Importance of Entrepreneurship

✓ Entrepreneurship produces more jobs that equate to an increase in national

income.
New businesses need to hire employees. They create jobs and these economic
opportunities uplift and support communities through increasing the quality of life and
overall standard of living.
✓ Entrepreneurship amplifies economic activities of different sectors of society.
Even small businesses from rural and urban areas can contribute to the active
economic activities of the country.
✓ Entrepreneurship introduces new and innovative products and services.
Successful sustainable businesses are focused on the creation of new products,
services, or practices that address or mitigate environmental and social concerns in
new ways. Success in implementing sustainable business practices relies
on entrepreneurship and innovation.
✓ Entrepreneurship improves people’s living standards.
As businesses and employees increase their wealth, they tend to spend more, which
increases demand for more goods and services, furthering economic growth. The
economic activity generated by business leads to an increase in standard of living.
✓ Entrepreneurship disperses the economic power and creates equality.
It balances the economy by distributing national income to more business rather
than to only few monopolies.
✓ Entrepreneurship controls the local wealth and balances regional development.
It makes sure local resources are used properly and that every area has an
appropriate allocation of resources.
✓ Entrepreneurship reduces social conflicts and political unrest.
Imagine that there are no or only few stores in the area. All of you will fight for the
food supplies because the store cannot supply all your needs.
✓ Entrepreneurship elicits economic independence and capital formation.
Entrepreneurs promote capital formation by mobilizing the idle savings of public by
placing profitable business proposition that attracts investment to ensure private
participation in the industrialization process. They employ their own as well as
borrowed resources for setting up their enterprises.
Who is an entrepreneur?
An entrepreneur “sees” what others have overlooked and “takes action” where others
have hesitated. An entrepreneur is a risk-taker with a business idea. If the idea does not
pay off, the entrepreneur will stand the loss. If the idea is a good one, the entrepreneur
will make money (profit) earned from the idea. Entrepreneurs start their own businesses.
An entrepreneur comes from the French word “entreprendre” which means to
undertake.
● An individual who undertakes the risk associated with creating, organizing, and
owning a business.
● Is a person who strongly advocates and correctly practices the concepts and principles
of entrepreneurship in operating and managing the self-owned entrepreneurial venture
● Is a unique individual who has the innate ability and extraordinary dedication to
establish and manage business, acknowledging all the risk and reaping the rewards.
What is an entrepreneurship?
● Is the process by which individuals pursue opportunities without regard to the
resources they currently control.
 ● According to Knights (1921) entrepreneurship is “Having profits from bearing
uncertainty and risk”
● According to Shane (2003) “An activity that involves the discovery, evaluation and
exploitation of opportunities to introduce new goods and services, ways of organizing
efforts that previously had not existed”
● According to Kuratko (2009) “A dynamic process of vision, change and creation that
requires application of energy and passion toward the creation and implementation of
new ideas and creative solutions”
● Is the art of observing correct practices in managing and operating a self-owned, wealth
creating business enterprise by providing goods and services that are valuable to the
customers.
What is enterprise?
● The enterprise is some business structure/object that usually carries out some
commercial activity, creates new job positions, gains some profits.

TYPES OF ENTREPRENEURS
The world of entrepreneurship these days has already evolved, and new terms are coined
to suit an entrepreneurs’ field of expertise. Here are some:
● Technopreneur- entrepreneur who puts technology at the core of his or her business
model
● Social entrepreneur- entrepreneur who takes advantage of the country’s social
problems and turn them into profitable institutions with the intention of helping the
disadvantaged community rather than making a profit.
● Intrapreneur- an employee in a large company or corporation who is tasked to think,
establish and run a new big idea or project about the business.
● Extrapreneur- an entrepreneur who hops from one company to another to act as
innovation champion, providing creative and efficient solutions.
 COMMON AND CORE TRAITS OF SUCCESSFUL ENTREPRENEURS
COMMON TRAIT DESCRIPTION
1. Proactive – Ability to control a situation by causing something to happen rather than
waiting to respond to the situation after it occurs. If the entrepreneur does not have the
proactive personality they will fail to identify the opportunity and lose the chance to make
changes.
2. Agents of change - An entrepreneur that transforms the resources into useful goods
and services, often creating the circumstances that lead to industrial growth.
3. Risk taker - Someone who risks everything in the hope of achievement or accepts
greater potential for loss in decisions and tolerates uncertainty.
4. Have a sharp eye for opportunities/opportunity seeker – a special ability to notice
or recognize a particular thing or quality He has a keen/sharp eye for detail. Your vision of
success is strong, but the road to success is paved with unforeseen problems and potential
opportunities; sharp eyes can spot these early.
5. Sociable Personality - factors such as emotional stability, personal relations,
sociability, consideration and tactfulness are important contributors to the entrepreneur’s
success. An entrepreneur must maintain good relations with customers to be able to
establish good relationship with them.
6. Networkers - A person who forms business contacts through informal social meetings.
Developing and using contacts made in business for purposes beyond the reason for the
initial contact.
7. Decisive - A decisive person shows the ability to make decisions quickly but effectively.
An entrepreneur needs to be decisive to be a good a leader. Decisive means that having the
power or quality of deciding.
8. Balanced- The Balanced Entrepreneur establishes a new paradigm for implementing
balance in the lives of those who try to do it all: work, family, and the pursuit of wellness in
the midst of life’s hiccups.
9. Innovative - Introduces new goods and services , inaugurates new method of
production, discovers new markets and reorganizes the enterprise and discovers new
markets.
CORE TRAITS DESCRIPTION
1. Leaders - The entrepreneurial leader takes responsibility for their actions and those
actions must be more proactive than reactive. They think about achieving organizational
outcomes in an innovative way and working with a diverse group of people and resources to
achieve these goals.
2. Communicators - Good communicator gets your core message out to stake holders,
sets clear expectations, inspires your team , opens up opportunities and positions you as a
strong leader.
3. Specialists - Entrepreneurs are experts in their chosen business. They are tactical and
are very keen with details.
4. Problem solvers - This skill enables entrepreneurs to identify problems and turn such
problems into opportunities.

CAREER OPPORTUNITIES IN ENTREPRENEURSHIP

● Business consultant – provides advice about business issues, such as development
and implementation of business plans, how to streamline operations or to expand into
new market.
● Management analysts-the person who evaluates business systems procedures and
operations
● Research and development-to work in R&D you need to understand business
concept, procedures and practices.
 ● Not –for-profit- fundraiser- able to raise funds requires understanding of the
importance of business and networking relationships.
● Intrapreneur- is an inside entrepreneur within the large firm who uses entrepreneurial
skills without incurring the risk associated with those activities.
● Sales-someone who works in sales. They need to know how the business runs.

ENTREPRENEURSHIP OR EMPLOYMENT
IMPORTANT CAREER ENTREPRENEUR EMPLOYMENT
FACTORS
1. Income - Income generated passively even -Income generated actively
when the entrepreneur is resting (ex. no work = no pay)
-Income is unlimited -Income is usually fixed
depending on the success of -Income is earned whether the
business business is successful or
-Income is only earned when the unsuccessful.
business is successful
2. Hiring and firing, -Provides job -Seeks for a job
organizational set-up, -Fully responsible in serving the -Has the goal of satisfying the
major customers, making the business employer.
key results area profitable/ sustainable and -Fully dependent on the
providing employee satisfaction employer’s performance
-Has the power to disengage non- -Can only work for the current
performing employees employer exclusively
-Can venture into expansion of the
business.
3. Daily tasks -Performs all necessary variable -Has routine tasks and works on
tasks to establish and manage a regular or normal hours
startup business -Follows policies, procedures and
-Prepares policies, procedures and memoranda from the employer.
memoranda of the business.
4. Leisure time and -Has a flexible schedule and can -Has limited number of vacation
vacations take unlimited number of vacation days imposed by the employer
days
5. Taxation -Taxed on the net income, can -Taxed on the gross income;
claim taxable income deductions cannot use expenses incurred
for allowable expenses incurred byrelated to the job such as food and
the business transportation expenses to claim
for deductions from taxable
income.
6. Comfort level at work -Comfortable in doing multiple -May be comfortable with routines
and challenging tasks and takes and minimal risks
accountability with the risks and
profits of the business
The Entrepreneurial Process
It is a step-by-step procedure in establishing any kind of business that an entrepreneur
has to undergo.

Four Aspects
Opportunity Spotting and Assessment

Developing a Business Plan

Determining the capital needed

Running the business

● Opportunity Spotting and Assessment

- This is the beginning of the process and is considered the most difficult.
Entrepreneurs at this point take note of interesting trends in their environment.
Consumers are reliable sources of opportunity information because market needs
originate from them.
- Entrepreneurs should already think in advance how they will position the product
or service in the market and showcase its unique selling proposition.
● Developing a Business Plan
- Entrepreneurs should formulate a business plan when they have already spotted
and assessed the opportunities for a market.
- A business plan is a comprehensive paper that details the marketing, operational,
human resource, financial, strategic direction, and tactics of the business. The business
plan will be the core guide and direction of the entrepreneur in calculating the resources
needed, assessing how to obtain these resources effectively, and running the business
sustainably.
● Determining the capital needed
- It is mandatory in the entrepreneurial process to calculate the resources needed to
establish the business and compare this against the entrepreneur’s current resources.
- Allowance must be considered as well because there will be times that resources
will be inadequate or unsuitable.
● Running the Business
- This is the part where the entrepreneur use the resources allocated for the new
venture.
- All aspects of the business plan should be critically observed from operations,
marketing and sales, human resources, finance, and strategy implementation.

3S of Opportunity Spotting and Assessment

eeking

S creening
eizing
What is Opportunity?
It is an entrepreneur’s business idea that can potentially become a commercial product
or service in the future.
S1: Seeking the Opportunity

It is the first step and is the most difficult of all due to the number of options that the
entrepreneur will have to choose from. It involves the development of new ideas from various
sources.

Macro-environmental Sources Micro-market

1. STEEPLED. This is a mnemonic for 1. Customer preferences, interests,
sociocultural, technological, economic, and perception
environmental, political, legal, ethical 2. Competitors
and demographic factors. This 3. Unexpected opportunities from
represents the general environment customers
where an entrepreneur identifies 4. Talents, hobbies, skills and
business opportunities from and where expertise
the future business is about to operate. 5. Irritants in the marketplace such
2. Industry. This is the source of current as deterrents or discouragements
trend on what is happening in the because of the price, problems,
industry where the future business will complaints, and delays
belong to. 6. Location
3. New Discovery of Knowledge. These are
new trends that can be the core
business of a new venture.
4. Futuristic Opportunities. These are
future business ideas that are like
portraits entrepreneurs paint in their
mind and set out to create.

S2: Screening the Opportunity

It is the process of cautiously selecting the best opportunity. The selection will depend on
the entrepreneur’s internal and external intent.

S3: Seizing the Opportunity

It is the last step in opportunity spotting and assessment. This is the “pushing through”
with the chosen opportunity.
Identifying Customer Needs
Identifying customer needs is mission-critical for businesses looking to create a
product that truly speaks to their customers’ problems.
Customer needs are the named and unnamed needs your customer has when they
come in contact with your business, your competitors, or when they search for the solutions
you provide.
However, identifying the needs of your customers is easier said than done. There are a
couple easy ways to gain insight into what your customers really need from you.
Methods to Identify Customer Needs:
1. Focus Groups - A focus group is a marketing research tool in which a small group of
people (typically eight to ten individuals) engages in a roundtable discussion of selected topics
of interest in an informal setting. The focus group discussion is typically directed by a
moderator who guides the discussion in order to obtain the group's opinions about or
reactions to specific products.
2. Social Listening - Social listening gives brand an opportunity to track, analyze, and
respond to conversations through brand improvement and development. It’s a crucial
component of audience research. Start to ask around, hear other opinions about your
business. You start to listen and based on what you hear you start to make changes that
people like.
3. Customer Needs Analysis Survey - The customer needs analysis is typically
conducted by running surveys that help companies figure out their position in their
respective competitive markets how they stack up in terms of meeting their target customers'
needs. The survey should primarily ask questions about your brand and competitors, as well
as customers' product awareness and brand attitudes in general.
4. Means-End Analysis - Once you've conducted the customer needs analysis survey, you
can use the answers to get a fuller picture of the reasons why your customers purchase from
you, and what makes your product or service stand apart from your competitors'. A means-
end analysis analyzes those answers to determine the primary reasons why a customer
would buy your product. Those buyer reasons can be divided into three main groups:
● Features: A customer buys a product or service because of the features included in
the purchase. If the customer were buying a laptop, for example, they might buy it from
you because it's smaller and lighter in weight than other options.
● Benefits: A customer buys a product or service because of a benefit, real or
perceived, they believe it will offer them. The customer might also buy the laptop because
it syncs easily with their other devices wirelessly and can be used while travelling.
● Values: A customer buys a product or service for unique, individual values, real or
perceived, they believe it will help them fulfill. The customer might think the laptop will
help them to be more creative or artistic and unlock other personal or professional artistic
opportunities.
Meeting Customer Needs
So, how do you meet customer needs?

1. IDENITIFY
2. DISTRIBUTE
Identify what your customers and
potential ones need from you Distribute the information to
through focus groups, social relevant stakeholders in your
listening and other methods organization.
mentioned above.

4. COLLECT 3. CREATE

Collect customer feedback on how Craft product features or create

your efforts meet their content that speaks to your
expectations. customer’s needs.
 When something is “viable,” it is capable of not only germinating, but growing. In
product development terms, viability means that a product not only gets purchased, but it
performs well enough to be recommended to others. Its popularity spreads organically, or
virally. If you want your product or service that both initiates a sale and generates word of
mouth, it must meet customer requirements and if possible, exceeds their expectations.
Customer Requirements is particular characteristics and specifications of a good or
service as determined by a customer. Most of the times the customer is enabled to state the
requirements precisely while others can be characterized as “nice to have.” Some are never
expressed, but are critically important to how the customer will arrive at a purchase decision
and influence how the consumer perceives the product, brand and provider. It is therefore
the responsibility of the supplier to reconsider the attributes of desired/supplied product or
service in terms of the implied or real requirements.
Things to Consider During a Product Viability Analysis
To start, you’ll need to ask yourself some serious strategic questions about your product’s
viability.
● Is the product idea practical?
● What obstacles or challenges lie ahead?
● Will it need support services of some kind to ensure customer satisfaction?
After answering these questions, you’ll need to shift your focus to the more tactical aspects
of your product and how it will impact your business model.

1. Consider product size and weight.

● The size and weight of your product will have an impact on how much you sell.
● If the product you’re considering is large, awkwardly shaped or heavy, you may have
high shipping costs. Think you can pass the cost of shipping on to your customers? Think
again.
● Shipping cost is a top reason for cart abandonment.
● If you can provide your customers with free, fast shipping, you significantly increase
your chances of winning their loyalty.
● That being said, free shipping is tightening profit margins across all industries,
making it harder to stay competitive and offer a leading customer experience. By having
a smaller product, you can minimize shipping costs and satisfy your customers’ desire for
quick and easy delivery.
2. Consider product fragility.
● Fragile products need extra attention when shipping to ensure they arrive in
perfect condition.
● Fragility shouldn’t completely dissuade you from offering a certain product, but
keep in mind that opting to sell fragile goods will increase costs for shipping, inventory
and customer service.
3. Consider SKUs.
● An SKU, or stock keeping unit, typically refers to color, size, gender and other
variations of a single product.
● The more SKUs you have, the more attention, time and money you will need to
spend in tracking and maintaining inventory.
4. Consider product lifespan.
 ● Having a consumable or disposable product is often perceived as a great choice from
a business perspective because you can improve the way you earn customers’ loyalty and
ultimately, build your business off of repeat sales.
● There are many successful businesses out there that sell perishable products.
However, their road to success didn’t come without challenge—like storage, shipping and
production.
5. Consider seasonality.
● Seasonality means that there are different levels of demand for a product
throughout the year.
● Of course, there are different aspects to consider, including where your target
customers are located (if you’re selling internationally—keep in mind your winter could be
their summer).
● To make sure you can manage a seasonal product or capitalize on holiday buzz,
you’ll need to determine your own business downtime, and work to off-set expectations
and costs during those periods.
6. Consider price point.
● Remember, you’ll want to make sure your prices are still attainable for your target
customer. So, when you determine the market viability, keep in mind how you can
maintain functionality and quality.
7. Consider competition.
● That’s not to say that you can’t be successful selling a commonly-found item, but
the more niche your products, the less competition you’ll have—and the more leverage
you have to win a large share of the market.
● Don’t let this deter you—after all, competition can be a good thing.
8. Consider yourself.
● Yes, on top of choosing a product that’s viable in the market, you should select one
that you actually enjoy yourself or one that solves a problem you have personally
experienced.
● Building a successful business often requires long hours, and those can either fly
by or drag on endlessly depending on how passionate you are about what you’re selling.
● Be passionate, find yourself a niche and start selling to other passionate people just
like you.
 There are thousands of products and services available to consumers today. And there
are unlimited opportunities for you to enter the marketplace and compete effectively with a
new product or service that's better in some way than what's already being offered by your
competitors.
The most important thing you can do before deciding what to sell is to think. And the
more you think about a product or service before you bring it to market, the better your
decisions will be.
So how do you start? To make a product successful, you must be personally and
emotionally committed to its success. Once you've got a product or service in mind, you need
to begin with a self-analysis:
● What kinds of product do you like, enjoy, consume and benefit from?
● Do you like the product or service you're planning to sell?
● Can you see yourself selling this product or service for the next five to 10 years?
Then analyze the product or service from the customer's point of view:
● What does the product achieve, avoid or preserve for the customer?
● How does the product improve your customer's life or work?
There are number of questions you have to ask yourselves before finally select the best
product or service that will meet the market need.
For a product or service to succeed, it must be the right product, being sold at the right
time, to the right customer, in the right market. It must be produced and sold by the right
company, and the right people. What you have to decide is this: Is this product right for you?
But what if product launches fail? Is it because a brand pushes it to launch without
stopping to find out if the product is something people actually want especially without input
from target audience?
Whether you’re looking for the safest bet or wondering if a risky concept might actually
pay off, product testing can help you find a concept that meets your goals and appeal with
your audience. With a product concept test, you can gauge customer sentiment and find the
proven winners in a pool of different product ideas.
Product testing gives your target audience a range of options and asks them to provide
feedback on each one. With product testing, you can compare metrics like purchase intent,
quality, and value to find out which product concepts customers like best.
Why you should test your product concepts before launch? By asking for audience
feedback on your product concepts before moving forward with a launch, you can identify
successful product ideas right off the bat. This ensures that you commit money and
resources to the right projects.
When you use product testing, you take on a product launch with 4 major advantages:
1. IDENTIFY FLAWS AND DEFECTS
During a product test, consumers experience your product and share their input on
it. By learning about a taste concern e.g. too sweet or too sour, in new snack product for
example, allows you to fine tune the product before full launch. Customers also may
identify certain attributes or features of a product that they would like you to modify.
Making the modification may contribute to better success when you release the final
version to the market. Not to mention the saving in production costs to the manufacturer.
2. POSSIBILITY OF ATTRACTING EARLY ADOPTERS
Early adopters, those customers who like to be the first to buy a new product, may
become loyal to your business when you are the one to launch exciting new products.
Getting these cutting-edge buyers on your side is especially beneficial in creating a domino
effect through word-of-mouth advertising after a product launch. Even if those testers find
flaws, they may feel loyal because they were invited to share their opinions.
3. AVOID MAJOR ERRORS
Product evaluation or testing can protect your business from major mistakes that can
ruin the brand. If you launch a product without testing, negative features could cause
much greater harm to a brand than necessary.
4. GATHER MARKETING INSIGHTS
Companies gather data through product tests that is used to reveal the features and
benefits users like, as well as those they don’t like. This data is valuable when preparing
promotional strategies. In advertising, the company wants to focus on communicating
benefits that were most valued by the test subjects e.g. smooth texture, easy to spread,
lighter, easy to use, etc. If a high percentage of trial users were inspired by certain benefits,
it is likely that many consumers in the broader target market feel the same.