ENTREPRENEURIAL

PROCESS
 1. Opportunity Spotting and Assessment

The beginning of the process and

is considered the most difficult

Entrepreneurs at this point take

note of interesting trends in their
environment
Sources of Opportunity
Information
Sources of Opportunity Information

1. Consumers
 Sources of Opportunity Information

2. Glaring problems
in the environment
 Sources of Opportunity Information

3. Problems encountered
by co-entrepreneurs
Sources of Opportunity Information

4. New trends
Sources of Opportunity Information

5. Processes
Sources of Opportunity Information

6. Development in
the environment
 Opportunity Spotting and Assessment

The entrepreneur’s toughest job

is to carefully assess the
opportunity through the
estimation of opportunity
length, capitalization required,
threats, profitability and
calculation of real and perceived
value.
 2. Developing a Business Plan

Entrepreneurs should formulate a

business plan when they have
already spotted and assessed the
opportunities for a market.
Is a comprehensive paper that
details the marketing,
operational, human resource,
financial, strategic direction,
and tactics of the business.

Business Plan
 Core guide and direction of the
entrepreneur in calculating the
resources needed, assessing how
to obtain these resources
efficiently, and running the
business sustainably.

Business Plan
 It is mandatory in the
entrepereneurial process to calculate
the resources needed to establish the
business and comparethis against the
entrepreneur’s current resources.

3. Determining the Capital Needed

 This is the part where the
entrepreneur should use the
resources allocated for the new
venture.

4. Running the Business

Business plan implementation

4. Running the Business

 All aspects of the business plan
should be critically observed from
operations, marketing and sales,
human resources, finance, and
strategy implementation.

4. Running the Business

 The entrepreneur should have a
control and monitoring system to
serve as a check and balance of
the formulated plans.

4. Running the Business

 Opportunity
Developing a Determining the Running the
Spotting and
Business Plan Capital Needed Business
Assessment
 Evaluate the  Come up with a  Calculate the
 Practice leadership as
identified business description intrinsic and extrinsic
a way of life
opportunity and analysis capital needed
 Conceptualize and
 Perform industry  Calculate the existing  Recognize critical
measure the
analysis capital success factors
opportunity
 Calculate the
difference between
 Identify the
the needed capital
perceived value of  Identify existing and
 Come up with the and the existing
the opportunity to foreseeable problems
marketing plan capital. Choose the
the company and and issues
most cost-efficient
the customers
suppliers or service
providers
 Do cost-benefit  Prepare the  Develop contact  Employ risk-
analysis of the operations plan and relationship mitigating
opportunity including the with suppliers controls and
including risk organizational and service monitoring
analysis plan providers systems
 Match the
opportunity
 Devise an
with the  Come up with the
  expansion/sustain
entrepreneur’s financial plan
ability strategy
skills and
objectives
 Scan the
strengths and  Identify strategies
   
weaknesses of and tactics
the competitors
 Perform
   monitoring and    
control
Scanning the
Marketing
Environment
 Is the starting point of any new
venture that involves
understanding and knowing the
intricacies of the macro
environment, microenvironment,
and internal environment.

Scanning the Marketing Environment

 An entrepreneur can recognize
various opportunities and at the
same time understand thoroughly
the arena where the future
business will operate.

Scanning the Marketing Environment

 The general rule is to find the
opportunity first before coming
up with a new product or service

Scanning the Marketing Environment

3S of Opportunity
Spotting and
Assessment
 is the framework that most of
the promising entrepreneurs use
to finally come up with the
ultimate product or service
suited for a specific opportunity.

3S of Opportunity Spotting and Assessment

 Opportunity

an entrepreneur’s business idea

that can potentially become a
commercial product or service in
the future.
S1: Seeking The Opportunity
Opportunity Seeking

the first step and is the most

difficult process of all due to the
number of options that the
entrepreneur will have to choose
from.
It involves development of
new ideas from various
sources as follows:
a. Macroenvironmental
Sources
 1. STEEPLED
This is a mnemonic for Sociocultural,
Technological, Economic,
Environmental, Political, Legal, Ethical
and Demographic factors.
Represents the general environment
where the entrepreneur can identify
business opportunities from and where
the future business is about to operate
 1. STEEPLED
Any external factor or a
combination of external factors
from these eight environmental
forces can have a direct effect in
opportunity generation and
business sustainability.
 2. Industry

This is the source of current

trend of what is happening in the
industry where the future
business will belong to.
3. New Discovery or Knowledge

These are new trends that can be

the core business model of a new
venture.
 4. Futuristic Opportunities

These are projected new

opportunities that can possibly
affect the new business while it
is running.
b. Micromarket
 1. Consumer Preferences,
Interests, and Perceptions
These are the current needs and
wants of potential customers
that should be discovered right
away by a budding entrepreneur.
 Need
Is recognized when a customer
believes that there is a
difference between his or her
current situation versus his or
her desired condition
 Want

Recognized when a customer

believes that there is a specific
product or service that can
perfectly suit the need.
c. Competitors
 Competitors
Recognizing and understanding potential
competitors will aid the entrepreneur to
develop a product or service that is unique
and will surely stand out from the
competition. The 4Ps of Marketing will be
competitively positioned if the entrepreneur
is familiar with his or her competitors
 d. Unexpected
Opportunities from
Customers
Unexpected Opportunities from Customers

Oftentimes, the most brilliant

ventures come from the most
unexpected opportunities.
Unexpected Opportunities from Customers

It may happen in unlikely

situations, unlikely places and
with unlikely people.
 Unexpected Opportunities from Customers

Existing problems and

bottlenecks often give rise to an
unexpected opportunity.
e. Talents, Hobbies,
Skills and Expertise
Talents, Hobbies, Skills and Expertise

Business opportunities do not

just come from outside forces,
but also from within the
entrepreneur.
 Talents, Hobbies, Skills and Expertise

The entrepreneur’s talents,

hobbies, skills or expertise ca be
a source of business opportunity.
 f. Irritants in the
Marketplace such as
Deterrents, Problems,
Complaints and Delays
 Irritants in the Marketplace such as
Deterrents, Problems, Complaints and
Delays
Generally, entrepreneurs see
opportunities in situations where
there is a recurring problem or
sometimes when there is no
more hope in solving the
problem.
 Irritants in the Marketplace such as
Deterrents, Problems, Complaints and
Delays
When customers are already sick
and tired of the same old issue
or problem, that is when the
opportunistic entrepreneur
should come in and make a
difference
g. Location
 Location

Entrepreneurs just have to look

at their ecosystem and they will
be able to spot a business
opportunity right away.
 Methods of
Generating Ideas
 1. FOCUSED GROUP DISCUSSION (FGD)

A moderator handles a very open,

free-flowing, and in-depth discussion
with the group of people who can
provide insightful ideas about a new
product or service that will fill a
market need
 2. BRAINSTORMING

An activity that allows the

participants to share creative
ideas using the following rules:
 BRAINSTORMING

1. No destructive
criticisms or judgement
is allowed
 BRAINSTORMING

2. Wilder ideas are

accepted
 BRAINSTORMING

3. More ideas are

preferred
 BRAINSTORMING

4. Improvement of
others’ ideas is allowed
 3. BRAINWRITING OR INTERNET
BRAINSTORMING

This is exactly the same as

brainstorming except that the
channel used is not face-to-face,
but in writing on online
 3. BRAINWRITING OR INTERNET
BRAINSTORMING

The results of brainwriting or

Internet brainstorming usually
take longer, as the answers
depend on the availability of
participants
 4. PROBLEM INVENTORY
ANALYSIS
The participants are already given an
inventory of product or service
problems. The participants will just
identify from the list given the
compelling problem(s) of a potential
product or service instead of generating
the ideas from the
Macroenvironmental Sources:
Examples of Findings
 STEEPLED Analysis
The results of the STEEPLED Scan
will aid the entrepreneur in
deciding what product or service
to set up and whether this new
venture will succeed or not.
 FACTORS TO BE SCANNED IN
ORDER FOR ENTREPRENEURS TO
DECIDE IF THERE IS A
COMPELLING BUSINESS
OPPORTUNITY OR AN IMPENDING
THREAT
 1. Socio-cultural Factors

Factors that represent a

general view of a locality’s
traditions, customs, beliefs,
norms and perceptions.
 1. Socio-cultural Factors

These factors affect how a

person of the locality behaves
and reacts to marketing and
selling activities.
 The entrepreneur should
take note of the following
sociocultural factors:
• Health consciousness
• Education level
• Attitudes toward imported goods and
services
• Attitudes toward the person’s lifestyle
• Attitudes toward the product quality and
customer service
• Attitudes toward saving and investing
• Emphasis on safety
• Buying habits
• Religion and beliefs
 2. Technological Factors
Are composed of innovations of
an existing technology or an
invention of a new one mostly on
applied science and engineering
research areas.
 2. Technological Factors
Entrepreneurs should always be
up-to-date with the
technological changes, as these
are catalysts in improving a
product or service or replacing
them entirely.
Factors to be considered:
• Basic infrastructure level
• Rate of technological change
• Spending on research and development
• Technology incentives
• Legislation regarding technology
• Communication infrastructure
• Access to newest technology
• Internet infrastructure and penetration
 3. Economic Factors
Play a vital role in the scanning of
marketing environment because
economic factors directly affect any
business venture. These factors include
income, expenses, and resources that
can influence the cost of doing business
and generating income.
• Growth rates
• Inflation rates
• Interest rates
• Exchange rates
• Unemployment rates
• Labor costs
• Stages of business cycle
• Trade flows and patterns
• Level of consumers’ disposable income
• Monetary policies
• Fiscal policies
• Price fluctuations
• Stock market trends
 4. Environmental or
Ecological Factors
Should be given much
importance in conducting a
business especially when the
world has already suffered
severely from human-induced
calamities.
Factors to be considered:
• Weather
• Climate change
• Laws regulating environment pollution
• Air and water pollution
• Recycling
• Waste management
• Attitudes toward “green” or ecological products
• Endangered species
• Attitudes toward and support for renewable
energy
 5. Political Factors

Are mostly induced by

government policies and
administrations, which can have
a strong effect in the
entrepreneur’s business
• Government stability and likely
changes
• Bureaucracy
• Corruption level
• Tax policy (rates and incentives)
• Freedom of press
• Rule of law
• Government effectiveness
• Political rights
 6. Legal Factors

Related with political factors,

legal factors are government
laws and regulations that can
restrict or allow business
activities
 7. Ethical Factors

Are factors that will serve

as an entrepreneur’s guide
on how to be ethical in
running the business
Factors to be considered:
• Ethical advertising and sales practices
• Accepted accounting, management,
and marketing standards
• Attitude toward counterfeiting and
breaking patents
• Attitude toward development and well-
being of employees
 8. Demographic Factors

Characteristics of the
people in the target
market
Factors to be considered:
• Population growth rate
• Age distribution and life
expectancy rates
• Gender distribution
• Social classes
• Family size and structure
• Minorities
 According to INTERNATION
ENTREPRENEURSHIP, the Philippines is a
highly entrepreneurial country. The
major driver for this entrepreneurial
spirit is the prevalence of poverty. The
highest percentage of businessmen in
the Philippines belongs to the small and
medium enterprises (SMEs) and
microenterprises, which account for 99%
of all business establishments.
S2: Screening the
Opportunity
 Opportunity Screening

The process of
cautiously selecting
the best opportunity
 TheOpportunity
entrepreneur should apply
Screening
due diligence and independent
judgement in selecting the
opportunities that have a
potential and eliminate those
that are not within the scope of
the entrepreneur’s risk
appetite.
 Refers to the
entrepreneur’s tolerance
of business risks

Risk Appetite
Selection of Opportunity
is based on the
following:
 a. Entrepreneur’s Internal Intent

The main objective that

the business will
accomplish in the
entrepreneur’s life
 b. Entrepreneur’s External Intent

Which will address the

compelling needs of
the target market
 Time
Must be considered by the
entrepreneur in screening the
opportunities at hand, as it is
considered one of the most
critical resources of an
entrepreneur
 Time

Should only be
devoted to worthwhile
opportunities
 Time

Entrepreneurs must
always be sharp-eyed
for real opportunities
 BUSINESS
OPPORTUNITY
ELEMENTS
 Has superior value for customers
 Solves a compelling problem,
issue, a need, or a want
 Is a potential cash cow
 Matches with the entrepreneur’s
skills, resources, and risk
appetite