Core Competencies in Entrepreneurship b.

heart flame - surging passion

c. gut game - ability of the entrepreneur to
1. Economic and Dynamic Activity - Entrepreneurship is sense without using the five senses. This is
an economic activity because it involves the creation also known as intuition.
2. Opportunity Screening - process by which
and operation of an enterprise with a view to creating entrepreneurs evaluate innovative product ideas,
value or wealth by ensuring optimum utilization of strategies, and marketing trends.
limited resources. 3. Opportunity Seizing - At this stage, the entrepreneur
must already have an idea about where to
2. Innovative – The entrepreneur constantly looks for put up the business and the means and
new ideas, thus he needs to be creative. methods of marketing the products and/or
services.
3. Profit Potential - The entrepreneur can be ENTREPRENEURIAL SKILLS
compensated by his profit coming from the operation. Skills are considered as the personal abilities to do
things well. They come from the totality of the
4. Risk bearing – The entrepreneur needs to gamble but
knowledge, practice or experience, and aptitude of a
wise enough to offset the risk. person.
- It is acquired and developed by a person
Types of Entrepreneurs through constant and correct practice.
Entrepreneurial skills refer to the set of cognitive,
1. Innovative Entrepreneurs - They are those who technical, and interpersonal skills required in the practice
always make new things by thinking of new ideas. They of entrepreneurship.
have the ability to think newer, better and more
The skills required in the practice of entrepreneurship:
economical ideas.
a. cognitive skills
2. Imitating Entrepreneurs - They are those who don’t b. technical skills
c. interpersonal skills
create new things but only follow the ideas of other
entrepreneurs. 1. cognitive skills - mental ability of the entrepreneur to
learn new things, generate new ideas, and express
3. Fabian Entrepreneurs - They are skeptical about knowledge in both oral and written forms.
changes to be made in the organization. They don’t
initiate but follow only after they are satisfied. The cognitive skills in the practice entrepreneurship
include the
4. Drone Entrepreneurs - They are those who live on the a. ability to understand written materials,
b. ability to learn and apply new information,
labor of others. They are die-hard conservatives even c. ability to solve problems systematically,
ready to suffer the loss of business. d. ability to create new ideas, and
e. ability to innovate new products and procedures or
5. Social Entrepreneurs - They are those who initiate methods.
changes and drive social innovation and transformation
in the various fields such as education, health, human 2. Technical skills - relate to the knowledge and
proficiency in a specialized field like computer
rights, environment and enterprise development. technology, accounting, marketing, operation research,
engineering, medical fields, or other related technical
Career Opportunities of Entrepreneurship fields.
1. Business Consultant - with the expertise of in the field The technical skills of an entrepreneur include
of entrepreneurship, he can be a very good source of proficiency and ability among others, in the following
advices to other entrepreneurs and would be business areas:
men. a. information technology
b. feasibility study and business plan preparation
2. Teacher - a graduate of an entrepreneurship can use c. technical writings skill
d. management and finance
his knowledge in teaching.
3. Interpersonal skills - are basically about the
3. Researcher - the entrepreneur can be employed as a
relationship and interaction of the entrepreneur with the
researcher by an enterprise. workers, suppliers, creditors, prospective customers, and
other members of the business community.
4. Sales - the entrepreneurship graduate can apply as a The interpersonal skills of an entrepreneur may include,
salesman. among others.
a. Skills in verbal communication,
5. Business Reporter - the entrepreneur being expert in b. skills in non- verbal communication
the field, can be employed as a business reporter. c. skills in listening
d. skills in leading, and
3S of Opportunity Spotting and Assessment e. skills in negotiating.
1. Opportunity Seeking - They have endless curiosity
to discover new or different ideas and see whether Sources of Opportunities
these ideas will work in the marketplace. 1. Changes in the environment
Essential to an entrepreneur's opportunity Entrepreneurial ideas arise when changes happen in the
seeking:
a. mind frame - allows the entrepreneur to see external environment. External environment refers to
things in a very positive and optimistic light the physical environment, societal environment, and
in the midst of crisis or difficult situations. industry environment where the business operates.
 f. Special businesses

1.1 The Physical environment includes

a. Climate – the weather conditions.
b. Natural resources – such as minerals, forests, Definition of Terms
water, and fertile land that occur in nature and  Buyers – are the ones who pay cash in exchange
can be used for economic gain. for your goods and services.
c. Wildlife – includes all mammals, birds,  Competition – it is the act or process of trying to
reptiles, get or win something.
fish, etc., that live in the wild.  Entrepreneurial process - can be defined as the
1.2 The Societal environment includes the various forces steps taken in order to begin a new enterprise.
like It is a step-by-step method one has to follow to
a. Political forces – includes all the laws, rules, set up a business.
and regulations that govern business practices  Entrepreneurial ideas - an innovative concept
as that can be used for financial gain that is usually
well as the permits, approvals, and licenses centered on a product or service that can be
necessary to operate the business. offered for money.
b. Economic forces – such as income level and  Essentials of entrepreneur’s opportunity –
employment rate. seeking – these are the basic foundation that
c. Sociocultural forces – customs, lifestyles and the entrepreneur must have in seeking
values that characterize a society. opportunities, such as entrepreneurial mind
d. Technological environment – new inventions frame, heart flame and gut game.
and technology innovations.  External environment - refers to the physical
1.3 The Industry environment of the business includes: environment, societal environment, and
a. Competitors industry where the business operates.
b. Customers  Government - refers to the local government
c. Creditors (municipality, city, or provincial) or the national
d. Employees government and its branches. New entrants –
e. Government the one who enters something.
f. Suppliers  Opportunity – seeking – the process of
considering, evaluating, and pursuing market-
2. Technological discovery and advancement based activities that are accepted to be
A person with entrepreneurial interest sees possibility beneficial for the business.
of business opportunities in any new discovery or  Rivalry – is a state or situation in which people
because of the use of latest technology. or groups are competing with each other.
3. Government’s thrust, programs, and policies  Sources of opportunity - can be attained by
The priorities, projects, programs, and policies of the assessing and looking at changes in the
government are also good sources of ideas. environment; technological discovery and
4. People’s interest advancement; government’s thrust, programs,
The interest, hobbies, and preferences of people are and policies; people’s interest, and past
rich sources of entrepreneurial ideas. experiences.
5. Past experiences  Substitute – anything that takes the place or
The expertise and skills developed by a person who has function of another.
worked in a particular field may lead to the opening of a  Suppliers – are the ones who provide something
related business enterprise. that is needed or wanted.

The five forces competing within the industry:

Value Proposition (VP) - is a business or marketing
 Buyers
statement that summarizes why a consumer should buy
 Potential new entrants
a company's product or use its service. This statement is
 Rivalry among existing firms
often used to convince a customer to purchase a
 Substitute products
particular product or service to add a form of value to
 Supplier
their lives. In creating Value Proposition, entrepreneurs
Forms of Business Ownership will consider the basic elements:
a. Sole proprietorship  Target Customer
b. Partnership  Needs/opportunity
c. Corporation  Name of the product
d. Cooperative  Name of the enterprise/company
Entrepreneurial ventures are classified according to
nature as follows: Unique Selling Proposition (USP) – refers to how you sell
a. Service your product or services to your customer. You will
b. Merchandising address the wants and desires of your customers.
c. Manufacturing
d. Agriculture
e. Hybrid business
Unique Selling Proposition and Value Proposition are Procedure:
two of the most famous tools used to explain why I. Keep questionnaire a maximum of one page, less than
20 questions.
prospect customers buy each product and service. Base
II. Must be simple, structured with “yes/no” check boxes
on each definition, we learn that USP and VP are as respondents answer quickly and easily.
frameworks of each business industry.
STEPS IN IDENTIFYING AND VALIDATING MARKET
Three factors that will determine your customers PROBLEMS
1. Ask the Right Questions
A. Target Market 2. List Your Target Market’s Problem.
3. Interview Decision Makers
B. Customer Requirements
4. Build a Database.
C. Market Size 5. Analyze Stated Customer Problems.
Market segmentation is a marketing strategy designed to The modified framework of the marketing mix includes
determine the specific consumers of the entrepreneurial the following Ps:
venture since the total market is heterogeneous. It 1. Product
divides the market into small segments with distinct Product and services are created because of human
needs, characteristics, or behaviors. needs and wants.
The commonly used methods of segmenting the market needs - things that the person must have in order to
are: survive.
a. geographic segmentation, wants - things that the person must have in order to be
b. demographic segmentation, satisfied.
c. psychological segmentation, and
d. behavioral segmentation The entrepreneur may adopt the following branding
strategies:
Two types of customer requirements: a. Umbrella brand approach
1.Service Requirement b. House brand approach
2.Output Requirement c. Line extension approach
d. Product extension approach
Market size - is like a size of the arena where the
2. Price
entrepreneurs will play their business. It is the Cost – amount of money that is spent to produce a good
approximate number of sellers and buyers in a or service.
particular market. Price – what the customer pays for the product or
service.
VALIDATE CUSTOMER RELATED CONCERNS
Ways To Validate Customer Related Concerns 3 Elements of Cost
1. Interview 1. Direct Materials – expenses that are specifically
conducted one-on-one with professionals who can give incurred by the enterprise to produce a product.
detailed responses because of their knowledge in the 2. Labor – compensation for workers directly
industry. involve in producing a product.
3. Overhead – all indirect materials, indirect labor
3 GROUPS OF TARGET MARKET and indirect expenses
a. Existing Customers - includes customers that Mark-up – premium over the total cost of the good or
recognized a problem and purchased solution to solve service that provides the seller with a profit.
that problem.
b. Evaluators - using interview to understand why
your company wins and loses deals. 3. Place – where do customers find your product, learn
c. Potentials - group of customers that haven’t about it and then buy it
purchased the product.
4. Promotion
2. FGD (Focus Group Discussion) Ways on how to promote your product:
interactive group setting with a moderator, where a 1. Advertising
group of people/ customers gives face to face feedback. 2. Personal Selling
- form of qualitative research 3. Direct Marketing
4. Sales Promotion
3. Survey/ Research a. Buy 1 take 1
uses a written or online questionnaire to be completed b. Discounts
by the person being surveyed, or a telephone interview, c. Freebies
or personal interview. d. Free taste
e. Coupons
WAYS TO CONDUCT A SURVEY f. Gift certificates
1. Telephone - is an expensive, fast way to get 5. Publicity
information from potential customers.
Procedure: 5. People – includes the whole marketing team
I. Prepare a script before making calls and ensure to
cover all objectives. 6. Packaging
II. Keep your questions simple, clearly worded and brief. Packaging should include the following labels:
1. expiration date (DDMMYY)
2. Direct Mail - simple one page questionnaire or 2. manufactured date (DDMMYY)
elaborate with cover letter, questionnaire and reply 3. brand name
envelop.
 4. manufacturing details – manufacturing company, 3. Machine
address, contact details. 4. Design
5. instructions/ descriptions
5. Instructions
6. ingredients
7. net content
The Production process, also referred to as the
transformation or conversion process, is the stage of
production where the materials are transformed into
7. Positioning the final product with the aid of manpower and
The basic concept of market positioning is to clearly machine.
identify the specific and distinct position of the product in
the minds of the customers. The output represents the final product from the
production process and distributed to the customers.
Distribution Channels – chain of businesses or
intermediaries through which a good or service passes The four M’s of production refers to the following:
from the manufacturer until it reaches the end consumer. a. Manpower
b. Method
DISTRIBUTION CHANNELS c. Machine
1. Distributors - entities which purchase non-competing d. Materials
goods or product lines, warehouse them, and resells
them to wholesalers, retailers or direct consumers. (ex.
Import/Export Agents)
2. Wholesalers - those who buy large quantities of goods
or commodities from various producers or vendors and
warehouses them to sell to retailers.
- they can also sell goods direct to the consumers (ex.
Supermarkets, Malls)
3. Retailers - entities or merchants that directly sell
goods or commodities to the end consumer. (ex. Sari-
sari store, convenience stores)

STRUCTURE OF DISTRIBUTION CHANNELS

Product - is the physical output of the whole production
process. It should be valuable and beneficial to the
consumers and should satisfy their basic needs and
wants. A product can be heterogeneous or
homogeneous.
Heterogeneous product - has dissimilar characteristics,
parts, and physical appearance.

Homogeneous product - has a physical appearance,

taste, or chemical content that can hardly be
FUNCTIONS OF DISTRIBUTION CHANNELS: distinguished from that of the other products.
1. Bridge the gap between production and consumption.
2. Responsible for promoting the product. Product description - promotes and explains what a
3. Creating contacts or prospective buyers and product is and why it’s worth buying. The purpose of a
maintaining liaison with existing ones. product description is to provide customers with details
4. Understanding the customer's needs and adjusting around the features and benefits of the product so
the offer accordingly
they’re obliged to buy.
5. Negotiate price and other offers related to the product
as per the customer demand. Prototype - is a duplication of a product as it will be
6. Storage and distribution of goods
produced, which may contain such details as color,
7. Catering to the financial requirements for the smooth
working of the distribution chain. graphics, packaging and directions.
8. Risk taking by stock holding.

Value chain - is a method or activities by which a

The three important elements in the production system company adds value to an item, with production,
are; marketing, and the provision of after-sales service. The
main goal and benefit of a value chain, and therefore
value chain analysis, is to make or support a competitive
PRODUCTION
INPUT OUTPUT benefit.
PROCESS
Supply Chain Management
Supply chain management - refers to the over sighting of
the materials, information, and finances as products
The Input includes the following: move from the supplier to the manufacturer until it
reaches the consumer.
1. Manpower
2. Materials
THREE MAIN FLOWS OF SUPPLY CHAIN Fiscal Year – a twelve-month period that starts on
MANAGEMENT: any month of the year other than January and
1. The product flow – the movement of goods from the ends twelve months after the starting period.
supplier to the consumer along with returns and other e.g., a business whose fiscal year starts May 1,
service requirements 2020 ends its fiscal year on April 30, 2021.
2. The information flow – transmitting orders and
updating the status of delivery Types of Financial Statements
3. The finances flow – includes payment schedules,
credit terms, consignment, and title ownership 1. Balance Sheet – also called Statement of
arrangements Financial Position
- Shows the financial condition/position of a
STEPS OF A SUPPLY CHAIN business as of a given period. It consists of
1. Products start out as raw materials. the assets, liabilities, and capital.
2. Manufacturers convert the raw materials into finished
goods. Assets – economic resources owned by the
3. Products are shipped to the distribution facility. business expected for future gain.
4. Products are sent to Wholesalers
4. Retail stores can purchase from the wholesalers. Liabilities – include debts, obligations to pay, and
5. Products are purchased by consumers. claims of the creditors on the assets of the
business.

Business model - describes the factors of how an Owner’s Equity or capital – comes from two main
organization creates, delivers, and captures value in sources – investment of owners and earnings of
the business.
economic, social, cultural or other contexts. The
development of business model construction and 2. Income Statement – also called Statement of
variation is also called business model innovation and Comprehensive Income
forms part of a business plan. - Structured financial statement that
presents the income, expenses and net
income or net loss realized during a
certain period.
3. Statement of Owner’s Equity – also called
Statement of Changes in Owner’s Equity
- Shows the changes in the capital or
owner’s equity as a result of additional
investment or withdrawals by the owner,
plus or minus the net income or net loss
for the year.
4. Statement of Cash Flows – summarizes the
cash receipts (Inflows) and cash
Simple Bookkeeping
disbursements (outflows) for the accounting
Accounting – the systematic process of period.
measuring and reporting relevant financial
Guidelines in Using the General Journal
information about the activities of an economic
organization or unit. Date Column – shows the date of the occurrence
of the transaction. The year and the month are
General Accepted Accounting Principles (GAAP) –
not rewritten for every entry unless they have
these are broad, general statements or “rules”
changed, or a new page is needed.
and “procedures” that serve as guides in the
practice of accounting. Particulars – it shows the account debited and
credited as well as a brief explanation of the
Entity Concept – regards the business enterprise
transaction.
as separate and distinct from its owners and from
other business enterprises. Posting Reference – It is used when entries are
posted, that is, until the amounts are transferred
Transaction – refers to events where there are
to the related ledger accounts.
exchanges of values that are measurable in one
common denominator. Debit Column – It is the first money column where
the amount of the debit account is entered
Going Concern – concept which assumes that the
business enterprise will continue to operate Credit Column – It is second money column where
indefinitely. the amount of the credit account is entered.
Periodicity – concept behind providing financial Accounting Elements or
accounting information about the economic Categories of Accounts
activities of an enterprise for specified time a. Assets
periods. b. Liabilities
c. Capital
Classification of accounting Periods
d. Income
Calendar Year – a twelve-month period that starts e. Expense
on January 1 and ends on Dec. 31.
Classification of Assets Simple Journal Entry – there is only one debit and
one credit
1. Current Assets - include cash and
other assets that are reasonably expected Compound Entry – appears to have two debit
to become cash, or sold during the year. values, while credit has only one value

Cash – it describes money, either in paper or in Posting – it shows the transfer of information
coins involving cash account in the general journal to
the ledger and the cross- referencing procedure.
Accounts Receivable – it describes collectibles
from customers who made sales transactions on Footing – process of adding the debit and the
credit credit money columns of the ledger and finding
their balances
Notes Receivable – it describes collectibles that
are supported with promissory notes. Trial Balance – is the listing of the debit and credit
balances of accounts from the general ledger.
2. Non-Current Assets – also called plant
assets or fixed assets Cost of Goods Sold – amount of cost in selling the
- It must be more or less permanent in product or providing the business.
nature
Single Rule – implies that any amount that
- It must not for sale
appears above are related
- It must be intended for use in the business
- It must have physical existence Double Rule – indicates that there are no more
Equipment – it describes tools and equipment like related amounts to follow
calculators, computers, or any equipment directly
related to the production of goods.

Furniture and Fixtures – it describes assets like Bookkeeping - The process of recording business
chairs, tables, and display cases. transactions in a systematic and chronological manner.
It is systematic because it follows procedures and
Liability Account Titles
principles. It is chronological because the transactions
Accounts Payable – It describes the financial are recorded in order of the date of occurrence.
obligations arising from goods purchased or
services received. Bookkeeper - The person who is in-charge to record,
maintain and update business records from all sorts of
Notes Payable – it describes the financial
obligations supported with notes financial transactions using account title. The
bookkeeper uses the Book of Accounts to record the
Capital Account Titles business transactions.
Capital – it describes the original and additional
Book of Accounts -The book of accounts is composed of
investment of the owner.
the Journal and Ledger.
Drawing – it describes the temporary withdrawal
of a capital by the owner for personal use. Journal - Referred to as the book of original entry

Income Account Titles Ledger - Referred to as the book of final entry.

Sales – it describes the sale of goods or products General Journal - is the most basic journal which
to the consumers. provides columns for date, account titles and
Service Income/Revenue – income from our explanations, folio or references and a separate column
service rendered. for debit and credit entries.
Expense Account Titles General Ledger - is a group of all accounts that can be
Salaries and wages – it describes the expenses on found in the chart of accounts. These accounts will be
payments of salaries reflected in the trial balance as a summary of all
financial activities that have taken place as recorded in
Store Supplies Expense - it describes the
the general journal and subsidiary ledgers.
expenses on store supplies

Taxes and Licenses – it describes the expense on

Subsidiary Ledger - is a group of accounts directly
taxes, permits, fees and licenses associated with the general ledger. This record is
created to maintain individual accounts for customers
Utilities Expense – It describes the expenses on
and vendors whose cash is not being used as a medium
light and water
of exchange when purchasing or selling merchandise.
Travelling Expense – it describes the expenses on
transportation or fare of personnel. Account Receivable Ledger - The accounts receivable
ledger is a sub-ledger which records all credit sales
Rent Expense – describes the expenses on rent made by a business. It is useful for segregating into one
location a record of all amounts invoiced to customers.
A typical transaction entered into the accounts
receivable ledger which records all account receivables,
followed at a later date by a payment transaction from
a customer that eliminates the accounts receivable.
More importantly, it is a subsidiary ledger which records
a customer’s accounts in the business.

Account Payable Ledger - An accounts payable ledger

contains the detail for all invoices received from
suppliers. This ledger is used as a subsidiary ledger,
from which summary-level information is periodically
posted to the general ledger. Having a separate
accounts payable ledger keeps a large amount of
detailed payables transactions from cluttering up the
general ledger.

Debit - The left-hand side entry also known in

accounting as “Value Received.” When cash or non-cash
items are received, the said cash or non-cash items
must be recorded in the debit column. This means that
the debit balance has increased.

Credit - The right-hand side entry also known in

accounting as “Value Parted With.” When cash or non-
cash items are given, the said cash or non-cash items
must be recorded in the credit column. This means that
the credit balance has increased.

The Rules of Debit and Credit

The following steps will be undertaken in determining

account balances for every account title such as cash,
account receivable, etc.:

1. Add all the debit side to generate total debit

2. Add all the credit side to generate total credit.

3. Subtract total debit to the total credit. To strengthen your understanding about posting of
4. Determine the balance of each account. journal entries to the general ledger, it is suggested to
create T– Account and label them with the account title
T- Account - The most convenient and fastest way of and group them according to Assets, Liabilities, Owner’s
posting journal entries to the ledger is by way of using Equity, Revenue and Expense.
“T” Account. A T- Account is divided into two sides. The
left-hand side is called the debit side and the right-hand
side is called the credit side. The left-hand or debit side
shows the value received while the right-hand side
shows the value parted with. This is called T Account
because it resembles the capital letter “T.” An account
title is written above the T- account.