UNIT 1: DEVELOPING A BUSINESS PLAN

Many of us Filipinos see education as a means of becoming successfully. You often hear
your parents reminding you of being a diligent student in school and working hard so you can
land a reputable position in a company or in the government, as these equate to “success”.
Some even view living abroad as measure of success. Living abroad has been a traditional
notion for all of us. Nowadays, however there are some Filipinos who see another path to
success-entrepreneurship.
How did entrepreneurship become a path to success? There have been many cases in the
Philippines where entrepreneurship has helped transform ordinary Filipinos into millionaires
because of running their own business. Some of the biggest corporations were initially
established as small start up companies. This course is a helpful tool to help you become
financially successful as a manager of your own business.
This course will provide you with the conceptual and practical entrepreneurship
techniques on how to establish your own future business, whether you will sell product, offer
a service, or do both in your town or locality. This course will be divided into two units. Until I
will deal with developing a business plan whereas Unit II will be the application and
implementation of the business plan. The conceptual and theoretical framework of building
a comprehensive business plan will be tackled and prepared in this course because this is
mandatory in setting up a business. The real success of your future business will depend on
your compliance with the set business plan. Therefore, this course also aims to teach you
how to effectively and sustainably run your future business base on the business plan
prepared.
Owning and running a business have its own challenges. You are in charge of all the
operations in your business; therefore, you need to know all of the risks involved, including
the operations, human resources, and problems in the economic market. You need to have a
sound business plan. Most of the failures are caused by the owner’s inability to see the
details of the internal and external affairs of the business. Running a business entails
research, testing, proper execution, and monitoring. This course will give you tools strategies
on how to make your business profitable.
 MODULE 1: Overview of Entrepreneurship
At the end of this module, I can;
1. Discuss the relevance of entrepreneurship in general, including its economic importance.
2. Define who is an entrepreneur
3. Explain the key concepts of common and core competencies in entrepreneurship
4. Delineate clearly between entrepreneurship and employment
5. Explore opportunities for entrepreneurship as a career.
____________________________________________________________________________
Before you prepare a business plan, you need to understand first the macro view of
entrepreneurship. This module will teach you the basics of the entrepreneurship beginning with
role it plays in society and economy. You will also key concepts of common and core competencies
which are required skills to become a successful entrepreneur. You will be able to understand the
pros and cons of being an entrepreneur as compared to being an employee. A total persona of
entrepreneur will be inculcated to you, including the chatecteristics, behaviour, activities, values,
and mindset. Last, you will be exposed to the various exciting career opportunities in line with
being entrepreneur.
What is Entrepreneurship?
Entrepreneurship is a proactive process of developing a business venture to make a profit. It involves
seeking opportunities for a market, establishing and operating a business out of the opportunity, and
assessing its risks and rewards through close monitoring of the operations. With this definition, being an
entrepreneur may seem difficult, but it can be rewarding if the enterprise flourishes. Creating a sound
business plan, along with efficient and effective operation of the business, will not only benefit the
entrepreneur but also the entire society and the economy.
An entrepreneur is successful if the business that he or she envisioned has materialized into a thriving
industry with regular customer and financial gain. He or she either decides to maintain his or her business or
expand. This eventually reflects on the society and the economy as a whole. Here are the societal and
economic benefits of entrepreneurship.
1. Entrepreneurship produces more jobs that equate to an increase in national income. Millions of
unemployed people will have the opportunities to have a decent occupation. Small businesses produce jobs
and wealth.
2. Entrepreneurship amplifies economic activities of different sectors of society. A simple eatery in a rural
area and a coffee shop in an urban area both ignite economic activity regardless of their business scale.
3. Entrepreneurship introduces new and innovative products and services. New products and services are
always available in the market because of the ingenuity of entrepreneurs to seek opportunities and improve
on them.
 4. Entrepreneurship improves people’s living standards. How can you look good if not for
the services of your nearby salon or barber shop? How can your day be complete without the
food that a nearby eatery cooks? How can you live without the sari-sari store near your house
where you buy your basic needs?
5. Entrepreneurship disperses the economic power and creates equality. It balances the
economy by disturbing national income to more businesses rather than to only few
monopolies.
6. Entrepreneurship controls the local wealth and balances regional development. It makes
sure local resources are used properly and that every area has an appropriate allocation of
resources.
7. Entrepreneurship reduces social conflicts and political unrest. Imagine if there are no or
only few sari-sari or supermarket stores in your area. All of you will then fight for the good
supplies because the store cannot supply all your needs.
8. Entrepreneurship elicits economic independence and capital information. A country with
more entrepreneurs is highly likely to become financially independent and will less likely need
the help of other countries. This also applies to family, barangays, cities. Entrepreneurship
creates wealth instead of barrowing wealth.
Who is an Entrepreneur?
The word “entrepreneur” has a French origin and was coined from the words entre, which means “between,”
and prendre , which means “to take.”
An Entrepreneur is a unique individual who has the innate ability and extraordinary dedication to establish and
manage a business , acknowledging all the risks and reaping its rewards. Like other vocations, being an
entrepreneur is also a calling. It is not a career that one can just jump into when he or she decides so. It entails a
holistic business talent to be considered one , ranging from product and marketing expertise to operations agility ,
and to financial proficiency.
An entrepreneur will only expect returns once he or she already added or created value out of an opportunity.
An entrepreneur’s natural talent is being perceptive for opportunities in his or her surroundings that normal
people don’t give importance to or often neglect. He or she sees existing problems about a certain product or
service as prospects rather than threats. Leadership is the core of every entrepreneur . He or she is always excited
about his or her business and bravely takes risks. He or she innovates, executes his or her big ideas, and rarely
procrastinates.
The definition of an entrepreneur only provides you with a general description or shows you want is expected
from an entrepreneur. However, entrepreneurship is composed of varying degrees or levels of intensity. According
to action coach, there are five levels of entrepreneurial development.
1.The self-employed. Self-employed persons are, simply put, not comfortable with routines of a desk job. They
do not want to conform to a fixed working schedule . They want to do things in their own way and start to feel
agitated when controlled by the powers-that-be. While they can be self-sufficient, their tendency is to become too
reliant on themselves , which leads to exhaustion. They will eventually realize that a successful business should
work for them , not the other way around. If they realize this, they can move on the next level.
 2.The manager. In this level, entrepreneurs feel the need to step up and ask some help from
the people around them. They delegate and hire potential employees to do the work. However,
they may have the tendency to get more people who do not know the exact needs and
requirements of the job, because entrepreneurs think that the battle is in the scale and not the
profitability. As a result, entrepreneurs may get frustrated because the business does not go as
planned, and some potential problems arise from how employees operate. When they begin to
realize this, entrepreneurs will start knowing their employees better, assessing their strengths
and their areas for improvement. They will begin to create positions that match the requirements
of the business and the employees’ expertise. Entrepreneurs can now move on to the next level.
3. The leader. Entrepreneurs in this level already enjoy seeing their people flourish , stepping
up and producing great results with minimal supervision. Unlike before where they are in charge
of virtually everything, they can now sleep peacefully at night and have more freedom and time
for themselves. They already recognized key leaders in their organizations. In effect, these key
leaders also enjoy the entrepreneurs’ trust and are satisfied with the outcome of their careers .
Entrepreneurs at this stage now focus on the big picture and strategic direction of their business
rather than in generating sales and operating the business. At this point, entrepreneurs can now
move on to the next level.
4.The investor. Investors look for more opportunities for their business to grow. They may
either purchase one or two business that can potentially add value to the company, or
sell their established business(as a franchise ) to potential entrepreneurs. They will delegate a
suitable manager for such operations and will act as directors. When this becomes successful,
they will now become true entrepreneurs.
5. The true entrepreneur. True entrepreneurs, based on their experience, now aim for
quality and excellence in their work. They have fully learned, and to continue practice, a four-
step process of thinking; starting with idealization, visualization, verbalization, and
materialization, entrepreneurs start to create plans to make the dream a reality. Verbalization
involves sharing their ideas with other people, knowing that their vision is already occurring.
Materialization happens when the vision becomes a reality. In this stage, true entrepreneurs
now have an income that keeps on multiplying even if they do not put much effort.
The world of entrepreneurship these days has already evolved, and new terms are coined
to suit an entrepreneur’s field or expertise. Here are some of them.
1. A technopreneur is an entrepreneur who puts technology at then core of his or her
business model.
2. A social entrepreneur is one who takes advantage of the country’s social problems and
turn them to profitable institutions with the intention of helping the disadvantaged
community rather than making a profit.
 3. an intrapreneur is an entrepreneur on a large company corporation who is tasked to
think, establish, and run a new big idea or project. Intrapreneurs are usually the product
managers or the business development managers of a company.
4. An extrapreneur is an entrepreneur who hops from one company to another to act as
the innovation champion, providing creative and efficient solutions.
Common and core competencies in Entrepreneurship
Entrepreneurship is a career that requires a plethora of common and core competencies.
Therefore, to be considered a successful entrepreneur, he or she must possess common
entrepreneurial competencies that are needed all throughout the entrepreneurship career. At
the same time, he or she should also possess core competencies that are needed for business
sustainability and management.
Here are the common traits that entrepreneurs should always have.
1. Proactive. Entrepreneurs are reactive rather than passive. They address issues,
problems, and challenges before they come rather than when they already happened. They
ensure that proper research is done, the risk factors are assessed, and plans are executed on
a timely and most efficient way.
 2. Agents of changed. Entrepreneurs are innovation champions. They see opportunities in
hopeless and complex situations. They are always enthused to improve and develop new products
and services and introduce them to the market. They don’t settle for mediocrity and the status
qou.
3. Risk takers. Entrepreneurs will not be successful if they do not take risks. By taking risks,
entrepreneurs do not just grab opportunities left and right; they have to take into consideration
and potential various threats they may encounter. Entrepreneurs calculate risks; if they think that
there is a big chance of succeeding, they push through with the venture and don’t let the
opportunity pass.
4. Have a sharp eye for opportunities. Entrepreneurs have a talent for recognizing an
opportunity even by using the macrolevel data only. They know how to assess the net cause and
effect of an opportunity and decide intelligently if a venture should be considered or not.
5. Sociable. Soft skills are one of the most important competencies of entrepreneurs as these
establish the relationship with the most important assets of the company──its people and its
customers. Relationship management is the key for employee and customer retention, which can
be achieved by a sociable entrepreneur.
6. Networkers. A networker knows the key people to connect with. Networking can be a very
intimidating task, for it takes a lot of guts to pull it off. Successful entrepreneurs gain trust of their
valuable network and maintain a long-lasting relationship with them.
 7. Decisive. Entrepreneurs always have a decision about their business. They do not
settle for gray areas or unclear solutions. They do not leave an issue unsolved without a
disposition. They make sure that all aspects of their business have clear objectives and
strategies. Last, they base their decisions on scientific calculations backed up by their
experience and strategies and technical knowledge.
8. Balanced. The minds of entrepreneurs should have a balance between the
analytical and the creative side. Their brains are always playing with “unique ideas” that
no one has ever thought of yet. Entrepreneurs always have “Eureka!” moments and
enjoy them.
9. Innovative. The minds of entrepreneurs are rich with big ideas that can add value
to their existing business or could become a game changer in the industry or business
where they belong. They do not stop improving and thinking of new and worthwhile
ideas for their business.
Here are the core traits entrepreneurs should develop in managing in running the
business
1. Leaders. Successful entrepreneurs always have the heart of the leader. To be
successful leader they must be a source of inspiration of their employees. They must be
very humble, approachable, friendly, and also know how to listen to people’s concerns.
Leaders act on their responsibilities that were given to them. They use their strengths
and limitations to make the best of a situation. They must also be decisive and know how to
own up to their decisions. They know how to unite the team and bring out the best in every
employee.
2. Communicators. Entrepreneurs know how to use all forms of communication to effectively
share ideas and address certain concerns with their costumers or employees. Effective
communication not only provides people with a clear view of what business offers, they
also help prevent mishaps in an organization. Communication channels between
entrepreneurs and their employees or customers should always be open to ensure the
smooth flow of operations in their business.
3. Specialists. Entrepreneurs are expert in their chosen business. They are tactical and are very
keen with details. When asked about the specifics of their products or service, they can
easily answer without heavily relying on their people. They understand the totality and
specificity of their business. As a result, they can easily think of innovating and improving
the product or service offerings because they know their intricacies. They enjoy being in
action instead of being behind the scenes.
4. Problem Solvers. Entrepreneurs possess critical thinking skills and look at problems as
challenges or puzzles that they need to solve. They know how to handle issues in any area
of the business, be it finance, operations, or marketing. They listen to the plight of their
employees on certain problems involving their units, and come up with strategic solutions.
Entrepreneurs are able to solve problems by immersing themselves in day-to-day activities,
knowing what is happening in and out of their business. Entrepreneur should also be aware of
their employees’ personalities; they must know how and when to use them to help solve
problems. Entrepreneurs have faith that every problem has a solution no matter how hard it is.
They must also be courageous and know how to face consequences of their decisions.

Entrepreneurship or Employment?
Entrepreneurship and employment are two different career paths that a person can choose
depending on his/her personal aspirations and work characteristics. It is really up to the person
at the end of the day on what career trail he/she will follow, considering all compelling career
factors that are important to him/her. Table 1.1 shows a comprehensive list of the perks and the
downsides of being an entrepreneur as compared to being employed.
 Important Entrepreneur Employee
career factors
1. Income • Income generated passively even when the entrepreneur is • Income generated actively (i.e., on working hours only); no work= no
resting. pay
• Opportunity income unlimited, depending on the success of • Income usually fixed per month and increases every year depending
the business on the employer and employee’s performance
• Income only earned when the business is successful • Income earned whether the business is successful or unsuccessful

2. Hiring and • Provides job; is the owner of the business and conducts the
Firing, talent selection • Seeks for a job; is the one applying for a job and is interviewed by
Organizationa • Fully responsible for serving customers, making the the company’s hiring officers
l Setup, and business profitable/sustainable, and providing employee • Has the goal of satisfying only the employer or the direct supervisor
Major Key satisfaction • Fully dependent on the employer’s performance; is at risk of losing
Result Areas • Has the power to disengaged nonperforming employees his/her job if the company does not perform well; may find it
applying the due process policy of the disengaging difficult to just leave their below par employer if this only source of
personnel. income
• Can venture into expansion of business such as franchising • Can only work for the current employer exlusively
and buying other similar businesses.

3. Daily Tasks • Performs all necessary variable tasks to establish and • Has routine tasks and works on regular or normal hours
manage a startup business, which usually takes most of the • Follow policies, procedures, and memoranda from the employer
entrepreneur’s time; spend more hours on work than a
regular employee and sometimes gets no sleep
• Prepares policies, procedures, and memoranda for the
business.

4. Leisure • Has a flexible schedule and can take unlimited number of • Has unlimited number of vacation days imposed by the employer
Time and vacation days (applicable only if the business has stabilized
Vacations already)
5. Taxation • Taxed on the net income ; can claim
taxable income deductions for allowable
expenses incurred by the business
6. Comfort level at work • Is comfortable in doing multiple and
challenging task and takes accountability
with the risks and profits of the business;
does not want to be confined in a box;
thinks outside the box or sometimes thinks
there is no box
• Taxed on the gross income ; cannot
use expenses incurred related to
the job such as food and
transportation expenses to claim
for deductions from taxable
income
• May be comfortable with routines
and minimal risks; may also be
comfortable in working for the
company itself.