Entrepreneurship

 It introduces the learners to the key

concepts and underlying principles of
entrepreneurship while understanding
and developing the core competencies
required of an entrepreneur.
 It also seeks to uncover the innate
entrepreneurial abilities of the learners
and hone their skills and good judgment
in finding opportunities amidst crises and
turn them into profitable entrepreneurial
ventures.
 1.Goal –oriented
 2. Committed to their business
 3. Entrepreneur are hand-on
 4. Entrepreneur thrive on uncertainty
 5. Entrepreneur continuously look for
opportunities to improve
 6. Entrepreneur are willing to take risks
 7. Entrepreneurs are willing to listen and
learn
 8. Entrepreneurs have great people skills
 9. Entrepreneur are inherently creative
 10. Entrepreneurs are passionate and
always full of positivity
 1. Opportunistic
 2. Passionate
 3. Dedicated
 4. Self-Confident
 Planning the Enterprise
 Opportunity Seeking, Screening,
and Seizing
 Getting to Know the Market
 Let the Market know You Better
 The Right Product for the Right
Market
 Needed by the Entrepreneurs
 Different business plans for diff.
purposes
 It serves as guide to the
entrepreneur
 It focused on bringing the
enterprise to a higher level of
growth
 Clearly, a business plan serves
many masters.
1. It serves the entrepreneur who
must set a navigational course.
2. It serves investors and cautious
financiers.
3. It serves the managers and staff
of the organization so that they
will know the strategies and
programs of the enterprise.
BUSINESS PLAN FORMAT:
I. Introduction
A. The Business Concept and the Business
Model
B. The Business Goals: Vision, Mission,
Objectives, and Performance Targets
C. The Business Offering and Justification
II. Executive Summary
III. The Business Proponents: Organizers
with their Capabilities and
Contributions
IV. The Target Customers and the Main
Value Proposition to the Customer
V. The Market, Market Justification
based on the Industry Dynamics and
the Macro Environmental Factors
Affecting the Opportunities and
Threats in the Market, the Size,
Potentials and Realistic Share of the
Market
VI. The Product and Services Offerings
VII. The Enterprise Strategy and
Enterprise Delivery Systems: Business
Competitiveness
VIII. The Financial Forecasts and
Expected Returns, Risks, and
Contingencies
IX. Environmental and Regulatory
Compliance
X. The Capital Structure and
Financial Offering: Returns and
Benefits to Investors, Financiers,
and Business Partners
 The Business Concept and the Business
Model – contains the essence of the
enterprise in a concise but powerful
manner.
 Four areas of moneymaking:
1. How will the business raise revenues?
What critical factors will cause the
revenues to materialize?
2. What will be the costs of the enterprise
products and other costs of doing
business? How will these costs be
managed to ensure comfortable profits?
What critical factors will drive the costs?
How can these factors be controlled?
3. What will be the major investments of
the enterprise? Why will these
investments give the enterprise a
competitive edge?
4. How will the enterprise finance the
investments? How will the enterprise fund
its growth?
 It show the future and long-term
prospects of the enterprise
 It is composed of the vision, mission,
objectives, key result areas, and
performance indicators of the enterprise
 Objectives must be more specific than
the vision and mission statements
 They should be measurable, achievable,
and time-bound
 Translated into key result areas/KRA
 It contains everything that is relevant and
important to the business audience
 It is a synthesis of the entire plan.
 ES should then introduce and highlight the
good qualities of:
1. The business proponents and their partners
2. The enterprise organization and its
capabilities
3. The technology providers and their
expertise and experience
4. The suppliers and all the major service
providers
 It should likewise describe the
products/services of the enterprise, their
features and attributes, and why they
are the right ones to deliver to the
customers
 ES should then proceed to discuss and
justify the Enterprise Strategy and
Enterprise Delivery System
 The enterprise strategy builds and
develops the game plan for attaining
competitiveness.
 The enterprise delivery system is the
entire process of converting input
(resources) into output and these output
into outcomes.
 However, the ES can only be written last
in order to capture the findings and
insights of the other parts, but for
presentation purposes, it is placed in the
first part of the business plan.
 The third section of the business plan
contains information about the business
proponents or stakeholders
 Four types of stakeholders:
1. Resource mobilizes and financial
backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team
 It is the fourth section of the business plan
 Target Customers must be of sufficient
size, sufficient paying capacity, and
have sufficient interest to purchase the
products being offered by the enterprise
 The Main Value Proposition is the unique
selling proposition of the enterprise
 Knowing where the target customers are
exactly concentrated
 The business plan should then pinpoint
what the customers buy, how they buy,
when they buy, where they buy, and
what convinces them to buy
 These information should then be used to
justify the exact locations and marketing
channels to be employed by the
enterprise
 The business plan should estimate the
total market supply and demand for the
product offerings of the enterprise
 Then, determine the major critical factors
that influence this market demand and
supply
 Once these critical factors determined,
the business plan should then forecast
the future demand and supply
 Both the industry players and the market
are affected by the macro environment,
which includes:
1. Social environment – entrepreneurial
behavior, people beliefs, tastes, mores,
customs, and traditions
2. Political environment – governance
system of the country or the local area of
business (laws, rules, and regulations)
3. Economic environment – supply and
demand forces (interest and foreign
exchange rates to fluctuate with the
movement of the market forces
4. Ecological environment – all natural
resources and the ecosystem that
defines the habitat of man, animals,
plants, and minerals
5. Technological environment – it makes or
break competing participants in any
industry (rendering the old ones
obsolete)
 It contains a description, evolution and
justification of the product/service
offerings
 It must be described by highlighting the
features and attributes that would most
appeal to the target customers
 It would be accepted and carried by
the distribution channels.
 The business plan should expound on the
Enterprise Strategy (ES) by mapping the
competitive landscape and by situating
the enterprise and its competitors as to
their strategies and chosen positioning
 The business plan should then show how
the Enterprise Delivery System (EDS)
would enable the business to implement
the Enterprise Strategy
 The EDS starts from Input (resources
mobilized), proceeds to the Throughput
(the transformation process where input
are converted to output), and produces
the Output (the products/services)
 The output are then marketed to the
customers (in the case of goods) or
experienced by the customers (in the
case of services)
 Outcomes of the EDS are:
Customers satisfaction level, profits
generated, & the performance of the
people from the transaction
 Input Throughput Output Marketing Desired
Outcomes
• Harnessing • Conversion of • Goods • Positioning • Customer
of human, input into produced satisfied
money and output and the or services • Product
physical transformation delivered • Sales
resources process within • Packaging volume
• Resources the factory or attained
mobilized service shop • Place
- Money •Profits
- Men • People generated
- Machines
- Materials • Promotion •People
- Methods performance
- Mgt. • Price

Table: ENTERPRISE DELIVERY SYSTEM

 The EDS serves as the enabler of the
Enterprise Strategy.
 The business plan must demonstrate how
the EDS and the ES tandem lead to the
attainment of the desired enterprise
outcomes.
 Business outcomes includes:
 High customer satisfaction levels;
 High sales volume, market share, and
market reach;
 High financial returns; and
 High people performance, productivity,
and morale levels.
 The business plan must translate
everything that we have discussed so far
into financial forecasts and outcomes
 From the financial forecasts, the BP
should then calculate the expected
returns from the business
 Important return calculations are the
following:
1. Expected return on sales;
2. Expected return on assets/investments;&
3. Expected return on stockholders’ equity
 The business plan should also calculate
the long-term returns, using the time
value of money
This means:
Estimating the internal rate of return & the
expected net present value
 BP evaluate both the business risks & the
financial risks involved
 The business plan must articulate the laws,
rules, and regulations governing the
business, and the industry that the
enterprise is in
 It should ascertain that all the necessary
permits, licenses, and authority to use
proprietary intellectual capital had either
been secured or would definitely be
secured
 The BP should also assure the reader that
all the necessary local government
ordinances and barangay ethics would
be followed by the enterprise
 The tenth section of the business plan
contains the capital structure and
financial offerings of the enterprise
including some discussions on who are
the investors, the financiers, and the
partners of the enterprise
 Finally, the business plan must appeal to
its target audience
1. Customer preferences change
over time.
2. People’s tastes in clothes, music,
shoes, entertainment, dance,
sports, hobbies, and even careers
have evolved over the years.
3. What piques customers is a great
source of opportunities.
4. Before the customer is won over; there
is first a battle for the mind. Next,
there is a battle for the heart. Finally,
there is a battle for the wallet.
5. The longer the customer wants to use
the product, the greater the chances
of creating lasting loyalty.
6. Opportunities abound in shaping
consumer perceptions or occupying
spaces in their minds or places in their
hearts that have not yet been filled.
7. New inventions, new systems and
work processes, new insights about
the human psyche, new
applications for old knowledge,
new revelations about how the
physical world works, new
interpretations, new combinations
based on the convergence of
previous technologies, new outlooks
about how life should be led, and a
host of other new things are
tremendous sources of
opportunities.
8. Determining personal preferences
and competencies lay the
foundation for a new business
venture.
9. Unexpected occurrences in both
the external and internal
environment of the enterprise
indicate that significant changes are
happening and opportunities are
sprouting.
 Entrepreneurial Mind Frame, Heart
Flame, and Gut Game
 The many Sources of Opportunities
1. Macro Environmental Sources of
Opportunities
2. Industry Sources of Opportunities
3. Market Sources of Opportunities
a. Micro-market
b. Consumer Preferences, Piques, and
Perceptions
 The Personal Screen (basic questions)
1. Do I have the drive to pursue this
business opportunity to the end?
2. Will I spend all my time, effort, and
money to make the business
opportunity work?
3. Will I sacrifice my existing lifestyle,
endure emotional hardship, and forego
my usual comforts to succeed in this
business opportunity?
1. Relevance to vision, mission, and
objectives of the entrepreneur.
2. Resonance to values.
3. Reinforcement of Entrepreneurial
Interests.
4. Revenues. To determine the sales
potential of the products or services.
5. Responsiveness to customer needs and
wants.
6. Reach. Expanding through
branches…
7. Range. Lead to a wide range of
possible product or service offerings.
8. Revolutionary Impact.
9. Returns. Highest returns on
investments.
10. Relative Ease of Implementation.
11. Resources required.
12. Risks. High technological , market,
financial, and people risks.
 Criteria Very High Average Low Very Sample Score
High Low Weight
Rating 5 4 3 2 1 Weight Score*
1. RELEVANCE 2
2. RESONANCE 1
3. REINFORCEMENT 1
OF
ENTREPRENEURIAL
INTERESTS
4. REVENUES 2
5. RESPONSIVENESS 1
6. REACH 1
7. RANGE 1
8. REVOLUTIONARY 2
IMPACT
9. RETURNS 4
10. RELATIVE EASE 1
OF
IMPLEMENTATION
11. RESOURCES 1
REQUIRED
12. RISKS 3
TOTAL SCORE
Following factors that are contained in a
pre-feasibility study:
 Market potential and prospects
 Availability and appropriateness of
technology
 Project investment and detailed cost
estimates
 Financial forecast and determination of
financial feasibility
 Market potential is based on the
estimated number of possible customers
who might avail of the product or
service.
 It would help to narrow down your
estimation to the relevant population or
target customers in the area where you
want to operate your business.
 Many suppliers try very hard to
differentiate themselves from one
another by dividing the huge market into
many customer segments.
The customers would, oftentimes, make the
final choice on what to buy according to
several factors such as:
1. their purchasing power or disposable
income;
2. their proximity or accessibility to the
goods or services;
3. their individual desires and preferences;
4. their age or generational grouping;
5. their social, cultural, or ethnic
background;
6. their peer group preferences;
7. their gender;
8. The season of the year;
9. Their personal identification with trend
setters;
10. Their educational attainment;
11. Their technical proficiency and product
expertise;
12. Their motivational impetus;
13. Their lifestyle preferences;
14. Their susceptibility to certain advertising
and promotional appeals, and many
others.
 Market estimation is the most difficult task
of the entrepreneur because of the many
ways customers can be divided and
segmented.
 Demographics:
• Income
• Age
• Gender
• Level of education
• Locational proximity
“In a pre-feasibility study, the
entrepreneur should, at the very least,
determine and quantify the market
potential according to these broad
Segmenting the Market
 Using a set of demographics will
be the most basic approach in
determining the target segment.
 Specific classifications that are
relevant to the market you are
targeting such as the
psychological profiling and
lifestyle preferences of different
customer segments.
Assessing Competition
 Market potential is also affected by
the number of establishments
supplying and serving your target
customers.
 This process would determine how
saturated the market is in the given
area of coverage.
 The more suppliers and competitors
there are within a confined area, the
greater the level of saturation.
Estimating Market Share and Sales
 Important task is to quantify the market
potential in a systematic way.
 Entrepreneur must:
 Define the market coverage. The area
would define the total population being
targeted.
 Determine the broad market segments
within this area or total targeted
population.
 Select broad categories like gender,
age, and income class.
 Having determined the forecast
or derived market share, the
entrepreneur should then
estimate potential sales.
 The sales forecast can be
computed using the following
formula:
(Estimated Sales x Estimated Price)
 Detailing the operations which also
include technology assessment.
 Entrepreneur would be able to
determine whether the product or
service offering will meet customer
demand or not.
 Four target customer expectations
affecting the scale and complexity of an
enterprise’s operations:
1. Quantities demanded. To determine the
needed capacity of operations.
2. Quality specifications demanded.
(a)quality of input or raw materials;
(b)quality assurance process in
transforming input to output;
(c)quality output that meet the
operations, standards set; and
(d)quality outcomes for the customers
who will be looking for specific results.
3. Delivery expectations. Knowing how
much, how frequent, and when to
deliver to customers.
 Entrepreneur needs to determine how
much money is needed to start the
business opportunity with consideration
to the technologies and operating levels
required.
 Three investments that need to be
funded:
1. Pre-Operating Costs. These are the cost
related to the preparation for the launch
of the business.
2. Production/Service Facilities Investment.
This refers to the long-term investment for
the actual business establishment.
 Investment in land
 buildings
 machinery
 computers
 software
 furniture
 vehicles
3. Working Capital Investment. This
includes the investments needed to
operationalize the business.
 Cash – to cover the inventories to be
purchased (or manufactured)
 Accounts receivable – to
accommodate customers
 Operating expenses – to be incurred.
Inventories (raw materials, work-in-
process, and finished goods)
These operating expenses would
include the following:
a. Employee salaries, wages, and
benefits
b. Rent and lease expenses
c. Utilities
d. Transportation
e. Fees and licenses
f. Commissions
g. Office supplies, etc.
Four critical financial statements:
1. Income Statement
2. Balance Sheet
3. Cash flow statement
4. Funds flow statement
 It is more comprehensive and
detailed compared to a pre-
feasibility study.
 It is prepared to convince bankers
and investors to put money into
the business opportunity.
 After opportunity seeking and screening,
opportunity seizing is the final stage.
 The entrepreneur has an idea as to
where he or she will locate the business
and how he or she will market the
product or service.
 The question for the entrepreneur in
opportunity seizing is “Will I be able to
manage, to my advantage, the critical
success factors and avoid the critical
failure factors?”
 Itis important for the entrepreneur to
establish the positioning of the
business enterprise in the market
place.
 In order to craft a positioning
statement, the entrepreneur is advised
to look at other competitors in the
market place.
 Their major buyers, attributes or
features that make the competitors’
products attractive should give the
entrepreneur an idea.
 Example of grids for competitor analysis
that the entrepreneur can follow:
Grid 1 arranges the products according to
their quality levels along the horizontal
plane and according to their prices
along the vertical plane.
Quality vs Price Positioning of Competitors

H A
G B

F C
E D
Grid 2 arranges the products according to
their sales volume along the vertical
plane and according to their main value
propositions in the horizontal plane.
Sales Volume vs Main Value Proposition
VERY HIGH
4
HIGH 2 5
SALES AVERAGE
1 6
VOLUME IN LOW
3 7
UNITS OR VERY LOW 8
PESOS HIGH GOOD GOOD QUALITY POOR
QUALITY QUALITY LOW PRICE QUALITY
HIGH PRICE MEDIUM LOW
PRICE PRICE
Note: Numbers
represent MAIN VALUE PROPOSITIONS
competitors
The Opportunity Seizing:
Competitor Analysis Grids
1. Choose an industry with several strong
competitors. An example would be fast
food industry, footwear industry, or
apparel industry.
2. Try to come up with your own version of
Grids 1 and 2.
3. Share your grids with your classmates
and/or teacher for critiquing and
improvement purposes.
MARKET RESEARCH
 Entrepreneur, know thy market well!
 The entrepreneur should exert all efforts
to know the market he/she wants to
exploit
 The more you know about your market,
the better you will be able to determine
customer needs and wants
 You will be able to reach them wherever
they are
Why Purpose and objective for conducting the market
research.
What Determines the scope and the limitations of the market
research to be conducted.
Which Determines which segment of the market must be
studied; this must be the market segment that the
entrepreneur is eyeing.
Who Identifies who among the members of the selected
market segment will participate in the market research.
When Determines the time and timing of the research. This is
critical for entrepreneur whose product or service will
be offered to a time-constrained market such as office
workers.
Where Pinpoints the relevant location of the market research.
How Determines the methodology to be used for the market
research (e.g., survey, focus group discussion,
observation, etc.).
“Entrepreneurs and investors do not
want to put resources in unknown
markets. Good market research
allows entrepreneurs and investors to
make wiser decisions.”

Dr. Eduardo A. Morato, Jr.

 Important market information can only
be obtained by conducting a good
market research
 The more the entrepreneur know about
his/her relevant market, the more
customers can be properly segmented
and reached, product can be
positioned, brands can be promoted,
prices can be set, and locations can be
pinpointed.
 It is one of the most common qualitative
research tools.
 This method can also be used for
generating initial insights
 FGD is an interview by a facilitator of a
small group of people that normally lasts
for an hour and a half up to three hours
 The participants are selected because of
their knowledge about the topic
 The objective must be clear, precise and
met
 Respondent selection includes:
1. The definition of the respondents;
2. The classification of the respondents; &
3. The screening of respondents
 The number of respondents per group
should range from six to eight
 If the number falls below six, the likelihood
of generating a momentum and group
dynamics necessary for a good discussion
will not happen.
 However, if the group exceeds eight, it may
be too crowded, resulting in the passive
participation of some respondents and a
discussion that is not as cohesive.
1. Develop the research objectives. What
is the research all about?
2. Determine the participants’ profile. Who
are the most knowledgeable or most
relevant participants?
3. Determine the appropriate token or
“compensation” for the participants
4. Develop a participant screener
questionnaire
5. Recruit the participants
6. Select a good facilitator. The key
qualities of a good facilitator are:
o kindness with firmness
o Involvement and encouragement
o Complete understanding
o Flexibility
o Sensitivity
7. Develop a facilitator’s discussion guide
8. Arrange for the venue and logistics
9. Analyze the results of the focus group
discussion
 It is probably one of the best ways of
gathering data about customers in their
natural setting without having to interact
or talk to them
 It simply observe people as they go
about their usual activity such as buying
and using products and services and
assess how they behave
 Having a clear objective in mind will help
the researcher focus on the important
things to observe or watch out for
 Recording the event as it happens may
be the best means to capture the
information
 In the absence of a video recording,
jotting down observations will do
 These observations must be
documented and tallied for proper
analysis later on.
Two diff. types of Observation techniques:
1. Human observation – humans observe
the events as they happen
2. Mechanical observation – mechanical
devices are used to record events for
later analysis
 Focus on what you want to observe:
a. Is it customer demographics?
b. Customer buying behavior?
c. Customer usage behavior?
d. Other customer information?
 It is most preferred instrument for in-
depth quantitative research
 The respondents are asked a variety of
questions which are often about their
personal information, their motivations,
and their behavior
 It can be conducted via :
 Telephone
 Personal (face-to-face interview
 Mail interview (either printed/electronic
mail)
 The most popular type of survey research
is the Usage, Attitude, and Image (UAI)
survey, which is intended to derive
market awareness, market size and
share, product usage and preferences,
customer interest, and customer image
3 important concerns in planning a survey:
1. Sampling techniques
2. Getting the sample size
3. Designing the questionnaire
* Of these concerns mentioned, designing
the questionnaire proves to be the most
sensitive phase.
 Some basic rules that have to be followed
in question formulation:
1. The questions, in their totality, should be
able to elicit all the necessary information
required in the research
2. Each question should be clear and definite
3. Each question should cover one topic at a
time
4. Each question should be presented in a
neutral manner
5. Each question should be translated into
the dialect that the target respondents are
familiar with
 It is classified into probability and non-
probability sampling
 Probability sampling is where the
respondents are randomly selected from
a population
 Non-probability sampling refers to the
technique that is resorted to “ when it is
difficult to estimate the population of the
study because they are mobile or
transitory in a given location.”
*this renders the characteristic or profile of
a group that is difficult to generalize
 There are three basic sample size
determinants. These are as follows:
1. Data variability of a proportion – how
widely spread the data is from a central
point
2. Confidence level in the estimation
process – the higher the confidence
level desired, the bigger the sample size
needed; the current industry standard
has 95% confidence level
3. Error in the result of the estimation
process – the less error margin desired,
the bigger is the required sample size; it is
expressed as plus or minus (+/-) a certain
percentage
1. Develop the research objectives
2. Determine your sample
3. Choose the interviewing methodology
4. Create your questionnaire
5. Pre-test the questionnaire
6. Conduct interviews and enter data
7. Analyze the data
CUSTOMER PROFILING
- Entrepreneur starts doing the market
research, he/she is also beginning to
understand his/her customers.
- Customers knowledge starts with good
customer profiling.
1) Demographics
2) Psychographics
3) Technographics
 Marketing is about creating and
accumulating customers.
 Marketing plans are designed to capture
market share and defeat competitors.
 The marketing function and the
marketing mix serve the overall business
strategy.
 It is summarized in 7 Ps by which the
enterprise will engage competitors and
gain customers.
 displayed the brand name
 the main attributes of the
product
 the company’s logo
 its place of business
 Sizes: small, medium and large
sizes
1. Packaging identifies the product,
describes its features and benefits, and
complies with government rules on
specifying its contents, weight, chemical
composition, and potency.
 It provides easy brand identification for
the consumers.
2. Packaging differentiates the product
from its competitors and even from its
other brand offerings.
3. Packaging lengthens the lifespan,
physically protects, and extends the
usefulness of the product.
4. Packaging has become an
environmental issue by itself.
 Recyclability and biodegradability
are now a major concern of
packagers and consumers alike.
5. The aforementioned purposes of
packaging have increased the cost
of packaging and, therefore, the
price of the product.
“Packaging does not refer only to
the wrapper or container of the
product. It can mean the bundle
of products or services that are
put together to attract and delight
customers. It can also mean the
terms and conditions attached to
the sale or after-sale servicing of
the product.”
 Isthe tangible good or the
intangible service that the
enterprise offers to its
customers in order to satisfy
their needs and to produce
their expected results.
 Brand names
1. Breakthrough products
2. Differentiated products
3. Copycat products
4. Niche products
Breakthrough products
 offer completely new
performance benefits.
 need a higher level of customer
education and orientation.
 common example are borne out
of the biotechnology field
particularly in terms of coming up
with new vaccines to protect
people from certain viruses.
Differentiated products
 try to claim a new space in the
mind of the customer different
from the spaces occupied by
existing products.
 The performance benefits may
be close to existing products but
there would be additional
benefits on special aspects of
the product.
Copycat products
 will not make much impression on
the consumer’s mind.
 The marketer should make up for
this lack of mental space by
offering more physical space in the
shelves, lower prices, easier access,
promotional freebies, and the like.
 Aggressive advertising may add to
market demand but a greater cost
than the leading brands.
Niche products
 do not intend to compete
directly with the giants.
 They are the products with lower
reach, lower visibility, lower
prices, and lower top of mind.
 They are content to play minor
roles in specific and smaller
market segments.
 People are the ultimate marketing
strategy, they sell and push the product
 People search hard to find the right
market
 People distribute, promote, price, and
sell the products in the most attractive
market places.
 People are the regular contact points
between the enterprise and its market.
 The marketing efforts of people are
organized at four levels:
1. To create customer awareness
2. To arouse customer interest
3. To educate customers as they evaluate
their buying choices
4. To close the sale and deliver the
products
 Finally, the sale must be closed and the
products should be delivered to the
customer.
 Closing the sale demands that the
product be available, adequate,
acceptable, and affordable.
 Availability means that the enterprise has
the goods or services on hand.
 Accessible means that the customers
can easily get the product from their
usual buying places or the products can
be conveniently delivered to them.
 Adequate means the product meets the
quality and delivery specifications of the
customer.
 Acceptable means that the customer is
convinced by the selling points of the
product, finds very little or no
objectionable features in the product,
and accepts the conditionality,
warranties, and amenities given by the
seller.
 Affordable means the price and
payment terms are right.
 It is the explicit communication strategy
adopted by an enterprise to elicit the
patronage, loyalty, and support not only
from its customers but also from its other
significant stakeholders.
 Promotion encompasses all the direct
communication efforts of the enterprise,
such as:
• Advertising
• Public relation campaigns
• Promotional tours
• Product offerings
• Point-of-sale displays
• Websites
• Flyers
• Emails
• Letters
• telemarketing
 Effective promotion depends on three
critical factors:
1. The credibility of the communicator
2. The message and the medium of the
message
3. The receptiveness of the audience to all
that is being communicated
 Pricing depends on the business
objectives set by the enterprise
 Price is a major factor for the customer in
buying a product, it is not the only factor
such as in the case of buying premium
products
 The enterprise should set the prices of its
products or services based on its business
objectives such as the following:
1. Profit maximization
2. Revenue maximization
3. Market share maximization
4. Attainment of the desired prestige or
quality leadership
5. Penetration, survival, or liquidation
6. Scarcity pricing or market skimming
7. Cost recovery
8. Subsidy pricing
9. Marginal pricing
 “Location. Location. Location.” This is the
often-recited mantra of salespeople who
want to have the best access to their
customers
 Finding a good location proves to be
challenging, even more challenging is
maximizing the potentials of that
location
Initial Location Screening
1. The number of customers residing or
working in the area, and the number of
customers who frequently pass through the
area
2. The density or number of customers per
unit area
3. The access routes to alternative locations
and their traffic count in those routes
4. The buying habits of customers or where
they buy, at what time and how frequent
5. Locational features such as parking
spaces, foot access, creature comforts,
and the like
 It is the way the customers perceive the
enterprise and its products or services in
their minds
 Positioning, in the context of a marketing
battle plan, has three overlapping
objectives
 First, positioning has an enterprise
perspective. The enterprise scans the
market environment and decides to
position itself with products that specifically
address the needs of a chosen target
market
 Second, positioning has a competitive
perspective. The enterprise has to
differentiate and distinguish itself from its
competitors
 Third, positioning takes the customers’
perspective
A Very Clear Purpose
 Purpose in establishing the
enterprise
 For generating profits/feeding the
family
 Making a difference in the industry
or actualizing the self
The personal purpose of the
entrepreneur is their personal mission
(enterprise mission statement)
 The sake of the customers being
wooed
 The investors who need to know
what they are getting into
 The financiers evaluating the
enterprise
 The government functionaries who
must regulate the activities of
industries and businesses
 The entrepreneur must offer
something new, something
appealing, something different that
says,
“Take notice, I’m arriving with a bang!”

In other words, the entrepreneur

must present a winning business
concept that manifests tremendous
future possibilities
Not by Any Other Name
 The entrepreneur must choose a
very fitting name for the enterprise
 The entrepreneur must think long
and hard about the name
 The company name must project its
very desired image
 Microenterprises
 Small, medium, and large
enterprises – the choice of
business partners here is a very
critical one
- the entrepreneur must choose the
“company angels”, partners who
are well-meaning and like-minded
 Angel investors may come in the
form of senior relatives, close
friends, and professional equity
investors
 Angel industrial partners are people
who can contribute their expertise,
experience, technology, contacts,
and good character that will enable
the enterprise to succeed
 The entrepreneur is well advised to
make the best choice of such angel
partners
 to chart the course of the business
properly
 to focus the efforts of the
entrepreneur
 Part I lesson, the entrepreneur was
asked to prepare an outline of the
business plan
 Flesh out into more specific details,
the information that a good business
plan contains
 For WHOM
it is being written (target
audience)

WHAT
would be the coverage
of the BP (in terms of
depth and breadth)
1. Entice partners, investors, and
bankers to fund a business
venture
2. Communicate what the
enterprise is all about, what
market it wants to serve
3. Show what financial returns it
could muster
 the business itself
 the organizers
 the management and technical people
 the financial structure
 its market potential
 its target market
 its projected sales, expenses, and
profits
 its probable risks
1. The organizers and the key people
behind the business and why these
people have the resources, talents,
skills, and technology to achieve
success
2. The market being targeted and
why there is enough market
potential to justify the business
3. The products or services to be offered
and why they are right for the market
4. How the business will be operated
and organized, including all
outsourcing, subcontracting,
franchising, and licensing agreements
5. The investment capital required for
the business and what exactly it would
be used for
6. The technology, the technical
expertise, the equipment, and materials
suppliers to be utilized
7. Thecapital structure (short and
long term debt, stockholders’
equity) of the business
8. The operating budget, financial
projections (income statement,
balance sheet, cash flow), and
return on investment prospects
9. The risks in the business and the
contingency measures to
counteract them
 ”the concluding
portion of the business
plan should highlight
the key messages for
the intended readers of
the plan”
 The Business Plan must be able to
estimate the capital required by the enterprise
the capital required would be
dictated by the investment in the assets of the
enterprise
These assets are composed of the ff.:
1. The current assets – short-lived assets
*Cash *accounts receivables

*inventory *other current assets

2. The long-lived or fixed assets
*property *plant
*equipment

3. The other assets

*organizational
*pre-operating expenses

The assets of the enterprise are

financed by its liabilities.
1. Current liabilities = Suppliers’ credit
and other short-term credit
2. Long term debt
3. Owner’s equity

The way the financial package is

designed is called the capital structure
of the enterprise
 sole
 It is about delivering products and
services to customers to meet or surpass
their expectations.
 It is designing, developing, and
executing the Enterprise Delivery System
(EDS), from sourcing of the necessary
input to the transformation of these input
into the final output which, in turn assure
the intended outcome of delighting the
customers.
 The final output, which come in the form
of goods or services (or both), must carry
all the features and attributes that
customers are looking for.
 Customer’s wants and desires in mind:
1. Quality expectations;
2. Delivery expectations; and
3. Price expectations
Thus, the customers’ quality, delivery, and
price [QDP] expectations are crucial to
the operations function.
Activity 1

 The groups are tasked to make a picture

collage about what the customer’s
wants and desires in mind.
 Old newspapers, manila paper and
other art materials can be utilized by the
group.
 A presentor will present the group
output.
 Preparation time: 20 minutes
 Presentation time: 3mins. each group
 This information influences our expectations
and gives us the ability to evaluate quality,
value, and the ability of the product or
service to meet our needs.
 Important things to remember on
Customers’ Quality Expectations: They must
be listed in detail and with tolerance levels.
They should be prioritized, starting with what
the clients finds most important.
 Setting shipping and delivery expectations
to make the ecommerce experience less
tricky for your customers.
 Some customers want their products quickly
while others prefer a cheaper shipping
option even if it takes longer.
 Customers want to know how long it will
take to wait before the item they have
ordered reaches them.
 It is important to set up shipping and
delivery expectations.
 Customers have price expectations in
their minds before entering a store, as
well as expectations of prices in other
stores.
 How customers update their
expectations once they see the actual
prices can help businesses better
manage their promotions and sales for
maximum effect.
I arte mo toh!!!
 Input Throughput Output Final Delivery Outcomes
to Customers
Resources Transformation PRODUCTS Marketing Customer
process
mobilized and Customer Expectations
Servicing -Quality
-Delivery
-Price
MONEY Conversion Goods Marketing Market
MEN of Input made or Program Expectations
MACHINES into output Services -Revenues/Sales
MATERIALS rendered -Market Share
METHODS -Market Reach
MANAGEMENT Service Level Finance
Experience Expectations
-Profits
-Return on
Investment
 Management is done to meet
day to day business requirements and the
funds involved in meeting those
requirements are known as working
capital.
 Man in management is referred to as a
human resource
 It is the recruitment, selection, training,
promotion and grievances handling of
personnel
 Payment of compensation gratuity,
termination of services are the few issues
that have to be dealt effectively to
retain the talent within an organization.
 Machines are the basic tools to produce
goods or to generate services
 Selection of an appropriate machine not
only enhances efficiency but also saves
time and increases revenue
 Tailoring the requirement of the
organization
 Selections of a right technical machine
and equipment
 Availability of spare parts
 Evaluation of after sales services,
substitutes and technology
 The organization budget are the crucial
criteria while purchasing a machine
 Maintenance and overhauling issues
along with its life span also cannot be
overlooked
 Material is a basic ingredients in
management be it a service industry or a
product industry
 Most of the industries locate them self
nearby to the availability of material
 Everything has a right way to do and this
right way is known as a Method in
management
 It means an art of doing
 It is a set of procedures and instructions
 The visible methods of a company
include: Plans, Policies, Procedures, and
Data.
 The less visible ones include a company’s
norms and its culture
 The norms and culture of the society
around it and the methods of its
customers, suppliers, associates, and
competitors
 Methods determine how people work
and their work priorities
 It link people to each other and link
people to materials
 Management by objectives
 This involves setting objectives and
targets for different aspects of the
organization
 The managers job is then to make sure
that these objectives are achieved given
an allocated amount of resources
 The objectives will either be achieved,
exceeded, or fallen short of requiring
remedial action where appropriate
Five hundred years ago, the merchants of
Venice invented accounting. They wanted
to record all of their business transactions as
they imported goods from Asia and
exported goods from Europe. Today,
accounting has come a very long way.
Professional organizations have established
generally accepted accounting principles.
 Page 106-109
 Financial statements are nothing but
abstractions of all the business
transactions going on in an enterprise.
 Analyzing or interpreting financial
statements can give very powerful
insights into how an enterprise is
conducting itself.
 One of the most easily understood
financial statements is the income
statement, also called the profit and loss
statement.
 The top line of the income statement is
Sales. One can compare the Sales
figures of an enterprise over the years to
see whether it is growing or not.
 This comparative analysis over several
years (or months) is called a time series
analysis or a horizontal analysis.
  The growth rate from year to year can
be computed on a percentage basis as
shown in the table.

Year 2011 2012 Annual 2013 Annual

Percentage Percentage
Growth 2011- Growth
2012 2012-2013
Amount P3,000,000 P3,300,000 10% P3,960,000 20%
 Gross Profit is the line-up of Operating
Expenses, also known as Selling, General,
and Administrative (SGA) Expenses.
 The typical Operating Expense accounts
are as follows:
 Salaries and Wages
 Sales Commissions
 Rental or Office Leases
 Advertising and Promotions
 Professional Fees
 Travel and Transportation
 Training and Education
 Employees’ Benefits
 Light, Water, and Power
 Office Supplies
 Depreciation of Office Furniture,
Equipment, and Leasehold
Improvements
 Representation Expenses
 Miscellaneous or Other Expenses
 The balance sheet items are logically
arranged by the accountant for
convenient analysis.

Current Ration = Current Assets

Current Liabilities

Quick Ratio = Cash, Marketable Securities,

and Accounts Receivables
Current Liabilities
Total Dept – to – Owner’s Equity Ratio = Total Liabilities
Owners’ Equity

Long – Term Debt – to – Owners’ Equity Ratio = Long – Term Debt

Owners’ Equity

Return on Sales (ROS) = Net Profit after Taxes

Sales

Return on Assets (ROA) = Net Profit after Taxes

Assets

Return on Equity (ROE) = Net Profit after Taxes

Owners’ Equity
 The art of financial forecasting is popular
among entrepreneurs who know their
businesses inside out.
 It enables them to ask the following
questions, among many, prior to a
financial forecasting exercise:
 What will happen to the market
conditions tomorrow?
 What will competition do?
 What products and services will come out?
 What technology is in store for us?
 What will interest rates be like?
 How will the economy grow?
 What regulations might the government
impose?
 What changes are happening in the
environment?
 How is our organization responding to these
changes?
 What are we capable of doing or not doing
tomorrow?
 Financial forecasting is just rendering into
numbers of the assumptions that
entrepreneurs make about how their
sales will move, how costs will behave,
what kind of profit they will attain, what
assets they will require, and how they will
finance those assets.
Choosing the Right People with the Right
Competencies, Values & Attitude

RECRUITING
Career Pathing of Personnel to Reach their
Optimum Potential

ROUTING
Satisfying Needs, Wants and Demands of
People and Creating a Conducive Work
Environment

RETAINING
Rally the Organization to Meet Challenges
to Develop a Culture of Excellence and to
Build Social Capital

RESONATING
Performance Indicators and Assessment

REVIEWING
Motivation , Incentive System and
compensating

REWARDING
Transforming People to Higher Levels of
Performance

RETOOLING
Maximizing Potentials of People in the
Organization

RECYCLING
 Administrative functions
 Into “personneling”, which can be
defined as the:
1. Processing of recruits
2. The computation of employees’ pay
3. Handling of people transfers or
resignations.
1. Strategic HR – manages the big
changes in the direction of the
enterprise.
2. Operational HR – installs the
administrative systems that would allow
for the efficient management of the
organization.
- creation of a conducive
work environment that would nurture a
culture of excellence and empower its
people.
 The Four Major HR Functions
STRATEGIC
STRATEGIC-SYSTEMIC PEOPLE-STRATEGIC
FUNCTION OF HR FUNCTION OF HR

Aligning HR Strategy with Strategic Transformation of the

Institutional Strategy Organization and its People

A D
SYSTEMS PEOPLE
B C
Empowering and Energizing
Administering the HR System People to Become More
Of Building and Growing the Productive and to Achieve Goal
Organization Congruence
SYSTEMIC-OPERATIONAL OPERATIONAL-PEOPLE
FUNCTION OF HR FUNCTION OF HR
OPERATIONAL
1) Recruiting – HR advisors & consultants
often advocate that organizations
should “hire for attitude, develop for
competence.”
 Applicants are screen accdg. to their:
a) Resume/past employment records
b) Recruitment competency exams
c) Skills already possessed
d) Traditional measures such as the
Intelligence Quotient (IQ) test,
abstract and logical reasoning,
mathematical and verbal abilities.
 Left brain is more structured in thinking.
It favors factual, technical, analytical,
sequential, logical, and critical thinking.
 Right brain is more creative, intuitive,
holistic, emotional, visual-spatial,
interpersonal, musical, and kinesthetic.
e) New tests have spawned to measure
Emotional Quotient (EQ) and IQ2
(creative, intuitive and holistic thinking).
 RECRUITMENT CRITERIA CRITERIA DEFINITION
1.Past Performance Tract Record and Resume of
Recruit
2.Proficiency Profile Brain Preferences,
Intelligences, Skills, Talents
3.Personality Profile Personal Conduct, Behavior,
Relationship Styles, Personal
Disposition
4.Psychological Profile Normalcy in psychological
tests; negative for neurotic,
psychotic and sociopathic
disturbances
5.Personal Character Emotional Literacy and
Maturity Values, Attitudes,
Principles
6.Potential for Growth Personal Ambition, Need to
Achieve, Excel, Lead,
Review previous five criteria
VALIDATION AND VERIFICATION
Verify resume; check with
previous employers, schools;
background investigation; in-
depth interviews
Proficiency and Skills Testing, IQ,
IQ2, demonstration of skills,
competencies and talents;
On-the-job observation during
training, probationary period;
group dynamic exercises
Psychological tests, EQ tests,
interviews and behavioral
observations; background
investigation
Character “boot camp” training
and testing; personal stories on
how values and principles are
being lived; verification from
friends, relatives, colleagues,
bosses, and subordinates
In-depth interviews; essay
questions on life plans; stories in
areas of excellence claimed
2) Routing
 Organizations who desire to optimize the
value of people over the long haul
should have a good routing strategy.
 Must be assessed as to their ability to
contribute to the organization in various
functions and responsibilities several
years later.
 The more versatile and flexible the recruit
is, the more opportunity he/she has for
assuming multiple roles in the
organization.
 Relevant and the more applicable are the
recruits’ intelligences (using the Theory of
Multiple Intelligences) for the organization.
 Career paths of an employee should be
regularly discussed and adjusted over time
in order to provide guidance and direction
for both the recruit and the organization.
 Vertical managerial track – begin at the
rank-and-file category, move up to
supervisory positions to top positions.
 Technical track – ladderize the proficiency
levels; from low level of expertise and
experiences to the highest level.
3) Retaining or retention – is being able to
hold on to people, provided that a
company wants to keep them in the first
place.
 it is quite expensive and inefficient to
recruit and train people only to lose
them to competitors.
 People have a learning curve to hurdle
before they can reach their full
potentials in a company.
 Retention is therefore a vital part of the
human resources management function.
4) Resonating
 an organization that resonates with its
people and employees who resonate
with their management are likely to have
goal congruence.
 The organization’s goals are embraced
and internalized by the people and the
personal goals of the people are realized
and fulfilled while serving the
organization.
 There should be clear directions and
strategies on how the organization
intends to achieve its goals.
5) Reviewing people is to measure and
evaluate their performance with the
organizational goals in mind.
 Qualitative assessments are made…
 Potential can be measured in terms of
meeting existing job requirements or in
terms of prospective job promotions.
 First, the person’s aptitude in terms of
knowledge, skills and competencies for
doing the activities and tasks demanded
of a job can be measured.
 There are testing instruments on
intelligence quotient, abstract reasoning,
numerical abilities, verbal skills, technical
competencies, functional capabilities
and managerial expertise.
 Analytical, critical, creative, intuitive,
systemic, and integrative thinking
processes can be assessed.
 Even behavioral and communication
skills as well as emotional quotient
(people skills) can be calibrated.
 Second, attitudes and values,
including personality traits and
personal preferences can be
measured through written and oral
tests and through job performance
observations.
6) Rewarding is concerned about
compensating, incentivizing, and
recognizing employees for their work,
loyalty, and accomplishments.
 it includes both monetary and non-
monetary benefits. Basic pay, living
allowances, incremental pay for extra work,
bonuses, commissions, and profit shares
compose the monetary benefits.
 Employee pay is configured by
organizations in many ways.
1. First, compensation can be tied to the
level of responsibility that the employee
has.
2) Second, compensation can be
competency-based.
 In this method, organizations define the
competencies and skills required in order
to accomplish the strategies, programs,
activities, and tasks.
 The pay is based on the different levels
of job complexity and difficulty. The
higher the complexity and difficulty, the
higher the pay.
3) Third, organizations can pay people
according to their output.
 Skilled craftsmen are sometimes paid
according to the number of pieces they
have produced, the scope of work that
they have accomplished, the hours that
they have put in, and the value of the
work that they have done.
 The more valuable the work to the
organization and the higher its impact,
the higher is the compensation.
 Organizations are willing to pay lawyers
per hour, the pay being set according to
their level of expertise, prestige,
connections, experience, and affiliations.
4) Fourth, organizations can pay people
according to their length of service,
their demonstrated loyalty, and the
level of trust and confidence which
the owners and managers have for
them.
 The more loyal and trustworthy the
people are, the higher their pay.
7) Retooling
 Both new recruits and old-timers need
some retooling in order to meet the
performance expectations of the
organizations.
 Nobody really comes full ready for a job.
For the old timers, there is always a need
to refresh, upgrade, and acquire greater
skills. Even old dogs must learn new tricks.
 Retooling people is not just about
improving their capabilities. It is also
about re-orienting them to the new
directions of the enterprise.
 It is likewise about changing attitudes and
behavior, creating a healthier corporate
culture, and adopting more responsive
approaches to greater customer service.
 Retooling is a continuous process of
organizational development.
 Retooling can come in various forms. First is
through formal training sessions conducted
either-in-house or by professional training
organizations. Second is through on-the-job
training where the employee is given an
assignment and is closely supervised and
trained as he/she learns the job. Third is
through a formal or informal actual
advising, coaching, and mentoring
program.
8) Recycling affords the people the
chance to change jobs or even careers.
 Sometimes, people get bored in what
they are doing, or they are not able to
land jobs more suited to their personality,
competency, and temperament.
 It allows people to reinvent themselves. It
is definitely invigorating just to know that
there are alternative job options either
inside the organization or outside of it.
 It is more possible in an organization that
provides education and training
opportunities outside those given for
existing job requirements.
 In some companies, they mandate their
employees to undergo training in
accounting and finance so that they
can understand the language of
business.
 All of these training programs would
broaden the competencies of
employees and provide them the
opportunity to pursue new-found
interests and recycle themselves.
Strategic-Systemic Function of HR
- it manages the big changes in the
direction of the enterprise by aligning HR
Strategy.
- it highlights two critical HR processes:
(1) reviewing or diagnosing organizational
performance; & (2) rewarding the
accomplishments of the organization and
its people.
Operational-People Function of HR
- installs the administrative systems that
would allow for the efficient management of
the organization
- to attain goal congruence among the
diff. units of the organization
- it also aspires to achieve congruence
between the goals of the organization & the
personal goals of its people
- mutual respect between employer &
employees
1. What are the two significant things that
you have noticed on the video?

2. What profession are you planning to

pursue?

3. What do you think are the processes

that you need to undergo in order to
reach your goal?
1st step in RECRUITMENT

Job Analysis

Involves examining activities,

responsibilities and roles involved with the
job in question
1. Job Description – is a document which
outlines the duties and responsibilities
associated with a particular job
2. Person Specification – outlines physical
and mental attributes that are required
for a particular job
3. Job Advertisement – raises awareness
of the vacancy and it attracts potential
applicants
Application Process

METHODS OF APPLICATION
1. Letter of Application
2. Application Form
3. Online Application
Short Listing

The business narrow down the list of

applicants for selection
Selection Process

Methods of Selection
1. Interviewing
2. Head Hunting
3. Aptitude Test
4. Assessment Centers
5. Psychometric Test
Job Offer

Is presented when the applicant is

successful in their application
Contract of Employment

- is an agreement that sets out as

employees:
• Employment Conditions
• Rights
• Duties and Responsibilities
Picture Analysis
 Job Placement

Job Hunting

Job Orientation

Creating Resume Job Interview

I Arte Mo Toh!!!
 Each group will create and portray a
creative and meaningful skit about the
process of recruitment.

Each group will be given 5 mins. to

perform their task and the activity will be
graded according to the rubrics.
 4 3 2 1
Criteria Excellent Very satisfied Satisfactory Fair
Accuracy and Points-of-view, Points-of-view, Points-of-view, Points-of-view,
arguments, and arguments, and arguments, and arguments, and
believability of role
solutions proposed solutions proposed solutions proposed solutions proposed
30% were always were usually were often realistic were rarely realistic
realistic and realistic and in and in character and in character
consistently in character
character
Clarity of speech Speech is always Speech is usually Speech is often Speech is rarely
clear and easy to clear and easy to clear and easy to clear and easy to
10%
understand understand understand understand
Expression and Always expresses Usually expresses Often expresses Rarely expresses
body language emotion through emotion through emotion through emotion through
voice, facial voice, facial voice, facial voice, facial
20%
expression, and expression, and expression, and expression, and
gestures gestures gestures gestures
Knowledge gained Can clearly Can clearly Can clearly Cannot explain
explain several explain several explain one way in any ways in which
40%
ways in which his ways in which his which his or her his or her
or her character or her character character “saw” character “saw”
“saw” things “saw” things things differently things differently
differently than differently than than other than other
other characters other characters characters characters
and can explain
Identification
1. It refers to how people apply and get chosen
jobs.
2. It involves examining activities, responsibilities
and roles involved with the job in question.
3. Raises the awareness of the vacancy and it
attracts potential applicants.
4. Is a document which outlines the duties and
responsibilities associated with a particular job.
5. Outlines the physical and mental attributes that
are required for a particular jobs.
6. Is whenever the business narrow down the list of
applicants for selection.
7. Is presented when the applicant is successfully in
their application.
8. Is an agreement that set out as employee.
1. Recruitment
2. Job Analysis
3. Job Advertisement
4. Job Description
5. Person Specification
6. Short listing
7. Job Offer
8. Contract of Employment
Study for the upcoming long test.