Entrepreneurship

LET Competencies: Identify Entrepreneurial Competencies Explain parts of the business plan Analyze production and marketing processes Explain the basic principles of office and business management Observe business ethics

Personal Entrepreneurial Competencies (PECs) refer to the desired traits, which enable an entrepreneur to do what is expected of him/her and succeed in business.

Three Clusters
Achievement Cluster Planning Cluster Power Cluster

1. Opportunity-seeking
Perceives and acts on new business opportunities Seizes unusual opportunities to obtain financing, equipment, land, workspace or assistance.

2. Persistence
Takes repeated or different actions to overcome obstacles Makes sacrifices or expends extraordinary effort to complete atask Sticks to own judgment in the face of opposition or disappointments

3. Commitment to work contract

Accepts full responsibility for problems encountered Helps own employees to get the job done Seeks to satisfy* the customer

4. Risk-taking
Takes calculated or studied risks Prefers situations involving moderate risks

5. Demand for quality and efficiency

Always strives to raise standards Aims for excellence Strives to do things better, faster, cheaper

6. Goal-setting
Sets clear and specific short-term objectives Sets clear long-term goals

7. Information-seeking
Personally seeks information on clients, suppliers, and competitors Seeks experts for business or technical advice Uses contacts or networks to obtain information

8. Systematic planning and monitoring

Develops logical, step-by-step plans to reach goals Looks into alternatives and weighs them Monitors progress and shifts to alternative strategies when necessary to achieve goals.

9. Persuasion and networking

Employs deliberate strategies to influence or persuade others Uses business and personal contacts to accomplish objectives.

10. Self-confidence
Believes in self Expresses confidence in own ability to complete a difficult task or meet a challenge.

Business Plan: vital tool for any business; a

document that is a valuable tool that can act as a blueprint for business; and essential for getting a business loan.

Parts of the Business Plan: 1. Letter of transmittal

it officially introduces your business plan to reader explains reason for writing the plan gives a title to plan or business name outlines major features of interest.

2. Title Page
provides identifying information about you and proposed business name, address, phone number of business and same information about yourself -date plan was finalized/submitted

3. Table of Contents
Lists major headings and subheadings-provides a quick overview

4. Executive Summary and Fact Sheet

considered the most important part it captures attention of reader it should concisely explain current business status, describe products and services and their benefits to customers provide overview of objectives, market prospects, and financial forecasts if seeking financing, it should state the amount needed, explain how money will be used and state benefits to prospective lender/investor

Fact Sheet
a separate page at back of executive summary 1. Company Name 2. Location and Telephone /Fax/ Internet 3. Type of business and industry 4. Form of Business (sole proprietor, partnership, corporation) 5. Principal product or service line 6. Registered patents, trademarks 7. Number and name of founders/partners/shareholders 8. Length of time in business 9. Current and/or projected market share 10. Funds invested in the business to date and their source 11. Additional Financing required 12. Proposed terms and payback period 13. Total Value or net worth of the business 14. Name of business advisors (legal counsel, accountant, others)

5. (BODY OF PLAN)
the longest component-a detailed story of business proposition should be broken down into major divisions using headings and each division divided into sections with subheadings

A. COMPANY AND THE INDUSTRY (Include vision, mission statement and values) Background-date started, form of organization, location, founders, how key products/services chosen, success to date Current Situation-how you have identified market opportunity, assessed the competition and developed some unique factor that will make your business stand out Future Plans-goals and ambitions for business strategy to achieve goals

THE INDUSTRY Principal Characteristics-current status of industry-size-total sales-typical standards, seasonal patterns Major Participants-who, market share. strength/weakness -how will you compete Industry Trends -growing? Stable? What will happen in 5/10 years -any economic/social technological regulatory trends

 B. PRODUCT/SERVICE OFFERING
Description describe the product/service you plan to sell in detail explain unique characteristics or advantages indicate stage of development of product include pictures if possible

Potential outline market opportunity and how to take advantage of it describe key success factors and how you will exploit them

C. MARKET ANALYSIS describe the total market for product/service what segment is the market broken into explain the segment you will go after and the share you will reach

 Information is based on:

1. Market studies from research companies/government agencies 2. Statistics 3. Information from trade associations and publications 4. Surveys/ informal discussions with dealers, distributors, sales reps, customers and competitors

Target Market and Customers

identify primary target market break this target into groups with common identifiable characteristics: Demographics/Geographic Who are they? What are the primary bases for purchase decisions? How can product service be used? What benefit is there to purchase your product versus competitions? Identify and major buyers

Market Size and Trends

estimate size of current total market-identify trends

Competition identify principal competitors access services and products of each major competitor (price, quality, service support, warranties, other features) what market share does each competitor have Estimated Sales and Market Share estimate share of each segment of market -use a table

D. MARKETING PLAN
describes what has to be done, when, how and who as far as sales strategy, advertising, promotion pricing policy, channels of distribution Pricing
summarize the financial characteristics of your business and industry at large explain typical gross and net margins for products/services discuss prices you plan to charge for various products services detail any product mark up indicate how long it will take to break even

Sales and Distribution

indicate methods used to sell and distribute product/service

Advertising and Promotion

Describe program you plan to use to create awareness What consumers are you seeking? What media?-radio, television, newspapers?

How much will be spent and where?

What plans do you have to get free publicity?

Service and Warranty Program

indicate warranty and service plans and how they compare to competitors

E. PRODUCTION/OPERATIONS PLAN
outlines plant location, facilities needed, space requirements, equipment and labor requirements Location describe planned location (advantages & disadvantages) in terms of cost, proximity to customers access, zoning Facilities and equipment describe factory space/office space/selling space Lease? Own?

Manufacturing Plans and Costs

breakdown total costs into raw material, parts, labor, overhead inventory requirements

Labor
describe number of employees and their qualifications How much will each be paid?

F. MANAGEMENT TEAM
Description of Management Team/Directors
outline duties and responsibilities of each member-a brief resumequalifications/experience

Management /Directors Compensation

List names. titles, salary

Shareholders indicate shareholders and number of shares/% and amount paid for shares Professional Advisors names and addresses of all advisors and fees paid to each

G. IMPLEMENTATION SCHEDULE AND RISKS ASSOCIATED Milestones Summarize significant goals-what still needs to be done? Who will do these things? When?

Schedule develop a schedule of significant events and priority for completion Risks and Problems summarize problems to date and how resolved identify risks and how they will be dealt with

H. YOUR FINANCIAL PLAN

Funding requested indicate type/amount of funding needed how will money be used give overview of financial structure of company Outline proposed terms of investment

Current Financial Statements Financial Projections 1. Profit and loss forecasts 2. Pro forma Balance Sheets 3. Projected cash flow statements 4. Breakeven analysis

6. Appendixes (Back-up information) product specifications/photos detailed resumes of management prospective customer list names of suppliers job descriptions of management team consulting reports/surveys legal documents letters of reference relevant trade/journal/newspaper articles

Production Process: responsible for creating goods and services offered by the business organization. There are three main parts to the production process as can be seen in the diagram:

 A business organization must purchase all the necessary inputs and then transform them into the product (outputs) that it wishes to sell. How well-organized the organization is at undertaking this transformation process will determine its success. This is known as the productive efficiency of a firm and it will want to be as efficient as possible in transforming its inputs into outputs (i.e. using the minimum number of inputs as possible to achieve a set amount of output). This will reduce the cost per unit of production and allow the firm to sell at a lower price.

 Ultimately, the objective of the production process is to create goods and services that meet the needs and wants of customers. The needs and wants of customers will be met if a business can produce the correct number of products, in the shortest possible time, to the best quality and all at a competitive price.

Marketing Process: consist of selling and/or promoting the goods or services of the organization The Marketing Process Situation Analysis: viewed in terms of the external environment and internal analysis of the business organization itself; identification of opportunities to satisfy unfulfilled needs; understanding own capabilities and the environment in which it is operating.

 Situational Analysis Frameworks 5 C Analysis: company, customers, competitors, collaborators, climate. PEST Analysis: for macro-environmental political, economic, societal and technological factors. A PEST analysis can be used as the climate portion of the 5 C framework
SWOT Analysis: strengths, weaknesses, opportunities and threats for the internal and external situation; used to condense the situation analysis into listing the most relevant problems and opportunities and to assess how ell the business organization is equipped to deal with them.

 Marketing Strategy: pursuing for the opportunity of the identified unfulfilled needs.
Segmentation: identification of portions of the market that are different from one another; it allows the business organization to better satisfy the needs of its potential customers ( needs are identifiable, accessible, substantial, unique and durable/stable) Targeting (target market selection) Value proposition to the target market

 Marketing Mix Decisions: detailed tactical decisions Product development: specifying, designing and producing the products/services. Pricing decisions Distribution contracts Promotional campaign development
Implementation and Control: marketing plan has been developed and the product has been launched, results of the marketing effort should be monitored closely to accommodate market changes

Basic Principles of Office and Business Management Establish office and business management routines and stick to them. Set up clearly delineated responsibilities. Keep updated business records. Take a walk through the office and have a sit. Schedule the scut work (trivial, unrewarding, tedious, dirty, and disagreeable chores). Delegate and outsource. Make business planning a priority

Business Ethics
Form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Knowing the difference between right and wrong and choosing to do what is right.

Ethical Principles Honesty: saying things that are false, deliberately misleading consumer; open and free to share information about the product/service. Promise-keeping: keeping commitments; true to deliver the expected product/service. Fairness: create and follow a process and achieve outcomes that a reasonable person would call just.

 Respect for others: open and direct in communication, and receptive to influence; honor and value the abilities and contributions of others; embrace the responsibility and accountability for every action. Compassion: maintain an awareness of the needs of others and act to meet those needs whenever possible; minimize harm whenever possible; and act in ways that are consistent with commitment to social responsibility. Integrity: live up to ethical principles, even when confronted by personal, professional and social risks, as well as economic pressure.