ENTREPRENEURSHIP direct contact and feedback from

people in the product’s intended

LESSON 3
market.
Validate
HOW TO VALIDATE A PRODUCT’S OR
- the product/service description of A SERVICE MARKETABILITY?
the product with potential
1. Ring the cash register
customers to determine its
2. Conduct competitive analysis
market.
3. Research the existing demand
One of the most important aspects of 4. Start a crowd-funding
starting a business is validating that campaign
there is a demand for your products. 5. Meet customers in person
There is nothing more discouraging than 6. Beta Test
spending your time and energy creating
SELECT/PINPOINT
a product that you think people will
love, only to realize that there’s no - potential suppliers of raw
interest when you launch. materials and other inputs
necessary for the production of
WHAT IS MARKET VALIDATION?
the product or service
- Market validation is the process
Selecting the right suppliers is essential
of presenting a concept for a
for building a successful business. By
product to its target market and
employing some supplier's selection
learns from those prospective
criteria, it is possible to identify
buyers whether or not the idea is
enterprises who are reliable and meet
worth pursuing.
your particular needs.
- This process typically takes place
early-on in the conception stage, FACTORS TO CONSIDER IN SELECTING
before any significant investment POTENTIAL SUPPLIERS OF RAW
has been made in developing the MATRIALS AND OTHER INPUTS
product. The two most common
1. PRICE
approaches to market validation
2. RELIABILITY
are:
3. STABILITY
1. Interview people in the target
4. LOCATION
market, such as the buyers.
5. DEVELOPING PARTNERSHIP
2. Send out surveys to these
personas.
3. The key is that market
validation research must include
 VALUE CHAIN

Contrary to supply chain, the

SUPPLY CHAIN value chain starts with the customer
and flows inward to supplier alignment
and sourcing.
Purpose: Increase the value of a
⮚ A supply chain starts from the product/service
inside and flows outward to the
customer. Michael Porter pioneered the concept of
value chain in his 1985 book
⮚ It starts with materials and "Competitive Advantage: Creating and
suppliers then continues on to Sustaining Superior Performance."
logistics and production. Finally, it
ultimately reaches sales, He used this concept to show
marketing and the customer. businesses add value to their raw
materials to produce products that
5 ELEMENTS OF SUPPLY CHAIN finally sold to the market.
1. Designing a product to meet 5 STEPS IN VALUE CHAIN
consumer request
2. Obtaining the raw materials
required to produce the products
3. Manufacturing and developing
the products 1. Inbound Logistics:
4. Distributing the product to Processes related to receiving,
consumers/customer storing and inventory control.

5. Accepting and processing returns 2. Operations: Value-creating

of defective products activities that convert inputs into
finished products such as
assembly and manufacturing. In
here, operations systems create
value.
 3. Outbound Logistics: Activities consider when recruiting potential
concerned with the collection, employees.
storage, and distribution of
WAYS TO IMPROVE YOUR
finished product or service to
RECRUITMENT PROCESS
customers.
1. SEARCH FOR A CARRER-ORIENTED
4. Marketing and Sales: Involve
INDIVIDUAL
activities that associated among
2. EVALUATE FOR PRACTICAL
the general consumers or buyers
EXPERIENCE
to purchase a product.
3. TEST YOUR APPLICANTS
5. Service: Activities that maintain 4. DTERMINE STRENGHTS NEEDED
and enhance the value of the FOR THE POSITION
product, such as customer care 5. CULTURE FIT
and warranty package. 6. TAKE THEM ONBOARD
7. RUN SOCIAL CHECKS

LESSON 4
Recruit
FORECASTING
- qualified people for one’s
business enterprise - Market trend and past
data are significantly valuable in
Without growing the number of
predicting the future and
people with whom you work, you
pathways of an enterprise.
cannot normally grow your business.
- Forecasting refers to the
Your success will depend on your
usage of historical data as inputs
capability to organize a team of
to make informed estimates that
highly qualified employees who are
are predictive in determining the
dedicated to the goals and objectives
direction of future trends.
of your business. Recruiting defines
the processes of the companies use BUDGET
to find qualified candidates to fill job
Budget is an estimation of
openings.
revenue and expenses over a
When recruiting, consider the specified future period of time and is
actual needs of your business. An usually compiled and re-evaluated on
impressive list of qualifications and a periodic basis.
broad work experience are necessary,
but these are not the only factor to
 An effective forecast allows for Forecasting Revenue and Expenses for
improved decision-making in Business
maintaining fiscal discipline and
Revenue
delivering essential community
services. ⮚ the money generated from
normal business
2 TYPES OF FORECASTING
operations, calculated as
1. Bottom-up forecasting the average sales price
times the number of units
⮚ A method of estimating a
sold.
company’s future
performance by starting ⮚ It is the top line(or gross
with low-level company income) figure from which
data and working “up” to costs are subtracted to
revenue. determine net income.
⮚ This methods starts with
detailed customer or
Expenses
product information and
then broadens up to ⮚ expense is the money
revenue. This guide will spent, or costs incurred, by
provide examples of how it a business in their effort to
works and explain why it’s generate revenues. These
commonly used in financial are regular payments
modeling and valuation. required to maintain
assets/property.
2. Top-down Forecasting
Classification of Cost & Expenses:
⮚ A method provides a
projection of revenue by a. Variable Cost
multiplying the total
b. Fixed Cost
addressable market
(“TAM”) of a given c. Cost of Goods Sold (COGS)
company by an assumed d. Operating Expenses
market share percentage. (Administrative and Selling
Expenses)
CLASSIFICATION OF COST & EXPENSES to predict revenue and expense
growth.
1. Variable costs are expenses that vary
in proportion to the volume of goods or
services that a business produces.
2. Fixed cost is a cost that does not
change with an increase or decrease in
the amount of goods or services 2. Moving Average
produced or sold.
⮚ are a smoothing technique that
3. Cost of Goods Sold (COGS) – the cost looks at the pattern of a set of
of acquiring raw materials and turning data to establish an estimate of
them into finished products. It doesn’t future values. The 3-month and 5-
include selling and administrative cost month moving average are the
incurred but purely a production most common types.
expense.
⮚ Moving Average Example
4. Operating Expenses (Selling and
To perform a moving average forecast,
Administrative) – expenses which are
the revenue data should be placed in the
related to selling goods and services
vertical column. Create two columns, 3-
such as salaries, advertising, and shop
month moving averages and 5-month
rent among others.
moving averages.
REVENUE AND EXPENSES FORECASTING
METHOD
A revenue and expense forecast
is a prediction or estimation for the next
period on how much money your COMPUTATION OF PROFIT AND LOSS
enterprise is likely to bring in and spend
to generate profit. This allow you to Profit
know how much money will be spent, ⮚ means success for a
and what will be your margins business.
afterwards.
⮚ describes the financial
1. Straight line method benefit realized when
⮚ one of the simplest and easy-to- revenue generated from a
follow forecasting methods. It business activity exceeds
uses historical figures and trends the expenses, cost, and
taxes.
Net Loss increase by 30%, cost of goods sold
remained to be 40% of sales, operating
⮚ A net loss is when total
expenses increased by 80,000, and
expenses (including taxes,
interest expenditure remained the same.
fees, interest, and
depreciation) exceed the a. Compute for the
gross income or revenue forecasted sales revenue
produced for a given for the year 2021.
period of time.
b. Compute for the Cost of
PROFIT Goods Sold for the year
2021.
Profit= Total Revenue – Total Expenses
c. What is the total operating
Example: Jake wants to find out how
expenses for the year
much money they’ve made in their dog
2021?
walking business.
d. Compute for the
Total Revenue : Php 10,000
forecasted profit for the
Direct costs, such as dog treats: Php year 2021
1,000
Indirect costs, like posters and flyers:
Php 500
Profit = Php 8500

From the example, the following

additional data were given for the 2021
operation. Sales are expected to