Entrepreneurship Ut 1 Reviewer PDF

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ENTREPRENEURSHIP UT 1 REVIEWER I.

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Basic Overview on Entrepreneurship A. What is Entrepreneurship?  RA 9501  Magna Carta for Micro, Small and Medium Enterprises  entrepreneurship  a proactive process that involves opportunity seeking, establishing a business and assessment of a risk  TWO MAIN GOALS OF DEVELOPING A BUSINESS:  provide needs and wants of the people  make and earn a profit B. Benefits of an Entrepreneurship 1. Produces more jobs that equate to an increase in national income 2. Amplifies economic activity of different sectors of society 3. Introduces new and innovative products and services 4. Improves people’s living standards 5. Disperses the economic power and creates equality 6. Controls the local wealth and balances development 7. Reduces social conflicts and political unrest 8. Elicits economic independence and capital formation The Entrepreneur A. Who is an Entrepreneur?  entre  between; French  prendre  to take; French  entrepreneur  unique individual with innate ability and extraordinary dedication to establish a business; while knowing the risks  also a calling; like any job  only expect returns once he added a created value outside opportunity  sees an organization; creates an organization to pursue it  natural talent: be perceptive for opportunities  INITIATIVE  readiness and ability in initiating action  RISK  hazard or chance of loss B. Five Levels of Entrepreneurial Development  Self-Employed  not comfortable with routine jobs of a desk  do not want to conform to a fixed schedule  do things their own-way; agitated when they become controlled  too reliant on themselves  leads to exhaustion  eventually realize that a successful business should work for them  Manager  feel the need to step up and ask some help from the people around  delegate and hire potential employees  tendency to get more people who do not know the exact needs  because they think that scale > profitability  frustration; does not go as plan; some potential problems arise  start knowing their employees better

creates positions that match the requirements of the business  in-charge of virtually everything  Leader  already enjoy seeing their people flourish  great results with minimal supervision  can sleep peacefully at night; freedom and time for themselves  already recognized key leaders in their organization; who trust the entrepreneur and are satisfied  focus on the big picture and strategic direction of their careers  Investor  look for more opportunities for the business to grow or prosper  purchase businesses that can add value to the company  sell their established business (as a franchise)  delegates a suitable manager for operations and will act as directors  True Entrepreneur  have complete full experience; PASSIVE ENTREP  aim for quality and excellence in their work; fully learned  have income that keeps on multiplying even if they do not exert effort  practice the four-step process of thinking: a. Idealization  dream enormously and desire to build b. Visualization  start to create plans to make it reality c. Verbalization  sharing their ideas with others d. Materialization  happens when the vision = reality Common and Core Competencies of An Entrepreneur A. Common Competencies  needed all throughout their entrep. careers  Proactive  reactive > passive; address needs and problems before they have a chance to come true; assure proper research  Agents of Change  innovation champions; opportunities in hopeless situations; don’t settle for mediocrity; develop new products  Risk-takers  weigh potential risks and threats; calculate and if there is a big chance of succeeding, they push through the venture  Sociable  establish relationships with people and customers;  relationship management  key for employee and customer retention  Have a keen eye for opportunities  recognize opportunities even while viewing macrolevel data; assess opportunities and decide if venture should be done or not  Balanced  balance analytical and creative sides; unique ideas and Eureka!  Innovative  minds are rich with big ideas that could be game changers; don’t stop thinking for ideas  Networkers  knows key people to connect with; can be intimidating; takes a lot of guts; gain trust for long-term relations  Decisive  no gray areas; always has a disposition to issues, all aspects have objectives and based on scientific knowledge B. Core Competencies  needed for sustainability and management 

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 Problem Solvers  critical thinking; know to handle issues strategically by immersing into the ins and outs of the business  Specialists  experts in the business; detailed; know specific information on product; think of new ideas; enjoy being on action  Leaders  humble, inspirational, friendly, listen to concerns; act on responsibilities; bring out the best in others  Communicators  use all means to effectively share ideas; provide people with clear views and avoid mishaps; always open communication channels to ensure smooth flow Entrepreneurship and Employment ENTREPRENEUR

EMPLOYEE

PASSIVE INCOME: Earns income even while sleeping Has unlimited income opportunities

ACTIVE INCOME: Income during working hours; “No Work, No Pay” Has a fixed and safe limited compensation income Finds jobs Responsible for making his employer happy Takes regular hours of work; does routine tasks Takes an annual limited rest and vacation (restricted by employer) Taxed on his gross income (actual income) Hired and fired by an employer A reader and follower of the memorandum Can’t be a worker of other similar employers Requires a higher educational background to get a higher position Acquires wealth after retirement after long years of service Mandated to follow a system whether he likes it or not

Gives jobs Responsible for making his customers, the public, happy Takes long hours of hard work during start-up Gives himself enough vacation and rest when enterprise is stable Taxed on his net income (after deducting expenses) Hires and fires an employee A writer and instructor of the memorandum Can be an owner of other similar businesses Don’t require educational decrees Acquires wealth at a young age Creates a system he likes and follows it

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The Entrepreneurial Process  A step-by-step procedure in establishing any kind of business; has five steps: A. Opportunity Seeking and Discovery  beginning of the process  most difficult  take note of interesting trends  generates ideas, recognizes and assesses opportunities and studies the market  IDEA VS OPPORTUNITY:  IDEA – a concept for a product in a market niche that doesn’t exist yet  OPPORTUNITY – a business idea that has a potential to become a commercial product service  ESSENTIAL QUALITIES OF AN OPPORTUNITY:  DURABLE  long-lasting, tenacious and can withstand...