Lesson 3-6 in entrepreneurship

SEPTEMBER 21 · IT411- ENTREPRENE…

Lesson 3

Entrepreneurial Qualities and Self –Assessment

10 Personal Entrepreneurial Characteristics which was divided into 3 clusters that lead to Success are:

Achievement Cluster

· This pertains to the desire of the individual to fulfill or to realize something.

· This desire is strong to an entrepreneur who will not stop at any obstacle but take such obstacles as
challenges.

The characteristics are:

1. Opportunity-Seeker

a. Perceives and acts on new business opportunities

b. Seizes unusual opportunities to obtain financing, equipment, land, work, space, or assistance

2. Persistent

a. Takes repeated or different actions to overcame obstacles

b. Makes sacrifices or expends extraordinary effort to complete a task

c. Sticks to own judgment in the face of opposition or disappointments

3. Committed

a. Accepts full responsibility for problems encountered

b. Helps own employees to get the job done

c. Seeks to satisfy the customers

4. Risk-Taker

a. Taker moderate risks

b. Prefers situations involving moderate risks

5. Values Efficiency and Quality-Oriented

a. Always strives to raise standards and aims for excellence

b. Strives to do things better, faster, and at a lower cost.

Planning Cluster
To make sure that the resources (money, materials, machinery, etc.) are efficiently used, the
entrepreneur makes his move tentatively on paper hence, the plan. A plan is a blueprint of the project
that he wants to establish.

Such quality of an entrepreneur demands that he be a:

6. Goal-Seeker

a. Sets clear and specific short-term objectives

b. Sets clear and long-term goals

7. Information-Seeker

a. Personally seeks information on clients, suppliers, and competitors

b. Seeks experts to render business or technical advice

c. Uses contacts or information networks to obtain information

8. Systematic in Planning and Monitoring

a. Develops logical, step-by-step plans to reach goals

b. looks into alternatives

Power Cluster

This means the power to lead, to convince people of your ideas, to make people believe in you, or to
persuade others especially those with negative perceptions.

That entrepreneur must:

9. Be Persuasive and Good in Networking

a. Uses deliberate strategies to influence or persuade others

b. Uses business and personal contact to accomplish objectives

10. Possess Strong Self-Confidence

a. Believes in self

b. Expresses confidence in own ability to complete a difficult task or to meet a challenge

Other Factors to Consider

1. Personal Interest. Your personal interest will be a deciding factor in getting into the business. Your
personal interest will drive you to engage in something that will give him satisfaction.

2. Knowledge/Talents. The skills or talents or knowledge of an individual serve as his best asset in
venturing into something that will earn him an income.

3. Training/Work Experience. The kind of training or experience you have influenced your desire to go
into business.
4. Government Support / Assistance Programs. The goal of any government is economic development.
This is done through investment, business, and employment. Thus support is available in terms of
technology, marketing, or training.

5. Rate of Growth of Business.. Check government and industry reports to have a glimpse of the future
of the business you have in mind.

The Entrepreneurial Personality

The entrepreneurial personality can be lumped into three (3), namely:

1. High need for achievement. Here lies the strong desire of an individual to pursue his dream, a dream
that could be long-range or immediate.

2. Strong belief that can control their destiny. William Jennings Bryan said, “Destiny is not a matter of
change, it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved.” Indeed, it
is!

3. Risk-taker. Risk is present in every activity, but it can be lessened. Or avoided by careful planning,
insurance, and being alert of what is happening around.

Make a self-evaluation. Do you possess the characteristics of an entrepreneur? Below is the

Entrepreneurial Self-Test

Encircle your answer

1. I am persistent. Yes Maybe No

2. When I am interested in a project, I need less sleep. Yes Maybe No

3. When there is something I want, I keep my goal

Clearly in mind. Yes Maybe No

4. I examine mistakes and I learn from them. Yes Maybe No

5. I keep New Year’s resolutions. Yes Maybe No

6. I have a strong personal need to succeed. Yes Maybe No

7. I have new and different ideas. Yes Maybe No

8. I am adaptable. Yes Maybe No

9. I am curious. Yes Maybe No

10. I am an initiative. Yes Maybe No

12. I see problems as challenges. Yes Maybe No Yes Maybe No

12. I see problems as challenges. Yes Maybe No

13. I take chances. Yes Maybe No

A sure thing.

15. To learn something new, I explore unfamiliar subjects. Yes Maybe No

16. I can recover from emotional setbacks. Yes Maybe No

17. I feel sure of myself. Yes Maybe No

18. I am a positive person. Yes Maybe No

19. I experiment with new ways to do things. Yes Maybe No

20. I am willing to undergo sacrifices to gain possible

Long-term rewards. Yes Maybe No

21. I usually do things my own way. Yes Maybe No

22. I tend to rebel against authority. Yes Maybe No

23. I often enjoy being alone. Yes Maybe No

24. I like to be in control. Yes Maybe No

25. I have a reputation for being stubborn. Yes Maybe No

Scores per answer

Yes – 3 points

Maybe – 2 points

No – 1 point

Scores Interpretation

60-75 You have the qualities of an entrepreneur

48-59 You have the potential but need to push yourself

37-47 You may not want to start a business alone

Below 37 Self-employment may not be for you

Quiz

Indicate on the space provided whether the statement shows (a) entrepreneurial characteristics or (b)
employment characteristics. Write the letter “A” or “B” only.

_______________1. He wants a fixed working time.

_______________2. He sees opportunities in problems.

_______________3. He enjoys experimenting and creating new things.

_______________5. He loves the status qou.

Lesson 4

Entrepreneurial Activities

Types of businesses

3 types of entrepreneurial businesses are:

1. Trading 2. Manufacturing 3.Service.

Trading or merchandising

· is buying of goods and selling the same without a change in form.

· When goods are sold in small quantities, it is called retailing.

· When goods are sold in big quantities or in volume, it is called wholesaling.

· The process of buying and selling is also called trading or merchandising. A common example of
retailing is the “sari-sari” store

Kinds of Retailers

1. Department Store carries a wide variety of product lines, usually clothing, shoes, bag, beauty
products, home furnishings, and household goods.

2. Supermarkets sell a variety of food and household products.

3. Specialty store carries a variety of models for one kind or limited product line.

For example, a cellphone store carriers brands like Nokia, Motorola, Samsung with different models of
each brand.

4. Convenience store is a store that carries high turn-over goods, Twenty-four hours a day, and a week.
Examples of convenience stores are 7-Eleven and MiniStop. The retail prices of the convenience stores
are usually higher than those of supermarkets.

5. Superstores which are larger than supermarkets and department stores have emerged. Examples of
superstores are Uniwide, Makro, PriceSmart, and PureGold.

6. Factory outlets of different manufacturers are grouped together in one factory outlet mall. The
outlets are located in places far from the cities. When the customer goes to the factory-outlet mall, he
will have varied choices.

7. Direct Selling is one-on-one selling. One seller approaches a buyer. Many times the buyers are friends
or relatives of the seller.

Manufacturing is the process of converting raw materials. You make the raw materials to finished
products by applying direct labor.
Raw materials are what you see in the completed product.

For example: in shoes and handbags, leather is the raw material. Paper is the raw material for books.
Wood is the raw material for furniture.

Direct labor is the work on the raw materials as it is converted into finished products. Direct labor is the
work of the sewer when leather is made into handbags.

Service business

· is doing work for others. Examples of service businesses are beauty parlors, spas, barbershop, laundry
shops, and repair shops. Medical, dental, accounting, legal, and other services of professionals are also
examples of service businesses.

The Benefit of Retailing

1. Retailing allows the fast movement of products. Product price is discounted if the buyer will buy
several or in combination with other products to encourage customers to buy.

2. It encourages people to buy more by giving preferential benefits to customers and by increasing the
number of quantities at the same price with such customers or promotions like” buy one, take one”.

3. Enhances buyer-owner relationship. This is because some sellers are very friendly, thus encouraging
people to buy from them every time.

4. Low budget families would be able to buy products in small quantities. For example, ½ kilo of sugar
instead of one kilo.

5. Retailing is the answer to small buyers whose need is only for a couple of days for a small family. For
example, a family of four will not buy five kilos of bananas for their one week consumption.

6. Retailing is a business strategy. In grocery stores, slow-moving products are packed with a toy to
make the product saleable. Another strategy is the offering of credit cards to be able to move/ sell more
goods or services.

Activity

1. Give at least five traders in your community and the kind of products they sell.

2. Find out what the retailers in your community do to increase their sales

3. Give some importance of ratiling.

Quiz 1

Match column A with column B. Write the letters only.;

Column A Column B

______2. Gasoline station with coffee shops a. vending machine

______2. Gasoline station with coffee shops b . megamalls

______3. You get your purchase by dropping a coin

______4. Selling through very big malls d. mail order

______5.Selling via television advertisement e. combination stores

Lesson 5

Manufacturing Business

What is manufacturing?

· Manufacturing is the process of converting raw materials into finished products.

· The manufacturer buys the raw materials and makes the raw materials into finished products by
applying direct labor and factory overhead

Factors to consider when deciding into the business are:

1. Capitqal- How much capital is available for tools, equipment, machines, raw materials, payment for
wages, overhead and other expenses.

2. Product spaces – How big/small is space? Where is it? Is it owned or leased? If leased, how much is
the rent? What are the terms for leasing the property?

3. Storage for materials and finished goods- Is there a space for storing materials and finished goods?

4. Labor costs and labor supply – Is there a ready supply of qualified workers?

What is the prevailing wage rate in the area?

5. Factory overhead – How much, more or less, would be the factory overhead give the cost of utilities
like water and electricity and other costs?

6. Cost of manufacturing – If the cost of manufacturing would be higher than that of the competition,
then perhaps manufacturing is not the right venture.

7. Technology – To produce a product, technology should be available.

8. Availability of raw materials – This is vital. No product will be produced without the materials.

9. Competition – As mentioned, if the producer will produce at a higher cost compared his competitors,
selling price will be high, causing a difficulty in moving the products.

There are many kinds of manufacturers in the country. Some of these are:

§ Manufacturers of shoes/footwear specially in Liliw and Marikina

§ Canned goods manufacturers

§ Manufacturers of soap and toiletries

§ Manufacturers of food products

§ Manufacturers of garments or RTWs

§ Manufacturers of glasswares, silverwares, chinawares, or kitchenwares

Role of Manufacturing in Economic Development

Aside from selling, manufacturing is the other dimension in economic development. No product will be
sold without producing it. In the process of producing the products, the exchange also takes place. Raw
materials will have to be purchased and labor will have to be paid plus all other expenses.

The elements of manufacturing costs are:

1. Direct Materials pertain to all materials which form part of the finished product which can be
measured and charged directly, and can be identified as forming part of the product, such as leather to
make bags and shoes, lumber to make tables and chairs.

2. Direct labor is labor used in manufacturing a product that can be charged directly to the particular
product. The wages paid to a carpenter making chairs in a furniture factory is examples of direct labor.

3. Factory Overhead refers to indirect elements of cost incurred to turn out a finished product which
may be in the form of indirect materials, indirect labor, or other indirect expenses.

On the opposite side of the direct costs are the indirect costs

1. Indirect Materials are materials needed for the completion of the product but which consumption
with regard to the product is either so small or allocation too complex that it will be inconvenient or to
laborious to charge them directly to a particular unit of product.

2. Indirect Labor refers to human efforts used in the factory which cannot be identified as pertaining to a
particular product. The cost of indirect labor includes salaries and wages paid to foremen, supervisors,
janitors, timekeepers, and the like.

3. Other Indirect Expenses are expenses necessary for the production as a whole such as light and
power, rental, insurance, taxes, etc.

Importance of Manufacturers

Manufacturers of products are important because of the following reasons:

1. Considering the expenses and receipts of manufacturers, they contribute to the movement of the
economy.

2. Manufacturers provide the supply of products needed by people like canned milk or powdered milk,
clothes, bags, etc.

3. Manufacturers provide employment and income to the household.

4. They pay taxes which are used by the government to finance its projects and pay for the salaries of
government employees.

Creativity in Manufacturing

· Many kinds of products in different designs owed their production to the creativity of manufacturers
· . Bags, for example, come in different colors, sizes, and shapes for different uses, occasions, and even
reasons.

Manufacturers need to be creative to meet the ever-changing demand of the customers

How can an individual be creative?

· Creativity is developed by being observant.

--Observe what people are wearing or using and try to improve it by way of function or ease of use.

--For example, many years ago, people used pen and ink. So many times you carry bottle and ink. But
now we used ball pen.

· Creativity is developed by imagination.

--Through imagination, toy manufacturers are able to introduce toys that move with the use of
batteries, dolls whose eyes open and close and many other different kinds of toys.

· Creativity is developed because of external conditions.

--Manufactured products change because of people’s lifestyles.

--For example, people are now very mobile. They move from one place to another, hence the
introduction of small and portable products.

The economic conditions in the country also influence the manufacture of products from the expensive
to the affordable. For example, from pure leather to leatherette products.

Why should Manufacturers be Creative?

1. To be competitive- There is a need to be creative and competitive. If you do not introduce products
that are different and affordable, sooner or later, you are going to be out of business

2. To meet the need of customer- Customers are very choosy, They do not buy the same product for
long, They want to try new things, That is why manufacturers need to be creative

Elements in Choosing Products or services to Offer

· Personal interest. Your interest. Your interest will determine your success. If you love what you do, you
will persevere in spite of the odds.

· Your competence. Determine your competency. What are you good at? If you are good at baking, then
put up a bakeshop. If you are good at cooking, then put up a cafeteria. If you are good at handicrafts like
making décor, then manufacture decors.

· Competition. Consider the realities of competition. If you love broiled chicken and your recipe is super
good, you may say, “I will go and put up a litsong manok stand in front of our garage.” But wait, how
many roasted chicken stands are there in your block or in your small subdivision?

· Available Resources. Your manufacturing operation is highly dependent on resources such as raw
materials, machines, and labor.
· Season. Unless you receive an order for next year’s summer season, you do not manufacture swim
suits during the rainy season.

· Capital. Your amount of capital needed to operate your manufacturing business will determine
whether you have the capacity to establish it or not.

· Personal exposure. Usually, children of manufacturers become manufacturers or entrepreneurs

· Market demand. Manufacture products that are in demand. Check market or industry figures to
determine sales. If the sale potential of a product is good, chances are, the sales of the company will be
increased.

· Ethics in business. This is important because many manufactures nowadays cheat their customers by
way of quality. Cheating will not do! Customers are protected by law. Cases can be filed in court

Okay let us see what have you learned

Activity

1. Identify at least five products that are manufactured and discuss the process used in manufacturing
the same.

2. How do you practice creativity.

Quiz 1

Fill in the blanks.

1. The process of converting materials into finished goods is called_____________

2. The primary input in the manufacturing process is the_____________________

3. The output of the manufacturers is called_______________________________

Quiz 2

Indicate whether the following sentences are true or false.

_________________1. Creativity can be developed through practice.

_________________2. Customers are very choosy. Hence, products need to be changed every so often.

_________________3. Creativity can be learned.

_________________4. Manufacturers should be sensitive to current trends.

_________________5. Prices do not affect creativity.

Lesson 6

Service Business
What is the service business?

Service business is doing work for others. It is a kind of business that sells services. The service offered
could be the service of a single individual, like the one who fixed your leaking faucet, or the
sophisticated services of hotels and banks.

Below are some samples of businesses under the service sector:

Small businesses

- Beauty parlors – pensionne house

- Barber shops – bake shops

- Daycare centers – dress shops

Large corporations

- Banking and finance – hospitals

- Hotel and restaurant services – call centers

- Schools – transportation services

Professional services

- Medical/ dental services by doctors

- Legal services by lawyers

- Accounting services

- Engineering services

- Tutoring services by teachers

- Services by architects

Benefits of Service Business

· The easiest way towards becoming an entrepreneur is to render personal service to customers.

· Plumbers, for example, do home repairs and as the magnitude of the work becomes great, they hire
people to work with them as helpers.

· As these helpers learn the task, they too enter into an agreement to work on plumbing projects, hence
knowledge and skills multiply and more people become self – employed.

Advantages of Establishing a Service Business

1. Easy to establish. A service business is easy to establish.

-Documentation is simple. Some are not even registered with any government agency, like food catering
and the street food operators,
”.

2. It requires minimum capital. The capital requirement in establishing a service business is very
minimal.

For example, to start a beauty parlor, all you need is a small space with mirror, chair, and tools for hair
trimming. As your business grows, additional tools can be purchased.

3. Services are non – perishable. Products and services, unlike fruits and vegetables, are not perishable.
Therefore, you do not need a space to store them and there is no risk of spoilage.

4. You are your own boss. You call the shots and to you belongs the profits.

5. Mobility.Service is a very mobile business. You offer your business anywhere using a minimum of
equipment/ tools/machines.

For example your business is coordinating events. The tools/equipment needed are only communication
gadgets and probably a video camera.

Community – Oriented Businesses

· A body – building gym. The beauty of this type of service business is that you encourage people to keep
themselves trim and physically fit

· Water station. Providing clean water to the community is a noble undertaking. This business allows
people to have a supply of clean drinking water.

· Services offered by carpenters, plumbers, masons, etc. You will need a carpenter to fix your ceiling and
you will need a mason to put up a concrete fence.

· Dance and music instructors. These people also do their share in having a pleasant community. The
exercise will strengthen the relationship in the community.

· Daycare centers.Centers for babies and toddlers are now flourishing especially in exclusive villages
where parents are both working and do not want to risk leaving the child with a nanny.

· Computer centers. Many families do not own a computer, but the children have school assignments to
work, hence, this kind of business is also becoming a common sight in the community.

· Barber shops/ Beauty parlors. These businesses are also very dominant in communities. Their peak
season is during fiestas, school openings, Christmas season, graduation in schools and other occasions.

Activity

1. What do you think is the implication of the service business to the community?

2. In addition to what was in the module, what other advantages can you give in establishing a service
business?

Quiz 1

Match the two columns below by writing the letters on the space provided.
_______________1. Body massage a. Shipping

_______________2. Parcel delivery b. Personal service

_______________3. Installation of electricals

_______________4. Laundry service

_______________5. Catering service

Quiz 2

Indicate on the space provided whether the following is a service business or a manufacturing business:

______________1. The printing of books

______________2. Providing piano lessons

______________3. Offering tutorial sessions in science and math

______________4. The production of softdrinks

______________5. Operating a pre-school

Quiz 3

Match column A with column B. Indicate the letters on the space provided.

_____________1. Taxi business a. entertainment service

_____________2. Celebrity manager b. medical service

_____________3. Dermatologist clinic c. transportation service

_____________4. Barber shop d. food service

The service business is doing work for others. It is a kind of business that sells services. The service
offered could be the service of a single individual, like the one who fixed your leaking faucet, or the
sophisticated services of hotels and banks.