Lessons on Applied Entrepreneurship
Week 1&2
Entrepreneurship - is an integrated concept that permeates an individual’s
business in an innovative manner.
-A dynamic process of vision, change, and creation.
- The process of discovering new ways of combining resources.
- The capacity and willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit. The most obvious
example of entrepreneurship is the starting of a new business.
Entrepreneur -is derived from the French entreprendre, meaning “to undertake.”
Entrepreneurship
This is an act of creating a business or businesses while building and
scaling it to generate a profit. It is an important driver of economic growth and
innovation.
Derived from the French word “entreprendre”, which means to
undertake. The enterprise is created by an entrepreneur and the process is called
entrepreneurship.
 What people do to take their career and dreams into their hands and lead
it in the direction of their own choice. It is about building a life on your own
terms. No bosses! No restricting schedules! And no one holds you back! (Batalla
2011).
An entrepreneur is a person who sets up a business with the aim of making a
profit and creating a new business, bearing most of the risks and enjoying most
of the rewards. An innovator, a source of new ideas, goods, services, and
business/or procedures. Playing a key role in any economy, using the skills and
initiative necessary to anticipate needs and bring good new ideas to market.
Businessman
A businessman is someone who sets
up a business with an existing idea
offering products and services to the
customers.
Starts a business from an existing idea
or concept
Has many business rivals
Focuses on competition
Is always busy on his business
Entrepreneur
An entrepreneur is a person who
starts an enterprise with a new idea or
concept, undertaking commercial
activities.
Starts a business from his own unique
idea or concept
His business rival is himself
Focuses on cooperation
Is only busy in preparing his new
enterprise
Don’t have enough time for his family Have a lot of time for his family and
and personal life
personal life
His business gives him a living
He gives life to his business
Traditional
Worried; Stay safe
Profit oriented
Hire people to increase business
productivity
A market player
Has not yet achieved financial
freedom
Only gives importance to a part of the
business world (atomistic)
Innovative and revolutionary
Excited; Risk taker
People oriented
Hire people to give them productivity
A market leader
Has achieved financial freedom
Gives importance to the business
world as a whole (holistic)
Three Levels of Entrepreneurial Competencies
1. Personal competencies: creativity, determination, integrity, tenacity,
emotional balance and self-criticism.
2. Interpersonal competencies: communication, engagement/charisma,
delegation, respect.
3. Business competencies: business vision, resource management,
networking, negotiating skills.
Business Plan
Business plans are written prior to setting up an enterprise, which are like a
prefeasibility study and a feasibility study.
Why Write a Business Plan?
a. A business plan helps to evaluate the feasibility of a new business idea in
an objective, critical, and unemotional way.
b. It provides an operating plan to assist in running the business and
improves probability of success.
Example: Identify opportunities and avoid mistakes; Develop production,
administrative, and marketing plans; and Create budgets and projections to show
financial outcomes
c. It communicates idea to others, serves as a “selling tool,” and provides the
basis for your financing proposal.
Example: Determine the amount and type of financing needed; forecasts
profitability and investor return on investment; and forecasts cash flow, show
liquidity and ability to repay debt.
Importance of Entrepreneurship
Entrepreneurship is very important to every nation for the following reasons:
1. It generates/provides employment.
2. It helps in the economic growth of the country.
3. It eradicates poverty.
4. It improves our social image across the country.
5. Entrepreneurship generates new wealth in an economy.
6. Entrepreneurship decreases poverty.
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7. It creates opportunities, ensures social justice, instills confidence and
stimulates the economy.
8. Entrepreneurship improves productivity.
9. Entrepreneurs create jobs.
10. Entrepreneurs innovate.
11. Entrepreneurs create innovation and social change.
12. Entrepreneurs give to society.
Factors Affecting Entrepreneurship
1. Personality Factors
a. Initiative
b. Proactive
c. Problem Solver
d. Perseverance
e. Persuasion
f. A Planner
g. Risk-Taker
2. Environmental Factors
Common Competencies in Entrepreneurship
1. Decisive
2. Communicator
3. Leader
4. Opportunity Seeker
5. Proactive
6. Risk Taker
7. Innovative
Types of Entrepreneurs
1. Innovative Entrepreneurs. They are those who always make new
things by thinking of new ideas.
2. Imitating Entrepreneurs. They are those who don’t create new things
but only follow the ideas of other entrepreneurs.
3. Fabian Entrepreneurs. They are sceptical about changes to be made in
the organization. They don’t initiate but follow only after they are
satisfied.
4. Drone Entrepreneurs. They are those who lives on the labor of others.
They are die-hard conservatives even ready to suffer the loss of business.
5. Social Entrepreneurs. They initiate changes and drive social innovation
and transformation in the various fields such as education, health, human
rights, environment and enterprise development.
Importance of Entrepreneurship
1.
Entrepreneurship generates new wealth in an
economy.
2. Entrepreneurship decreases poverty.
3. It creates opportunities, ensures social justice, instills confidence and
stimulates the economy.
4. Entrepreneurship improves productivity.
5. Entrepreneurs create jobs.
6. Entrepreneurs innovate.
7. Entrepreneurs create innovation and social change
8. Entrepreneurs give to society.
Lesson 1: The Potential Market and the Market Need
This module is written for you to accomplish at home. It is carefully designed so that
you can work at your own pace and allow self-discovery of the concepts through
activities that you will perform. Activities are also selected to allow independent
learning which aims to develop your reading comprehension skills through
understanding written texts. You may start your journey in learning about the potential
market and the market need.
The Potential Market
1. Potential market is the part of the total population that has shown some level of interest in
buying a particular product or service. Potential market is also called Total Addressable Market
(TAM) (MBA Skool Team, 2018).
2. A potential market is the part of the market you can capture in the future. It includes the
demographic groups that are not currently your customers but could become customers in the
future (Lake, L, 2019).
3. Market potential is the total demand for a product in a given business environment (Bhasin,
H., 2018).
The Importance of Potential Markets (Lake, L., 2019)
Potential markets are an important part of a business's future growth. Ensure the
future of your business by identifying new customers. Think proactively about ways for your
business to grow and change. Show the potential of your business to investors or collaborators.
Increase your revenue. Create a plan B that will weather changes in the economy or market.
How to Identify Your Potential Markets (Lake, L., 2019)
Consider every target demographic that you currently sell to, as well as those you have
not yet targeted. Identify what they have in common with each other, new milestones that they
will encounter in their lives that will impact their buying patterns, and where they overlap or
diverge from your current customers.
For example, a business that makes face masks and PPEs could identify potential markets
such as:
• Hospitals and other health related industries whose employees are prone to COVID 19 virus and other viruses.
• Business industries and other organizations who want to ensure the health condition
of their employees.
• Employees and workers who need to report to work to earn income.
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•
Households who needs to go out for their necessities.
Note: Depending on the size and age of your company, as well as your industry, you may have
a clear picture of the potential markets that are available.
Reaching Your Potential Market (Lake, L., 2019)
Once you've identified and chosen a potential market to begin targeting, you will
need new marketing strategies in place to communicate with them. Use this profile to identify:
• The demographic information that people in a group have in common.
• The best forms of media to reach them.
• How they prefer to shop and make purchases.
• The concerns, struggles, or problems that you can help them overcome.
• What values matter to them, both in everyday life and when shopping.
• The language that resonates with them.
Available Market
These are prospects who are willing and capable (have sufficient resources) buyers
and have access to a particular market or service (www.businessdictionary.com). It is defined
as the number of people who are both willing and capable of buying a particular product or
service in a particular market (MBA Skool Team, 2020).
Target Market
This refers to a group of potential customers to whom a company wants to sell its
products and services. Target markets are generally categorized by age, location, income, and
lifestyle. Defining a specific target market allows a company to home in on specific market
factors to reach and connect with customers through sales and marketing efforts. (Kenton, W.,
2019).
Penetrated Market
This is a set of customers or clients who are already using a particular product or
service. A penetrated market means that the potential users of a product or service are aware
of it, and in many cases are active consumers of it (www.businessdictionary.com).
The size of a potential market helps a company understand the level of investment it
should make further in the market, while taking into consideration other factors. If the potential
market is very small, it means there is a very small fraction of the total population showing any
interest in the product or category. This means that it is better that the company doesn’t invest
further in the product or category because people won’t buy it. If the size of the potential market
is large, it means that there is a huge fraction of the total population which is showing interest in
the product, so further investment can be made on the product development or modification,
marketing, promotions etc. The size of the potential market gives an estimate of what all a
company should do and how much it should invest (MBA Skool Team, 2018).
The need is a driver of human action which marketers try to identify, emphasize, and satisfy,
and around which promotional efforts are organized (www.businessdictionary.com).
2. Market
A market is a place where two parties can gather to facilitate the exchange of goods
and services. The parties involved are usually buyers and sellers. The market may be physical
like a retail outlet, where people meet face-to-face, or virtual like an online market, where there
is no direct physical contact between buyers and sellers (Kenton, W. & Boyle, M., 2020).
A market does not refer to a particular place but it refers to a market for a commodity
or commodities. It refers to an arrangement whereby buyers and sellers come in close contact
with each other directly or indirectly to sell and buy goods (Shaikh, S., retrieved 2020).
A market is any place where sellers of particular goods or services can meet with
buyers of those goods and services. It creates the potential for a transaction to take place. The
buyers must have something they can offer in exchange for the product to create a successful
transaction (Moffatt, M., 2019) Your market consists of (Stull, C., Myers, P.& Scott D.M. (2008)
as cited in: https://learn.marsdd.com/):
Existing customers: People who have already purchased your product.
Prospects: People who have not yet purchased your product but are considering it.
Target market users: People in your target market who are not currently looking for a
solution.
Define the Market Need for Your New Business
The market now demands that your business align to their needs. In order to properly
align your marketing efforts and your content, in particular to what buyers need, you have to
have a clear understanding of the many intricacies, pains and pressures within your market. To
achieve such alignment, you need the ability to define market patterns, needs, interests,
preferences, etc. for a comprehensive view of the buying process is critical.
Below are ways to define your market (Lancaster SCORE (2010):
 Consider whether the business offers a new solution to an old problem or
complements an emerging trend.
 Have a clear picture of your target market.
 Determine the benefits that your product or service offers.
 Examine industry data that can confirm whether there is a sustained, growing
demand for your product or service.
 Identify the percentage of market share that it is realistic for you to capture.
Prepared by:
The Market Need
1. Need
GUIA C. SISON, MBA
Subject Teacher
This refers to the motivating force that compels action for its satisfaction. Needs range
from basic survival needs (common to all human beings) satisfied by necessities, to cultural,
intellectual, and social needs (varying from place to place and age group to age group) satisfied
by necessaries (www.businessdictionary.com).
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