Marian School of Quezon City

Fides et Veritas
S. Y. 2021-2022

Module for Entrepreneurship

Prepared by: Edited by:

Mrs. Luzmarie B. Adula Mr. Antonio Calipjo Go

Subject Teacher Academic Consultant

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Table of Contents

Chapter 1 Nature and Relevance of Entrepreneurship ………………………….. …….. 3

LESSON 1 Concept of Entrepreneurship ……………………………………………… … 3
LESSON 2 Development of Entrepreneurship ……………………………………………. 7
LESSON 3 Relevance of Entrepreneurship and Entrepreneurs in Economic Development
and society……………………………………………………………………… 10

Chapter 2 Entrepreneurs and Entrepreneurial Competencies …………………………… 16

LESSON 1 Concept of Entrepreneurs Today ……………………………………………. 17
LESSON 2 How Entrepreneurs Think ……………………………………………………. 20
LESSON 3 Entrepreneurial Competencies ……………………………………………….. 23
LESSON 4 Entrepreneurial Decision-making as a Core Competency…………………….. 27

Chapter 3 Career Opportunities …………………………………………………. …… 29

LESSON 1 Entrepreneurship Career Opportunities for Academic Track ………… ……. 29
LESSON 2 Career Opportunities Using Entrepreneurship Competencies for
Students in the Sports, Arts, and TVL TRACK …………………………….. 32

Chapter 4 Starting a Business …………………………………………………………. 34

LESSON 1 Factors to Consider in Starting a Business ………………………………….. 34
LESSON 2 Identifying Business Opportunities………………………………………….. 36
LESSON 3 Types of Business Available to Entrepreneurs ……………………………… 39
Chapter 5 Marketing …………………………………………………………………… 42
LESSON 1 The 7Ps of Marketing ………………………………………………………. 42
LESSON 2 Market Research ……………………………………………………………. 47
LESSON 3 Branding ………………………………………………………………….... 50
LESSON 4 Marketing Management Practices …………………………………………… 51
LESSON 5 The Business Plan …………………………………………………………… 54
….
Chapter 6 Operations and Human Resource Management ……………………… …. 60
LESSON 1 Productions/Operations Management ……………………………………… 60
LESSON 2 Human Resource Management……………………………………………… 63
…..

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CHAPTER ONE

NATURE AND RELEVANCE OF ENTREPRENEURSHIP

Entrepreneurship is a catchword in this era of global economy. It is a foundation and catalyst for
economic growth and innovation across nations. Entrepreneurial activities thrive in societies with
supportive government policies and which give much importance to innovativeness and risk-taking to
turn new ideas into breakthrough solutions. Small and medium enterprises (SMEs) are concrete
manifestations of entrepreneurship.

Objectives:
• Explain the concepts of entrepreneurship;
• Discuss entrepreneurship in some countries and in the Philippines;
• Trace the development of entrepreneurship;
• Explain the entrepreneurial processes, and
• Discuss the relevance of entrepreneurship in economic growth and society.
Essential Question:

• Why is entrepreneurship important to our economy?

LESSON 1: Concept of Entrepreneurship

Over the years, the meaning of entrepreneurship has had a lot of variations given by different contributors
from early on to the present time.

CONTRIBUTOR DEFINITION
Knight (1921) Having profits bearing uncertainty and risk.

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 Schumpeter (1934 Carrying out of new combinations of firm organization-new products, new
services, new sources of raw materials, mew methods of production, new
markets, new forms of organizations.
Hoselitz (1952) Uncertainty bearing…coordination of productive resources… introduction
of innovations and provision of capital.
Cole (1959) Purposely activity to initiate and develop a profit-oriented business.
McClelland (1961) Taking moderate risk.
Shapero (1975) A kind of behavior that includes: (1) initiative taking, (2) the organizing or
reorganizing of social economic mechanisms to turn situations to practical
account, and (3) the acceptance of risk failure.
Casson (1982) Decisions and judgments about the coordination of scare resources.
Ronstadt (1984) Dynamic process of creating incremental wealth.
Drucker (1985) Behavior rather personality trait. Its foundation lies in concept and theory
rather than in intuition.
Gartner (1985) Creation of new organizations.
Hisrich & Brush Process of creating something new with value by devoting the necessary
(1985) time and effort; assuming the accompanying financial, psychic, and social
risks and uncertainties, and receiving the resulting rewards of monetary
and personal satisfaction.
Stevenson & Pursuit of opportunity without regard to resources currently controlled.
Grousebeck
(1989)
Hart, Stevenson Pursuit of opportunity without regard top resources currently controlled,
and Dial (1995) but constrained by the founders’ previous choices and industry-related
experience.
Shane (2003) An activity that involves the recovery, evaluation and exploitation of
opportunities to introduce new goods and services, and ways of organizing
markets, processes, and raw materials through organizing efforts that
previously had not existed.
Kuratko (2009) Dynamic process of vision, change and creation that requires an application
of energy and passion toward the creation and implementation new ideas
and creative solutions.
Dyck and Neubert Conceiving an opportunity to offer new and improved goods or services,
(2012) showing the initiative to pursue that opportunity, making plans, mobilizing
the resources necessary to convert the opportunity into reality.

Although each of these definitions view entrepreneurship from a slightly different perspective,
they all contain the following common elements:
• Innovation
• Opportunity seeking and exploitation
• Resource mobilizing
• Encountering risks and uncertainties
• Economic and personal rewards

There are a lot factors that influence the friendliness of a country to entrepreneurs; among these
are the employment regulations, bankruptcy laws, and the tax policy of the country. But there ar e
still people who will take up the challenge to become an entrepreneur in spite of the competitive
business environment. Culled from different sources, the following are examples of
entrepreneurship in these countries

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1. Unites States of America: Noted to be one of the friendliest countries for entrepreneurs in the world,
the United States is home to thousands of successful entrepreneurs as shown by companies like
Apple, Google, Starbucks, Walmart and Walt Disney.

2. China: This emerging country is home to budding entrepreneurs who manufactures different
products that range from toy, gadgets, electronics and cars. Most of the new businesses in this
country are home-grown because of a new breed of entrepreneurs who realize the potential in their
country. However, a lot of products in China have generic brand names though.

3. Singapore: This is literally a small country that controls a significant portion of the economy in Asia.
Many of their entrepreneurs innovate on existing services for local and international use.

4. Canada: Entrepreneurs in Canada are exploring opportunities over the internet. For example: people
from a region called Sanikiluag are known for their wood carving skills and entrepreneurs are selling
their products online.

5. India: Entrepreneurship plays a dominant role in the country’s economic landscape, with the
government providing a venue, called the Delhi Huts, to start-up entrepreneurs which promote local
handicrafts. cottage Industries compound is another venue put up by the Indian government for the
development of local products manufactured and retailed by start-up entrepreneurs. In fact, India is
one of the countries in Asia-Pacific rim with a strong base of entrepreneur organizations led by the
youth and women.

6. Taiwan: Entrepreneurship is encouraging here through the small and medium enterprise incubation
centers for the purpose of nurturing young firms, new products and technologies. These incubators
provide space, facilities, hands-on management assistance and access to technologies and financing
to clients, helping them to survive and grow during the start-up period. There are hundreds of
incubators that have been sponsored by the Taiwan SME Development Fund.

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7. Hong Kong: With a knowledge-based economy, Hong Kong utilizes its human resources to make its
economy the best possible through entrepreneurship. There are many entrepreneurial endeavors
that flourish from the real estate enterprises, to the retail and food businesses. Entrepreneurial
activities related to tourism and agricultural exports have likewise continually received strong support
both from the government and private sectors. Hong Kong is known as a “shopping haven”.

8. Thailand: The extent of government support to entrepreneurs is very evident in, for example, in its
international airport in Bangkok, where a huge section is subsidized by the Bureau of Small and
Medium Enterprises for the promotion of local products marketed by entrepreneurs. Tourism for
international markets and agricultural exports are two major sources of income generate d by Thai
entrepreneurs.

9. Malaysia: This country is becoming friendlier to entrepreneurs and this is apparent in the number of
businesses, both international and local, which decided to locate in Malaysia. Its current emphasis on
tourism as a business venture for entrepreneurs is gaining popularity.

10. South Korea: South Korea emerged from the Asia financial crisis better than any other country in
the region. The enterprising spirit is quite obvious in such companies as Samsung and Kia that have
now become well-known even outside the country.

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LESSON 2: Development of Entrepreneurship
1. The Earliest Period

Based on the idea that an entrepreneur is a person who sells goods on behalf of the good’s owner,
entrepreneurship was exhibited by Marco Polo (1254-1324), the merchant from Venice who travelled to
many places in Asia to trade. He would enter into a formal agreement with a capitalist to sell his goods.
He bore all the risks of possible damage or loss of the goods. After everything was sold, profits were
divided between the capitalist and the trader as agreed upon. (OUM, n.d.)

2. The Middle Ages

The term entrepreneur was used to describe both an actor and a person who was in charge of and
managed large production projects. This person merely managed the projects using the reso urces
provided by the government. In this case, he did not assume any risks. The entrepreneur in this age was
the person who was in charge of great architectural works such as public buildings and cathedrals (OUM,
n.d.
The origins of entrepreneurship are often traced back to the Industrial Revolution. Schumpeter who
defined entrepreneurship as 'the carrying out of new combinations (of means of production)'
(Schumpeter, 1934:74) and his notion of creative destruction are often held up as initiating or in fact re-
awakening a spirit of enterprise that began with the Industrial Revolution and yet as Casson and Casson

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(2014) demonstrated, the study of entrepreneurship can be pushed back to the medieval period by
focusing on the individual entrepreneur rather than on the firm. A further interesting feature identified
by Casson and Casson (2014:1237) given a re-awakened spirit, or culture of entrepreneurship, is that in
the medieval period 'no-one considered themselves too important to be engaged in trade. ...

3. The 17th Century

Entrepreneurship has become associated with risk. The entrepreneur was someone who would enter
into a formal agreement with the government to provide products or services. It was common practice
to agree on the price as part of the terms in the agreement. In effect, the entrepreneur either reaps
profits or bears losses (OUM, n.d.).
A prominent theorist during this period was Richard Cantillon (1680-1734), an economist who viewed
the entrepreneur as a risk taker and a bearer of uncertainty (Van Praag, 1999).

4. The 18th Century

The entrepreneur was distinguished from the capitalist who simply provides money for the creation of
products to be sold. Jean-Baptiste Say (1767-1832), a French economist and businessman, described the
entrepreneur as a person who plays a central coordinating role both in producing and selling goods. He
was someone who coordinates, leads and manages all the activities of the firm (Van Praag, 1999).

5. 19th and 20th Centuries

There was very little distinction between an entrepreneur and a manager. However, towards the middle
of the 20th century, Joseph Schumpeter (1883-1950), an Austrian-Hungarian-American economist and
political scientist, refuted the idea of entrepreneurship as just a manager of the firm, and espoused the
concept of the entrepreneur as innovator who seeks opportunities and leads “existing means of
production into new channels. The entrepreneur is neither a risk bearer nor a manager or capitalist”
(Van Praag, 1999).
Risk and financing is relegated to the banker or some other party whose sole aim is to provide the
needed capital. On the other hand, it was also during this period that business expert Peter Drucker
(1909-2005), came up with a behavioral concept of the entrepreneur – one who actually searches for
change, responds to it, and exploits change as an opportunity (Holden, 2011).

6. 21st Century

Hailed as the Dot Com era, entrepreneurs in the 21stand Century are considered heroes of free
enterprise (OUM, n.d.). Creativity and innovation have enabled and inspired many of these
entrepreneurs to exploit high growth potentials. “Today, many people regard entrepreneurship as
‘pioneership’ on the frontiers of business” (Kuratko & Hodgetts, 2004). Much of the significant changes
revolutionizing the world of business was due to the internet which provided countless opportunities for
entrepreneurs.

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Evolution of Entrepreneurship in the Philippines

• It existed since the interaction of the early Filipinos with foreign traders especially the
neighboring countries like Malaysia, Indonesia and China.
• They started business transactions through the barter system wherein goods and services were
the means of exchanges.
• When we were colonized by Spain, Japan and America, the structure of society, the economy,
education and the political system changed.
• The small and medium enterprises (SMEs) became the embodiment of entrepreneurship in the
country which started in 1935.
• The intensification of entrepreneurship development started in the 1970s.
• The Magna Carta for Small Enterprises is the landmark legislation which reflects the current
government policy to foster dynamic SME sectors, particularly rural and agricultural-based
manufacturing ventures.
• R.A. 7882, the Act Providing Assistance to Women, recognizes the special role of women in
development and supports women entrepreneurs who are engaged in the manufacturing,
processing, service and trading business.
• The Land Bank of the Philippines and the Development Bank of the Philippines are mandated to
provide assistance to NGOs, existing women enterprises and potential women entrepreneurs.

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LESSON 3: Relevance of Entrepreneurship and Entrepreneurs in
Economic and Society

Activity # 1

Imagine that you are the person in the given picture. Inside each circle, draw an image of the business
that you want to build and write its contributions to the economy and society. Share your insight with
the class.

Entrepreneurship has an enormous impact on the economy and in our society. Globally, the level of
entrepreneurial activity has contributed significantly to the national level of economic growth of many
countries. Entrepreneurs initiated changes and innovation in the structure of business and society. Their
contributions are immeasurable and their roles are incomparable. Specifically,

Entrepreneurship has these contributions to the economy and society:

❖ Creates Employment
When entrepreneurs put up their businesses, they employ people who possess different
competencies and personal values to help them operate the enterprise.

❖ Develops New Market

Entrepreneurs are opportunity-seekers, creative and resourceful. They seek new buyers or
customers for their products or services. They go beyond the existing places where their products
are sold and look for other people who will be interested.

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❖ Introduces Innovation

Entrepreneurs innovate. Innovations can be something ordinary or technological or a

breakthrough. This innovation is done for the product, service or technology towards commercialization
and generates economic wealth. Due to innovation, other businesses fold, while others will open or
flourish. Some even restructure like merging or buying-out firms, to respond to the changes that are
required in order to become sustainable in the business.

❖ Generates New Sources of Materials

Entrepreneurs are always in constant search for better and cheaper sources of materials
they need. Finding new material provides help in the economic growth of the place.

Examples of raw materials include: steel, oil, corn, grain, gasoline, lumber, forest resources,
plastic, natural gas, coal, and minerals.

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❖ Stimulates Investment Interest in the New Business Ventures being Created

When entrepreneurs engage in a new business, it stirs curiosity in other people to invest in
the business because of the benefits it offers. This new investment contributes to economic
growth.

❖ Improves the Quality of Life

The new products and services developed by the entrepreneur contribute to the
increase in the personal benefit and convenience of people in society. The use of
automatic gadgets in cooking or washing clothes, mobile phones, internet services,
agricultural machines, and many other innovations leads to a better quality of life.

Top Ten Successful Entrepreneurs in the Philippines. Do a research and know their stories.

❖ Serves as Role Models

Entrepreneurs are people to be emulated by younger generations in the community and
society at large. The attitude, behavior and personality traits, like proactiveness, opportunity

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 recognition, risk-taking, alertness and creativity, are some of the characteristics that will also
make them successful entrepreneurs in the future.

❖ Brings Social Benefits to the People

Entrepreneurs pay taxes for every product or service sold in the market. They also pay for
the permits and licenses to operate their businesses.

Where do taxes paid by the entrepreneurs and the working force in our society go?

Taxes are funds used by the government to finance basic social services that are vital
to the lives of citizens and the country’s economic growth. Every year, individuals and
corporations pay government taxes, which are used to fund expenditures. When
government spending exceeds the revenue collected, a budget deficit occurs.
29 Mar 2017.

Examples where taxes are spent:

The income derived from all of these taxes by the government are then used for the
people, especially the poor, to have more access to social services such as education and health, as

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 well as improvement in infrastructure facilities, such as roads and bridges for faster and safer
transportation of people from various destination.

❖ Utilizes and Mobilizes Indigenous Resources

Small and medium enterprises will always look for cheaper local materials to supply
their needs. They also make use of idle or unused resources to meet their needs. This saves
much in terms of foreign currency as local enterprises patronize their own resources and they
do not become dependent on imported materials.

Examples of indigenous Materials

▪ Entrepreneurs’ creativity can change these things into simple yet valuable materials.

❖ Provides More Alternatives for Consumers

The stiff competition in the market for quality and cheaper products and services requires
the entrepreneurs to come up with more products and services that consumers can choose
from. Entrepreneurs also become more concerned about the welfare of their cons umers, and
ethical in producing and selling their products or services, in order that consumers will prefer
them over the other enterprises selling the same

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 A. It creates employment
B. It introduces innovation
C. It generates new sources of materials
D. It stimulates investments
E. It improves the quality of life.
F. Serves as role models
G. It mobilizes and utilizes indigenous local resources
H. Provides more alternatives for consumers

Entrepreneurs have shaped the face of business and enterprise since the dawn of man. From
the first wheel to the advent of the internet, these clever businesspeople evolved for centuries into
their most recent incarnation, the social media entrepreneur.
By creating new products and services, they stimulate new employment, which ultimately results
in the acceleration of economic development. So public policy that encourages and supports
entrepreneurship should be considered important for economic growth.

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CHAPTER TWO

ENTREPRENEURS AND ENTREPRENEURIAL COMPETENCIES

Overview
This chapter enriches the learners' understanding of the different characteristics of
entrepreneurs from the past to the present. It will also deepen their perception about how
entrepreneurs think. The learners will analyze the different entrepreneurial competencies and have the
knowledge to explain the entrepreneurship decision-making process as core competency. Each lesson is
designed to provide activities that will encourage the learners to participate actively in accomplishing
the tasks expected from them.

Objectives:
• compare the personal characteristics of entrepreneurs in the past and in the present;
• discuss how entrepreneurs think;
• analyze the different entrepreneurial competencies; and
• explain the entrepreneurial decision-making process as a core competency.

Essential Question
▪ Why do entrepreneurs think differently from other people?
▪ Which among the different characteristics of an entrepreneur do you possess?

Activity 1 – Role-Playing
o Divide the class into groups with five members.
o Select a leader who will act as a business owner of a grocery store. Assign each member the role
he/she has to portray for the given scenario.
A. Group 1 – You have a staff or employee who refuses to obey the dress code. He is supposed
to wear pants to work, but he insists on wearing shorts. All of the staff or
employees follow the dress code aside from him. How will you handle situation?
B. Group 2 - The consumer wants to change the purchased product due to a change of mind
or wrong purchase. What is the best ethical thing to do in this situation?
C. Group 3 - You have a cashier who had been giving out incorrect change to your regular
customer. It has happened thrice already. How are you going to handle this
situation?
D. Group 4 - A young girl is in the candy aisle and her parent is not paying attention. You saw
her put one lollipop inside her pocket. What will you do if you were the store
owner or a store keeper?
E. Group 5 - You heard from the midnight news that the DTI has approved the price increase
requested by the manufacturers on some basic commodities. What are you going to
do?
F. Group 6 - One day, one of your costumers showed up in your store with the money which
according to him was the change he had received when he bought something
from your store thirty minutes ago with a deficit of twenty pesos. What are you
going to do?

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 ❖ Evaluation and Assessment
- Leaders of each group will give their assessment on their members’ participation in
presentation while the rest of the members of the group will give their own assessment in
the performance of other groups with the teacher’s own evaluation using the rubric below.
Rubric for Role-Playing

Criterion Standard Score

Participation in 5- always available and contributed a lot during

Preparation and group preparation, rehearsals and actual presentation
Presentation 3- usually available and adequately contributed during
group preparation, rehearsals and actual presentation
1- rarely available and hardly contributed during group
preparation, rehearsals and actual presentation

5- very convincing portrayal of character and

excellent delivery of lines
Portrayal of Character 3- adequately convincing portrayal
1- portrayal of character was not so convincing and there
were many mistakes in the delivery of lines

Use of Non-Verbal Cues 5- purpose is well-established and effectively sustained.

(voice, gestures, eye 3- purpose is adequately established and generally
contact, props, sustained
costumes) 1- purpose is unclear and not sustained

2- very engaging and moving

Audience Impact 1- some parts were engaging and moving
0- little or no connection with the audience

TOTAL SCORE

LESSON 1 Concept of Entrepreneurs Today

There is no universal definition of the word entrepreneur. Being an entrepreneur means different
things to different people. From an economist’s point of view, he/she is someone who brings resources,
labor, materials and other assets into different combinations so that their value becomes greater than
before; also one who “introduces changes, innovations, and a new order.” To a psychologist, a person
who is “typically driven by certain forces such as the need to obtain or attain something, to experiment, to
accomplish or perhaps to escape the authority of other,” is an entrepreneur. From a managerial
perspective, the entrepreneur is “someone who identifies opportunities, plans, mobilizes resources,
manages and assumes the risks of a business to have a positive impact on society.”
The 21 st century is considered as the entrepreneurial era. The number of entrepreneurs
increases every year, such that in 2006, about half a billion people worldwide were either
actively engaged in starting a new venture, or were owner-managers of a new enterprise.
According to The Global Entrepreneurship Monitor (GEM) in 2006, approximately 19 million
Filipinos, or 39% are engaged in various types of business activities. Records show that the

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Philippines has the highest established business rate globally , with one out of five Filipinos or
19.72% owning and managing an established business.
Characteristics of Entrepreneurs in the Past and Today

ENTREPRENEUR DIMENSION IN THE PAST TODAY

Educational Attainment Less Educated Highly Educated
Age Older and men Younger
Gender Dominated by males Mixed ownership by women and
men
Previous experience Less business and More business and employment
employment experience experience
Knowledge of Business Knows the trade at large Knows the core business and its
operation
Utilization of Information Relies on manual systems Proficient in and uses to a large
technology extent, information technology
Innovation orientation Automation for efficiency Values innovation for new
venture, creation and discovery
Goal Economic and financial Social, ecological and economic
gains gains
Principles of governance Compliance and Ethical, transparent and group
centralized accountability
Use of word structure Highly structured to meet More flexible to better balance
work demands their work and family life
Leadership style Directing Empowering
Drive orientation To get ahead To make a difference
Perspective of self-confidence “I can do it” “We can do it”

Compilation of Common Characteristics Among Filipino Entrepreneurs

1. Calculated Risk-taking – is doing everything possible to get things in their favor, and they often
avoid taking the unnecessary risks.
Example: convincing others like investors to put up money, creditors giving discounted interest rates,
and suppliers offering special terms of payment for the raw materials.

2. Commitment – is the unwavering dedication to work for the common good of the society through
one’s business.
Example: willingness to use one’s own savings, sacrificing family time, and working long hours, and
travelling to different places to acquire the needed resources.

3. Feedback-seeking is the taking of steps to know how well they are doing and how they might
improve their performance.
Examples: constantly asking for comments, reactions and suggestions from his employees and
customers.

4. Perseverance is the determination to succeed by overcoming obstacles and

setbacks.

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 Examples: borrowing money from other sources to augment capital; looking for
and training employees or asking help from the government.

5. Drive to achieve is the internal desire to pursue and attain challenging goals.
Examples: assessing their business performance regularly based on set standards; analyzing how
their competitors are doing in the market and planning strategically to sustain the business.

6. Self-confidence is the belief that together with other people, things can be done in the business.
Example: having a positive belief and allowing those around them help during crisis.

7.. Opportunity orientation is the constant awareness of opportunities that exist in everyday life.
Example: studying the change in consumer preferences to improve an existing product or service.

8. Innovativeness is the ability to come up with something different or unique every time. This can be
in terms of a new product, service, process, market or technology. This trait is often related to
creativity or “thinking-out-of-box” in any given situation to look for opportunity for
business.
Example: developing new models, online buying and selling of products, etc.

9. Responsibility is their willingness to put themselves in situations where they are personally
responsible for the success or failure of the business operation.
Examples: taking on the blame for the mistakes of an employee, admitting to
the costumers that there is an error that has been done that this will be corrected.

10. Tolerance for failure is using it as a learning experience.

Example: confronting the source of the problem like employees or suppliers not
repeating the same mistakes in the production of the product; improve their
services to avoid complaints in the future.

Activity # 2 - Write a word or phrase after each letter of the word ENTREPRENEUR that describes the
characteristics of an entrepreneur.
E-
N-
T-
R-
E-
P-
R-
E-
N-
E-
U-
R-

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LESSON 2 – How Entrepreneurs Think
❖ Entrepreneurs identify opportunities, plan and mobilize resources, manage and assume the
risks of a business to have a positive impact on society.

Activity # 3
➢ Given a chance to start a business, what kind of business would you like to open? Why?
➢ What do you need to do to start a business?
➢ What are the things that you need to consider in putting up a business?

Reading:
Entrepreneurs are a unique breed of people. While some people sit and fantasize about
the glamor of being their own boss and creating their own business, those in the thick of
business ownership understand that even considering all its rewards, entrepreneurship is a
difficult and complicated path.
Entrepreneurs and entrepreneurial competencies generate multiple decision models, and
actuate self-assessment and choose a course of action. These thinking processes enable the
entrepreneurs to reflect, comprehend, and control one’s learning and intellectual ability.

1. Challenges are opportunities. 6. Mistakes are healthy.

2. Competitors are research subjects. 7. There is no magic.
3. Everything requires effort. 8. Discipline is a prerequisite
4. No pain, no gain. 9. Entrepreneurship is a life style
5. Big things are made from small 10. A journey of a thousand miles begin with
Components. the first step.

❖ Actuate Self-Assessment and Choose a Course of Action

At the start, the entrepreneur determines what they have like knowledge, skills,

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 resources, and people they know. Then, chooses from possible outcomes. For example,
an entrepreneur would like to open an "a small café or a massage clinic" having an
experience about it or having someone who is knowledgeable in operating the boutique.

❖ Generate Multiple Decision Models

The thinking process enables the entrepreneur to reflect, comprehend and control
one’s learning and intellectual ability.

❖ Learn from Failure

Business failure is very common among entrepreneurial firms. There are many
causes of failure such as: lack of experience in doing business, inability to attract new
funding, lack of new product development effort, entry into a new market without a
plan, lack of supply of needed raw materials, mily conflict over the management of the
business, resignation of skilled workers, and many more.

Entrepreneurs don't accept things the way they are. Instead, they look for ways to
improve things and make changes for the better. ... Entrepreneurs don't worry about
what other people think. Instead, they focus on doing what they see as right and
necessary to accomplish their goals.

▪ HOMEWORK
Make a poster that shows or interprets how an entrepreneur thinks on a long bond
paper. Write your explanation at the back of the poster. The rubric below will serve as
your guide in making your poster.

Rubric for Poster-Making

Criterion Standard Score
Coverage of Topic 5- excellent coverage of topic; captures all
the important and relevant information
3- most details relate to the topic but
includes some irrelevant information
1- poor coverage of topic with little or no
relevant information

Use of Images and 5- excellent use of images and graphics to

Graphics help put message across to target audience
3- moderate use of images and graphics with that
delivers a weak message
1- images and graphics are mostly irrelevant
and hardly helps put message across to
target audience

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 Layout and Design 5- very good design concept and layout
execution that attracts attention and
easily viewable
3- satisfactory design concept and layout
execution that attracts attention and
easily viewable
1- poor design concept and layout execution
that attracts attention and easily viewable
Slogan 3- very catchy slogan that incorporates the
message very clearly; stimulates interest
1- slogan is not so catchy and message is not
so clear and moderately stimulates interest
0- slogan is not catchy at all.

Mechanics 2- no grammatical, spelling, or punctuation

Errors
1- few grammatical, spelling, and/or
punctuation errors
0- many grammatical, spelling, and/or
punctuation errors
Total Score

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LESSON 3 - ENTREPREMEYRIAL COMPETENCIES
Essential Questions :
• What is entrepreneurial competency?
• What are the different entrepreneurial competencies?
• Why are entrepreneurial competencies changeable and learnable?

Explore:
According to Lau, Man, and Chan (1999), entrepreneurial competencies are considered a
higher-level characteristics encompassing personal traits, skills and knowledge, and therefore,
can be seen as the total ability of the entrepreneur to perform a job successfully.
Entrepreneurial competencies are important in many ways. They facilitate opportunity
recognition, help adapt rapidly to changes, enhance business performance, strengthen the
firm’s competitive position and ultimately, stir the achievement of organizational success.
Entrepreneurial competencies are the sum total of the personality, skills and knowledge that
the entrepreneur possesses, which are necessary to effectively perform their functions and
responsibilities.
According to Camuffo, Gerli and Gubitta (2012), the entrepreneurs’ competencies can be
divided into functional, behavioral and cross-functional groups as shown in the table below.

Functional Behavioral Cross-Functional

. Personal computing (use 1. Self-awareness 1. Action and attainment skills
of computer equipment; - Emotional awareness - Efficiency orientation
use of electronic mail and - Accurate self- - Planning
spreadsheets) assessment - Initiative
. Procurement (knowledge of - Self-confidence - Attention to detail
procurement processes and 2. Self-management - Self-control
order-to-delivery - self-control - Flexibility
processes) - result orientation - Information gathering
. Business English - Initiative - Result orientation
. Managerial communication - reliability - Organizational
. Production and logistics - conscientiousness commitment
. Project management - Adaptability 2. People management skills
. Total quality management - Optimism - empathy
. Organization 3. Social awareness - Persuasiveness
. Strategy - Empathy - Networking
. HR management - Service orientation - Negotiation
. Information technology - Organizational - Self-confidence
. Marketing and sales awareness - Group management
. Business law . Cultural awareness - Developing others
. Control 4. Relationship management - Oral communication
. International management - Inspirational leadership - Customer orientation
. Finance - Communication - Business bargaining
. Accounting - Conflict management - Organizational awareness
- Change catalyst - Directing others
- Influence - teamwork
- Developing others - Leadership
- Relationship creation 3. Analytical reasoning skills
- Teamwork - Use of concepts
5. Cognitive - System thinking

23
 - Systemic thinking - Pattern recognition
-. Pattern recognition - Theory building
- cross-function - Use of technologies
- Quantitative analysis
- Social objectivity
- Written communication
- Visioning
- Process based vision
- Benchmarking

Man and Chan categorized all the identified competency areas into relevant activities or behavior in
the small and medium enterprise context as follow:
• Opportunity Competencies – competencies related to recognizing and developing market
opportunities through various means.
• Relationship Competencies – competencies related to person-to-person or individual-to-group-
based interactions, e.g., building a context of cooperation and trust, using contacts and
connections, persuasive ability, communication and interpersonal skill.
• Conceptual Competencies – competencies related to different conceptual abilities, which are
reflected in the behaviors off the entrepreneur, e.g., decision skills, absorbing and understanding
complex information, and risk-taking and innovativeness.
• Organizing competencies - competencies related to the organization of different internal and
external human, physical, financial and technological resources, including team-building,
leading employees, training and controlling.
• Strategic Competencies – competencies related to setting, evaluating and implementing the
strategies of the firm.
• Commitment competencies – competencies that drives the entrepreneur to move ahead with the
business.

Essential Understanding

Entrepreneurial competencies are the sum total of the personality, skills and knowledge that the
entrepreneur possesses, which are necessary to effectively perform their functions and
responsibilities.
According to Canuffo, Gerli and Gubitta (2012), functional competencies are those skill,
organized into clusters, regarding the main areas of the managerial knowledge, such as
accountancy, finance, control, marketing, HR management, organization, operations
internationalization and strategy plus other capabilities that enable the entrepreneur to manage the
organization.
Behavioral competencies are those broad overall skills that are grouped into goal and action
management cluster, people management cluster and analytical reasoning cluster.
Cross-functional Competencies are those broad overall skills that are grouped into goal
and action management cluster, people management cluster and analytical reasoning
cluster.
The six competency areas are: opportunity competency, relationship competency,
conceptual competency, organizing competency, strategic competency and
commitment competency.
Entrepreneurial competencies are changeable and learnable, so that the low level
competencies of entrepreneurs in any areas can be changed through proper education
and training.

24
 • Benchmarking is a process where you measure your company’s success against
competitors to discover how you can improve your performance.

Homework
Interview a relative or friend who has a family business. Using the Entrepreneurs’
Competencies Portfolio, ask which of these he/she possesses at an advanced level and how
these helped in their family business.

25
LESSON 4 – Entrepreneurial Decision-Making as a Core Competency
Fast-Talk Activity:
• Call one representative from each track.
• Let them choose between two words that could be compared in the fastest time possible.
Words to choose from:
o Hot or cold
o Love or hate
o iPod or iPhone
o fruit or vegetable
o hot coffee or hot chocolate
o fast food or restaurant
o K-drama or Filipino-drama
o Bus or Jeep
o McDo or Jollibee
o Soft drink or iced tea
• The student who answered with the shortest time wins.
• Processing the activity

Think and Share:

➢ How important is decision-making as a core competency?

Reading:
Entrepreneurs think and process information differently. Research has shown that
entrepreneurs are able to make sense of complex and ambiguous situations more quickly and
take more conventional approaches in making decisions. However, it was also observed that
entrepreneurs also experienced stronger levels of emotion and mood than other people do in
relation to their work, which influence their judgments. But then again, they will always make
decisions from the identification stage, to the organization and implementation /execution
stages of their business venture. The success or failure of their business depends on their ability
to make the right judgment at every step of the way.
The following are some of the important factors that determine the entrepreneurial decision-
making process:
1. Rational or scientific method in decision-making. This involves the use of standard six-steps
process to arrive at a decision as shown below.
➢ Identify the problem
➢ Gather data
➢ Analyze the data
➢ Formulate alternative solutions
➢ Select the best alternative
➢ Implement the decision

26
 There are entrepreneurs who have not gone to college and, therefore are not familiar with and
did not utilize the scientific method, yet they became successful.

2. Use of intuition in decision-making – this pertains to the “gut feel” to arrive at the decision.
Entrepreneurs are believed to have a “sixth sense” that enables them to make quick decisions even
in the absence of complete information or even without a deliberate search of data.

3. Affect infusion – this suggests that entrepreneurs’ current moods influence judgment or decisions by
influencing the ease with which information consistent with positive or negative mood, (happy or
angry) moods can be brought to mind. Another aspect of this is that entrepreneurs’ examination of
their current feelings, whether favorable or unfavorable about a person or event, can influence their
judgments or decisions. The likelihood of affect infusion is higher when entrepreneurs engage in
careful, effortful thought about some business operation (e.g. sourcing of additional capital or
product design) or opportunities (e.g. new customers in a nearby town or increase in the purchasing
power of customers), than when they engage in simpler and relatively “automatic” modes of thought
(e.g., time to open and close the store or cleaning the machines/equipment).

4. Attribution style – this refers to the entrepreneurs’ self-serving bias. This bias is actually related to:
(1) strong tendency on the part of most entrepreneurs to attribute positive outcomes to internal
causes ( e.g. own skill, talent, good judgment or hard work), and (2) a corresponding tendency of the
entrepreneurs to attribute negative outcomes to external causes (e.g. high-inflation rate, obsolete
machine, unavailability of raw materials or unreliable suppliers). Therefore, the judgments or
decisions they make are hinged on the strong belief that they will succeed and vastly overestimate
the odds.

5. Counterfactual thinking – is understood as an “afterthought in decision-making in which the

procedures followed to perform the tasks are discussed and various alternatives that could have
been followed are considered.” Entrepreneurs are less likely to engage in counterfactual thinking,
specially in situations where they have experienced negative outcomes such as missed opportunities,
big volume of rejects from buyers, high resignation rate of workers, family conflicts and bankruptcy.

6. Over-confidence – this refers to the tendency of the entrepreneurs to think that they know more
than what they really know when they make the decision. This is the entrepreneurs’ failure to know
the limit of their own knowledge. Over-confidence occurs when entrepreneurs’ assessments are
overly optimistic. Over-confidence also occurs because of their tendency to see past events as more
predictable than they actually were, so they will usually say “I know it.” Over-confidence also occurs
because of their tendency to gather evidence for, and assign more weight to information that
validates ones’ belief and to stop seeking and or to ignore contradictory information. This particular
bias is shown when entrepreneurs refuse to see reality, such as the decline in the sales of the
products, low morale of workers and inefficient production.

7. Knowing style – this is the combination of “analytical and conceptual thinking”, when the
entrepreneurs look for facts and data before they make decisions. When they use this style, decision-
making tends to be slower, more cautious, and centralized especially when they are small- or
medium-sized family firms.

8. Creative style – this is characterized by “holistic and conceptual thinking.” Entrepreneurs who use
this style tend to be creative and enjoy experimentation before making decisions. They think “out –

27
 of-the-box.” They tend to see opportunities and challenges. They do not like rules and take
pleasure in uncertainty and freedom. Successful entrepreneurs show more originality than others and
are able to produce solutions that run against established knowledge.

o The Entrepreneurial process shows that creative thinking is the must have “skill” of an
entrepreneur for the creation of new ideas.

Something to Ponder On
Decision Making is all about employing one’s mental processes to come up with a final choice
after careful consideration of several options or alternatives. The outcome of your decision
could significantly affect your work, your business, and even your life. Effective and
successful decisions make profit for the company and unsuccessful ones make losses. This is
why in entrepreneurship, making intelligent decisions is regarded as very important because it
could mean the difference between the success or failure of your endeavor.

Homework
1. Explain the rational/scientific method in entrepreneurial decision-making.

2. Give at least one example of each process.

3. Study Chapter II, Lessons 1 – 4 and prepare for a quiz.

28
CHAPTER THREE
CAREER OPPORTUNITIES
Chapter Overview
The focus of this chapter is to point out the various career opportunities for the learners. The
learners will also be exposed to recognize the career options using competencies and skills learned in
entrepreneurship subjects. Pursuing a career about entrepreneurship is full of uncertain possibilities.
Nowadays, entrepreneurship is a sign of progress. It has an impact on the cultural, social, and
economic progress of the society. Each lesson in this chapter is designed to provide activities that will
encourage the learners to participate actively in accomplishing the tasks expected from them.

Objectives
• differentiate the various career opportunities open to students who will take the Academic
Track; and
• identify the career options using the competencies and skills learned in the entrepreneurship
subjects for students who will take the Arts, Sports, and TECHVOC tracks.

LESSON I. Entrepreneurship Career Opportunities for the Academic Track

Explore:
Each job has its pros and cons, but often, pay outweighs them all. In the Philippines, the following are the
jobs whose salaries have made them 2019’s present heavyweights. Watch the short video clip about
Top 10 Highest paying Jobs in the Philippines. Use the given link as a reference.
https://www.youtube.com/watch?v=lId.

After watching the video, answer th e following questions:

1. What is the video all about?

2. Based on the video that you have watched, are there any thoughts of having a career that you
would like to pursue now? What is it? Why did you choose it?

There are plenty of reasons why many professionals keep to certain jobs. Depending on who is
asked, the answers can range from fulfilling a passion or finding one’s purpose, to believing in the
company’s mission or even just liking the office’s location. A common response across all roles,
however, and one that often trumps all others, is how well the profession pays.

The opportunity to earn as much as possible and build a comfortable life and a secure d future for
oneself and one’s family is a considerable priority. In some instances, making a good living is more than
enough to not only influence accepting or declining a job offer but be the outright reason why a career is
chosen.

In an effort to help job seekers in making such monumental career choices, the Department of
Labor and Employment (DOLE), in partnership with the Bureau of Local Employment (BLE), revealed in
their latest Labor Market Trends release which jobs presently earn the highest salaries in the Philippines.

29
 The following are images showing the Top 10 Highest Paying Jobs in the Philippines. Can you
identify each and explain why?

1 2 3 4 5

6 7 z8 10
9

Our world today is changing rapidly like advancements in information technology, forging alliances
in the international politics, globalizing economy, and breakthroughs in science and technology. Bearing
this in mind, one of the best things about pursuing a career as an entrepreneur is the wide-open
possibilities. If anyone has the opportunity, conceptual and organizing entrepreneurial competencies
but not yet ready to start one’s own business, there are other ways to use entrepreneurial skills.
Michalowicz (2011) enumerated career options as follow:
• Business consultant
• Sales
• Research and development
• Not-for-profit fundraiser
• Teacher
• Talent recruiter
• Business reporter
There are other career opportunities that are open to people who have entrepreneurial background
and competencies. They can be found in every field, industry, and organizations. Some create products,
services, companies and even industries. Some work for themselves, or a family nosiness while others
work in traditional companies. Those with entrepreneurial aspirations typically pursue one of the
following career jobs:
• New Venture Creations: Launching a company, buying a business or franchise , starting a new
venture in a family enterprise, or commercializing a technology.

30
 • Careers in Existing Entrepreneurial Venture: working for a startup, small business. Corporate
entrepreneur, strategic entrepreneurial unit, or other areas, education, resarch, public policy,
and accelerators.

Other graduates go on to work in areas including:

• Innovation Director
• Inn ovation architecture
• R& D
• Business Development
• Innovation Management Counselling
• Financial Analysis
• Policy Adviser
• Marketing and Sales

Something to Remember:
Entrepreneurial career transcend specific job titles, career and industries.
The possibilities in entrepreneurship are endless. The rewards can be high.

31
LESSON 2 – Career Opportunities Using Entrepreneurship Competencies for Students in Sports, Arts
And TECHVOC Track

Activity # 2

1. Arrange the jumbled words in proper order to form a comprehensive sentence.

2. Explain each arranged sentence.

A.

________________________________________________________________________________

C.

Reading:

As cited in Careers in Entrepreneurship, entrepreneurs have a number of personalities. There are

those who never have finished college. Some are fiery game -changers. Some are gentle with a good
ideas. Others are pleasant, personable and compassionate renegades. Generally, there is a life event,
key motivator, or source of inspiration that can cause a person to work on her/his own rather than work
in a bigger firm.

Students in the Arts track can opt to be in any of the following:

A. Fine Arts ( What can I do with a degree in Fine Arts?)

• Artist
• Graphic designer
• Photographer
• Illustrator
• Film director
• Art gallery manager
• Curator
• Arts administrator
• Secondary school teacher

32
B. Fashion Designing (career in fashion designing)

• Designer wear production

• Fashion marketing planning and concept management
• Fashion media design production management
• Fashion accessories designing
• Costume designer
• Fashion consultant
• Technical designer
• Production pattern maker
• Fashion coordinator
C. Students in the Sports track can have the following job options using their entrepreneurial
Competencies:
• Health club manager
• Strength wellness or event planning manager
• Professional or amateur team manager
• Sports facility manager
• Corporate fitness manager
• Rehabilitation center director
• Nutrition center manager
D. The students in the Technical-Vocational track can opt to be in any of the following:
• Cook/chef
• Automotive Mechanic
• Electrician
• Technical Support Specialist
• Data Analyst
• Surveyor
• Network Support Associate
• Mechanic technologist

Something to Remember:

Mastering skills and acquiring knowledge from technical-vocational courses opens opportunities
in many TECHVOC jobs such as automotive mechanic which uses their skills to inspect, maintain
and repair automobiles.
Entrepreneurship is the pursuit of opportunity without regard to resources currently
controlled.

Homework:

1. Explain the career opportunities open to students in the arts track, sports track and technical-
vocational track.

33
CHAPTER FOUR

STARTING A BUSINESS

Chapter Overview
There are many practical things that need to be considered such as location, size,
employees, quality control, and etc. As a beginner entrepreneur, there is a question that might
pop-up in mind, but it is important that the entrepreneur exploit the opportunity by starting a
business on the right path with a solid foundation enough to enable i. t to grow, succeed, and
become sustainable. The critical phase in the entrepreneurial process is actualizing the
entrepreneurial mindset after opportunity recognition when the business idea is put into a
final form where the details are worked out and it is transformed into something of value, such
as new products or services. The government made entrepreneurship a priority in its economic
agenda. The agenda includes the creation of millions of new entrepreneurs and a tripling of
loan
Objectives:

• discuss the factors to consider in starting a business;

• explain how an entrepreneur can identify business opportunities;
• explain the types of businesses available to entrepreneurs; and
• discuss the government support available and legal requirements needed to start a
business.

Essential Questions:
❖ Why are factors in starting a business important?
❖ Why are opportunities important to identify in starting a business?
❖ How are businesses classified?
❖ Why does the government require all the business establishments to secure permits as
soon as the business operates or before the business operates?
LESSON 1 - Factors to Consider in Starting a Business

There are several reasons why entrepreneurs start a business:

1. financial stability
2. self-fulfillment
3. help the family
4. provide employment to others
An entrepreneur has several ways to start a new venture. The most frequent forms used by
entrepreneurs are start-up and franchising. A start-up enterprise is a company which is recently
formed, where the founder established a completely new business from scratch. Buying an existing
business is acquiring either the shares of an existing company or all of the assets of an existing

34
enterprise. Franchising is when the “owner of the company has already a successful product or services,
licenses its trademark, trade name and methods of doing business to others in exchange for an initial
franchise fee and novelty payments.” Examples of these are Jollibee, Mang Inasal, 7-eleven, Tapa King
and Ricky Reyes Salon franchises.
Given the form of starting a business, there are many other important factors to consider before an
entrepreneur can actually begin the enterprise. These are the following:
➢ FOCUS AND DIRECTION. It is imperative to have a very good objective grasp of the business and
where it will be headed many years from the start of operation. It means that there should be a
clear and documented mission-vision and strategies to begin with. Start right by “beginning
with the end in mind.”
➢ SOURCES OF CAPITAL. There are different sources of capital that can be used depending on
the needs to start the venture. These can be from personal funds, family and friends, a
retirement account, banks/financial institutions, a government loan, and/or the stock market.
➢ GOOD NETWORK. Building good relationships and working with other people could help start
the business.
➢ LEGAL REQUIREMENTS. It is very important to know the laws and regulations that govern the
type of business that will be opened to avoid major problems that can arise if legal requirements
are overlooked.
➢ DEGREE OF RISK. Consider the degree of risk related to a specific business opportunity. A
business is said to be risky when the probability or chances of failure is high. It means the odds
are greater in many aspects against starting a business, like limited market, stiff competition,
high costs of financing the business and unavailability of needed labor.
➢ RESEARCH AND DEVELOPMENT. There should be a strong research and development that
should be undertaken. Government support is important as well as technologies that could help
manufacture products quickly and accurately and deliver services fast.
➢ PERSONAL COMPETENCIES. The personal competencies, like creativity, opportunity seeking,
self-confidence, persistence, commitment and risk-taking as well as technical background and
the related experiences needed to run the business are necessary to start running the business.
➢ s. Resources pertain to raw materials, human resources and machineries/ equipment.
Specifically, the raw materials should preferably be indigenous to the community and available
in certain quantities, like clay, sand, sand, abaca and other natural fiber.

Something to Remember:
Expressions could help build or spoil a good network.
It is always best to begin with the right product/service at the right place, and right time in
starting a business.

Something to Talk About

1. Explain the necessity of having various sources of resources needed to start the business.
2. Describe the role of legal requirements in starting a business.
3. Discuss the importance of having sources of capital and good network in starting a business.

35
LESSON 2 – Identifying Business Opportunities

Activity # 1
Classify the following whether needs or wants:
rice, car, shelter, cellphone, TV, dress, cake, fruits, mansion, water, softdrinks

NEEDS: WANTS:

Essential Question:
• Why are opportunities tough to spot?

Let’s Get Started

The identification of business opportunities is central and key in starting a business.
Generally, entrepreneurial opportunities are a favorable set of conditions that will enable the
entrepreneurs to create new products or services by combining resources that will result, not
only to a profit, but for the common good of the society and the environment. As noted by
Shane (2003), entrepreneurial opportunities can take the forms of new products e. g. medicine
for cardiovascular disease) or services (e.g. home delivery of birth certificate or exam results),
new ways of organizing (special events like a wedding, debut and product launching), new raw
materials (e.g. stem cells, organic vegetables, multigrain bread), new markets (e.g. foreign
tourists for alternative medicine like acupuncture), and new production processes (e.g. digital
production of pictures). Given the entrepreneurial opportunities, entrepreneurs either start a
business may be because of external stimulation or internal stimulation. Example of external
simulation is the customer’s demand for new products or services to make life more
convenient while internal stimulation on the other hand is the recognition of a problem or
opportunity gap and decides to fill it or solve it. Regardless of the source of stimulation of a
new business, it is said that opportunities are “tough to spot.”
As cited by Barringer (2006), an opportunity has four essential qualities namely:
“attractive, durable, timely and anchored in a product/service or business that creates or adds
value for the buyer or end-user. For entrepreneurs, they need to capitalize on the so called
“window of opportunities.” This is the time when a firm can realistically enter a new market
and attempt to establish a competitive position in the industry. Most good business
opportunities do not suddenly appear but result from an entrepreneur being alert in identifying
potential opportunities. How do entrepreneurs identify opportunities? One approach is by
observing trends like fashion, eating habits, technological, economic or social trends. Another
approach is by solving a problem and looking for solutions to solve it.

Successful entrepreneurs are those who can exploit business opportunities. Drucker has
identified seven potential sources of opportunities in the external context , namely:

1. The unexpected – opportunities that can be found when situations and events are
unanticipated.

36
2. The incongruous – situations happens when there are inconsistencies in the way they
appear.
3. The process needs – opportunities that could be seized during the process of discovery such
as research and development done by researchers and technicians of a
product or service.
4. Industry and market structures – changes in technology , social value and customers’ tastes
that could give the entrepreneurs opportunities to innovate their products
or services.
5. Demographics – influence industries and markets upon their target market and market
segmentation. There can be entrepreneurial opportunities in anticipating
and meeting the needs of the population.
6. Change – changes in perception get to the heart of people’s psychographic profiles of what
their values are, what they believe in, and what they care about.
7. New knowledge – like new technologies and new discoveries that can be sources of
information for entrepreneurial innovation.

Something to Ponder On

How Do Entrepreneurs Identify Opportunities

Observing trends like fashion, eating habits, technological and social trends , and
recreation. (external stimulation)
Solving a problem and looking for solutions to solve. ( internal stimulation)
The potential sources of opportunities are the positive attitude off Filipino workers, low
labor cost, literacy of the workforce, large market potential ecause of our big population
size, changing preferences and lifestyles of Filipino consumers, abundace of natural
resources and availability of competent middle management and creative technical
talents.
By viewing everything as a problem and considering the availability of solutions and the
needs of different groups of people (or companies), you start spotting opportunities
everywhere. It is worth mentioning however that spotting problems is easy, but spotting
opportunities requires at least some level of knowledge and research.

Homework:
1. Conduct a focus group discussion (FGD) with your groupmates who are interested to have
their own business in the future. The goal of your FGD is to generate new business ideas.
Ask what they have observed in the community or in other places that they gone to that may
have propects of being bought or patronized which were not yet offered or patronized by
entrepreneurs.
2. Conduct a survey among 15 students/teenagers in your community about a particular
product that you are assigned to. Use the form below.

37
Activity # 2
Survey Form

Name of respondent :____________________________________________________________

Age:_____ Gender:_______ Grade level: _______

What are your reasons for buying the product?

_____________________________________________________________________________
______________________________________________________________________________

Where do you buy the product?

Is it always available when you need it?

__ yes ___ sometimes ___ No

What do you use as a substitute if it is not available?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Is the price affordable to you? ___Yes ____ No

38
LESSON 3 Types of Business Available to Entrepreneurs
Activity # 3

Guess What?
• Name what type of businesses are the following:
• How much is their assets?
• How many people do they employ?

4. ______________________ 5. _________________________ 6. ________________________

Reading:

Entrepreneurs can identify more ideas and opportunities from the types of businesses available
to them in the community and in the country at large. There are a number of ways to identify
enterprises which they can choose from. 1) According to Size, 2) According to Forms of
Ownership and 3) According to Industry Classification. The Department of Trade and Industry,
through the Bureau of Small and Medium Enterprise Development (BSMED), categorized them
according to its total assets or number of employees who work for it as follow:
A. Types of Businesses According to Size:
1. Micro Enterprise – has an asset size not exceeding to PHP 50,000. It is usually home-based
enterprise, operating in makeshift or temporary quarters. The owner heads the

39
 enterprise, and employs from one to not more than ten people.
2. Cottage Enterprise – It has an asset of PHP 250,000 but not exceeding P 500,000. It is a
home-based business which is often managed and operated by the members of
the family.
Examples: Subcontractors of footwear like shoes and slippers, food manufactures, decorative
products, RTW clothing line, etc.

3. Small Enterprise – it has an asset of PHP 500,000 but not exceeding PHP 2.5 million. It is owned by
an individual or a group and has enough resources to continue operating. It employs
from 10 to 20 people.
Examples: groceries, bakeshops, beauty salons

4. Medium Enterprise – it has an asset of PHP 5 million to less than PHP 20 million. It is owned by single
individual, business partners or a corporation. It employs more than 20 to 100 people
which are more skilled and possess technical expertise to run the busine ss with
machine/equipment and utilize various quality controls to make the products.
Examples: fine dining restaurants, garment manufacturers, private educational institutions, etc.

5. Large Enterprise – it has an asset of PHP 20 million or more. It is often owned and managed by a
corporation. It is large in scope of operation and number of products or services that it
offers to the market. It employs 100 or more workers who are hired on the basis of their
expertise. Its Board of Directors responsible for its governance and it has Chief
Operating Officer to oversee the implementation of the directives of the Board.

B. Types of Businesses According to Forms of Ownership

1. Single Proprietorship – is owned and usually managed by one person. It registers with the
Department of Trade and Industry (DTI)

2. Partnership – is an association of two or more persons who act as co-owners of a business. It

registers with the Securities and Exchange Commission (SEC)

3. Corporation – is an artificial being created by operation of law, having the right of succession,
and the powers, attributes and properties expressly authorized by or incident to its
existence. It also registers with the (SEC)

4. Cooperative – is a duly registered association of persons with common bond of interests, who
have voluntarily joined together to achieve a lawful common social or economic end,
making equitable contribution to the capital required, and accepting a fair share of the
risks and benefits of the undertaking in accordance with the universally accepted principles
of the cooperatives. It registers with the Cooperative Development Authority (CDA)

C. Types of Business According to Industry Classification:

There are many types of businesses based on the Philippine Standard Industrial Classification
(PSIC). They produce goods or services for the use of individuals, groups or organizations in society.
Goods are products that are processed from raw materials that are consumable. These are things

40
 that people use, such as clothes, shoes, tables, books, cosmetics, toys, jewelry, and many more.
Services are activities which help that are demanded by consumers based on their needs and wants.
Examples of these services are medical, dental, banking, transportation, printing, publishing,
insurance, education, and wellness programs.

C. Types of Business According to Industry Classification:

Agriculture, Fishing and Forestry

This includes the exploitation of vegetal, animal and
natural resources, comprising the activities of growing crops,
raising and breeding of animals, harvesting of timber and
other crops, animal or animal products from a farm or their
natural habitats.

Mining and Quarrying

This includes the extraction of minerals occurring naturally
as solids, liquids or gas. Extraction can be achieved by different
methods, such as underground or surface mining, well
operation, seabed mining, etc.

Manufacturing
This section includes the physical or chemical
transformation of materials, substances, or
components into new products.

Construction
This includes general construction and
specialized construction activities for building and
civil engineering works.

Real Estate Activities

This includes acting as lessors, gents,
and/or brokers, in one or more of the
following: selling, or buying real estate,
renting real estate, and providing other
estate, such as appraising real estate or
acting as real estate escrow agent.

41
 Education
This includes education at any level or
for any profession, oral or written, as well as
by radio and television or other means of
communication.

Arts, Entertainment and Recreation

This includes a wide range of
activities to meet varied cultural,
entertainment, and recreational
interests of the general public,
including live performances, operation
of museum sites, sports, gambling and
recreation activities.

Electricity, Gas, Steam, and Air-conditioning

Supply
This section includes the activity of
providing electricity power, natural gas,
steam, hot water and the like through a
permanent infrastructure (network) of lines,
mains and pipes.

Water Supply, Sewerage, Waste

Management
This section includes activities related to
the management of various forms of waste,
such as solid or non-solid industrial or
household waste, as well as contaminated
sites.

Transportation and Storage

This section includes the provision of
passengers or freight transport, whether
scheduled or not, by rail, pipeline, road, water or
air and associated activities, such as terminal and
parking facilities, cargo, handling, storage. etc.

42
Something to Ponder On
Most of the businesses are in the form of single proprietorship and manage by the
family.
Starting entrepreneurs with limited capital are engaged in the retailing or trading
businesses.
Homework:
• Visit the website of the Department of Trade and Industry. Find out the latest
statistics on the number of businesses classified as micro, cottage small and medium
Enterprises.
• Go around your community. Find out the following:
a. name of businesses that are present in your community based on the type of
business according to size, ownership and industry classification;
b. type of business which has the highest number of companies; and
c. type of industry which has no business operation in your community

43
CHAPTER FIVE

MARKETING
Chapter Overview
This chapter emphasizes the role of market research which will help entrepreneurs make strategic
decisions that affect their businesses as pointed out by Drucker who was an influential manage ment
professor in the cold war. He believed market research to be “ the quintessence or marketing. The
American Marketing Association (Kotler and Keller 2007, 3) defines marketing as “an organizational
function and a set of processes for creating, communicating and delivering value for customers and for
managing customer relationships in ways that benefit the organization and its stake holders.” It is “the art
and science of choosing target markets and getting, keeping and growing customers through creating,
delivering , and communicating super customer value.”

Objectives:
• discuss the 7Ps in marketing;
• explain the importance and process of market research;
• describe a brand name; and
• discuss marketing management practices that can be adopted.

Essential Question:
❖ Why is marketing an art and a science?

LESSON 1 - The 7Ps of Marketing

Describe each picture:

Product Promotion People Process

Pricing Place Physical Evidence

Image link:

https://www.google.com.ph/search?
q=product+image&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjcoO_q1KHVAhWJKZQKHYdE
AIwQ_AUICigB&biw=1067&bih=563#tbm=isch&q=price+7ps+marketing&imgrc=uv4e2raSIEQz8M

44
Reading:

The birth of the 7Ps of marketing can be traced back to the article published in 1948 by
Harvard University professor James Culliton who described marketers as “mixers of
ingredients.” Professor Edmund Jerome McCarthy of Northwestern University proposed the
conceptualization of 4Ps, which focusses on the four elements, namely: product, price, place
and promotion. However, the original marketing mix catered only to “product industries,”
leading scholars to extend the original marketing mix by including other elements that catered
to the “service industries.” Three additional Ps--- people, physical evidence, and process--- were
suggested to relate to the service-based industries (Booms and Bitler 1981), leading to the
current 7Ps of marketing that allows product and service industries to craft strategies in a
holistic manner (Fish, Brow and Bitner 1993).

The following are the 7Ps Marketing Mix:

1. Product.
In the manufacturing industry, the production and consumption of the product are not
simultaneous and it is tangible, not always diverse nor usually perishable.
In the service industry, the production and consumption of the product are simultaneous and the
product is intangible, diverse and perishable. This means that the point at which the activity is
occurring becomes very important. “No matter what your product or service is, it is important that it
meets the demands of the market and satisfies or exceeds the expectations of the customers.
2. Pricing.
With the product, the materials that go with it can be measured and its actual tangible cost of
production is also measurable
However, since a service cannot be measured by what material goes into its creation nor is the
actual tangible cost of production measurable, it can be challenging to put a price tag on it.
3. Place
The place of production or the plant site can be different from the place of distribution or selling.
The service is produced and consumed in the same place. It cannot be owned and taken away from
the location. Fast food restaurants and service centers may be located in busy main streets to allow
walk-in customers, while fine dining restaurants may be located in a quiet street to maintain
exclusivity and privacy. The place signifies where you choose to distribute or allow access to your
product or service. It could refer to anything from a warehouse, a high-street store to an e-
commerce shop or cloud-based platform.
4. Promotion
Refers to advertising, marketing and sales techniques. To prevent a service becoming
interchangeable with its competitors, it becomes vital to create a desirable brand image and name
in the market. Differentiation becomes a key goal in order to attract both new and repeat customers.
5. People
- Are needed to do the tasks that are not directly dealing with the customer so that customer
service training is not a priority but production related training is. People element is vitally
important in the service marketing mix.
- Are employees who are involved in selling a product or service designing it, managing teams, or
representing customers.
There is no use for creating a great brand, innovative product or amazing social media presence if

45
 you don’t have the right people behind you. This is the reason why they need fair training and
considerable understanding of their role and the impact to the company or business. Employing and
retaining the right people is important in both the long and short term success of a business.
6. Process.
Describe the series of actions that are taken in delivering the product or service to the customers.
Examining the process means assessing aspects such as the sales funnel, payment systems,
distribution procedures and managing customer relationship.
7. Physical Evidence.
With the product, the location of the manufacturing site or plant site is dependent on the
availability and accessibility of materials, manpower, machineries, nature of the product and the
target market. A calm and soothing environment with thoughtful comfort measures may provide a
sense of security to a new customer which will make them return.

Something to Ponder On

Companies are constantly trying to differentiate themselves from their competitors to build a
loyal customer base
Build an effective network of relationships with key stakeholders and profits will follow.

Homework
Interview an entrepreneur in your community. Ask them how they apply the 7Ps of marketing by
using the following guide questions:

1. How do you develop your product/service?

2. How do you price fairly?
3. How do promote your product/service?
4. Who are the people who represent your company and what are the skills that they need?
5. What process do you use to deliver your product/service t

46
LESSON 2: MARKET RESEARCH

❖ What is Research?
“Research is a formalized curiosity. It is poking and prying with a purpose “ (Zora
Nealae Hurston)

❖ What is Market Research?

Market research is the process of gathering-information which will make the company more
aware of how the people, the company hopes to sell to, will react to the company’s current or
potential products or services. It is simply an information-gathering exercise to determine the
viability or acceptability of a product or service an entrepreneur intends to offer in the market.
Businesses conduct research on a continual basis to keep up with market trends and to maintain a
competitive edge. Regardless of whether an entrepreneur is starting or expanding its business,
market research is necessary to understanding its target market and increasing sales.
Today, business owners conduct market research for a lot of reasons, such as the following:

• Identify potential customers

Who are going to use your product/service? How old are they? Are they male or female?
Are they married, single, or divorced? Do they have children? Where do they live? What is
their level of education?
• Understand existing customers
Why do customers choose your product over competitors? What do they value? Is it a
service, product quality, or the prestige associated with consuming your product/service? Who
influences their buying decision? What magazines do they read? What websites do they visit?
What do they enjoy doing?
• Set realistic targets
From the information you have collected, set realistic targets for areas, such as growth,
sales, and introduction of new products/services.
• Develop effective strategies
From your research, you will be able to make informed marketing decisions about how to
price your product/service, how to distribute your product/service, which media channels to use
(e.g. newspaper, radio or direct marketing), or whether to develop a new product/service.
• Examine and solve business problems
If you have identified a business problem, research will help you work out what is
happening. For example, if your sales has fallen, you might discover that brand awareness has
also fallen, or that a new competitor has entered the market, or a substitute product has become
available.
• Prepare for business expansion
Research will help you identify areas for expansion and test the market’s readiness for a
new product/service. For example, you could be looking for a new retail store to open and you
need to find the right location, or you could plan to make changes to your distribution channels
(e.g. from home parties to retail) and need to determine how that could affect your customer base.

47
• Identify business opportunities
Research could help you find an un-serviced or under-serviced market. You could identify
changing market trends, such as population shifts, increasing levels of education, or leisure time,
which bring new opportunities.
According to the Guide to Market Research and analysis (2015), to conduct market research, it is
important to set clear goals for the market research activity, and define what are needed to be known and
why. Then, it is vital to develop a strategy and select data gathering techniques that will be used.

❖ Two kinds of research

A. Primary research
Primary research – is gathering information directly from the respondents who answered a
set of questions. This information is usually collected through surveys, observation, focused group
discussion, or experimentation.
Surveys are the most common way to gather primary research with the use of questionnaire
or interview schedule. These can be done via direct mail, over the phone, internet (e.g. Google
survey) or email, face-to-face, or on web (e.g. Skype, Facetime, Zoom, or Viber). When designing or
constructing your own research questionnaire, remember the following guidelines:
• Keep it as short and simple as possible.
• Make sure it is visually appealing and easy to read.
• Cluster or block related questions.
• Move from general questions to more specific questions.
• Move from easy to answer questions to more difficult to answer questions.
• Avoid leading questions, questions with ambiguous words, and questions that are too difficult to
answer (due to recall problems, etc.)
• Make sure any response scales used are logical, with categories that are mutually exclusive.
• Always pretest the questionnaire to establish its reliability and validity, as well as identify
potential problems, like length of answering and the use of the language for understanding.

❖ What are Focus Group Discussions?

Focus group discussions (FGDs) can be moderated group interviews and brainstorming sessions
that provide information on users’ needs and behaviors. It can be useful for the following types of
discussions:
• Exploratory – Obtain information on general attitudes, understand the circumstances under
which customers might require your product or service, and understand their desired
outcomes.
• Feature prioritization – If trade-offs have to be made among various customers’ needs,
focus on groups can be helpful in prioritizing them.
• Comparative analysis – Understand whereelse customers go to get similar information,
services, or products and what attracts them to those sources.
• Trend explanation – If you notice a trend in the way that customers use your website (for
example, they always use the search function rather than navigate through the structured
product list), then focus groups can be used to better understand why this is happening.

48
The Canada Business Network (2015), also discussed the following considerations in the use of FGDs in
market research:

• Limit the length of the session to between 90 and 120 minutes.

• Generally, conduct focus groups with 8 to 10 participants per group (recruit 10 to 20 participants
to ensure that 8 to 10 show up)
• Use a knowledgeable moderator/facilitator who can manage group dynamics, probe skillfully to
obtain deeper understanding of issues, and capture a broad spectrum of opinions.
• Use a semi-structured or open-format discussion.
• Strive for uniformity in the group’s composition.
• If you feel that group influence is likely to be a strong factor ( participants will be influenced
greatly by what others are saying), then personal interviews or smaller groups may be an option
to consider than FGD.

❖ What are personal interviews?

Personal interviews are traditional method of data collection which are normally
done on a face-to-face manner with the respondents. It is generally used in the following
situations:
• The topic is too personal or sensitive.
• A person’s opinion may easily be influenced by others in the group.
• Logistic problems may make the groups impractical
• The interview respondents are executives from competing firms who would be
reluctant to open up in a group situation.
• The interview respondents are busy and it is difficult to schedule group sessions.

B. Secondary Research
Secondary research is gathering data from existing available resources, like company
records, data bases, research reports published in the media, internet search engines, libraries and
books, which answer the question at hand. It is usually less time consuming than primary
research, and can be less expensive as well.
Another key secondary resource is statistical data from official statistics providers (like the
National Statistics Office; NEDA; Department of Trade and Industry); and other organizations
(Marketing Associations, Chambers of Commerce; Industry Associations).

Let’s Analyze
1. Explain the meaning of market research and give at least three reasons for business owners to
conduct market research.

2. Differentiate primary research from secondary research. Give specific examples of each.

3. Describe four guidelines in designing a questionnaire for market research.

4. Discuss three considerations in the conduct of FGDs.

49
LESSON 3: BRANDING
❖ What is branding?
According to Cannon, Perrault, and McCarthy (2008), branding means “the use of a name, term,
symbol, or design---or a combination of these---to identify a product.” It encompasses the use of
brand names, trademarks, and practically all other means of product identification. A brand combines
dimensions that differentiate the offering in some way from other offerings designed to meet a similar
need. These variations may be functional, rational, or tangible---related to the brand’s product
performance. They may also be more symbolic, emotional, or intangible---related to what the brand
represents.
A brand name is a word, letter, or a group of words or letters. Examples: Air21; Datu Puti;
ANC; PLDT; LBC; Knorr, Lucky Me; and many more. Brand names connect a product with the
benefits a customer can expect.
Trademark is a legal term which includes only those words, symbols, or marks that are legally
registered for use by a single company.
A service mark is the same as trademark, except that it refers to a service offering.
Examples of trademarks/logos:

Branding is providing products and services with the power of brand. To brand a product, it is essential to
teach consumers “who” the product is ---by giving it a name and using other brand elements to help
identify it ---as well as “what” the product does and “why” consumers should care.
Characteristics of a good brand name:

Short and simple Suggestive product benefits

Easy to spell and read Adaptable to packaging/labelling needs
Easy to recognize and remember No undesirable imagery
Easy to pronounce Always timely (does not go out-of-date)
Can be pronounced in only one way Adaptable to any advertising medium
Can be pronounced in all languages (for Legally available for use (not in use by another
international markets) firm)

Let’s Perform
1. You are to market “cupcakes” in a particular city. Develop a brand name and a trademark/logo for it.
2. You are to market a “wellness center that offers spa and massage” in a particular province. Develop
a trademark/logo for it.

50
LESSON 4: MARKETING MANAGEMENT PRACTICES

According to the American Marketing Association, Marketing is: “The process of planning and
executing the conception, pricing, promotion, and distribution of organizational objectives.” Each of
these functional areas involves a lot of coordination and planning to arrive at the best advertising, public
relations, and sales package to best present your product or service to the customer.

Marketing Management Practices

1. Estimate potential market demand.

Estimation is an educated guess. The best way to be very certain and confident about estimates
for potential market demand is to look for facts about the industry where the entrepreneur intends to enter.
Census data is a good source of estimates to be able to project sales.
2. Analyze the competitors.
It is first knowing what the competitor’s marketing is, and then, understanding why the target
market is buying or will buy from the competitors. The best way to do this is to go out there and see the
competition yourself. Some entrepreneurs even go to the extent of buying the products or using the
services of its competitors. In this way, they are able to assess and differentiate their own and their
competitor’s products or services, determine the marketing needed, be ahead of the competition, and ride
with the market trends.

3. Price the products/services reasonably.

A product can have great features and benefits, but the price of the product can have a greater
influence on how it will sell in the marketplace. Some people will pay a higher price for a particular
product if it is of better quality and will perform better and last longer.

4. Adopt a good product name for branding.

When a name is different or unusual, it may attract attention. And perhaps arouse curiosity. Is it
something that is interesting, such as one that is a part of a rhyme or evokes humor? A good example is
Jollibee. Consider a name that creates a mental picture or image. Another example is Red Ribbon which
provides an image that is to remember. If the name is meaningful and fits in the product, it tends to
generate higher recognition and recall.

5. Put price tags.

All goods which are being sold must have a price tag. A price tag is a label to the price
of an item sold in a store. It is the amount of money a buyer pays in order to own the item.
Placing a price tag on goods being sold have the following advantages:
• The price of an item is readily available to a buyer;
• It eliminates inconvenience on both the seller and the buyer as to the process of
inquiry regarding the prices of goods being sold;
• A buyer can save time in choosing goods because he can easily pick out goods
he/she can afford;
• The government can easily monitor stores which are not selling goods at a higher
price than the prices specified by the Price Control Council.

51
6. Promote the products /services in various ways to increase sales.
Products or services of the firm need to be advertised in order to generate sales. The
entrepreneur has to devise ways of making people know and want to buy their products. This phase of the
business falls under sale promotions. Sales promotion may be accomplished through any of the following
ways:

• Newspapers, radio, and other forms of media

• Window displays
• Fashion show
• Exhibits
• Lecture and demonstration
• Product sampling
• Quantity discounts
• House-to-house selling
• Telephone
• E-mail
• Website
• Social network
• Sales events
• Poster

7. Attend to the complaints of the customers.

Among the practices being resorted to by business establishments are the following:
• Supermarkets and department stores have a customer service counter which attend to the
needs and complaints of customers;
• Customers are given a certain number of days within which they can return a product for
replacement or refund;
• Goods being sold have an expiration date to prevent the sale of expired or stale products;
• In restaurants, waiters repeat the orders of customers to ensure that they a have taken the right
orders.

8. Issue official receipt to customers.

All business establishments are required to issue official receipts. However, there are some
which do not issue receipts unless the customers ask for it. Failure by a business establishment to issue a
receipt means a financial loss to the government in terms of payment of taxes.

9. Practice courtesy and efficiency in serving customers.

Treating customers in a courteous manner means greeting them upon entering the store
and thanking them upon leaving, promptly attending to their orders, informing customers as to
the length of time an order can be finished, requesting people to sit down while waiting for their
orders, answering all queries from the customers, and delivering the service or product on the
date and/or time promised to the customer.

10. Pack the goods bought by a customer properly.

The service to a customer does not end when the customer pays for his goods.
Loading goods inside the paper bag should be done properly.

52
11. Observe the rights of consumers.
To protect the consumers from manufacturers who produce poor quality goods and from service
providers who provide inefficient service, the government passed several laws protecting the following
rights of consumers:

RIGHTS OF DESCRIPTION CONSUMER RELATED LAWS

CONSUMERS
1. Right to safety Consumers have the right to be safe from Art. 2187, RA 386, Civil Code of the
goods that are harmful to one’s health and Philippines--Manufacturers are accountable
life. All products are required to be for the death, sickness, injury, or harm anyone
checked for safety, reliability, and quality. resulting from the use of its products.
Art. 10, RA 7392, Consumer Act of the
Philippines –Products found unsafe and
dangerous are not to be sold nor distributed to
the public.
2. Right to Information Consumers have the right to be protected RA 306 – The manufacturer is accountable for
from misleading information and fraud. all the information it gives out regarding a
Art. 546, RA 3940—Fake advertisements particular product.
are not allowed. Art 546, RA 3940—Fake advertisements are
not allowed.
Art. 10, RA 7392 – Advertisements which
misinform the public are not allowed.
Art. 38, Ra 7392—This act provides a listing
of food, cosmetics, drugs, and others which
are unsafe to the consumers.
3. Right to choose Consumers have the right to choose among
a variety of products. In case of a
monopoly, the government needs to monitor
such a manufacturer to safeguard the
welfare of the public.
4. Right to be heard Consumers have the right to complain to the Art. 1547, RA 386 – Complaints from the
proper authorities regarding any consumers should be entertained.
dissatisfaction for any harm done as a result
of the use of a particular product.
5. Right for compensation Consumers have the right to claim for Art 1457, R 386 – The seller should provide a
for damages compensation for any harm done as a result guarantee attesting to the safety of the product
of the use of a particular product. and must be responsible for whatever harm
may be inflicted on the consumer.

Let’s Perform
1. Together with your group mates, prepare an advertising campaign for a product that caters to
young people like you. Take a video and present it in class complete with production gimmicks.

53
LESSON 5: THE BUSINESS PLAN
❖ What is a business plan?

The business plan is a blueprint of the business that the entrepreneur would like to start. It
aims to establish if a business idea will bring in a fair return to one’s investment, will be beneficial to
the society, and will bring no harm to the environment when it is operated. The goals of a business
are to assess the feasibility of the business idea, develop business strategies to make the business
idea doable, and to use it for obtaining resources, especially loans from financial institutions like
banks. According to the Department of Trade and Industry, through the Bureau of Small and
Medium Enterprise Development (BSMED), the following are the reasons why an entrepreneur still
need to make a business plan, no matter how good the business idea seems to be:
• Reduce, if not remove, the risk of losing money invested in a poorly researched or unstudied
business idea.
• Avoid costly mistakes.
• Anticipate the financial requirements.
• Organize the activities beforehand.
• Assess actual performance against set goals.
• Apply for financing from lending institutions.

Business Plan Outline

A. Executive Summary
• Description of the proposed business and business model
• Description of the business opportunity to capture or market problem the business needs
to solve.
• Reasons for why this is an attractive business opportunity
• Key distinctions or differentiations of the business versus competitors
• Overview of the sales, marketing and operations strategy and plan
• Description of the execution plan and timeline
• Overview of projected financials containing revenues, costs, profits and assumptions
B. Management and Organizations
• Company name, logo and address
• Vision and mission statements
• Key personnel
• Workforce and support personnel
• Organizational chart
• Ownership capitalization, compensation and incentives
• External Management Support
C. Product / Service Plan
• Purpose of the product/service
• Product’s unique features
• Material requirements and sources of supply
• Process and equipment that will be used to manufacture the product/render the service
• Production/Service Process and Controls
• Distribution logistics

54
 • Regulatory and other compliance issues
D. Market Plan
• Market analysis which includes demand and supply vis-à-vis competitors
• Marketing and Sales Strategies
• Product/Service Characteristics or features
• Pricing policy
• Sales projection
E. Financial Plan
• Start-up Cost requirements
• Financial projections
• Breakeven analysis
• Budget

Sample of an Actual Business Plan

Chapter I

• Executive Summary
My T-shirt Company will offer personalized, good quality, and fashionable printed casual T-shirt wear that
are attuned to the needs of the youth in Bulacan. Historical data shows that there is an increasing demand for t -shirts
among the high school and college students in Bocaue, Bulacan. However, the existing five big competitors are not
able to meet such demand resulting in a big gap. This means that there is a big unmet demand of the market in the
printed silkscreen t-shirt. Our primary strategy is to offer a variety of options for choosing their custom shirts. Most
of the orders will be for white t-shirts; however, other colored t-shirts will be available both for men and women.
The customers may choose from the existing designs, supply their own, or have our graphic designer create a design
for them. Our business will initially operate home-based, and use social media (e.g. Facebook and Twitter) to
showcase designs and actual T-shirts with silkscreen designs for ease of browsing and ordering. Any customer will
have the option to pick-up their merchandise or have it delivered at their convenience. The pre -designed shirts will
also be available at school bazaars, focal bazaars, in Bocaue, and fairs on some occasions. My T -shirt products have
number of competitive features that will be used to their advantage to achieve market penetration, such as its large
catalog of graphics and the affordability of the shirts.
Initial capitalization for the business is P 49,700.00, good for a one-month expense. Expected revenue for
Year 1 is P 147,532.80, while the total costs of goods sold will amount to P 568,800.0 0

Chapter 2

• Management and Organization

Company Name: My T-shirt Company

Logo:

Address:

Vision Statement:

55
 Mission Statement:

Key Personnel:

Workforce and Support Personnel:

Organizational Chart:

Ownership:

Capitalization:

Compensation and Incentives:

External Management Support:

Chapter 3

• Product Plan
Purpose of the Product

My T-shirt will offer customers a variety of options for choosing their own custom shirts. Most
of the orders will be for white t-shirts, however, other colored t-shirts will be available both for men
and women who are looking for casual yet trendy shirts.

Product’s Unique Features

My T-shirt has two unique features: First, a wide array of graphic designs …. Second, high
quality of screen printing which is made from the premier silk screen ink and paints…

Materials and equipment requirements and source of supply

MATERIALS SOURCE
Screen printing press Silkscreen Printing Specialty Store in Divisoria
Wood screen Hardware store in Bocaue

Production Process and Controls

1. Create a design
a. Print out a solid image pattern
2. Prepare the frame
a. Coat the frame with photo emulsion
3. Transfer image

Distribution Logistics

My T-Shirt Company will initially operate home-based, and use social media(e.g. Facebook and
Twitter) to showcase designs and actual T-shirts with silk screen designs for ease of browsing and
ordering.

56
 Regulatory and other compliance issues
My T-shirt Company will be registered as a single proprietor enterprise with the Department of Trade
and Industry provincial office. A Barangay Clearance will also be secured before it applies for a
Mayor’s permit to operate as a home-based business micro enterprise.

Chapter 4

• Market Plan

Market analysis, which includes demand and supply vis-à-vis competitors

Historical Total Supply: Previous 3 years sold by the competitors per year Total
Data Demand Supply
(3 Years)
A B C D E
Year 1
Year 2
Year 3

Marketing and Sales Strategies

Marketing Strategy
My T-shirt will utilize a number of different venues to communicate this message.
Social Media – the company will be active on social media platforms, specifically Twitter,
Facebook, Instagram and Pinterest, to increase awareness and visibility to the younger
generations, particularly the millennials.
Student Organization – the company will try to gather data from the various student groups who
actively purchase shirts for their members. A link will be established with them so that they
become aware of the My T-shirt products.

Sales Strategy
The sales strategy will emphasize that ordering and buying a shirt from My T-shirt is very easy,
accessible, and a pleasing experience. The sales effort will work on the possibility of having its own
website in the long run, the main tool to be used in ordering.

Product Characteristics or Features

My T-shirt products have a number of competitive features that will be used to its
advantage to achieve market penetration.
• Large catalog of graphics …
• Availability of the shirts…

Pricing policy

My T-shirt Company will adopt the differing price based on the size and the complexity of the
design policy. As such, below is the pricing scheme that will be adopted:
SIZE OF THE T-SHIRT PRICE (PESO)
Small 160

57
 Medium 170
Large 180
Extra Large 190
Sales Projections

Size Price Quantity Year 1 Year 2 Year 3 Year 4 Year 5

Per Qty Peso Qty Peso Qty Peso Qty Pes Qty Pes
Month (Units (Units (Units (Units o (Units o
) ) ) ) )
Small 160 37 444 71,040 488 78080 537 85920
(10%)
Medium 170 93 1116 189,72 1228 208,76 1,350 22950
(25%) 0 0 0
Large 180 185 2220 399600 2442 439,56 2686 48348
(50%) 0 0
Extra 190 55 660 125400 726 137,94 799 15181
Large (15%) 0
Total 370 4440 785,76 4664 864,34 5372 95071
0 0 0

Market Analysis Summary

The demand for silkscreen printed shirts in Bulacan has shown steady growth over the last five years. It
was observed that high school and college students are among the biggest market for the product. These
market segments favor trendy and quality shirts at an affordable price. To increase market penetratio n,
My T-shirt will offer a large catalog of graphics aside from the affordable shirts to its intended market
segment. My T-shirt offers price differential based on the size and the complexity of the design wiiith
prices ranging from P160-P190.

Chapter 6

• Financial Plan

Start-up costs requirements

Financial projection
Breakeven analysis
Budget

Start-up Summary

Expenses Cost/pc 370 shirts Year 1

Screen printing press 4,500.00 4,500 54,000
Wood screen (50 uses/pc) 600.00 3,600 43,200
Squeegee 400.00 400 4,800
Silkscreen fabric (60 shirts @ P5/shirt) 300.00 1,800 21,600
Photo emulsion (10-15 screens @ P16/shirt) 250.00 4,500 54,000
Lightbulb 100.00 100 1,200
Shirt 50.00 18,000 216,000
Transparency of or acetate film 5.00 1,500 18,000
Utility 800.00 800 9,600
Labor cost 13,000 156,000
Permits and licenses 1,500 18,000
TOTAL 49,700 596,400

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 The business plan starts with the market idea. Generate about five products or services that you want
to start as a small business. Describe each briefly. Then, identify to whom you intend to sell your
products(s)/service(s). Use the table below to write your answers.

Products/Services Description Target Market

The next step in a business plan is the production aspect. Choose one product/service that you like
the most to be your future business. Research how you will produce it and the raw materials and
equipment/machinery needed for its production. Use the table below to write your answers

Name of the Product/Service _____________________________________________________________

Production Process Raw Materials Equipment/Machinery

Something to Ponder On
• “A business plan is an operating tool which, if properly prepared , will help the entrepreneur to work
effectively towards its success.”
• “The entrepreneur should communicate the company’s mission and vision to all his/her stakeholders
to gain their confidence.”

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CHAPTER SIX
OPERATIONS AND HUMAN RESOURCE MANAGEMENT

Objectives:
• Discuss the 5Ms of production management;
• Explain the production/operation management practices that can be adopted;
• Describe the meaning and functions of human resource management; and
• Discuss the human resource management practices that can be adopted.

❖ What is management?
Management is the art of getting things done with and through other people. For the
owner-manager of the business, there are basic managerial concerns that should be attended
to. There are a lot of ways to manage business so that it operates effectively and efficiently.
According to Gutstein and Sheely n,d., “Multistream managers use practical wisdom to
achieve multiple forms of well-being for multiple stakeholders.”

LESSON 1
Production /Operations Management

❖ What is production?
“Production is an activity that converts materials into useful forms. The materials may be raw
materials, semi-processed or semi-finished goods, or even finished products. Machinery, equipment,
methods, and processes are the basic elements of production” (Burstiner 1997).

❖ What are the 4Ms of production?

1 . Method. Based on the inventory management system, the manager can determine the volume of
products that need to be processed and who will be responsible for each step of the process to
eliminate damage to the product and to eliminate areas where time and manpower are be wasted.
Controlling waste is the key to efficient and profitable production.
2. Manpower. Refers to people who will take to perform the methods being examined and what
positions should they be in. How will the personnel be trained and measured for performance?
What is the “cycle time” for each part of the method.
3 . Machine. These are tools or equipment needed in order for the business to function effectively,
efficiently and fast. In a company, all workers must have access to the same tools and equipment
and are trained on how to maintain the machinery and tools.
4 . Materials. In production, all materials needed to perform all parts of the production must be
conveniently located to minimize waste and time.

❖ What is operation management?

Operation management refers to the activities, decisions, and responsibilities of managing the
resources which are dedicated to the production and delivery of products and services. It can
significantly contribute to the success of the business by using one’s available resources to effectively
produce products and services in a way that satisfies the customers.

Four advantages of an effective operation can provide:

1. reduce the costs of producing products and services
2. increase the revenue by increasing the customer satisfaction through good quality product and

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 service
3. reduce the amount of investment that is necessary to produce the required type and quantity of
products and services, by increasing the effective capacity of the operation
4. provide the basis for future innovation, by building a solid base of operations skills and knowledge
within the business

Production/Operations Management Practices

1. Plan and control production. Production planning and control is the key to efficient and
effective production management. It deals with decisions that will enable the entrepreneur to
produce goods or offer services: 1) according to the customers; specifications or needs; 2) in the
quantity demanded; 3) by the schedule demanded; 4) minimum costs.

2. Adopt the standard production models. Whatever the business needs to produce to be able to
sell, it means it is vital to have a production process in place that will help the entrepreneur make
certain that the company has a quality product/service that is needed and produced the way it
was planned.

3. Design plan layout for better efficiency. Layouts pertains to “the way machines, workplaces, and
storage areas are located in relation to one another.” According to DTI-BSMED, “a good layout is
one that facilitates the manufacturing process, minimizes materials handling and investment in
equipment, maximizes use of floor area, promotes effective utilization of manpower, and
provi des for employee convenience, safety, and comfort at work.”
4. Choose the right machine and equipment. The choice of machine and equipment affects the
overall profitability of your business. The DTI-BSMED Guide (2010) indicated that when choosing
machines and equipment, the following considerations should be kept in mind by the
entrepreneur:

Different kinds of machines

• Operating characteristics. The most important thing to consider in selecting the supplier or
brand for a particular production machine is the operating characteristics of the machine you
need.

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 • Engineering features. These features of machine must be compatible with other equipment ,
process and plant layout -- consider the size, power requirements, maintenance and safety
features.
• Cost. Analyze and compare the cost of each machine in relation to its capacity, efficiency in
its use of fuel, and other technical considerations.
• Qualitative factors. Consider all possible suppliers before making a final decision. Who
among them is willing to provide installation assistance, warranty and/or maintenance
service.

5. Purchase based on needs and on time. Determine correctly what needs to be ordered, the
reliable sources of supplies, the quotations, prices and terms of supply and the contracting for
the supplies or services.
6. Maintain machines and equipment properly. It is important to keep machines and equipment
in good running condition. Their proper care and maintenance ensures that there is no
disruption of production due to machine breakdown.
7. Manage inventory/stock well. Stock inventory pertains to “all the goods a business has for sale,
and all raw materials or parts of a business keeps for continuous operations.”
8. Ensure quality control. Defective products can be a result of lack of control.
Let’s Perform:

1. Read through a newspaper’s Business Section. Find out how an entrepreneur undertake operations
management of his/her business. Clip the newspaper item/s of feature/s.

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LESSON 2: Human Resource Management

❖ What is human resource management?

According to Noe, Hollenbeck, Gerhart, and Wright (2006), human resource management
(HRM) refers to “the policies, practices, and systems that influence employees’ behavior, attitudes, and
performance.” HRM practices, as viewed by them, include analyzing and designing work, determining
human resource needs (HR planning ), attracting potential employees (recruiting), choosing employees
(selecting), teaching employees how to perform their jobs and preparing them for the future (training
and development), rewarding employees (compensation), evaluating their performance (performance
management), and creating a positive work environment (employee relation).”

The following are some of the important human resource management practices that should be
considered by the entrepreneur in managing one’s business effectively :
• Design effective recruitment strategy. Recruitment is “any practice or activity carried on by the
organization with the primary purpose of identifying and attracting potential employees.”
• Adopt a good selection process. Selection is the “process by which the organization attempts to
identify applicants with the necessary knowledge, skills, abilities and other characteristics that will
help the organization achieve its goals.”
• Develop effective training program. Training is a “set of activities aimed to facilitate learning of
knowledge, attitude, and skills among people in the organization, to, in turn, improve their current job
performance and contribution to the achievement of organizational goals.”
• Conduct performance management. Performance management is the “process through which
managers ensure that employees’ activities and outputs contribute to the organization’s goals.”
• Implement an attractive compensation scheme. Compensation refers to “all forms of financial
returns and tangible services and benefits that employees receive as part of an employment
relationship.”
• Design work-family balance program. Work-family balance may be defined as the “degree to
which an individual is able to simultaneously balance the temporal, emotional, and behavioral
demands of both paid work and family responsibilities (Hill, Hawskin, Ferris, and Weitzman 2001).
• Observe fair employee relation practices. Employee relations or labor relations, pertains to a set of
processes and procedures utilized in the interaction between employees and employer to attain their
perspective goals, while accommodating the needs of both parties.
• Determine the entrepreneur’s role in the business. Many small businesses begin with the founder-
owner doing all the management functions of marketing, production, human resource, and finance
without the help of specialized staff.
• Get the right people. In starting a business, the entrepreneur may begin with family members,
relatives, friends, neighbors or acquaintances as the workforce, but be clear about requiring them to
be professional. Do not limit applicants to the trained and experienced. Be open to those who can
help the enterprise grow. Choose people who possess the expected work values and are willing to be
trained and to stay in the company after being trained.
• Prepare an employee manual. Employee manual should contain information pertaining to company
policies and procedures on working conditions, compensation, other benefits, discipline, and
grievance processing, among others.
• Invest in human capital. Human capital is the quality and quantity of skills, education, and talents
a person has. Allocate sufficient budget for the cost of specialized training that human resources may
need to meet the skills necessary to be able to make the product or complete the service to be offered
to acquire or develop the market.
• Motivate the people in the workplace. Motivation is a function of willingness and ability (skills)
to do the job, as well as help employees work at a high energy levels.

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• Maintain employees’ commitment and loyalty. One way of doing this is to ensure that the work
environment is safe, healthy, caring for employees, and at least compliant of government rules and
regulations, as well as company social responsibility.
• Effectively communicate policies and practices with employees. Communication is very
important so that employees feel they are really part of the organization and, thus, work more and
better. When employees know what are expected of them, how they will accomplish their tasks,
instructions are clear, and they are given opportunity to give feedback to the concerned stakeholders
in the enterprise, they will feel valued and respected. This can lead to better performance and higher
productivity.

• Something to Ponder On
1. “Learn to invest in human capital. Your profit will be beyond your expectation.”
2. Happy workers are productive and committed in their jobs.”
3. Your people are your important asset in the business. Take good care of them.
4. Human resources play an important part in developing and making a company or organization at
the beginning or making a success at the end, due to the labor provided by employees.

Let’s Perform:
1. Get hold of the labor code of the Philippines. List about (10) Labor Code provisions that the
entrepreneur should comply with in managing his/her business with regard to his/her workers.
2. Interview a female entrepreneur whose business is now very successful. Ask her for some
tips on how she successfully managed her business over the years. Write your answers in a
diary forma

Reference: Divina M. Edralin, Entrepreneurship, K-12 revised edition, Quezon City Philippines, 2019

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