Entrepreneurship

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SY 2023-2024

B175 Entrepreneurship 1st SEMESTER

GEC 13a MIDTERMS REVIEWER FM – 2A


BUSINESSMAN VS. ENTPRENEUR
 A person who starts  Brings his own
in an old concepts unique idea to run
or ideas. start-up.
 Makes his place with  Creates the market
best effort and for his own.
dedication.
 Market Player  Market Leader –
first to make a
market.
 Oriented towards  Focused on
profit and give essence.
importance to its
employees.
 Risk factor is low but  Take risks.
faces competition
due to similarity.

3 PRIMARY REASONS WHY PEOPLE WANTS TO BE AN ENTREPRENEUR


1) The desire to be their own boss.
2) The desire to pursue their own ideas.
3) Financial Rewards.

HUMAN DEVELOPMENT TO ENTREPRENEURSHIP


1. Economics
2. Our history

DEVELOPED COUNTRIES (UNDEVELOPED)


 Totally big companies not in land but in economic
 China and US (heavy competition)

UNDEVELOPED COUNTRIES (DEVELOPING COUNTRIES)


 Problem
 Difficulty in life
 Economy is not that high.
 Philippines: biggest problem: inequality, wealth inequality, scarcity.

PHILIPPINE CULTURE IN ENTREPRENEURSHIP AND DEVELOPMENT


 Perceive chances and opportunities in the environment.
 Take calculated risks – when to stay and when to survive.
 Produce and use capital.
 Introduce innovation.
 Organize the business – recognize weakness.
 Make plans and decisions.
 Make profits.

PUTTING PHILIPPINE CULTURE INTO ENTREPRENEURSHIP


 Ethics
 Mamaya na Habit
 Bahala Na System

MICRO SMALL-MEDIUM ENTERPRISE


 Ultimate provider of job in the Philippines.

REVIEWER BY: LYKA BELGICA


SY 2023-2024
B175 Entrepreneurship 1st SEMESTER

GEC 13a FM – 2A
 It is defined as MIDTERMS REVIEWER
the basis of asset and number of employees.
 Republic Act 6977 amended by Republic Act 8289.
o Law: Republic Act No. 9501
o The act to promote – supports micro, small, and medium enterprises.
o It intends to strengthen entrepreneurs of MSME.
o Programs provided by the government – DTI, RIC, DA.

ASSET VALUE EMPLOYEES


MICRO 3M or less 1–9
SMALL 3M to 15M 10 – 99
MEDIUM 15M to 100M 100 – 199
LARGE More than 100M Ex: Jollibee

RATIONALE FOR PROMOTING MSME


a) Relative ease to set up.
Lower government requirement.
The larger the business, the harder it is to register.
b) Employment Generation – generating jobs through MSME.
c) Flexibility and lower capital cost per job created.
The smaller the business, the lower the capital.
d) Provision for niche services that may not be profitable for large businesses.
e) Distribution of Income
f) Utilization of Local Resources
g) Exporting Earnings
h) Seedbed for Entrepreneurs
Training ground, initial process.

5 SECTORAL INDUSTRY DISTRIBUTION OF MSME


1) Wholesale and retail trades; repair of motor and vehicles used.
 More on merchandising.
 Channel.
2) Accommodation of Food Service Activity
3) Manufacturing Services
4) Other Service Activities
5) Financial and Insurance Activityv
 Lending services.

MAJOR CHALLENGES AND ISSUES FOR PHILIPPINE MSME


GENERAL ISSUES
 Capital
 Technical Know-How
 Packaging
1) Competition in export markets and influx of mass production at a cheap price.
2) Existence of small domestic market and limited local market.
3) Need for imported parts and materials and limited local market.
4) Lack of basic management techniques.
5) Barriers to start-up business.
Lack of support of fundraising in research and development.

6) Limited economic activities at the local level.


Experts in business management have suggested the following steps in arriving at a business
opportunity:

REVIEWER BY: LYKA BELGICA


SY 2023-2024
B175 Entrepreneurship 1st SEMESTER

GEC 13a MIDTERMS REVIEWER FM – 2A


Step 1
Idea Generation
Step 2 Selection and Hearing
Step 3 Formulating the concept of the business by doing the following analyses:
a) Resource Analysis
b) Environmental Analysis
c) Personal Values Analysis
OPPORTUNITY IDENTIFICATION AND SELECTION
IDEA GENERATION
A sound business idea is the economic opportunity which is within the reach of the entrepreneur
with the intention that it will provide a desirable value in order to save time, money, and effort in
pursuing goals.

Typical examples of business ideas are:


 An old type of business can be professionalized.
 A standard product can be customized.
 New technology can be adapted to manufacture an old product.
 Imported products can be replaced by local products.
 Business operations can be internationalized.
To generate sound business ideas, one may look into the following sources:

1) ENVIRONMENT
a) Identify the needs and wants and draw ideas of a product or service.
b) Focus on specific sector or type of customer or client by doing market segmentation.
c) Identify problems with potential business opportunities.
d) Look into the social, technological, economic, environmental, and political aspects of the
business environment at a macro level.

2) MARKET
a) Analyze demand and supply gaps.
b) Study import – export movements.
c) Explore substitutes to existing products.
d) Read industrial information from technical and business journals, and research studies.
e) Consider forward – backward industry linkages.

3) AVAILABLE COMMUNITY SKILLS


4) BUSINESS ASSISTANCE PROGRAMS
a) Visit the office of Department of Trade and Industry (DTI)
b) Other government and private institutions and non-governmental organizations (NGOs)

SELECTION AND SCREENING


After generating the business ideas, information must be collected by using any of these three (3)
methods:
1) Ad Hoc Scanning – usually short – term, infrequent and initiated during crisis.
2) Regular Scanning – involves studies made on regular basis, usually annual.
3) Continuous Scanning – use of current information to immediately respond to business
threats significant damage is done.

Specifically, the various ways of collecting information from the environment can be made thru:
 Accessing networks
o Networks may be agencies, organizations, or personal contacts.

 Public meetings, trade fairs, and fora.


o Trainings or Seminars

REVIEWER BY: LYKA BELGICA


SY 2023-2024
B175 Entrepreneurship 1st SEMESTER

GEC 13a MIDTERMS REVIEWER FM – 2A


 Focused – group discussions.
o These are small gatherings of group of people whose opinions and expertise on a
particular aspect of an industry are sought. The group may be concerned with a
certain product and what the product can do for its intended market and the
industry it represents. Outputs of focused groups can be revealing and may provide
indicators of gaps in the market, which you, the budding enterprise can fill in.
 Key people surveys

o Participants are asked on their opinions on trends, problems, opportunities, threats,


strengths, and weaknesses.
 Publications
o You can use available reading materials such as trade or industry journals, or
publications containing information on trends, opportunities, and related topics or
issues.
 In-depth interviews
o Conduct of structured interviews.
 Usage and awareness studies
o Based on written questionnaires which is mailed to the users of a particular
product.

THE SCREENING PROCESS


This is to shorten your lists of choices. Screening is done primarily so you can focus on the
business that is suitable to your situation.
Screening is then made to shorten the list of business ideas. This is made possible by doing these
two (2) methods, namely:
1) PERSONAL – LEVEL SCREENING (MACRO SCREENING)
- Apply the process to yourself as a business proponent.
a) Personal Preference
b) Educational Background
c) Work Experience
d) Network of Business Contacts
e) Family Support

2) FIRM – LEVEL SCREENING (MICRO SCREENING)


- Uses generally accepted business criteria in determining the feasibility of a proposed
enterprise.
a) Market Demand – demand of the product in the market.
b) Technology – Technical Viability
a. Availability of Technology Skills
b. Availability of Raw Material
c. Labor
c) Financial or Capital Requirement
d) Profitability
e) Government Support

FORMULATION OF BUSINESS CONCEPT


To strategically improve the opportunity seeking process, a SWOT (strengths, weaknesses,
opportunities, and threats) and personal value analysis must be done in three (3) ways:
1) RESOURCE ANALYSIS

REVIEWER BY: LYKA BELGICA


SY 2023-2024
B175 Entrepreneurship 1st SEMESTER

GEC 13a MIDTERMS REVIEWER FM – 2A


- Indicates what the potential business is capable of doing at the start of the business
operations in terms of its resources.
- Strengths – describe what a business enterprise excels and what separates it from the
competitors.
- Weaknesses – prevents it from performing at its optimum level.

A. MONEY
B. MATERIALS
C. MACHINES
D. METHODS
E. MANPOWER
F. MANAGEMENT
G. MOMENT (TIME)

2) ENVIRONMENTAL ANALYSIS
- Indicates whether the potential business can survive in the business environment or not.
- Opportunities – refer to favorable external factors that could give the potential business
a competitive advantage.
- Threats – refer to external factors that could harm the potential business.
A. SOCIO-CULTURAL ENVIRONMENT
B. TECHNOLOGY AND TECHNICAL ENVIRONMENT
C. ECONOMIC ENVIRONMENT
D. NATURAL ENVIRONMENT
E. POLITICAL SITUATION
F. PEACE AND ORDER SITUATION
G. POPULATION DEMOGRAPHICS
H. GOVERNMENT PROGRAMS
I. GLOBAL ENVIRONMENT

3) PERSONAL VALUE ANALYSIS


- Indicates the personal evaluation of the philosophy, principles, outlook and
aspirations of the entrepreneur towards the potential business.
- These are non-monetary values.
- They indicate your personal attitudes towards the business.
- They also represent the kind of satisfaction you like to give to your clients and other
stakeholders as well as yourself.
 What are my guiding principles in business?
 How do I expect to satisfy my customers?

THE GEM RESEARCH PROJECT


The Global Entrepreneurship Monitor (GEM) research project studies entrepreneurship in different
countries to better explain the role of small and medium enterprises in economic development.

Sixteen years after the initial 1997 study by Babson College and London Business School, over
100 countries now participate. GEM is now the largest worldwide study on entrepreneurship.

GEM CONCEPTUAL FRAMEWORK

REVIEWER BY: LYKA BELGICA


SY 2023-2024
B175 Entrepreneurship 1st SEMESTER

GEC 13a MIDTERMSasREVIEWER FM – 2A


GEM defines entrepreneurship “any attempt at new business or venture creation, such as
self-employment, a new business organization, or the expansion of an existing business by
an individual, a team of individuals, or an established business” (Reynolds et al. 1999, p. 3.)

GEM tracks the entire entrepreneurial process: from the stage where a potential entrepreneur
is identified to when the business is considered established.

Some useful definitions to follow:


 Potential Entrepreneur – in the pre-conception stage, is one who intends to set up a
business or pursue self-employment within the next 12 months.
 Nascent Entrepreneur – in the conception stage, is one who has started a business
within the last 12 months.

A firm’s birth – covers the first year of a business.


A firm’s maturity – said to be attained after three and a half years.

 Within the GEM Framework, this period of 42 months makes up the so-called Total
Early-Stage Entrepreneurial Activity or TEA.
 Business in existence for longer than 3.5 years are considered Established Business
or EB.

Furthermore, within the model, the type of entrepreneurial activity (high growth, innovative,
global) is influenced by two factors: the country’s social value towards entrepreneurship and
individual’s psychology, demographic characteristics, and motivations.

On the other hand, social and individual attitudes toward entrepreneurship are enhanced or
discouraged by – social, cultural, economic, and political conditions within a country.

These factors are composed of basic economic requirements, efficiency enhancers, and the
level of business sophistication within the country.

REVIEWER BY: LYKA BELGICA

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