ENTREPRENEURSHIP PRINCIPLES AND PRACTICES

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Understand the concept

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FINAL OUTPUT BUSINESS PLAN

REFERENCE MATERIALS
ENTREPRENEURSHIP: AN INTRODUCTION Donald Kuratko 2012. (Philippine Edition)

SCHOOLBOOK
ACCESSCODE:

SOME OF MY RULES
!!Attendance. You may be absent only (due to sickness or extremely unavoidable circumstances), for a maximum of 9 hours, inclusive of tardiness. You are held responsible for all lessons and requirements that you missed during your absence. All absences after that shall mean excessive absences, which merit a grade of 0.00.

SOME OF MY RULES
!!Assignment. Assignments will be due at the beginning of class unless otherwise indicated. Online assignments/assessments deadline will be indicated. Late submissions will be accepted with corresponding deductions !!Seatwork. There is no provision for makeup for any missed seatwork.

SOME OF MY RULES
!!Examinations. Make-up quizzes are given for excused absences only. If you missed any quiz you should see me during my consultation hours on the day you report to our class to schedule the makeup quiz. You will lose the chance to take the special quiz if you fail to take such as scheduled.

SOME OF MY RULES
!!Major Examinations. You may take a special examination only if your failure to take such is due to an approved absence, sickness, or extremely unavoidable circumstances. You are responsible for arranging the schedule with me. Special major examination is given only within one week after the examination schedule.

PROCESS Opportunities Value creation INNOVATION growth RISK rewards

ENTREPRENEURSHIP
!!Entrepreneurship is more than the mere creation of business:
!!Seeking opportunities !!Taking risks beyond security !!Having the tenacity to push an idea through to reality

ENTREPRENEURSHIP
!!The process whereby an individual or a group of individuals used organized eorts and means to pursue opportunities to create value and grow by fullling wants and needs through innovation and uniqueness, no matter what resources are currently controlled

entrepreneurship
!!The process of creating something dierent with value by devoting necessary time and eort, assuming the accompanying nancial, physical, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence (Hisrich and Peters, 1999)

Entrepreneurs challege the unknown

!!Recognize opportunities where others see chaos or confusion !!Are aggressive catalysts for change within the marketplace !!Challenge the unknown and continuously create the future

Entrepreneurs vs. Small Business Owners

Small Businesses Owners
!Manage their businesses by expecting stable sales, prots, and growth

Entrepreneurs
!Focus their eorts on innovation, protability and sustainable growth

Small Business
!!Independently Owned !!Doesnt emphasize new or innovative practices !!Little Impact on industry !!Fewer than 100 employees

Entrepreneurial Venture
!!Innovative Practices !!Goals are protability and growth !!Seeks out new opportunities !!Willingness to take risk

SME FACTS
Small and medium enterprises (SMEs) comprise 99.6% of all registered business in the Philippines and employ 70% of the workforce

SME CLASSIFICATION
As to No of workers
Magna Carta for Small and Medium Enterprises !!Micro !!Small !!Medium !!Large less than 10 10-99 100-199 200 and above

SME CLASSIFICATION
As to Asset Size
Republic Act No. 9178, Barangay Micro Business Enterprise (BMBE) Act of 2002

!!Micro up to 3,000,000 !!Small P3,000,001 - 15,000,000 !!Medium - P15,000,001 - 100,000,000 !! Large above P100,000,000

ENTREPRENEURS 1.! Johnlu Koa 2.! Sheree Gotuaco 3.! Ronald Pineda 4.! Rodrigo and Julia Gandionco 5.! Jay Aldeguer 6.! Bernie Liu 7.! Chit Juan 8.! Cecilo Kwok Pedro 9.! Jose and Socorro Cancio-Ramo 10.! Steve Benitez

ENTREPRENEURIAL VENTURES A.! B.! C.! D.! E.! F.! Folded and Hung French Baker Island Souvenirs Penshoppe National Bookstore Lamoiyan Corporation (Happee, Dazz) Julies Bakeshop Solo, Ensemble, Freeway Figaro Coee Company Bos Coee

G.! H.! I.! J.!

1. Johnlu koa
B. French Baker

2. Sheree Gotuaco
H. SOLO, Ensemble, Freeway

3. Ronald Pineda
A. F&H

4. Julie and Roberto Gandionco

G. Julies Bakeshop

5. Jonathan
C. Island Souvenirs

Jay Aldeguer

6. BerNIE LIU
D. Penshoppe

7. Pacita Chit Juan

I. Figaro

8. Cecilio pedro kwok

F. Lamoiyan Corporation

9. Socorro Ramos
E. National Bookstore

10. Steve Benitez

J. Bos Coee

MORE DEFINITIONS
!!According to Robert Ronstadt
!!The dynamic process of creating incremental wealth. !!This wealth is created by individuals who assume major risks in terms of equity, time, and/ or career commitment of providing value for a product or service. !!The product or service itself may or may not be new or unique but the entrepreneur must somehow infuse value by securing and allocating the necessary skills and resources.

IN conclusion
WE CAN SAY THAT: ENTREPRENEURSHIP is !!A dynamic process of vision, change, and creation.
!!Requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions.

AS A CONCLUSION
!!Essential ingredients include:
!!The willingness to take calculated risksin terms of time, equity, or career. !!The ability to formulate an eective venture team; the creative skill to marshal needed resources. !!The fundamental skills of building a solid business plan. !!The vision to recognize opportunity where others see chaos, contradiction, and confusion.

ENTREPRENEURSHIP MYTHS

MYTHS
1.! Entrepreneurs Are Doers, Not Thinkers 2.! Entrepreneurs Are Born, Not Made 3.! Entrepreneurs Are Always Inventors 4.! Entrepreneurs Are Academic and Social Mists 5.! Entrepreneurs Must Fit the Prole

MYTHS
6.! All Entrepreneurs Need Is Money 7.! All Entrepreneurs Need Is Luck 8.! Entrepreneurship is Unstructured and Chaotic 9.! Most Entrepreneurial Initiatives Fail
6.! Corridor principle with every venture launch, new and unintended initiatives arise

10.!Entrepreneurs Are Extreme Risk Takers (Gamblers)

Evolution of Entrepreneurship

ENtrepreneurship
!!derived from the French entreprendre, meaning to undertake.

Actor or a person in charge of large production projects NO RISK CLERIC

Richard Cantillon (FOUNDER) Buy at a certain price and selling at an uncertain price

Jean Baptist Say - Prots of Entrepreneurship were separate from prots of capital ownership

Organize and operate an enterprise for personal gain

Joseph Schumpeter Innovator using invention or untried technology

RISK

Idea of Capital Users vs. Venture Capitalist

Peter Drucker - Someone who maximizes Opportunity

ENTREPRENEURIAL SCHOOLSOF-THOUGHT

MACRO VIEW
!!The Environmental School of Thought
!!Considers the external factors that aect a potential entrepreneurs lifestyle. !!Institutions, values, morels that mold entrepreneurship

!!The Financial/Capital School of Thought

!!Based on the capital-seeking processthe search for seed and growth capital.

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MACRO VIEW
!!The Displacement School of Thought
!!Alienation drives entrepreneurial pursuits
!!Political displacement (laws, policies, and regulations) !!Cultural displacement (preclusion of social groups) !!Economic displacement (economic variations)

Micro view
!!factors that are specic to entrepreneurship !!The Entrepreneurial Trait School of Thought
!!Focuses on identifying traits common to successful entrepreneurs. replicating means success
!!Achievement, creativity, determination, and technical knowledge

!!Focuses on the nurturing and support that exists within the home atmosphere.

Micro view
!!Venture Opportunity School of Thought
!!Focuses on the opportunity aspect of venture developmentthe search for idea sources, the development of concepts, and the implementation of venture opportunities. !!Creativity and market awareness !!Right idea at the right time to the right market
!!Corridor principle: New pathways or opportunities will arise that lead entrepreneurs in dierent directions.
!!Preparation in meeting opportunities

STRATEGIC FORMULATION
!!Emphasizes the planning process in successful venture development.

!!Ronstadts View
!!Strategic formulation is a leveraging of unique elements:
!!Unique Markets identifying market segments and inbetween markets from larger markets (mountain gap strategies) !!Unique People - the special skills and talents from where the venture is built (great chef strategies) !!Unique Products - innovations in new or existing markets (better widget strategies) !!Unique Resources ability to gather or harness resources over the long term (water well strategies)

PROCESS APPROACHES

INTEGRATIVE APPROACH
!!Built around the concepts of inputs to the entrepreneurial process and outcomes from the entrepreneurial process. !!Focuses on the entrepreneurial process itself and identies ve key elements that contribute to the process. !!Provides a comprehensive picture regarding the nature of entrepreneurship that can be applied at dierent levels.

Source: Michael H. Morris, P. Lewis, and Donald L. Sexton, Reconceptualizing Entrepreneurship: An Input-Output Perspective, SAM Advanced Management Journal 59, no.1 (Winter 1994): 2131.

ENTREPRENEURIAL Assessment approach

!!Stresses making assessments qualitatively, quantitatively, strategically, and ethically in regard to the entrepreneur, the venture, and the environme