OPST 127 LE 3

• Entrepreneurship


  The process of planning, organizing, operating and assuming the risk of a business
• Entrepreneur


  From the French word "entrepender" meaning "to undertake"
• Most start up entrepreneur ventures are small businesses
• Most big businesses and companies started out as a small business venture
• Small business


  A privately owned venture by one individual or a small group of individuals, with sales and assets that are not large enough to influence its environment
• Entrepreneurship vs Small Business

  • Amount of wealth creation - entrepreneurship generates substantial wealth, not just income
  • Speed of wealth creation - entrepreneurial ventures create wealth faster
  • Risk - entrepreneurial ventures have higher risk due to speed and amount of income
  • Innovation - innovations provide the competitive edge for entrepreneurial ventures
• What makes someone an entrepreneur?

  • Creative
  • Dedicated
  • Determined
  • Flexible
  • Leader
  • Passionate
  • Self confident
  • Smart
• Concept of Entrepreneurship


  • New products
  • New production methods
  • New markets
  • New forms of organization
• Why do people want to become entrepreneurs?

  • Personal financial gain
  • Want to be their own boss
  • Want to be involved and in control
  • Want to trailblaze
  • Want to contribute to their environment
  • Want to achieve something
• Role of entrepreneurship in society


  • Create jobs
  • Bring in innovation
  • Provide raw materials for big businesses
  • Create a new method or process for product development
• How to become an entrepreneur


  1. Choose an industry to compete in

  2. Emphasize distinctive competencies

  3. Write a business plan
• Business categories


  • Existing product for an existing market
  • Existing product for a new market
  • New product for an existing market
  • New product for a new market
• Existing product for an existing market


  • Winning over consumers through merchandising appeal, advertising, etc.
  • High entry cost, uncertain profit
  • Most difficult category/strategy for start up companies
• Existing product for a new market


  • Venue for selling is the focus
  • Create a new group of consumers
  • Requires extensive research
  • High risk, considerable profit
• New product for an existing market


  • Modification of product
  • Initially may produce high profit due to consumer curiosity
  • Requires merchandising/advertising strategies
• New product for a new market


  • Riskiest strategy - product and market is unknown
  • Requires research and planning
  • If successful provides the highest potential for a big business venture
• Strategies


  1. Identify new product and markets

  2. Make the first move - First mover advantage (no competition)

  3. Write a business plan with goals/objectives and activities

  4. Think globally
• Starting a business


  • Buy an existing business
  • Start from scratch
• Buying a business


  • Proven track record
  • Established networks, customers, suppliers, etc.
  • Inherit previous owners' problems
• Starting from scratch


  • New ideas, new concepts
  • Freedom to choose suppliers, equipment, location, etc.
  • Avoid inheriting problems from previous owners
  • Higher risks and uncertain
• Financing your business


  • Personal resources
  • Family loans
  • Strategic business alliances
  • Financial partnerships and mergers
  • Established credit and loan institutions
• Franchising


  A form of business by which the owner (franchiser) of a product, service or method obtains distribution through affiliated dealers
• Advantages of Franchising


  • Reduced financial risk for new businesses
  • Assured quality control due to centralized training, supplies, personnel
  • Established marketing plan/strategy
  • Branding
• Disadvantages of Franchising


  • High start up capital
  • Institutional limitations imposed by franchisor
  • Control of franchisor on business decisions
• Entrepreneurial Ventures in the Philippines

  • Function Enablers - Traveling therapist company
  • RehabTech - designer/manufacturer/distributor of therapy aids
  • TheraToys - designer/manufacturer/distributor of therapy toys and materials
• Choose a product and market 


  Research

  timing

  purchasing