Chapter One

Entrepreneurship refers to the economic activity of a person who starts, manages and assumes the risk
of a business enterprise. The person who undertakes entrepreneurial activities is called an
entrepreneur.

Economic Development is a scheme aimed at improvibg the living standards of the nation's citizenry.
The effective and efficient utilization of the various resources elements such as (1) human resources (2)
natural resources (3) capital formation (4) technology contributes to the economic growth. However,
government restrictions limit the effectiveness of entrepreneurs.

The entrepreneurs are responsible for products and services for customers and producers (2)
employment (3) taxes (4) demand for suppliers products and services and (5) training facilities for future
entrepreneurs.

In the attempt to make make profits, the entrepreneur perforns the following specific functions (1) to
supply the necessary capital (2) to organize production by buying and combining inputs like materials
and labor (3) to decide on the rate of output, in the light of his expectation about demand and (5) to
bear the risk inherent to the venture.

Innovation may be defined as the introduction of a new method, procedure, custom, device, among
others.

New ventures must develop into small business or grow into a mature and bigger compant. This is
because the entrepreneur must recover the cost of opening the venture. The transition from a new
venture to a long-term enterprise consists of the pre start-up stage, start-up stage, early growth stage
and large growth stage.

The factors of production are rewarded accordingly and if entrepreneur is successful, he receives profit.
However, he may reap huge amounts of profits but may also lose large amounts in the exercise.

To many people, entrepreneurship means running a small business. However, it can also be undertaken
on a large scale. Business of whatever size must adapt innovative approaches to its activities.

Chapter Two

Small business may be defined by using any of two approaches: market share or total assets. Under the
market share approach, small business may be defined as one which is independently owned and
operated and which is not dominant in its field of operation. Under tye total assets approach, small
business may be defined as one having total assets that fall within a certaij bracket. The government
prefers total assets approach because its simplifies formulation and implementation of policy.

Small business may be classified into five types (1) Manufacturing, is one involved in the conversion of
raw materials into produdts needed by society. (2) Service, businesses that provide service in one way or
another. (3) Wholesaling, refers to the activities of persons or establishments which sell to retailers and
other merchants, and/or to industrial, institutional, and commercial users, but who do not sell in large
amounts to final consumers. (4) Retailing, covers all activities involved in the sale of goods and/or
services to the final consumers. (5) General construction firms, those engaged in the construction of
buildings whether for private individuals or firms, or the government.

Small business have their own distinctive characteristics (1) independent management (2) small capital
requirement (3) mostly local operation.

Small business play an important role in the development of our economy. They are providers of
economic opportunities for entrepreneurs, providers of profucts and services to consumers, suppliers of
products and servives to other businesses, distributor of products and services of other businesses,
supporters of government and providers of employment.

Chapter Three

Ethics is the study of moral obligation involving the distinction between right and wrong. The rules about
how entrepreneurs ought to behave are referred to as business ethics.

The ethical behavior required of entrepreneurs is determined by the (1) public (2) interest groups
business organizations and (3) the individual personal morals and values.
Ethical behavior, whether by a person or

business entity, is influenced by (1) situation (2) reward system (3) individual differences and (4) other
factors.

The ethical behavior of employees may be encouraged through adaption of a code of ethics, institution
of rewards and the punishments concerning ethical behavior, adaption of internal programs for
resolving conflicts, creation of ethics review committees, provision of training in ethics among
employees, and top management support.

Ethical issues confronting entrepreneurship arise from their relationship with their customer, their
personnel, and employees, their business associates, and the investors and the financial community.

Chapter Four- ENTREPRENEURIAL PERSONALITY

Operating a business enterprise is a very challenging occupation. The rate of failure among those who
dared to make attempt high. Only a small amount number of them become successful and the levels of
their success differ.

An entrepreneurship will survive and grow in an environment that is friendly or akin to it.
Entrepreneurship will survive and grow only in the economic environments of free enterprise. Economic
environments may be classified as (1) fully supportive of entrepreneurship (2) moderately supportive of
entrepreneurship (3) not supportive of entrepreneurships.

Personality refers to the pattern of characteristics that distinguishes one person from another. It
includes the person's traits, values, motives, genetic blueprints, attitudes, emotional reactivity, abilities,
self-image, intelligence, and visible behavior patterns.

Among the six personality types, the enterprising type is the most appropriate for entrepreneurial
ventures. The personality traits considered vital to entrepreneurial success consist of drive, thinking
ability, human relations ability, ability to communicate, technical knowledge, reasonable risk-taker, self-
confident, goal setter, accountable and innovative.
Persons are motivated to become entrepreneurs by the following (1) desire to be one's own boss (2)
desire for financial rewards (3) desire to create one's own job security and (4) desire to improve one's
quality of life.

"Entrepreneur" and "manager" are sometimes used interchangeably but are different because they
perform functions that are distinct from each other.

Chapter Five

The search for sound business idea

A new business venture is confronted with the immediate concern of gaining at least a foothold in the
market it desires to serve. Entrepreneurs spend time and money exploiting business ideas.

A sound business idea may be defined as the economic opportunity which is within the reach of the
entrepreneur and will provide him with a desirable value. An entrepreneur who is well grounfed in the
concept of sound business idea will be able to save time, effort, and money in pursuing his goals.

There are two general methods of generating business ideas. It can be generated through unanticipated
means and deliberate search. When the entrepreneur finds business ideas without serious effort, the
method is referred to as unticipated means. The person's work, hobbies, acquaintances or a chance
event encountered by the person constitute the unticipated means of generating business ideas.
Deliberate search consist of using search questiom and idea prompting.

The search for a sound business idea calls for the preparation of a list so the best can be selected.
Generated ideas must be screened through a determination of their market, technical, financing anf
financial feasibility. After screening, final selection is undertaken to determine the best among tge
feasible business ideas.
Effective innovation assures the continuous survival and growth of the enterprise but innovation can
only thrive by sn atmosphere encouraging creativity and risk taking, rewarfs for creativity, open
communication, allowances for errors, a climate of participation, structural mechanisms that aid
creativity, training in the creative process and flexibility.

Chapter Six

Strategic Planning for small business

Strategic planning refers to the process of determining the primary objectives of the entrepreneurship
and then adopting courses of action and allocating resources to achieve those objectives.

The Mission Statement refers to the basic description of the fundamental nature, rationale and
direction of the firm.

Strategic Objectives refer yo the specific performaance targets that the entrepreneurship hopes to
accomplish.

A strategy is a carefully designed plan for achieving the firm's objectives. It indicates how the
entrepreneur will attempt to accomplish the goals with the resources availanle.

SWOT ANALYSIS is an organized method of assessing a firm's strengths and weaknesses and
opportunities and threats in the internal and external environment that confront or will confront the
firm.

Forecasts of Future Sales Performance are supplementary tools for SWOT analysis. It is an estimate or
prediction of the future sales or income of the firm.
Small business business ventures are not usually afforded the advantage enjoyed by large business. It is
very difficult for small business to effect changes in its environment because its resources are usually
imited.

Chapter Seven The business plan

Planning may be viewed as systematic approach to achieve certain objective. Planning provides the
decision maker with ample time to consider relevant variables before a decision is reached.

The business plan is a document that helps the small business owner determine what resources are
needed to achieve the objectives of the firms and provides a standard against which to evaluate resulgs.
It is a sort of business blueprint and it keeps the entrepreneur on the right track.

A business plan is prepared in consideration of the current and expected situations. However, even with
business plan, the SBO must strige to be well informed about what is happening to his business and to
the industry where his business belongs. Necessary steps must be undertaken to adjust changes.

The content of the business plan will depend upon the purpose. Usually, they contains information
about the business (1) title page and contents, (2) executive summary, (3) description of the business,
(4) the product or service, (5) market strategies, (6) analysis of the competition, (7) operations and
management, (8) financial data and (9) supporting documents.

Chapter Eight Forms of Small business ownership

One of the most important decisions a prospective entrepreneur or SBO has to make is the form of
ownership that has to be adapted. The choice would depend largely on the resources and personal
objectives of the prospective owner. The forms of ownership applicable to small business are sole
proprietorship, partnership, and corporation.

A sole proprietarship is a business owned and operated by a single person. Sole proprietorships are
afforded with advantages such as (1) ease and cost of formation, (2) secrecy, (3) distribution and use of
profits, (4) control of the business, (5) government regulation, (6) taxation and (7) closing the business.
However, sole proprietorship also inherent the following disadvantages (1) possibility that the owner
lacks ability and experience, (2) the difficulty in attracting and keeping quality employees, (3) difficulty in
raising additional capital , (4) limited life of the firm and (5) unlimited liability of the proprietor.

Partnership is a legal association of two or more persons as co-owners of an unincorporated business.

Please have advantages pertaining to (1)ease of formation, (2) pooling of knowledge and skills, (3) more
sources of capital, (4) ability to attract and retain employees and (5) tax advantages. However, operating
Partnership are hindered by the following disadvantages (1) unlimited liability, (2) limited life, (3)
potential conflict between partners, and (4) difficulty in dissolving the business.

A corporation is a legally chartered enterprise with kodt of the legal rights of a person, includung the
right to conduct a business, to own and sell property, to borrow money, and to sue and to be sued.
Corporations are owned by stockholders and are issued certificates of ownership called stocks.
Corporations inherent the followng advantages (1) limited liability, (2) ease of expansion, (3) ease of
transferring ownership, (4) relatively long life, and (5) greater ability to hire specialized management.
However, corporations also have disadvantages; (1) more expensive and complicated to organize, (2)
double taxation, (3) more extensive government restrictions and reporting requirements; and (4)
employees lack personal identification and commitment.

Chapter Nine

Organizing, directing, and controlling the small business.

Organizing is the means by which management blends human and nonhuman resources through the
design of a formal structure or tasks and authority. The objective of Organizing is to produce and
organizational structure for the firm which indicates who performs which task and who supervise whom.

The following concerns are reflected in the organizational structure (1) specialization, (2)
departmentalization, (3) delegation of authority, (4) span of management, (5)hierarchy of objectives and
(5) degree of centralization.

In the day-to-day operations of the business, the SBO or entrepreneur is confronted with the formal and
informal organization. Within the formal organizational structure are the (1) line type, (2) functional
type, (3) line and staff type, and (4) committee type. Within the formal structure, informal groups are
oftentimes formed as a consequence of varying circumstances. These groups affect, positively or
negatively, employee performance.

After the organizational structure is put in place, directing the activities of employees becomes
necessary. For effective directing, the following activities are required (1) communicating with
subordinates, (2) counseling, (3) motivating, and (4) disciplining.

Efforts expended in organizing and directing may be rendered useless unless effective control systems
are put in place. Controlling is a management function that makes sure resources are efficiently used. It
establishes goals and standards, measures performance and reinforce successes and correct
shortcomings.

Chapter Ten Marketing The Small Business

Marketing is that function concerned with planning and implementing the conception, pricing,
promotion, and distribution of products or services that eill satisfy the firm's objectives.
Marketing strategy is the general guide the SBO will use to achieve the firm's marketing goal. It is a plan
for getting products and services into the hands of customers in a timely, cost-effective, and appropriate
manner.

Market strategy planning is a small business activity which seeks to find attractive opportunities and
develop profitable marketing strategies. The following must be specified in a marketing strategy: the
target market, the applicable marketing mix, and the size of the market area.

Knowing the needs of the target customers will be very helpful in designing the right marketing mix. The
use of an applicable marketing mix will facilitate the achievement of the firm's sales goals.

In the attempt to describe the company's customers, market research because necessary. The two basic
tyoes of market research are; (1) primary research, and (2) secondary research.

One of the most important estimates a small business operator has to know is the forecast of how much
sales the company will make for a given period to determine the quality of sales the company can
generate if it will concentrate on a certain market segment.

Chapter Eleven

DETERMINING THE RIGHT LOCATION

One of the most important decisions the small business operator has to make is choosing the right
location for his business. The right location refers to that one which will bring the highest possible
benefits to the firm. The wrong location is one which will bring the most disadvantages to the small
business.
Different types of small business need to use different sets of criteria in determining the right business
location. These refer to those which concern the region, the province, and the city or town.

There are general and specific criteria used for selecting business locations. The criteria will differ as to
the type of small business under consideration, namely: manufacturing, retailing, or service. Some
location criteria are uniquely applicable for retailers. They may be derived through three major business
location selection steps. The steps are classified as follows: (1) choosing a viable community (2) selecting
the trading area, and (3) evaluating the specific site.

The central business district (CBD) refers to an unplanned shopping area around the geographic point at
which all public transportation system converge. Apart from the CBD, larger cities have developed
secondary business districts (SBDs) and neighborhood business districts (NBDs). An SBD is a shopping
area smaller than CBD and which revolves around at least one department or variety stores at a major
street intersectuon. And SBD is a shopping area that evolves to satisfy the convenience-oriented
shopping needs of a neighborhood.

Chapter Twelve

Promoting the Small Business

Promotion may be defined as activities, including advertising, personal selling, sales promotion, public
relations, and direct marketing, used by SBOs to persuade prospective customer to buy the company's
products or services.

Promoting the small business may be undertaken by using any or all of the following methods:
advertising, personal selling, publicity, sales promotion, and word of mouth.
The type of advertising media are classified into: television, radio, newspaper, magazines, outdoor
billboards, specialty advertising, public transportation, yellow pages, direct mail, local cable TV, cinema,
or other means such as catalogs, samples, handouts, and the like.

To effectively attain the sales goals, the company hires salesperson. There are various types of
salesperson: order getters, order takers, and support personnel.

Publicity may be classified as news, business feature articles, service feature articles, finance releases,
product releases, pictorial releases, background editorial releases, and emergency publicity.

The major tools of sales promotion are point-of-purchase displays, premiums, trading stamps, samplung
and demonstration, retailer coupons, consumer contests and sweeptakes, rebates and trade shows.

A positive word of mouth is a result of having competent employees, good products and services, and
good customer relations.

Chapter Thirteen

Managing small busineelss finance

Financial planning provides the small business operator with a detailed approach to managing the
financial activities of the firm. Financial planning involves an analysis of possible future events and how
these events might affect the firm. It is an activity that involves analyzing the financial flows of the firm
as a whole, forecastijg the consequences of various investments, financing, profit decisions and weighing
the effects of various alternatives.
A budget is an estimate of the infone and expenditures for a future period of time, usually one year. It is
prepared to satisfy the target market, the employees, and management goals. Budgets are of different
types and each is applicable to a specific type of business.

Financial analysis is the process of interpreting the past, present, and future financial condition of a firm.
The basic requirements of financial analysis are: financial statements, break-even analysis, and financial
ratio analysis.

Financial ratio may be classified as: liquidity, activity, profitability and leverage ratio.

Aside from the effective use of funds, the SBO is also concerned with the sources of funds. The major
sources of funds are debt and equity capital.

Chapteer Fourteen

Managing Small business risk

Risk refers to the uncertainty about loss or injury. Various kinds of risks are confronted by the small
business in its daily operations. Risk may be classified into two major types; (1) speculative risk and (2)
pure risk.

Risk management is an organized strategy for protecting and conserving assets and people. To
effectively implement, the following must be undertaken; (1) identity the pure risk confronting the firm,
(2) estimate the probability of financial loss in various situations that could go wrong; and (3) decide on
the most economical way to handle possible losses.
In deciding the most economical way of handling possible losses, the SBO must be familiar with the
different methods of dealing with risk; (1) avoiding the risk, (2) reducing the risk, (3) assuming the risk,
and (4) shifting the risk.

Risk shifting involves paying a fee to an insurajce company to assume the risk the small firm is
specifically concerned. Insurance coverages consist of two types: (1) life, and (2) non-life.

Life insurance policies cover risk of losing one's lide, disability or sickness. Non-life policies cover any of
the following: (1) fire and allied risks, (2) motor car, (3) marine, (4) surety, (5) general liability, and
(6)miscellaneous risks.

When properly applied, insurance policies can be effective tool of risk management.

COMMENTS

Overall, I enjoyed reading the book of Robert G. Medina of Entrepreneurship and Small Business
Management (Second Edition). I specifically enjoyed the book because of what I was able to learn and
gained knowledge and discover new information about entrepreneurship. I was very immersed with the
variety of chapters discussed in the book because it helps me channel my creativity into creating
something on my own in this competitive world. It enhances my analytical and logical skills because the
book contains information how entrepreneurs will be able to solve problems. Aside from that, the
characteristics that an entrepreneur should possess inspire me to work myself to become a better
version of myself to meet the standards of characteristics that an entrepreneur should have because
someday, I also aspire to become one. The book also taught me that risks will always be present, so I
must be brave all the time to take the risk and even witb uncertainies and failure, I should not give up
with my goals but rather set myself to success just how an entrepreneur bounce back in every failure;
instead of giving up, entrepreneurs pitch ideas more effectively, work to enhance and innovate their
products, develop solid business models and make something that didn't already exist. The book inspire
me in a positive way in never stopping with my limits but aim for constant growth and development. But
above all, this book made me realize to make a living doing what I love because it set a solid foundation
for passion.
RECOMMENDATION

I recommend the book for aspiring entrepreneurs and also for entrepreneur students. For these book
encourage self-improvement and success. These book contains business strategies, as well as necessary
skills that an entrepreneur should equipped. These book will help them build their network, practice
innovation, diversity and their skills.