Entrepreneurship

• Entreprenuership comes from the pioneering work of Joseph Schumpeter.
• Entrepreneurship is an ability to be able to know whar products and services are needed by people and to be able to provide these.
• According Dr. Ralph Sorensen entrepreneurship is an art of creating, launching, and growing new venture businesses.
• Entrepreneur is a reference to individuals who have initiated the establishment of business enterprise.
• If you own a business, you are called business man or woman.
• If you manage a business you are called a professional manager.
• If you bought a franchise, you ae a franchisee.
• Passion for business - this trait refers to the eagerness to be involved in commercial activities.
• Confidence - is a must have trait for entrepreneurs, who should posses that belief in themselves and their capabilities to see things through and get things done.
• Self-determination - is the belief that one's fate or destiny lies really on one's beliefs, efforts, and actions.
• Management of Risk - Entrepreneurs know how to take risks but these risks are calculated risks that are well thought out and considered,
• Initiative and need for achievement-entrepreneurs usually have a great need to achieve things and to have accomplishments.
• Creativity - entrepreneurs have often been said to be creative because they are not satisfied with just copying or doing the same routine or churning out the same product.
• Seeing the big picture - entrepreneurs are able to assess how particular decisions about operations or human resources can affect the other aspects of the business.

  • they realize that specific decisions in certain areas can affect other areas, as well as the business as a whole
• Demand risk

  which was explained as the risk that the product will not be accepted by the market or that the market is much smaller than what was originally estimated to be.
• Competitive risk which was stipulated as the risk that competitors may be able to replicate the business model and capture the market ahead of the proponent.
• Capability risk - which is related to the capability of the firm, this considers the possibility that the product or services of the firm would fail to deliver the value proposition that the customers are willing to pay for.
• Top 5 Reasons Why Filipinos Don't Go into Business

  1. Money
  2. Time
  3. Skills
  4. Opportunity
  5. Connections
• Business plan

  it serve as a learning experience and forces the entrepreneur to organize her or his thoughts, experience and plans.

  like a road map, it directs the entrepreneur to his desired destination.
• Reasons for creating a plan

  1. Vision

  2. Opportunity assessment

  3. Financing

  4. Market assessment

  5. Implementing the Plan

  6. Outside Failure
• Business Failures

  1. Poor cash flow control

  2. Lack of managerial experience, training, skills

  3. Undercapitalization

  4. Inventory control problems

  5. Trade area competition

  6. Poor site location (retail)

  
  

  7. Unidentified target market

  
  

  8. Pricing strategy

  
  

  9. Inadequate long-term plan

  
  

  10. Inadequate financial control
• Basic components of a business plan can be organized as follows:

  1. Providing a description of the business.

  2. Choosing the best marketing strategy.

  3. Identifying the management plan, and;

  4. Analyzing the finances needed to start the business and make it successful.
• Market Size

  The first and most important factor to consider while determining market potential is the market size of your product. Market size is the total market sales potential of all companies put together.
• Market growth rate - you have to forecast based on the differences between product line extensions and a completely new concept in the Market
• Profitability to understand the market potential. If the business is going to give low profitability, then the volumes need to be high
• Calculation of profitability to determine Market potential can use three main elements

  ROI - Return on investment

  ROS-Return on sales

  RONA - Return on net assets

  ROCE - Return on capital employed

  You can use any of the calculations mentioned above to calculate the likelihood of profitability and to determine how profitable the industry or product is going to be.
• COMPETITION

  You need to know and understand the competition in an industry to determine the market potential for the product you are going to launch. If the industry has high competition, the entry barriers are going to be high and at the same time, establishing yourself will require deep pockets
• Product and consumer type

  Is your product a repeat buying product or one time sale only? In the above examples, Soap and shampoo is a repeat buying product. But once you buy a refrigerator, i doubt you will need another for the next 10 years. So in your whole lifetime, you will buy 8-10 refrigerators at the max
• Executive Summary - The first section should be a concise overview of your business plan. It should be short, and must be well written. Your goal is to draw readers in so they want to learn more about your company
• The executive summary for a business plan should include:

  Your business name and location

  Products and/or services offered

  Mission and vision statements

  The specific purpose of the plan (to secure investors, set strategies, etc.)
• Company Description

  This high-level view of your business should explain who you are, how you operate and what your goals are.

  • The company description should feature:

  •The legal structure of your business (corporation, sole proprietorship, etc.)

  • A brief history, the nature of your business, and the needs or demands you plan to supply
• Products and Services

  Clearly describe what you're selling, with a focus on customer benefits.

  • Include details about suppliers, product or service costs, and the net revenue expected from the sale of those products or services. Consider adding pictures or diagrams. • An overview of your products/services, customers, and suppliers

  A summary of company growth, including financial or market highlights

  A summary of your short- and long-term business goals, and how you plan to make a profit
• Market analysis:

  Show your industry knowledge, and present conclusions based on thorough market research.

  Place detailed findings of any studies in an appendix.

  Your market analysis should include: A sketch of targeted customer segments, including size and demographics of each group

  
  

  An industry description and outlook, including statistics

  
  

  Historical, current and projected marketing data for your product/services

  
  

  A detailed evaluation of your competitors, Chighlighting their strengths and weaknesses
• Strategy and Implementation:

  Summarize your sales and marketing strategy, and how you'll implement them with an operating plan.

  This section should include:

  An explanation of how you'll promote your business to customers and enter the market Details about costs, pricing, promotions, and distribution/logistics
• Organization and Management Team

  Outline your company's organizational structure. Identify the owners, management team and board of directors.

  Include the following:

  An organizational chart with descriptions of departments and key employees

  Information about owners, including their names, percentage of ownership, extent
• Important financial statements to include in your business plan:

  • Historical financial data (if you own an established business), including income statements, balance sheets, and cash flow statements for the past three to five years
  • Realistic prospective financial information, including forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets for the next five years
  • A brief analysis of your financial data, featuring a ratio and trend analysis for all financial statements