profitable operations.
5. The ability to manage time - time management is important in the success of an
entrepreneur. Because of the numerous activities to attend to the entrepreneur must
be able to log onto his schedule so that important activities could be attended on
time.
6. The ability to adapt to the changing environment of business - business
today is fast changing with the advent of technology and innovation. The new
entrepreneur must be able to adapt to these changes in the business landscape for
him to go with the time of progress and expansion.
Characteristic of an Entrepreneur
1. Leadership and Management abilities - managerial leadership is the ability to
plan, organize, direct and control the organization towards goal and objectives of the
organization.
➢ It requires conceptual skills in defining the direction of the business and
development of plans and programs that will work effectively.
2. Positive risk-takers - takes enjoy the challenges of putting his money and time in
test. He gathers complete data and makes careful analysis before making decisions.
3. Self-confidence and positive outlook - has a strong belief in his capacity to
make a difference in their chose field. It guides the man’s successful faith drives
them to do better.
➢ his faith in God drives him to work great enthusiasm and perseverance to teach
his target goals.
4. Innovativeness and forward-looking - to make innovations in products and
services. He refuses to stop at his achievements. He looks forward to creating new
things, something different from others.
➢ He thinks of new technology that will create new and better things for the
customers. He introduces innovations that will satisfy human needs and wants.
He satisfies the market demand for new and better products.
5. Natural intelligence and decision-making skills - he has to make decisions as
he cannot make things happen without making a wise choice of alternatives.
Creativity and innovative necessary with it the power to make decisions as he needs
to satisfy customer needs for new and better products and services.
The Decision-Making Process:
1. Identify the problem - the core objective is to minimize the risk factor involved as
the wrong choice of alternative would result in production or operation losses.
Relevant and information must be organized.
2. Gather the date that brought the problem - get data that brought about the
problem. The solution is dependent on the data available at hand. Correct
information gives better solutions.
3. Analyze the data - some data must be discarded. Data must focus on the
problem at hand. It must be timely gathered the information is based on actual
situations prevailing in the business environment.
4. Formulating alternative solutions - these solutions are subject to a series of
analysis and he may need outside opinion. He may subject the alternatives to further
study before making decisions until he finds the right alternative course of action.
5. Selecting the best alternatives course of action - decisions has to be
implemented (after making alternative decisions) with fewer possible risk in terms of
money, time and effort.
6. Implementing the best alternative - modern entrepreneur utilizes group efforts
in solving business problems. Problems and solutions have best arrived when
people who will be implementing the decisions are properly consulted and their
opinions and ideas are taken into account before the final decision is implemented.
Group effort is required in planning effective strategies for implementation
Organizing the business enterprise
The prospective entrepreneurs before going into the intricate field of the
business would first go into deep analysis of their personal and social attitudes. It is
not only material assets but personal values and characteristics. Before venturing
into the field of business. It is wise to develop entrepreneurial studies that will help
determine the feasibility of the project.
Entrepreneurial studies
The entrepreneur must see for himself the kind of management control and
how the business will be able to generate his projected profitable investment. He
sees the wide-open market of opportunities and the possible problems before he
plunges into the intricate operation of the enterprise. Wise investment through a
careful analysis of the business environment would minimize business failures.
Lesson 4A: THE BUSINESS ORGANIZATION
It can be legal entities through which investors and entrepreneurs provide goods and
services and collaborate with one another to achieve commercial goals.
Business Organization - a collection of people working together to achieve a
common purpose related to their organization’s mission, vision, goals and objectives
and sharing a common organizational culture.
Type of Business
1) Service Business - a service type of business offers professional skills,
expertise, advice, and other similar products.
2) Merchandising Business - this type of business buyer’s product at wholesale
price and sells the same at retail price. They are known as “buy and sell” businesses.
A merchandising business sells a product without changing its for.
3) Manufacturing Business - this type of business buys products with the
intention of using them as materials in making a new product.
4) Hybrid Business - companies that may be classified in more than one type of
business.
Forms of Business Organization
a) Sole proprietorship - firms owned by one person, usually the individually who
has day-to-day responsibility for running the business.
b) Partnership - two or more peoples share ownership of a single business who
bind themselves to contribute: money, property, or industry
c) Corporations - firms has a life of its on and does not dissolve when ownership
changes.
d) Cooperative - legal entity owned and controlled by its members.
Types of Venture
An entrepreneur has several ways to start a new venture.
A. Start-up - is a company that recently formed.
➢ it is a process where the entrepreneur creates a completely new business
starting from scratch.
➢ (advantage) freedom of making own decision, ability to make changes to
business, will not affect the reputation of the business as it is a new venture.
➢ (disadvantage) time consuming and costly, no ready customers, difficulty ob.
obtaining loans from financial institutions.
B. Buying an existing business - buying or acquiring either the shares or all of the
assets of an existing company or businesses.
➢ It is the safest and most effective way for entrepreneurs to go into business.
➢ (advantage) immediate operations, easier financing, existing customer
➢ (disadvantage) costly to buy, obsolete goods, problem of the business
C. Franchising - any agreement in which the owner of a trademark, trade name or
copyright has licensed others to use and sell its goods or services.
➢ (advantage) brand name appeal, proven track record, training and guidance
provided.
➢ (disadvantage) franchise fees
Lesson 5: DEVELOPING A BUSINESS PLAN
A good business plan guides you through each stage of starting and
managing your business. You use it as a road map for how to structure, run, and
grow your new business.
➢ It helps you funding/bring new business partners. It is the tool you’ll use to c) Power of Utilities - continuous power of supply is needed to keep the plant
convince people that working with your - investing in your company - is smart choice. in operation for its target production. Water supply is also needed and the proper
disposal of waste must be put in place to comply with environmental laws.
Before venturing into the field of business, the new entrepreneur should look into the d) Building and other Utilities - the building must be within the restrictions
following factors: code of the municipality or city. Sidewalks and gutters are important component in
1) Know your product/service employee’s safety while in the plant site. Fire safety and hazards signs are
2) Analyze the market potential mandatory requirements.
3) Determine the market potential e) Plant site Accessibility - The plant site must be accessible to public or
4) Know the competitors service transport for its employees and valued customers. It must be near highways
5) Do not set on your laurels or expressways to provide ease in travel time and reduce cost in the transport of raw
materials and finish product. Delay in transport system is added cost.
Environmental Scanning
The environment of business is vast the opportunities and the entrepreneur Lesson 5A
must have a greater look into this potential as well as the condition prevailing in the Important Factors for Environmental Scanning
community. A) Events - specific occurrences which take place indifferent environmental
➢ The entrepreneur ultimate objective in diving into the business world is to make sectors of a business. It can occur either in the internal or external environment.
a profit. To generate income for his product/service he must be able to deliver B) Trends - general courses of action or tendencies along which the events
customer satisfaction. occur. They are group of similar or related events which tend to move in a specific
direction. By observing this, an organization can identify any change in the
The following factors are contributory to the development of customer strength/frequency of the events suggesting a change in the respective area.
satisfaction: C) Issues - organization try to identify this emerging issues so that they can
1. Business location for small entrepreneur - an outlet would need a site that is take corrective measures to nip them in the bud. It is hard to identify.
convenient to prospective customers in terms of parking space, availability, and D) Expectations - interested group have demands based on their concern for
transportation. In choosing the location, there considered the following: issues.
a) Rent and space
b) Terms of lease agreement Components of Environmental Scanning
c) Type of goods or merchandise 1. Internal Environmental Components - lie within the organization and changes
d) Income level of prospective customer in these affect the general performance of the organization. Human resources,
e) Prospective sales volume capital resources and technological area some of the internal environmental
f) Municipal or city ordinances including taxes and fees components.
g) Location of the areas 2. External Environmental Components - fall outside the business organization. It
still affects the organizational activities. It can be divided into micro environmental
2. Location for Small Industrial Plant of Manufacturing Facilities and macro environmental.
Environmental Factors - the industrial facility must be suitable to the kind of
operation. It must comply with government zoning regulations related an Important of Environmental Scanning
environmental law. The following are important factors to consider: A. Goal accomplishment - it adapts itself to the environmental changes. One has
a) Land area - the contour, size, and shape must be suitable to the plant site. to adjust the strategies to fit in the changing demands of the environment.
It must be free from floods or environmental hazards that will disturb operation. B. Threats and weakness identification - minimize its threats and identify the
These must be reasonable as expenses to start-up/operation requires a lot of money. weakness. This is made possible with the help of environmental scanning with better
The assessed value is also a factor in the payment of taxes. strategies can be developed.
b) Facilities for Expansion - the land area must have ample space for plant C. Future forecast - an organization cannot anticipate all the future events but
expansion and provision for parking facilities for customers and employees. based on the analysis, it can make better strategic decisions in the future.
Anticipation of growth and expansion plant facilities should be considered as D. Market knowledge - every organization must be aware of the ongoing changes
additional in the future may create problem. in the market. If it fails, it will not be able to achieve its objectives.
E. Focus on the customer - environmental scanning and analysis make an 1) The management teams
organization sensitive towards the changing needs and expectations of the customer. 2) The production processes
F. Opportunities identification - by analyzing the current environment will be able 3) The marketing programs
to identify the possible opportunities and take necessary steps. 4) The financial management

The Identification of Business Opportunity

Lesson 6: DEVELOPING A BUSINESS PLAN 2 1) The starting point of conceiving the idea of the type of business.
Strength, Weakness, Opportunities, and Threats - an entrepreneurial tool in 2) The technical feasibility and time frame
determining the profitability of the business operation.
➢ Opportunities carries with it some risk involved and this should be looked into Tips in choosing the Business Name
carefully. 1) Easy to recall or remember
➢ Strength and Weakness are internal factors to the entrepreneur must look at 2) Pleasant meaning creates pleasant feeling
how strong he is to combat the weakness on his side and this needs strong 3) Easy to pronounce
determination to succeed with caution. 4) Easy to spell
➢ He may need long working hours and advanced thinking to overcome the 5) Related to the product
possible threats.
Organizing the Business Enterprise
The Product must be Evaluated along the following areas: Entrepreneurs before going into the business world should first go into deep analysis
1. Product Strength in the market must have the following: of their personal and social attitudes. It’s not enough that you have the capital and
a) Available technology in Product processing resources to go into business as it only involves material assets but personal values
b) The source of raw materials must be abundant and at lower price and characteristics.
c) Skilled workers must be available ➢ It is wise to develop entrepreneurial studies that will help determine the
d) Capital investment in machinery and operating expenditures feasibility of the project.
e) Expertise and technical skills of the management team
2. Characteristics of weak products and weak management The Event Formation Process for Entrepreneurs
a) Poor quality and high price 1. The change in life path
b) Product design and appeal 2. The desirability of the business concept
c) Production cost 3. The feasibility of implementation
d) Supply and demand 4. Forming the business enterprise
e) Weak product management 5. Stability of business income and profit
3. Sustainable Product Opportunities in the Market
a) Product demand Basic Phases of Business Plan
b) Presence of poor quality in the market 1) Management structure and component
c) Government policies and support 2) Marketing and distribution system
d) Liberal credit terms and interest rates 3) Production and technology
4. Treats to product profitability and market expansion 4) Financial management
a) Entrance of competition
b) The supply of raw materials will be limited as other competitors will be Why create a business plan?
getting the same suppliers. ✓ Saves time and money
c) The emergence of leftwing labor unions ✓ Key to raising capital
d) The presence of double taxation ✓ Serves as an operations guide
e) Peace and order in the area of business operation ✓ Helps you organize your thoughts before starting
f) The cost of power supply
Business Plan Components
The Entrepreneur should look deeper into the following areas: 1) Cover page
2) Table of contents 3. Behavioral factors such as frequency of product purchase and shopping behavior
3) Executive summary of the target market.
4) Mission, vision, and culture
5) Company description Categories of Consumer
6) Opportunity analysis 1. Price shoppers - group interested in the best deal for a product. They are
7) Marketing strategy and plan commonly called as practical and price conscious.
8) Management and operations 2. Brand loyal customers - they believe that their present brands are superior to
9) Financial analysis and projections others and willing to pay fair for the products just to acquire it.
10) Funding request 3. Status seeker - people interested in prestigious or called brands or known
11) Exit strategy product categories and willing to pay at any price.
12) Appendices 4. Service or feature shopper - they seek a high value on customer service and
product features and will pay for them.
Business Plan Suggestions 5. Convenience shoppers - people who value nearby locations, long store hours
1. Write for you audience and are willing for easier shopping.
2. Show that you have “skin in game”
3. Be clear and concise New consumers realities in 2016
4. Use current industry data and reports Seamless sensation - the online and offline experiences are intertwined and
5. Select a voice and stick with it consumers navigate their daily lives seamlessly, resonating with both physical and
6. Use a consistent, easy to read format the digital realm. The culture is changed. The physical and digital words are
7. Number and label items throughout the plan seamlessly intertwined. What brands should be digitally focusing on the upcoming
8. Present the plan professionally year is seamless experience.

Identify the market problem

Lesson 7: IDENTIFICATION OF TARGET MARKET
Market must be defined in terms of sizes, demographics, growth, prospects,
trends and sales potential market and the total aggregate sales of the competitors
must be presented.
Description of Target Market
1. Distinguished or determine the consumer from the consumer.
2. Explore the benefits of the proposed product to the target market.
3. How and why would the target market buy the product or service?
4. Is there a potential to increase the target market?
Business-to-business markets include:
1. Target market
2. Frequency of product purchase
3. Tendency for replacement needs versus expansion purchasing process
4. Estimates or market size, initial targeted geographic are, enterprise targeted
market share.
Entrepreneurs can meet customer’s needs. In identifying market problem,
the following can be considered:
1. Existing customers are the people who have already purchases the product you
are selling.
2. Target market users are the people in your market who are not currently looking
for a solution.
3. Prospects are the people who have not yet purchased your product but have an
intention to buy.
How to evaluate market problems?
1. Consider if the market problem is urgent, if yes, consider necessary action by
identifying alternative course of action then enumerating their advantages and
disadvantages.
2. Evaluate if the market problem is pervasive or easily diffused, if yes, think for a
temporary solution.
3. Determine if the buyers will pay to have this problem solved.

Business-to-consumer markets include: Lesson 8: IDENTIFICATION OF TARGET MARKET 2

1. Demographic factors, such as income level, age, range, gender, educational level
ethnicity of the target market. Problem Identification Research
2. Psychographic factors of the target market
 Learner can discover problem or opportunity. One could discover any of the ➢ Segmentation - process of dividing into segments with similar characteristics,
following factors: markets needed to slice into different segments. It is relevant if competitors
1. Brand image - impression in the consumers’ mind of a brands total personality. It focus only on certain segments.
developed over time through advertising campaigns with consistent ideas. This is ➢ Estimating the market value is often more difficult than assessing the number of
authenticated through the consumers’ direct experience. potential customers.
2. Market characteristics - describes attributes of the buyers in making decisions 2. Target Market - focused within the market. It is focused on the more qualitative
related in purchasing a certain product. side of the market analysis by looking at what drives the demand.
3. Market potential - estimated maximum total sales revenue of all suppliers of a 3. Market Need - investors must determine the needs of the market through
product in a market during a certain period. analysis based from research conducted focusing on their need. Identify what the
4. Market share - a percentage of total sales volume in a market captured by a customer wants to classify their needs.
brand, product/company. 4. Competition - defining competitor’s positioning (strength and weaknesses).
analyze competitors’ angle to the market in order to find a weakness that company
Problem Solving Research will be able to use in its own market positioning.
1. Distribution research - determines on how to transfer the product from the ➢ One way to carry the analysis to benchmark the competitor against each of the
manufacturer to ultimate user. key drivers of demand for the market.
2. Market segmentation - group customers by similar characteristics similar
purchase behaviors. Barriers to Entry
3. Pricing research - determines the ideal price for the product. Setting the price for There are the hindrances or something material that block passage. It is a
product is one of the most important marketing steps. natural formation or structure that prevents or hinders movement, action, and
4. Product research - tests the new/revised products or completing test marketing. separates the new businesses. Here are few examples of barriers to entry:
5. Promotional research - it determines the best research in the area of 1) Investment
disseminating information. 2) Technology
3) Brand
Market Need Analysis 4) Regulation
Define the market need for the new business. In analyzing the market need, 5) Access to resources
the following questions should be asked: 6) Access to distribution channels
1. Who will get interested in my product? 7) Location
2. What does the market need or want?
3. Who is buying the product? What and how much? How and why are they buying Lesson 7 & 8: IDENTIFICATION OF TARGET MARKET
those goods or services? Target Market - is a group of consumers or organizations most likely to buy a
company’s product/services. Because those buyers are likely to want or need a
Market Analysis - quantitative and qualitative assessment of a market ability to company’s offerings. Marketing to these buyers is the most effective and efficient
respond positively. It looks into the size of the market both in volume and value. approach.
➢ The various customers segments and buying patterns, the competition, and the
economic environment in terms of barriers to entry and regulation in the Why have a Target Market?
industry. For your business to thrive, you need to know who your customer is.
Knowing your customers will help you to target customers who are willing to pay for
How to do a market analysis? your product or service. You’ll be wasting resources if you aim too broadly, or find
This is to show to the investors that company knows their target market. It is out too late that there aren’t enough customers for your product or service.
large enough to build a sustainable business. The following can be recommended: ➢ By understanding your market, you can promote your product or service more
1. Demographics and Segmentation - statistical characteristics of human effectively to the right customer group.
population used specially to identify markets; a market or segment of the population
identified by demographic. 1. Research your Market
➢ To define your target market effectively you’ll need to do some research.
Gathering statistics and other market research data helps you to understand
your potential customers and their needs and make better marketing decisions.
2. Segment your Market
➢ Segment the market into groups of buyers with similar preferences and buying
habits. Once you’ve identified your market segments, you can define your ideal
customer for each segment.
3. Define your Target Market
➢ Then target your marketing efforts to explain how your product and service will
fit into their lifestyle and how it best meets their needs.

What Factors are Important in Selecting a Target Market?

a) Segment Size - the very first factor that affects the selection of the target
market is “segment size” in term of unit and revenue sales.
b) Competitors - you risk a competitor entering the same market place to try to
make the most from the lucrative market.
c) Demographics - the data regarding age, gender, location, and other such
elements related to your target audience. Figuring out who requires your product or
service and who would be interested in buying them is crucial when deciding your
target market.
d) Substitute Products - it could threaten the profitability of your business,
especially if they are sold at a lower price.
e) Distribution Channels - it would be to gain access to the appropriated
distribution channels.