xENTREPRENEURSHIP – MIDTERM

INTRODUCTION TO ENTREPRENEURSHIP
 Entrepreneurship
o The process of recognizing opportunities and transforming them into visible, marketable concepts that benefit the entrepreneur, the
consumers, and the rest of society
 Look at the right time and right opportunity, then take advantage of that
 Then, transform that opportunity into something real (e.g. product, good, service)
 Most entrepreneurs today are profit-oriented
 Ideally, when you create a business, you need to create a marketable product that benefits not only the entrepreneur and the
consumers but also the rest of society, like the environment and the less fortunate
o Entrepreneurship is the practice of social and economic empowerment through free enterprise (a much broader and more current
definition)
 It has to be socially and economically empowering and has the element of freedom
 Also called Sustainable Entrepreneurship or Green Entrepreneurship
 The concept is really to be more considerate of the kind of business or enterprise you are going to run or choose
o Summary – recognizing an opportunity, making it into something real, but doing that in a socially responsible and economically
empowering way
 Entrepreneur
o A person who destroys the existing economic order via new products, new methods, new organizations, and new uses of available
materials
o A person who destroys what is current through innovation
o A person of transformation, of innovation, always changing, always improving
o e.g. robot cleaners, online medical consultations, online business, online classes, delivery
 Entrepreneurship in the Philippine Context
o Philippine Statistics Authority (PSA) recorded over 1.08 million registered (formal, legal) business establishments as of 2021
o 478,576 of these establishments are newly listed
o A vast majority of these business are involved in wholesale and retail (reselling, supplying)
o The nation also recorded 259,707 establishments (1/4) with permanently closed status, the majority of these establishments (53.5%)
ceased operation between 2020 to 2021
o There were 56,971 establishments in the country recorded with temporarily stopped operation status (closed a long time and now opening
again, opened later)
o Types of Businesses
 Microenterprise (M)
 1-9 employees
 977,670 (90.5%) as of 2021
 Combined small, medium, large enterprises (SMEs+)
 Employed at 10-99 (small), 100-199 (medium), 200 and over (large)
 102,968 (9.5%) as of 2021
 The implication of having more Microenterprises
 Easy to open the business, but hard to maintain it
 The capital of Filipinos is not enough to start large businesses
 Trivia
o The biggest ride-hailing app in Southeast Asia is Grab
 Grab has more Filipino investors than Uber
o Jollibee started out as an ice cream parlor
o Netflix began as a video rental store
 Netflix pioneered digital renting
 Video streaming is a new technology
o The first company to mass-produce mobile phones was Motorola
o Nintendo first manufactured trading/game cards
o “There is a journey and a destination, but the destination is ever-changing”
o “The destination is always there for you to reach, only for you to get to another destination”
o “There is also nothing wrong with aiming for stability”
 Generalization
o “Having more entrepreneurs in a does not necessarily lead to a high-income economy… it is a matter of quality over quantity.”
o Quality in Enterprise – being particular about who opens the business; businesses that are good for society, the community, and the
environment
NATURE OF THE ENTREPRENEUR
 Roles of Entrepreneurs
o Individuals – you, I, households
 Create jobs
 Improve daily life
o Institutions – businesses, governments
 Create technology that improve economic efficiency
 Generate and improve wealth
o World – global economy, environment
 Speeds up innovation via sharing ideas with other markets
 Solve environmental, social, and economic challenges
 Connections
 Entrepreneur vs. Employee
o Employees
 Work for someone else
 Gain stability through consistent and/or progressive performance
 Follow someone’s leadership
 Are rewarded through salary and attaining job satisfaction
o Entrepreneurs
 Work for themselves
 Gain stability through wise investment of time, money, and effort
 Lead according to the need and call of the times – You grow to be more skilled over time through your business
 Are rewarded through profit from business ventures, independence, personal fulfillment of goals, knowledge to have made social
contribution
 Concepts
o Entrepreneurial Venture
 The creation of any business, organization, project, or operation of interest that includes a level of risk in acting on an opportunity
that has not previously been established
 The stage before a business is started
o Startup
 A company in the first stage of its operations, often being financed by its entrepreneurial founders during the initial starting period
 An entrepreneurial venture that has just started
 Every company always begins as a startup
 Rewards of Entrepreneurship
o Making your own rules – be your own boss
o Doing work you enjoy
o Creating greater wealth
o Continuous learning and improvement
o Helping the community
 Risks of Entrepreneurship
o Potential business failure
o Unexpected obstacles (internal and external)
o Financial insecurity
o Long hours and hard work
o Burn out or stress
 Types of Entrepreneurs (Venture – Approach – Typology)
General or Traditional Typologies
Type of Entrepreneur Approach to Venture
 Find new approaches, methods, or products that add value through solving a problem in a unique manner
Innovators  Innovate existing ideas
 e.g. what to add to TikTok to make it even better
 Make something new or see a problem that other people have not noticed
Creators  First ones to actually realize a potential problem and create a product to address it
 A bit more rare since many markets are already saturated
Market Makers  Innovate or reinvent their market from a future perspective by asking what the market could evolve into
 They don’t make a product, but the consumer
 Businesses that are very good at marketing in a way that they are able to change the mindset or culture of
 how people consume a product
 Good at manipulating the consumers/market
 Create needs and wants that consumers did not know they needed
 e.g. social media as a tool for advertising (not just for Communication)
 Seek out opportunities to expand upon previously created methods, processes, or products
 Introduce products that are not yet introduced in a certain market
Expanders and Scalers
 Get existing products that may not have been sold in a certain market, and introduce it to that market, then
introduce even more products later on
More Modern or Other Typologies (outcome of technology and other trends)
Type of Entrepreneur Approach to Venture
 One who continually generates new ideas and starts new businesses, one after the other
 He/she is more interested in the initial creative stages of inventing and launching an idea
 Once the venture is off the ground, they may give the responsibility to someone else and move on to the
next thing
Serial Entrepreneur
 People who do not have a single business because they create a startup then sell it once it grows, and repeat
the process
 Multiple business creators whose passion is on creating and nurturing startups
 They make money by selling the companies that are already successful
 Develops a business in order to alter his or her own lifestyle, not for the sole purpose of making money
 In a sense, the entrepreneur’s own life is the venture
Lifestyle Entrepreneur  They are focused on leading a fulfilling life and cultivating a passion for what they are doing
 Introduce their lifestyle as their enterprise
 e.g. healthy lifestyle, yoga studio, travel vlogger, game streamer
 Refers to individuals who invest money (can be their own or can be that of others like them) in an
Investment entrepreneurial company, often startups which they deem as having very scalable potential
Entrepreneur (venture  This category is usually for the very rich
capitalists, angel  Basically the financial backer of a startup
investors)  Investing money to many companies, and once the investment or share grows, it becomes your income
 You need to be a capitalist to be an investment entrepreneur
 A person who explores business opportunities that have a positive impact on their community, in society, or
Social Entrepreneur
the world
(non-profit/social
 Entrepreneurs who pursue social advocacy
enterprise founders)
 It is not for the profit but for the benefit of whoever it is targeted to
o Not all entrepreneurs can be tied to being a specific type because the journey of entrepeurnship is a continuous road where one explores
different destinations and continues
o Entrepreneurs can grow into other typologies, while some have simultaneous typologies
o An entrepreneur’s typology depends on the nature of their enterprise

THE ENTREPRENEURIAL PERSONA

 Strengths – know what to use; Weaknesses – know what to improve
 3 Facets
o Aptitude-Abilities – what you can do
o Attitudes – what you actually do
o Aspirations – what drives you
o One cannot stand on its own
 Aptitude-Abilities
o Skills
o Depending on what you are trying to pursue, depending on the field, depending on the business, there are specific skills that really are
necessary
o Refer to natural inclinations and acquired skills that people have, which allow them to do certain activities and do them really well
o Natural Inclinations – naturally good at it, innate to you, skills you are born with
o Acquired Skills – not good at them but can actually learn them, can be taught to you, you can learn it if you choose to learn it
o Consider the following questions to strengthen your aptitude-abilities
 What am I good at?
 What can I learn to do with enough practice?
o Learn the skills that are needed to the business you are going to run or start
o There are some skills that are common to all fields
 o e.g. critical thinking, communication, leadership, mathematical skills, organizational skills, people skills, technical skills, etc.
 Attitudes
o Your attitude determines your direction
o Successful entrepreneurs possess certain attitudes that support the aptitude-abilities that they already have
o Refers to how people process their thoughts and feelings, and the behaviors they demonstrate because of them
 This includes their perception and feelings about different aspects of life (family, money, friendships, work, etc.)
 Our attitudes are determined by own experiences and what we learn from them
 Thus, different people have different attitudes and different characteristics, where nobody is exactly the same
o Are often more innate and thus people are usually tied to what comes naturally to them
 Attitude is something that you cannot directly see but observe over time
 In some cases, with our experience, people can choose to alter their attitudes in ways that are personally and professionally beneficial
to them
 When we go through more experiences, our attitudes can shift if you decide to change it
 When successful entrepreneurs feel that who they are and how they behave are not working, they adjust and change
 It is not only about improving your skills but also about working through your own personality traits and characteristics
 Successful entrepreneurs work through the internal obstacles that they have
o e.g. commitment, confidence, courage, creativity, curiosity, discipline, empathy, optimism, passion, resilience, etc.
 Aspirations
o What will really be the test of time, what will take you to the farthest you can go is your aspirations
o Refers to aspects of the entrepreneur’s personal disposition that drive them to do what they do
o The extent of one’s personal motivations, inspirations, and triggers
o Attitudes help in aspirations
o Aspirations are something that stops you from giving up even when your attitudes are at their limits
o Goal-orientation or Ambition
 Entrepreneurs have a very high degree of ambition
o Grit or Adversity Quotient (AQ)
 How resilient are you in the face of challenges and obstacles
 Successful people have very high AQs
 Maturity (EQ) is really tested when you go through difficult situations
 What comes out when you overcome difficult situations is your AQ
o Locus of Control
 Internal – acknowledging what you did wrong or your weaknesses when you go through failures or difficulties
 External – blaming something or someone else for your difficulties or failures
 With external, you cannot do anything about it
 So, in many situations, your choice is to look at what you can do
 Successful people tend to always have internal locus of control
 For successful people, their locus of control is very internal, and they put a lot of pressure on themselves
o Ambiguity or Risk-tolerance
 Risk-averse – opposite of risk-tolerance
 In business, you have to be very risk-tolerant
 There are some careers which are more stable
o Opportunity-seeking
 How quick are you to recognize potential in situations
 It is usually instinctive
 These cannot be taught
 You can learn them through experience, so do not refuse experience
 Hard to achieve but necessary in business
o Consider
 To what extent can I stay on course?
 How do you perceive difficulty?
 Where do I attribute my failures and successes?
 How quick am I to recognize potential when I see one?
 How do I perceive risk?
 Exercise
(1) Aptitude-Abilities
(2) Attitudes
(3) Aspirations
2 Empathetic towards others
2 Particularly prompt/punctual with tasks
 3 Views failure as necessary for success
1 Can speak several languages (Spanish/Chinese)
2 Eager and open to learn new things
1 Is savvy with digital tools
3 Keeps track of goals to achieve
1/2 Able to collaborate with other people

ENTERPRISE IN THE TIME OF COVID-19 – TRENDS, ISSUES, PIVOTING

 What are the effects of the global pandemic on our business environment and how business is done today? The most visible “grassroots”
effects are that we have been impacted by
o Increasing job loss among population
o A damaged and fluctuating supply chain
o The ongoing massive closure of big and small business
 Closure
o The worst-case scenario for businesses today is when the likelihood of closure becomes apparent.
o This happens when companies start to cease business operations for a period, lay-off employees, and then file for bankruptcy before
ceasing permanently.
o Closure happens when companies start to
 Cease business operations for a period of time
 Lay-off employees (forced resignation or leave without pay)
 (then) File for bankruptcy before ceasing operations permanently
o Official and formal closure comes when the company files for bankruptcy
o If they never applied for bankruptcy, the company will still be considered operating or open unless you apply for bankruptcy and get
approval
 7 Factors Determining Business Survival in a Crisis (ex. Pandemic)
o Capitalization
 How much money a business has, and how deep their pockets can go
 Does a business have enough money to last through the length of a shutdown?
 Whether their own money or loaned, as long as they have money to keep the business going in a crisis
 Those with deeper pockets, they have a higher chance of going through a crisis
 However, small business who may not have access to loans or credit, or who may not have contingency funds to deal with a crisis
like a pandemic may not get through the crisis
 Government funding programs
 DTI microfinancing program
o Pre-crisis Business Conditions
 A business’ performance, profit, and standing before a crisis will determine whether you are prepared to face one head-on
 How was your business before the crisis
 Newly opened businesses and badly performing businesses before a crisis are at high risk
o Position in the E-commerce Space
 To what extent a company has pivoted itself into creating and working with an online infrastructure as a channel for business
activities to happen
 Readiness and access to adapting online alternatives is essential to business
 e.g. IG Stores, FB Store, Shopee, Lazada
o Consumer Response to Crisis
 Changes to your consumers spending and consumption habits can make or break the business
 Needs gain an edge over wants
 The problem happens when your target consumer gets badly affected in a crisis that their priorities and consumer pattern change
o Business Consumer Dependability
 Business whose concepts are founded on large-crowd consumerism or group-based markets (ex. tourism) or require face-to-face
contact to provide the product experience (ex. salons) will suffer
 How closely dependent and linked a business is to their target consumers
 Food businesses are consumer dependent but were able to find a way to respond to the pandemic
o Understanding of the Digital Economy
 Businesses who are technologically aware and in touch with digital trends in the market have an edge over those that do not
 It is not only important to have a presence in the digital space, but you also need to need to have the know-hows, the understanding,
and the skills to operate and work in the digital space
o Adaptability and Responsiveness
 Businesses who are able to pivot their practices to fit the situation and respond quickly to shifts in market demand will do better
compared to those who do not
 Businesses need to be quick on acting on what is happening
  Awareness and instinctive
 Trends and Shifts in the 10 Business Dimensions in the COVID-19 Pandemic
o Because of the 7 factors, those who successfully got through the pandemic were able to actually move with the current trends, and a lot of
it involve 10 business dimensions
o Consumer interaction – contactless
o Delivery – contactless and cashless
o E-commerce – contactless and cashless
o Robotics / Automation – automated production and mechanized work
o Sanitation – contactless, protocol heavy, social distancing
o Supply Chains – local
o IT Infrastructure – IT readiness (technical aspects)
o Communication – digital and virtual
o Events Management – digital, virtual, social distancing
o Workspace / Working Conditions – virtual space, work at home, social distancing
o These trends and shifts can change still depending on the crisis or situation
o In business, if things call for change, you have to change
 “We often say about relationships… bad ones fall apart in crisis, good ones get by, and great ones are better because of it…”
 Entrepreneurs must pursue operations and growth under new normal conditions
 How do they ensure that adapting the attest trends can truly help them survive and recover?
 Pivoting – A Crisis-driven Business Strategy
o Fundamentally changing the direction of a business when the current products or services are not meeting the needs of the market
o Implementing a strategic change to help a company improve revenue or survive in the market, while still ensuring value to the customers
(also called the lateral move)
 When and Why does a Business Pivot – Timing is critical to pivoting
o A capable entrepreneur would never pivot just at any time or just one whim
o It is the right time to pivot when
 You cannot see much progress even after putting in a tremendous amount of money and resources
 There is just too much competition
 The company’s progress has plateaued
 Only one of your company’s features or services gets traction
 Customers aren’t responding to your products like you thought they would
 Your perspective about the industry has changed due to internal or external changes in your business environment
 How does a Business Pivot
o Focus on a feature instead of a solution
 Take a “less is more” approach to what you can change
 Consider specific activities, product/service features, business practices that need tweaking or revamping
 Do not be distracted by adding in too many features, or too many “improvements”
 Start with one thing that needs changing the most
o Pick goals that align with your business
 Changing how the way the business operates means that new goals must be in the horizon
 Align new actions with new targets
o Analyze (not copy) what your competitors are doing
 Look at what your direct competitors are doing and determine how you can do it better
 Direct competitors – those who are exactly or almost similar to you or what you are doing (e.g. Starbucks and Bo’s Coffee, Jollibee
and McDonald’s)
 Eye your strong competitors and try to weigh what your edge and drawbacks are against theirs
 “Learning from your competitors”
o Determine the right messaging to the right market
 Show your value by identifying new ways to communicate your brand (Who you are and why you?) to customers, your purpose, and
your positions
 Advertising is key here
o Strategize and plan before making a move
 Make sure everyone (all employees, departments, partners, investors) in your
business are on board and understand the direction you want the business to go
 Test your pivot before executing it in the real market
 Risk vs Opportunity Model
o Scope and Risks in Pivoting
 How much should you change?
  To what extent?
 Implications?
o Message Pivot – Existing Offers and Existing Audience
 Change something about your advertising
 e.g. promotions, free Wi-Fi, buy one take one
 Turning an existing product or feature as a promotional opportunity
 Very Low Risk, Very Low Opportunity
o Offer Pivot – New Offers and Existing Audience
 Add in or introduce a new product
 Low Risk, High Opportunity
o Audience Pivot – Existing Offers and New Audience
 Look new customers or customers you never sold to
 Look for a new market that you never considered before
 Low Risk, Low Opportunity
o Business Pivot – New Offers and New Audience
 Completely changing your business
 Very Risky, Opportunity is possible but uncertain
 Examples

ENTREPRENEURIAL ECOSYSTEM
 For strategic innovations to be successfully pursued by an entrepreneur – be it for a start-up (new business) or an existing one, there needs to be
an iterative cycle of experimentation – testing, learning, adapting, and testing again – until you get it right (or abandon it!)
 This period of experimentation requires a certain mindset, specific behaviors, a methodology that includes the appropriate tools, and a guide
that can be used to check if you are on the right path
 Different societies have undergone socio-economic transformation while others have not
 The presence of different factors of socio-economic development in an area, including enterprise, shows whether there is growth or not
 It also determines the quality and pace at business and overall socio-economic development
 Entrepreneurial Ecosystem or Business Environment
o A dynamic (changing), self-regulating (check itself overtime, independence to sustain yourself) network of many different types of actors
and factors involved in entrepreneurial activity
o Its essence lies in the successful interactions (collaboration & trust) among the actors (people) involved and how they respond to
conditions outside their control
o Any form of economic activity can also bring about physical changes in the environment
o An entrepreneurial ecosystem is defined as the interconnectedness of 6 pillars – a conducive culture, enabling policies and leadership,
availability of appropriate finance, quality human capital, venture-friendly markets for products, and a range of institutional and
infrastructural supports which formally and informally combine to connect, mediate and govern the performance of all actors in the local
entrepreneurial environment
o It is the nature of entrepreneurship—thriving or not—across a geographic region to continually adapt to the organizational environments
in which they operate; it is a complex adaptive system
o The variables in the ecosystem can change, including new leaders that replace the old ones, new rules and regulations, and entrepreneurial
support systems that come and go
o But these do not necessarily change the fundamental nature of the entrepreneurial ecosystem, although the residents of the region might
want substantial change leading to a more vibrant economic situation
o On the other hand, some changes (we call parameter changes) can alter the ecosystem, such as major projects that boost economic
activity which have the power to create a new entrepreneurial culture
 Characteristics of an Entrepreneurial Ecosystem – common for all ecosystems
o The ecosystem has 6 domains (pillars)
 a conducive culture
  enabling policy
 availability of appropriate finance
 quality human capital
 venture-friendly markets for products
 a range of institutional and infrastructural supports
o Each ecosystem is unique
 While all ecosystems are composed of 6 domains, the idiosyncrasies, level, or quality of each domain will differ depending on the
venture, the industry, the region, the people, etc.
o There is no generic way to assess the cause-effect roots and paths in an ecosystem
 Changes and results that are witnessed in the short-term, may not carry on to the long-term, or have no impact whatsoever to the
growth of an ecosystem
 Cannot predict where an ecosystem will go in the long run
o Entrepreneurial ecosystems become (relatively), self-sustaining
 There is a tipping point at which government involvement can and should be significantly reduced
 Once the six domains are strong enough, they are mutually reinforcing, and public leaders do not have to invest quite so much to
sustain them
 6 Pillars of the Entrepreneurial Ecosystem
o What is this model showing us?
o How are Entrepreneurs & their ventures impacted by the ecosystem they are in?
o From the vantage point of the entrepreneur, there are internal and external factors that need to be considered in the ecosystem they operate
in

BUSINESS OWNERSHIP
 Factors to consider when deciding on Startup ownership
o owner’s liability
 unlimited – fully obliged to taken on financial responsibilities of the business (sole)
 limited – partial (partner or corporation) or not at all… (stockholder in corporation)
o income tax treatment of business transactions
 more income, more taxes to pay
 30% tax maximum for corporations
o ease of raising capital
o ease of legally establishing the business
 sole is easier to establish than partnerships and corporations
 Basic Types of Business Ownership
Type Characteristics
 personally owned by one individual
 this also means that the owner has unlimited liability
 the default business entity that some freelancers establish to legitimize their business transactions
Sole  however, freelancer and proprietor are not synonymous
Proprietorship  legally required to register with the Department of Trade and Industry (DTI), BIR, LGU Business Permit and other regulating gov’t
agencies
 if freelancers or online businesses regularly earn income, they should register
 if freelancers or online businesses intermittently or do not regularly earn income, they may not register
 owned by two or more people, referred to as partners
 partners invest money, property and/or expertise in a common business fund and share business profits among themselves
 partners still have a shared liability of all debts and obligations of the business, depending on each partner’s level of participation in
the business and liability agreements they have agreed and arranged among themselves
Partnership
 the bulk of liability within a partnership is also dependent on the extent of one’s involvement in the business
(Joint Venture)
 legally obliged to register with Securities and Exchange Commission (SEC), BIR, relevant LGUs and other regulating agencies
 in the Philippines, no written contract for a partnership
 there is no rule for diving the ownership percentage of the business
 it is easier to register with Cebu City than in Mandaue City because the latter is very strict
 owned by several individuals called shareholders (also called stockholders or investors)
 is seen as a separate and distinct legal entity from its shareholders
 shareholder’s liability as owners is limited only to the extent of the capital contributions they have made to the corporation
 types of corporations
o profit or organized for profit
Corporation  this business is controlled by a board of directors and can be stock
o non-profit or not organized for profit
 this business is controlled by a board of trustees and can be non-stock
 corporations are expected to have more extensive business activities and transactions, and thus are subject to more requirements and
regulation
 registration of corporations are with the Securities and Exchange Commission (SEC), BIR, LGU and other regulating agencies
 VAT vs. Non-VAT Business – Value Added Tax
VAT Non-VAT
Any person or entity that exceeds PHP 3 million of Gross Any person or entity that does not exceed PHP 3 million of
Taxpayer
Sales or Receipts Gross Sales and Receipts
Tax Rate 12% VAT Payable (Output Tax less Input Tax) 3% of the Gross Sales/Revenue
o What Type of Business Structure?
 The choice is up to you
 Professionals and sole proprietors have the options to pick between the two (VAT or Non-VAT)
 However, if your gross sales exceed PHP 3 million, you are required by the Bureau to opt for VAT
 If you are new to business or are starting a new business, it is better to register for Non-VAT
 First-time Sole Proprietorship – register for Non-VAT
 Registration or Renewal of Business Name
 Sole Proprietorships Registration Process
o Since the law treats the owner and the business as the same, the sole proprietor only needs to register his or her name with the Department
of Trade and Industry (DTI) and secure local licenses and permits to commence business operations
o Step-by-Step Process for Registering a Sole Proprietorship in the Philippines
 Register a business name with DTI to acquire a DTI Certificate of Registration
 Register with the Barangay Office where the business is going to be located to acquire a Barangay Certificate of Business
Registration
 Register with the Mayor’s Office to acquire a Mayor’s Permit
 Register with the Bureau of Internal Revenue (BIR) to acquire a Certificate of Registration
 Partnerships Registration Process
o List of Requirements
 Name Verification Slip (can be obtained on SEC’s website)
 Articles of Partnership
 Joint Affidavit (not required if already stated in Articles of Partnership)
 Registration of data-sheet
 Certificate of Bank Deposit
 Name of the partnership
 Principal office address
 Contact number of the partner
 Name, citizenship, address, birthday, and Taxpayer Identification Number (TIN) of the partners
 Capital contribution of the partners
 Purpose of the partnership
 Endorsement of Clearance (from other government agencies)
 FIA Form 105 (if you have a foreigner partner)
o Step-by-Step Process for Registering a Partnership in the Philippines
 Register with SEC
 Get a barangay clearance
 Register business and employees with SSS
 Obtain a business permit (Mayor’s permit)
 Register your business with BIR
 List of Requirements to get a Business Permit or Mayor’s Permit
o Certificate of Business Name Registration from Department of Trade and Industry (Sole Proprietorships)
o Articles of Partnership (Partnerships) or Articles for Incorporation (Corporations) from Securities and Exchange Commission
o Certificate of Registration (Cooperatives) from the Cooperative Development Authority
o Barangay Business Clearance
o Authorization letter of owner with ID
o Contract of lease (If leased) or Certificate of Title/Tax Declaration (If owned)
o Sketch of the business location
o Occupancy permit
o Community Tax Certificate (CTC or Cedula)
o Public Liability Insurance (for Restaurants, Cinemas, Malls, etc)
o Locational/Zoning Clearance
o Fire Permit
 o Sanitary Permit

OPPORTUNITY RECOGNITION
 Is opportunity accidental or is it pre-meditated? Why do you say so?
o In this course, we are looking at pre-meditated opportunity
 Opportunity
o We refer to it by several terms – potential, possibility, a Eureka!
or Aha! moment or concept, however an “Entrepreneurial
Opportunity” is specifically matched to business conditions that
allow entrepreneurs of all types to generate, implement and
commercialize on ideas to the needs, wants and demands of the
market
o Hence, while there are many opportunities out there, it takes
more effort to recognize one that is fit for enterprise
o Traditional Definition (Autio, E., 2015, Global
Entrepreneurship & Development Institute)
 Situations where products and services can be sold at a
price greater than the cost of their production
 Market imperfections that are exploited and become profit
situations
o Holistic Definition (Edralin, 2019)
 A specific set of conditions that will encourage and allow
entrepreneurs to create new business concepts (tangible and
intangible) via combining and using resources for profit,
while empowering society and the environment
 It is also about the innovation and improvement products
and services
 Sources of Opportunity – staying aware of things going on around
you can help you recognize potential business opportunities (Mariotti,
2010)
o Problems that surround you (personal – community – global)
 Many well-known companies were started because an entrepreneur wanted to solve a problem
 A problem could be something you are experiencing personally. Or it could be a problem you observe others experiencing
 What product or service would improve your life or the lives of others? What would you like to buy that is not available for purchase
in your area?
o Changes that occur in the present, or ones we can expect or anticipate
 Our world is continually changing—changes in laws and regulations, social customs, local and national trends, even the weather
 Change often produces needs or wants that no one is currently supplying
 Consider climate change and the trend toward taking better care of the environment
 Many new business opportunities have occurred because people are interested in purchasing “green” products and services
o New discoveries are the creation of new products or services that can happen by accident
 The creation of totally new products and services can happen by accident
 For example, someone who has an enjoyable hobby can discover something recognizable as a business opportunity
 Inventions also come about because someone wanted to find a way to solve a problem
 Other examples include changes in technology or medical and technological discoveries that entrepreneurs find ways to convert into
products and services
o Existing products or services are sources of ideas for someone who may think of ways to improve them or produce them differently for
a cheaper price
 You can get ideas for opportunities from businesses that already exist
 This is not the same thing as copying a product or service and then calling it by another name (which can be illegal)
 Instead, it means looking for ways to significantly improve a product, perhaps at a lower price
 It could also involve improving the quality and manner in which customers are served—including such features as better locations,
longer hours, or quicker service
o Unique knowledge – your own knowledge, experiences and skills can become products/ services you can offer others
 Entrepreneurs sometimes turn one-of-a-kind experiences or uncommon knowledge into a product or service that benefits others
 Think about your own knowledge and experiences
o A lot opportunities come from the simple things
 What makes an OPPORTUNITY Entrepreneurial?
 o An entrepreneurial opportunity presents a specific set of conditions that will encourage and allow entrepreneurs to create new business
concepts (tangible and intangible)
o It combines and uses resources for profit and shared empowerment with society and the environment
o This means that opportunity can take on various shapes and methods
o They are also triggered by external (outside of the entrepreneur’s control) and internal conditions (an entrepreneur’s own foresight)
o While numerous opportunities do present themselves, it must be noted that not all opportunities are viable ones thus it is critical for an
entrepreneur to:
 Assess the quality of an opportunity based on specific criteria that are essential to ensure its marketability
 Understand where it comes from (sources)
 Employ the appropriate process and steps to identifying the right opportunity
 The Process – Opportunity Recognition
o An entrepreneur has to be responsive to an encounter with the “Window of Opportunity” that presents itself
 The “Window of Opportunity” is not permanent
 It only exists for a specific amount of time
 Especially now, the window of opportunity is very short because of technology and social media
o Responsiveness = Opportunity Recognition (OR)
o OR is a developmental process that starts with generating a business idea and ends with the creation of a business model that brings the
idea to life
o Entrepreneurship only begins when an entrepreneur recognizes an opportunity’s (idea’s) potential
o The opportunity gains life the more the entrepreneur is willing to understand, create and exploit the idea(s)
 The OR Process
o Ideation (Opp. Seeking)
 Generate ideas
 Brainstorm
 Look at sources (self, market, problems, environment, culture, etc.)
o Selection (Opp. Screening)
 Assess options
 Look at essential qualities
 Your capabilities
 Consider business factors – entrepreneurial ecosystem
o Incubation (Opp. Seizing)
 Business model creation
 The collaborative and creative process of bringing the idea into “reality”
 It begins with the construction of the “business concept”
 Review of requirements
 Design of Identity
 Plan, plan, plan
 Action
 Phase 1 – Ideation (Opportunity-Seeking)
o Recognition is then expanded as the entrepreneur explores the many directions he or she can direct an opportunity to, this leads to the
second phase referred to as ideation
o It is the identification and generation of viable ideas – through creative analysis, brainstorming and observation of the environment
o Ideas can be found from problems, trends, and one’s own interests and experiences
o Key to a productive ideation phase is activating one’s creative thinking to spur the analysis and construction of ideas in the entrepreneur’s
mind
o What makes the difference between a blank canvas and a masterpiece?
 It all starts with an idea
 Ideas are thoughts about possible courses of action, and they are the heart and soul of creation
 Sometimes ideas come naturally, but it takes some hard work and creativity to create something new most of the time
o Characteristics of Entrepreneurial Ideas
 Desirable – meets a customer need
 Viable – generates profit
 Feasible – is technically feasible
 Ideas – brainstorming, opinion without judgement, bad options
 What is the product?
 What do have to do?
 Why is it important for users?
o How do I generate ideas?
  Micro-Seeking
 Personal, consumer-driven
 Yourself, your environment, your people
 What are your needs? What are your wants? What are your problems? What are your frustrations? What do you want to do
better?
 Where to find these – Lifestyles
o How do people live?
o How do people work?
o How do people play?
o How do people die?
o How do people invest?
 Macro-Seeking
 Focus on general Market Gaps / Imperfections
 Look into the changes in market demand (the growth and lack of it), societal problems that need to be addressed
 Explore and understand overall steep conditions from a broader scale – your locality, country, the world
o Social
o Technological
o Economic
o Environmental
o Political
o The Creative Process
 Activating one’s creative thinking to spur the analysis and construction of ideas in the entrepreneur’s mind
 Methods
 Brainstorming (freeflow group discussions)
 Brainwalking (activated brainstorming through assistive media)
 Customer Interaction and feedback analysis
 Analyzing existing products/ services
 Experimenting via substitutions
 Analyzing gaps in the supply chain (imperfections in how manufacturers, distributors, retailers, and marketers do business).
 Analyzing gaps in policy (Political systems, laws, public services, public infrastructure)
 Phase 2 – Selection (Opp. Screening)
o While Ideation can point you to multiple opportunities and multiple business concepts, selection focuses on assessing the potential
desirability, viability and feasibility of the options, then identifying and selecting the one that is most desirable, viable & feasible as a
start-up enterprise
o Components to Selection
 Essential Qualities
 Attractive – physical/experience/function
 Timely – trending? Needed?
 Durability/Longevity
 Profitable
 Creates and gives value to the end-user/consumer – satisfaction, improve lifestyle, contribute to survival
 Your Capabilities/Internal Business Factors
 Personal competencies
 Aptitude-Abilities – a natural ability to do something
 Attitude
 Aspiration Levels
 Motivation
 Access to Resources
 Experience
 External Business Factors
 Focus and Direction
 Good Network
 Sources of Capital
 Legal Requirements
 Degree of Risk – Competition, Market Response
 Research and Development
 Business Typology (other factors) – Venture, Type, Size, Industry
 o Assessment/Screening Model – Real, Win it, Worth it Screen (RWW) by Dominick Schrello
 A project feasibility and risk management tool used in evaluating innovation and business improvement projects
 REAL answers questions that assess whether there is a true need for the product by the market (Desirability)
 WIN answers whether you have a competitive edge & capability (Feasibility)
 WORTH IT ascertains that you are able to evaluate the profitability and strategic sense of your business idea (Viability)
o RWW Screening Questionnaire
 Scoring – 1-10 points per question, no – 1; yes – 10
 Interpretation
 12 – 50 (unlikely to meet requirements, do not pursue)
 51 – 80 (Needs further evaluation/ research)
 81 – 120 (has potential, may pursue planning)
Is it REAL? – Is there a market?/ Can we make the market? (Desirability)
Is there a conscious need?/Can an unconscious need be tapped?
CAN and WILL customers buy?
Is the product acceptable within the market’s social, legal, and environmental norms?
Is there a USP (unique selling point)?
Can we WIN it? – Can we be the ‘leaders’ of the pack? (Feasibility)
Do we know/can we identify the likely and strongest competitors?
Do we have competitive advantage and/or edge in the market?
Do we have the resources (technical, experience, networks/relationships)?
Can we plan & prepare (and execute) within the needed time frame?
Is it WORTH it? – Does the money & common sense align? (Viability)
Are the costs (financial and intangible) acceptable?
How likely are financial returns/profits to exceed our costs in putting up the start-up?
Can we handle and manage the risks involved? Is the financing for this obtainable?
Is our growth potential scalable? Can we strategically expand in the long run?
TOTAL SCORE(S): _____/120
 Most of the time, you choose the highest scoring idea
 However, you can choose other ideas but make sure you have a justification for it
 Phase 3 – Incubation (Opp. Seizing)
o “Incubation is the period between having a well-reasoned concept and an actual
artifact (product, service, platform, business model, etc.) that can thrive in the
world. The reason for having an incubation period (during which you are incubating
a new opportunity) is to break down, design and experiment to get as close to a true,
valuable manifestation of the product as possible” (Schmitt, L., 2019)
o It is the collaborative and creative process of bringing the idea into its “reality”
o It begins with the construction of the “Business concept” and business model,
and succeeded by thorough research, planning and test marketing, before
implementation
o The reality requires the construction of the “product” that is the answer to the market
gap being exploited, the market need/demand being served, or the problem that is
being solved
o From a concept, to a prototype as a result of research, to more research and more
prototypes, and ultimately, the best version of the artifact there could ever be, at least for the moment
o Stages of Incubation
 Your Business’ Identity (Branding Tools) – Incubation 1
 Who are you?
 How do you want the world to see you?
 Background & Product Vision – Incubation 1
 How did the idea come about?
 What is your vision in relation to your product?
 What is the product? What is its purpose?
 Business Concept/Business Model – Incubation 2
 Business Scope
 Business Model
 Product Sketch
 Research & Development – after midterm
 Who is your market? What do your customers think, see, feel?
 How else can we make the product better?
 What business activities do we prioritize and how do we do them? Who should be involved?
  How do we make ourselves ready for start-up?
 What is the best version of our product like?
o Business Identity
 Establishing Business Identity – This is expressed through two (2) mediums, mainly
 Business Name & Logo
o Symbols that render a memorable and lasting image to the company’s purpose, goals, and advocacy
o A well-designed logo is critical since this is often the business’ main avenue for communicating and identifying itself to
the public and to the industry
o A logo is a communication tool
o It is always matched with a product value proposition (PVP)
 Product Value Proposition (PVP)
o A marketing statement that a company uses to summarize why a consumer should buy AND prefer a product or use a
service
o It is like a slogan – “Just do it”, “We go it all for you”
o PVPs can change over time depending on what you are marketing
 NOTE – Out of the two mediums of identity, logos tend to leave a more permanent message, which is why businesses would keep
logos longer than they do PVPs
o Product Vision – definition of value for customers, the company, and society, including the business and technical requirements
 The initial product and company background
 A brief history of the product of how the idea came about
 The people behind the concept
 The business you are hoping to create with the product, and
 The main reasons/business justification for this new product
 Written in 1-3 paragraphs
 Formulating your business’ Vision Statement (Vision – Mission – Core Values)
 The Vision
o The entrepreneur’s definition of his/her commercial, creative and ethical success for his/ her business venture
o The simple and crisp statement defining the long-term goal – What you want your business to achieve at its highest
point
 The Mission statement(s)
o The sub-goal that describes how the enterprise’s vision can be achieved
o It can be presented as a single statement or multiple statements (3s) in an outline or paragraph
 The Core Values
o The determining characteristics or attitudes that will enable an enterprise to execute its mission
o A business would typically identify 3-5 driving values that are foundations of their vision and mission
 Core Values supports the Mission; Mission supports the Vision

o Vision Sketch – This is the initial blueprint of product being conceptualized often presented as a visual sketch that represents what the
product would look like
o Essential Design Attributes
 For VMC
 Remember to KISS – Keep It Short and Simple
 An outline format is readable, paragraphs give context & meaning
 Attributes of Enterprise LOGO
 Legible – a very clear and readable font
  Coherent – clear, easy to understand; balance of familiar & intriguing
 Adaptable – to be designed in horizontal and vertical formats, in any size for logo and befitting any platform
 Reproducible – easy to be copied, black and white or colored
 Memorable – easy to remember
 Timeless – survives the test of time
 Simple – easy to recognize
 For logo design reference, visit: https://core.ac.uk/download/pdf/81973191.pdf
o Scope, Models and the Idea Canvas
 How do they make money?
 Chong Hua Hospital – Patient care fees, Medical service fees, Rent, etc.
 Shopee – Commissions, transaction fees, Ad revenue, Fulfillment service fees, payment fees
 Call of Duty, Fortnite – In-app purchases, subscriptions, in-app ad revenue
 Define Your Business Scope
 Get to know the foundations and coverage of your business idea:
o Venture
 Start-up – a young company founded by one or more entrepreneurs
 Franchise – a joint venture between a franchisor and a franchisee
 Acquisition – when one company purchases most or all of another company's shares to gain control of that company
o Size and Ownership
 Size – Micro, Cottage, Small, Medium, Large Enterprises
 subject to size of capital, projected income and no. of employees)

 Ownership – Single/Sole Proprietorship, Partnership, Corporation, Cooperative, Other types

o Industry
 A group of companies that are related based on
their primary business activities
 e.g. Agricultural, Food and Beverage, Tourism,
ICT, etc.
 Who is your target market and why them? (1-2
paragraphs)
o A group of consumers or organizations most
likely to buy a company's products or services;
this same group will be the focus of your business
efforts
o These may be further classified into customer
segments – specific grouping based on shared
characteristics
o Segmentation towards individual customers or organizational customers
o Geographic factors need to be considered – where they live and work
 Create Your Business Model
 A business model is a business snapshot of your to-do list of actions and items needed to get your business started
 It allows you to visualize what your business will most likely look like when it starts operations
 It summarizes a company's core strategy/strategies for profitably doing business
 Precursor to the business plan, a short version of the business plan
 More visual than the business plan
 If you have your business model, it will become easier to write your business plan
 Building your Business Model
o You can visualize your business model using Osterwalder’s business model canvas and break down your idea into 9 core
blocks
 Start with your value proposition
 Right side – How will this idea generate money?
 Left side – What will I need to invest to get this idea off the ground?
o Value Proposition/Business Synopsis
 Refers to the product or service the firm intends to offer to its customers to meet their needs
 It is unique to an organization as it sets it apart from its competitors
 The description may be qualitative, or quantitative – describing what value you are offering to customers, and what
your goal is by doing so
 Your USP (unique selling point)
 Your offers/ what “value(s)” you give to your market
o Key Partners
 Lists down the networks (people and organizations)that whom you need to operate your business
 What networks and partnerships do you need to start/sustain your business?
 Mentors? Lawyers? Distributors? Suppliers? Services?
o Key Activities
 Describe core actions needed to generate the value proposition
 What do you need to do to pursue your value proposition?
 Production? Training? Advertising?
 e.g. restaurant – food preparation
o Key Resources
 Details what the business needs to create value for customers
 What internal resources do you need to perform these activities in block 3?
 e.g. building, equipment, software, etc.
o Cost Structure
 Section outlines all the monetary costs the business incurs while operating under the model
 How much time and money will be required to do this?
 Consider explicit (quantitative) and implicit costs (qualitative)
 There are nonquantifiable costs, which should be included
o Costumer Segments
 Specifies and identifies your target customers
 Who are your target customers? How large is this group?
 Do you have multiple customer segments? What are they?
o Customer Relationships
 Describe the type of relationship between your business and the customers (transactional, long-term, self-service, or
co-creation)
 Type of Relations – Personal/ Transactional/ Relational?
 Personal – friends and family
 Transactional – one-time purchase
 Relational – long-term
 Interactions – Digital? Physical? Both?
 Treatment – Acquisitive? Retentive?
 Acquisitive – focus on getting new customers
 Retentive – focus on nurturing existing customers for long-term relationship
 If you want to get new customers, you must know how to keep them
o Channels
 Describe your communication (advertising) and delivery (how products reach the customers)
 Advertising – how will you communicate to your customers?
 Delivery – how products reach the customers?
o Revenue Streams
 Describes how the company makes money from its target market
 How might you make profit ($) from this?
 What value, other than money, are you hoping to create?
Product Design
Adapting the Business Model Canvas
o The model may also take on a different blocking depending on the nature of the enterprise or business
o A non-profit or social enterprise will still map its own working model, but the building blocks will take on a sustainability
support perspective
 Design Your Product Sketch/Service Map
 Product Sketch
o A detailed and visual paper/digital design of the proposed product
o Paper prototype
o Should be a very detailed – color, measurements, shape
 Service Map/Blueprint
o Is a visual representation of your service offer’s architecture from the user’s/customer’s perspective, showing all the
components, stages and activities tied to providing the service(s)
o Usually presented using graphic organizers (flowchart, table, etc.)
o Involves a floor plan should physical space be a requirement
 Examples Product Sketch Service Map/Blueprint

o Roles
 General Manager (L) – to oversee that all roles and contributions are fulfilled; Member performance monitoring; Editor; Role
Assistance; Others
 Operations Manager(s) – streamline processes: production, delivery, human resources and training, resource and product
distribution, customer service management
 Product Developer – prototyping, blueprinting/ process design, Platform design, Advertising collaterals)
 Finance Officer – canvassing & costing, budget and other financial projections
 Marketing Officer – on-ground & Digital Promotions, Networking & Advertising