People who are willing to take risk and challenges in starting a business
Entrepende
Means undertake
Entrepreneur
Creating new business venture to generate profit while taking on financial risk
Types of entrepreneurs
Agripreneurship
BuyerEntrepreneurship
Ecopreneurship
ImitatorEntrepreneurship
Intrapreneurship
Largebusinessentrepreneurship
Scalablestartup Entrepreneurship
Smallbusinessentrepreneurship
Socialentrepreneurship
Technopreneurship
Agripreneurship
Deals with the production and selling various agricultural goods and inputs
Buyer Entrepreneurship
Possess substantial capital and utilize it to acquire established companies or merge with smaller business
Ecopreneurship
"green" business
Imitator Entrepreneurship
Creates a business by copying or adapting an existing business concept
Intrapreneurship
Act of being entrepreneur within a company or organization
Large business entrepreneurship
Involves taking calculated risks
Scalable startup Entrepreneurship
Launching a small-scale enterprise intending to quickly expand
Small business entrepreneurship
Starting a business on a smaller scale
Easy to manage because it is often one-person team
Social entrepreneurship
Focus on innovating and creating novel solutions to address pressing social issues
Technopreneurship
Solves complex business problems and bring uniqueness and novelty to the business
Type of ownership
Sole proprietorship
Partnership
Corporation
Cooperative
Sole proprietorship
Owned by single person
Advantage: Easily created and terminated, Ownership and rewards in one person, Flexibility to changes, Minimum regulation and taxation
Disadvantage: Unlimited personal liability, Limitations in capital, It ends when the owner dies or becomes seriously ill, Limited skills and capabilities
Partnership
Two or more co-owns a business
Advantage: Pooling of resources, Ability to obtain capital, Incentive for each partner, Limited regulation and taxation
Disadvantage: Unlimited liability – solitarily liable, Termination can happen, Difficult in reconciling personal or business interests, Problems in share liquidation
Corporation
Exist in contemplation of law, has own identity and distinct from stockholders
Advantage: Limited liability for stockholders, Legal entity protected by law, Ownership is transferrable, Obtaining capital is easier, Employee benefits, Right to vote for a significant decision
Disadvantage: Legal formality and regulations, Costly and time-consuming, Separate taxation, Owner's potential loss of control in the business
Cooperative
Duly registered group of persons with a common interest
Advantage: Open and voluntary membership, Democratic control by members, Education is mandated, Cooperation among members, Direct benefits to members and community, Tax privileges
Disadvantage: Limited interest in shares, Inequality of profit distribution, Pro-poor bias might deviate from the profit orientation
Pricing is a crucial factor in influencing consumer choice
Pricing objectives
Competition-based objective
Cost-based objective
Customer-value objective
Market share objective
Sales orientation objective
Customer-driven objective
Competition-basedobjective
The level of competition within the industry determines the pricing strategy
Cost-based objective
Determined by considering the total cost in production
Customer-value objective
Value determines the price
Market share objective
Centered in two primary goals: 1. expanding the market share, 2. Cultivating strong customer awareness and loyalty
Sales orientation objective
Designed to boost sales volume and maximize profit
Customer-driven objective
Depends on how much the customer is willing to pay
Cost
All the money spent to manufacture a product or provide a service
Costing
The process of allocating cost to various aspect of the business
Product cost
Cost associated with making a product to be sold
Has three components: 1. Direct material, 2. Direct labor, 3. Manufacturing overhead
Direct materials
Raw materials used in the production process
Direct labor
Cost of the labor involved in producing a product
Manufacturingoverhead
Expenses related to the production of the product
Consist: indirect materials, indirect labor, other overheads
Indirect material
Supplies and materials used in the production process but are not a visible part of the final product
Indirect labor
Work performed by individuals not directly engaged in producing goods such as security guards
Otheroverhead
Additional factory overhead costs such as equipment depreciation
Electricity expense is not categorized as material or labor costs
Service costing
Method used to determine the cost of providing a specific service
Service costing is commonly used in a service business such as logistics, accounting firms
Fixed cost
Expenses that do not change regardless of how much activity the business is doing
Includes: rent and lease payment, salaries, utility bills, insurance and loan
Semi-variable cost
Consist both fixed cost and variable cost
Labor cost are divided into two: 1. fixed cost for monthly salaried employees and 2. Variable cost for hourly employees
Variable cost
Subject to change depending on the number of unit produced