Topic: Introduction to Entrepreneurship
to turn unskilled jobholders into skilled ones. It
A. Entrepreneurship
➔ Entrepreneurship is a process of innovation and new
venture creation. It is both an art and a science of
converting ideas into marketable goods and services
that involves utilization of materials, machine, money
and man.
➔ Entrepreneurship is one of the resources economists
categorize as integral to production, the other three
being land/natural resources, labor, and capital.
2. Entrepreneurship Promotes Innovation
B. Entrepreneur
➔ The term “entrepreneur” comes from the French
word entreprendre which means to undertake. It is a
reference to individuals who have initiated the
establishment of a business enterprise.
3. Entrepreneurship Can Promote Social Changes
C. Importance of Entrepreneurship
1. Entrepreneurship Accelerates Economic Growth
- Act as the wheels of the economic growth of
the country.
- By creating new products and services, they
stimulate new employment, which ultimately
results in the acceleration of economic
development.
- A large number of new jobs and opportunities
are created by entrepreneurship.
Entrepreneurship creates a huge amount of
entry-level jobs that are very much important
also prepares and provides experienced
workers to large industries.
- By bringing innovation to every aspect of
businesses, entrepreneurial ventures enhance
production utilizing the existing resources in
the most effective ways. Entrepreneurs
develop new markets by introducing new and
improved products, services, and technology.
- Through the right practices of research and
development, entrepreneurs bring new
innovation that opens the door of new
ventures, markets, products, and technology.
- Entrepreneurs change or break the tradition or
cultures of society and reduce the dependency
on obsolete methods, systems, and
technologies. Basically, entrepreneurs are the
pioneer of bringing new technologies and
systems that ultimately bring changes to
society. These changes are associated with
improved lifestyle, generous thinking, better
morale, and higher economic choice. In this
way, social changes gradually impact national
 and global changes. So the importance of Topic: Introduction to Entrepreneurship
social entrepreneurship must be appreciated. (Common and Core Competencies in
Entrepreneurship)
4. Entrepreneurship Promotes Research and
Industrial Development
Common Entrepreneurial Competencies
- Along with producing new business ideas and
1. Opportunity-seeking and initiative
thinking out of the box, entrepreneurs also
- Entrepreneurs seek opportunities and take the
promote research and development. They
initiative to transform them into business
cultivate their ideas, shape them into a new
situations
form, and turn them into a successful business
2. Persistence
endeavour.
- When most people tend to abandon an
activity, successful entrepreneurs stick with it
5. Entrepreneurship Develops and Improves Existing
3. Commitment
Enterprises
- Entrepreneurs keep their promises, no matter
- We often think of entrepreneurs as inventing
how great the personal sacrifice.
totally new products and ideas, but they also
4. Demand for efficiency and quality
impact existing business. Since entrepreneurs
- Entrepreneurs try to do something better,
think differently, they can come up with
faster or cheaper.
innovative ways to expand and develop the
5. Taking calculated risks
existing enterprises.
- Taking calculated risks is one of the primary
- For example, modernizing production
concepts in entrepreneurship.
processes, implementing new technology in
6. Goal setting
the overall distribution and marketing
- This is the most important competency
processes, and helping the existing enterprises
because none of the rest will function without
to utilize existing resources in more efficient
it. Entrepreneurs set goals and objectives
ways.
which are meaningful and challenging
 7. Information seeking 10. Recruiter
- Entrepreneurs gather information about their 11. Business Reporter
clients, suppliers, technology and 12. Analytic and Data Management
opportunities.
8. Systematic planning and monitoring Topic: Developing a Business Plan
- Systematic behaviour means acting in a logical
way. Planning is deciding what to do. The Business Plan
Monitoring means checking. ➔ A business plan is a document that describes the
9. Persuasion and networking various external and internal elements involved in
- Entrepreneurs influence other people to follow starting a business or expanding an existing venture,
them or do something for them amidst a dynamic environment.
10. Independence and self-confidence ➔ It integrates the different functional plans such as
- Entrepreneurs have a quiet self-assurance in marketing, manufacturing, finance and human
their capability or potential to do something. resource management.
➔ During the first few years of business operations, it
Topic: Introduction to Entrepreneurship (Career serves as a guide for short-term and medium-term
Opportunities) decision making and managerial action
➔ It directs the entrepreneur to his desired destination
Career Opportunities Related to Entrepreneurship
1. Mid-level Management for an Entrepreneurship Purposes of Writing a Business Plan
Degree Holder ➔ It helps determine whether a proposed or existing
2. Business Owner business venture is viable given its target market
3. Business Consultant ➔ It guides the entrepreneur mobilizing the resources
4. Sales needed by the business
5. Marketing ➔ It serves as a tool in helping get financing for the
6. Finance business
7. Research and Development
8. Not-for-Profit Fundraiser
9. Teacher
Value of Business Plan to Selected Users
Business Plan
User of Business Plan Importance of Business Plan to
the Users
Entrepreneur ● serves as a road map for
managing the business
● identifies the resources
needed to operate and
grow the business
● allows the entrepreneur to
anticipate potential
business risks
Lender - A lender does ● allows the lender to assess
exactly what the word whether the entrepreneur
will be able to meet debt
says-they lend you money
and interest payments
that you must pay back,
● provides information about
usually with interest.
collateral or tangible assets
that can be secured for the
loan
Investor - An investor ● allows the investor to gauge
puts money into a whether the projected
business, projects, returns are acceptable
schemes, ideas and so on, ● provides information about
with the expectation of the character of the
having a stake in the
entrepreneur and about the
profits. capability of the venture’s
management team
Needed Information for the Major Sections of the
1. Market Information Needs
- General environmental trends
- Specific industry trends
- Local market conditions
- Market potential (e.g., market size, untapped
or underserved markets)
- Demographic and/or psychographic profile of
target market
2. Operation Information Needs
- Location
- Manufacturing or service operations
- Equipment and/or furniture required
- Space requirements
- Labor requirements
- Raw materials needed and potential suppliers
- Utilities (e.g., water and energy requirements)
3. Financial Information Needs
- Rental rates
- Cost of equipment
- Cost of utilities (e.g., water, electricity)
- Personnel costs
- Distribution costs
- Cost of insurance
- Registration and license fees
Major Sections of a Business Plan ➔ Physical plant
1. Executive Summary ➔ Machinery and equipment
2. Description of the business ➔ Suppliers of raw materials
3. Production plan ➔ Future capital equipment needs
4. Operations plan
5. Marketing plan Section 4: Operations Plan
6. Organizational plan ➔ Description of the company’s operations
7. Financial plan ➔ Flow of orders for goods and services
8. Assessment of risks
9. Timetable/milestones Section 5: Marketing Plan
10. .Appendices ➔ Pricing
➔ Distribution
Topic: Major Sections of a Business Plan ➔ Promotion
➔ Sales forecasts
Section 1: Executive Summary
➔ Highlights of the business plan summarized in two or Section 6: Organizational Plan
three pages ➔ Form of ownership
➔ Prepared after the total plan has been written, must ➔ Principal shareholders or partners
stimulate the interest of its reader, especially the ➔ Organizational; chart/lines of authority
potential investor ➔ Background of the management team
Section 2: Description of the Business ➔ Roles and responsibilities of the management team
➔ Products and/or services
➔ Size of the business Section 7: Financial Plan
➔ Mission statement and core values ➔ Assumptions
➔ Location of the business and its major physical assets ➔ Pro forma balance sheet
➔ Background of the business owners/entrepreneurs ➔ Pro forma income statement
➔ Cash flow projections
Section 3: Production Plan ➔ Sources and uses of funds
➔ Manufacturing process ➔ Break-even analysis
Section 8: Assessment of Risk ➔ Credit history
➔ Potential risks- internal or external ➔ Detailed market studies
➔ Strategies for preventing or minimizing risks
➔ Response to risk should they occur Capital
- the money a company needs to function and to
Section 9: Timetable/milestones expand
➔ Formal registration of the business - the money used to build, run, or grow a business.
➔ Completion of product or service design Sole proprietorship
➔ Completion of prototypes - a business that can be owned and controlled by an
➔ Hiring of initial personnel individual, a company or a limited liability
➔ Reaching agreements with suppliers and distributors partnership
➔ Actual production Partnership
➔ Initial orders, sales and deliveries - a kind of business where a formal agreement
➔ Progress or major information keme between two or more people is made who agree to
be the co-owners, distribute responsibilities for
Section 10: Appendices running an organization and share the income or
➔ Any agreements or contracts that you have with losses that the business generates.
clients or vendors Corporation
➔ Licences, permits, patents and trademark - a business entity that is owned by its shareholder(s),
documentation who elect a board of directors to oversee the
➔ Product illustrations or product packaging samples organization's activities.
➔ Marketing materials Income/ Revenue
➔ Resumes for each of your executive team members - A general term which means any earning made by
➔ Contracts and supporting documents for anything the business
else Service Income
➔ Building permit and equipment lease - derived from services rendered
documentation Sales Income
➔ Contact information for attorneys, accountants, - Revenue that comes from sales of goods or products
advisors, and so on
Legal fee
- income from rendering legal services
Commission Income
- income received from selling anything on a
commission basis
Cost and Expenses
- A cost of operations that a company or business
incurs to generate revenue
Patent
- an exclusive right given for a specific period of time
Liability
- They arise from past events such as obtaining a loan
to buy equipment for your business. These past
events create an obligation that you cannot avoid.
You typically transfer assets to settle liabilities.
Time-table
- the milestones of your business plan – the number of
employees, number of locations, sales targets, net
revenue expected and other targets.
Asset
- are properties or rights owned by the business.