Entrepreneurship
Regional Mass Training of
Teachers (MTOT)
Big Questions:
 Do you know someone who owns a small business?
 does he/she personally manage his/her own business?
How?
 Do you think he/she is an entrepreneur or an ordinary
small business person?
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Small Business Vs. Ordinary Small
Business
SMALL BUSINESS – refers to a business or enterprise
that correctly adopts and practices the principle of
entrepreneurship. It is owned by one person with a
limited workforce of not more than 20 person
ORDINARY SMALL BUSINESS – pertains to a business
enterprise managed and operated by an owner who is
not an advocate of and does not practice the concepts
and principles of entrepreneurship
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Origin and nature of
Entrepreneurship
Evolution
 originated in
Europe in the
Middle Ages
 French origin
from the word
entreprendre,
which means to
“undertake”
 20th century saw a number of scholars
focusing their research studies on the
concept of entrepreneurship so with the
growth of academic offerings in the field
of business, management, and finance, it
has been added to the of curricular
directions among schools
Origin and nature of
Entrepreneurship
 What is
entrepreneurship?
The ability to create
and build an
enterprise from
practically nothing,
fundamentally a
creative act.
Donald F. Kuratko
Origin and nature of
Entrepreneurship
 What is
entrepreneurship?
The creation of an
innovative economic
organization for the
purpose of gain or
growth under
conditions of risk and
uncertainty.
Marc J. Dollinger
Origin and nature of
Entrepreneurship
O What is entrepreneurship?
 “It is making the world
forever new. It is taking
aggressive
actions.” The
Spirit of the Enterprise
 CREATION OF WEALTH
UNDER CONDITIONS OF
RISK
*creating new business
*modifying an existing
business
*creating new uses, users,
usage of a product
The Various Degrees of
Creation
New
Concept/new
Business – create an
entirely new industry
Existing
Concept/
Different Approach –
old concepts but there
is something new or
different or better
which is a result of
creativity
Origin and nature of
Entrepreneurship
Entrepreneurial Framework
Opportunity
Identification
Attraction
and
Management
Resources
Entrepreneur
Leadership
and Direction
Organization
Origin and nature of
Entrepreneurship
 Entrepreneurship as a process and approach
As an approach: considers the business opportunity as a
chance to solve the problem than solving the problem
itself,
“The entrepreneur differs from the manager or small
business, not so much on goals or activities, but in approach
in doing business.” Camposano
As a process: a dynamic process of innovation and newventure creation through dimensions-individuals,
organization, environment, process and institutions
Origin and nature of
Entrepreneurship
Forms of Entrepreneurship
Social Entrepreneurship
―Any creative and innovative solution
applied to solve social problems
―Involves social mission
―Search for approaches to move poor
people out of poverty
―Bottom line: people, profit, planet
Business Entrepreneurship
―For profit
―study of systems, structure, and staffing
to make a corporation stay competitive,
innovative, and profitable on a sustainable
basis through keeping the Sense of
Mission alive as you grow, re-instilling
customer/product
vision
in
every
employee,
fostering
high-speed
innovation, making self-inspired behavior
the organization standard
Impact of Entrepreneurship on the economy
 Reasons why we need Entrepreneurs






90% of the world’s jobs are created by
entrepreneurs
Source of new products and innovation
In the third-world countries, the entrepreneurs
keep the sagging economies alive
It’s the entrepreneurs that keep the economy
moving
Lessens the dilemma on the lack of job, selfemployment
Ensuring the welfare of a free enterprise
economic system
The Entrepreneur
 Who is an Entrepreneur?
Common Understanding:
The boss, The business owner, The risk
taker, One who starts a small business,
The resourceful guy
What Entrepreneurs do: build new
organization, bring innovations to
market, identify market opportunity,
apply expertise, provide leadership,
accepts risk
The Entrepreneur
 Who is an Entrepreneur?
Types of Entrepreneurs
― Classic Entrepreneurs- who have grown their initially
small enterprise into a large enterprise
― Corporate Entrepreneurs- individuals who do not
own the firm they work for but use the
entrepreneurial mindset to increase the profitability,
productivity and professionalism
― Social Entrepreneur- individuals who use the
entrepreneurial mindset not only to improve
profitability and productivity but also improve social
equality and environment sustainability
The Entrepreneur
 Challenges to Entrepreneur
 “borderless world”- predominance of info
technologies and globalized trading system
 Competition is not anymore with Filipino
entrepreneurs’ products and services but
imported products and services
 Highly
competitive
market
due
to
advancement wherein one can easily network
with foreign markets and an environment that
is highly conducive to developing and
marketing export-quality products owing to
various incentives and supports available
The Entrepreneur
 Competencies of an Entrepreneur
Figure 6.1 Personal traits and
characteristics of entrepreneurs.
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Salient Features of Entrepreneurship





Providing values to customers
Wealth-creating venture
Art of correct practices
Risk – taking venture
Opening and managing self-owned business
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Impact of Entrepreneurship
on the economy
 Socio Economic Benefits
Promotes self-help and unemployment
Mobilizes capital
Provide taxes to the economy
Empower individuals
Enhance national identity and pride
Improves the quality of life
Enhances equitable distribution of
income and wealth
Figure 6.2 Eight reasons why many small
businesses fail.
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Study Question 3: How does one start
a new venture?
 Life cycle of entrepreneurial firms
 Birth stage
 Breakthrough stage
 Maturity stage
 Each stage poses different managerial challenges and
requires different managerial competencies.
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Figure 6.3 Stages in the life cycle of an
entrepreneurial firm.
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Environmental Scanning
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Entrepreneurial Process of Creating a
New Venture
Creation of
Entrepreneurial
Idea
Identification of
Entrepreneurial
opportunities
Opening of
Entrepreneurial
Venture
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Changes in the Environment
Entrepreneurial ideas arises from the changes that
happen in the
external environment with
entrepreneurial implications
- Physical Environment (climate and natural resources)
- Societal Environment (Economic forces, sociocultural forces, political forces and technological
environment)
- Industry environment (government, competitors,
suppliers, customers, suppliers, customers, creditors)
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Industry Analysis Scanning Tools
The different forces in the industry environment must be
properly evaluated and analyzed. They can be either a
catalyst to the growth of the business or become the
primary cause of the failure.
SCANNING TOOLS
1. SWOT Analysis
2. Forces of Competition Model (Potential New Entrants,
Buyers, Substitute Products, Suppliers and Rivalry
among existing firms)
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Internal Analysis
 The internal Environment is the entrepreneurial context
simply refers to the environment within the business
 Internal Environment is affected by the following:
1. Business Resources
2. Business culture – collection of values, beliefs, principles
and expectations learned and shared within the business.
3. Business Structure- formal organizational arrangement of
the business in terms of hierarchy, flow of communication
and relationship of functional areas
Tool: SWOT analysis
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Study Question 3: How does one start
a new venture?
Forms of legal ownership
 Sole proprietorship
 Partnership
 General partnership
 Limited partnership
 Limited liability partnership
 Corporation
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Market Identification
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Market Identification
 A strategic Marketing Approach and Process that is
intended to define the specific customers of the
products.
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Strategic Marketing Approaches
Market
Segmenta
-tion
Market
Market
Targeting
Positioning
Who is
the
market?
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Market Segmentation
 An entrepreneurial marketing strategy designed primarily to
divide the market into small segments with distinct needs,
characteristics or behavior
 The entire market is composed of different segments
Methods in Market Segmentation
1. Geographic ( Climate, dominant ethnic groups, culture,
density and classification of place)
2. Demographic ( Age, gender, income. Occupation,
education, religion and etc.)
3. Psychological (needs and wants, attitude, social class,
personality traits, knowledge, brand concept and lifestyle)
4. Behavioral (Benefits, reaction, perception and etc)
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Market Targeting
 Is a stage in market identification process that aims to
determine the set of buyers with common needs and
characteristics. They are the market segments that
the entrepreneurial venture intends to serve
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Market Positioning
 Refers to the process of arranging a product to
occupy a clear, distinct and desirable place in relation
to other competing products in the mindset of the
target consumers.
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What do you want to position in the
mind of your target market?





Price
Quality
Advantage
Benefits
Attributes
(uniqueness)
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Examples:
- A powder detergent may take pride in
the following taglines that describe its
and at the same time can easily recall by
house household consumers: “banayad
sas kamay, ang bango-bango at amoy
rosas”
- Powder milk
products may put
emphasis on the muscle-building protein
requirement for the youth and risk
reduction of osteoporosis for adults
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The Marketing Mix
The Tools of Marketing Management
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The Marketing Mix
 These are the tools of
marketing management
employed by marketers. They
are areas where marketing
managers need to make
decisions. These decisions
affect the nature of the
offering or package of
benefits that the organisation
offers to customers.
 The tools are commonly
known as the 4P’s or 7P’s.
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The Marketing Mix
The term “mix” is used to
explain the point that at any
one time the marketer will
select a set of tools from the
marketing toolbox or the
marketing mix in specific
proportions to solve specific
problems – in the same way
one selects spanners and other
tools for a specific job OR
ingredients to bake a particular
type of cake.
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What are the tools?
Product
Price
Promotion
Place (Distribution)
People
Process
Physical evidence
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Product
 Quality
 Features
 Options
 Style
 Brand name
 Packaging
 Sizes
 Services
 Warranties
 Returns
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The Product Life Cycle
• The product lifecycle looks at the sales of
a product over time
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Stages in the Product Lifecycle
Development – high costs but no sales
Launch – high expenditure on promotion and
product development, low sales
Growth – sales increase and product should
break-even
Maturity – sales stabilise, less expenditure on
promotion needed, revenue & profit should be
high
Decline – sales decline, extension strategies can
be adopted or the product withdrawn
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Extension Strategies
Extension strategies should maintain or
increase sales. They include:
• Modifying the product
• Reducing the price
• Adding a feature
• Promoting to a
different market
sector
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Price
The value that is put on
the exchange process
 List price
 Discount
 Allowances
 Payment period
 Credit terms
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Promotion (Communication)
 Advertising
 Personal selling
 Sales promotion
 Public relations
 Direct Marketing
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Place (Distribution)
Channels
Coverage
Locations
Inventory
Transport
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The Seven P’s
 Booms and Bitner
extended the traditional
4P (McCarthy)
framework to seven to
reflect a predominantly
service economy.
 Extended mix:
 People
 Process
 Physical evidence
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People
 The attitudes of staff
 Training of staff
 Internal relations
 The observable behaviour of
staff
 The level of service-mindedness
in the organisation
 The consistency of appearance
of staff
 The accessibility of people
 Customer-customer contacts
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Process
The manner in which the
service is delivered
 Degree of customer contact
 Quality control standards
 Quality assurance
 Payment methods
(degree of convenience)
 Queuing systems for
customers
 Waiting times
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Physical Evidence - ambience




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The “environment” or atmosphere in which the service
is delivered
Buildings
Furnishings/décor
Layout
Goods associated with the service e.g. carrier bags,
tickets, brochures
All the above can help shape customers’ perceptions
of the service
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Combining the Mix
The marketing manager has to identify the needs of
his or her target market through marketing
research and other investigative techniques. The
manager
must
understand
customers’
characteristics and buying habits, for example.
He/she then has to blend the components of the mix
to formulate strategies and tactics by which those
needs can be met.
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Combining the Mix
This is the essence of
marketing: identifying,
anticipating, and
satisfying customer needs
in the most profitable way
possible: delivering profits
to the organisation and
value to customers at the
same time!
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Big Questions
 What comes to you mind when you hear the “word”
toothpaste? How about “shampoo” when you are
asked to describe “burger”, what will you say first?
How about, “soft drinks”?
 Picture your product without a brand name, displayed
on the shelves of various groceries.
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Branding
 Brand Names play a significant role in the positioning of the
product
 Brand refers to the name, design, color, symbol quality
features or a combination of these elements that make the
product separate and distinct from similar products of the
competitors
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Branding Strategy
 Starts with the formulation of a brand name foe the
first products that the business intends to make.
 Umbrella Brand Approach – all products of the
business carry the same brand
 House Brand Approach – every product of the same
business has a separate brand name that distinguish it
from the rest of the company’s products
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How does one start
a new venture?
 Basic items that should be included in a business plan:











Executive summary
Industry analysis
Company description
Product and services description
Market description
Marketing strategy
Operations description
Staffing description
Financial projection
Capital needs
Milestones
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BUSINESS PLAN
OUTLINE
Guide
Questions
Executive Summary
 What is the nature of the
project?
 What are the entrepreneur’s
competencies and
qualifications?
 What are the project’s
contributions to the local and
national economy?
Section 1: Marketing Plan
 What is the product?
 How does it compare in quality and
price with its competitors?
 Where will be the business be
located?
 What geographical areas will be
covered by the project?
 Within the market area, to whom will
the business sell its products?
 Is it possible to estimate how much of
the product is currently being sold?
 What share or percent of this market
can be captured by the business?
 What is the selling price of the
product?
 How much of the product will be
sold?
 What promotional measures will
be used to sell the product?
 What marketing strategy is
needed to ensure that sales
forecast is achieved?
 How much do you need to
promote and distribute your
product?
Section 2: Production
Plan
o What is the production process?
o What buildings and machinery (fixed
assets) are needed and what will be
their cost?
o What is the useful life of the building
and machinery?
o How will maintenance be done and
are spare parts available locally?
o When and where can the machinery
be obtained?
o How much capacity will be used?
o What are the plans for using spare
capacity?
o When and how will the machinery be
paid for?
o Where will the factory be located and
how will the factory be arranged?
o How much raw materials are
required?
o How much will the raw materials
cost?
o What are the new sources of
raw materials? Are they available
throughout the year?
o How many direct and indirect
labor are needed and what skills
should they have?
o What will be the cost of labor?
o Are workers available throughout the
year? If not, what effect will this have
on production?
o How will the workers be motivated?
o What factory overhead expenses are
involved?
o What is the production cost per unit?
Section 3: Organization
and Management Plan
 How will the business be
organized?
 How will the business be
managed and operated?
 What is the business experience
and qualifications of the
entrepreneur?
 What pre-operating activities
must be undertaken before the
business can operate?
 What pre-operating expenses will
be incurred?
 What fixed assets will be required
for the office?
 What administrative cost will be
incurred?
Section 4: Financial Plan
 What is the total capital requirement?
 Is a loan needed? What will be the
equity contribution of the
entrepreneur? And how much?
 What security (collateral) can be
given to the bank?
 What does the Profit and Loss
Statement indicate?
 What is the total capital requirement?
 Is a loan needed? What will be the
equity contribution of the
entrepreneur? And how much?
 What security (collateral) can be given
to the bank?
 What does the Profit and Loss
Statement indicate?
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 What does the Balance Sheet
indicate?
 What is the loan repayment
schedule?
 What is the break-even point
(BEP)?
 What is the return of investment
(ROI)?
 Is the project feasible?
Study Question 3: How does one start
a new venture?
Financing the new venture
 Sources of outside financing
 Debt financing
 Equity financing
 Equity financing alternatives
 Venture capitalists
 Initial public offerings
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