INNOVATION new or different ways of doing things

when an individual creates a ew product, it is innovation

when he sells his product in a different approach, it is alos an innovation
ENTREPRENEURSHIP capacity for innovation, investmaent and expansion in new markets, products
and techniques
It is a science that converting ideas into a business
GROWTH a result or output
DEVELOPMENT a proceed or input

DEVELOPMENT AND GROWTH THEORIES
1. Laissez Faire Theory- means economic freedom
free from government intervention
free enterprise economy
2. Keynesian Theory- governemnt plays an important role in economic development
requires government spending
3. Ricardia Theory land is a key factor in economic growth
4. Kaldor Theory Nicholas Kaldor proposed this theory
He emphasize that technology is important in the development of a country
5. Innovation Theory

CONTRIBUTION OF ENTREPRENEURS
1. develop new market
2. Discover new sources of materials
3. Mobilize capital orders
4. Introduces new technologies
5. Create employment

ENTREPRENEUR defined as:
1. One who bears uncertainty, buys labor and materials and sells products
2. One who organizes, manages and assumes risks in business or enterprises
3. An innovator, does new things in a new way
4. Searches for changes, responds to it and exploit it as an opportunity


FACTORS TO CONSIDER IN HAVING A BUSINESS
1. The need of the society
2. Availability of capital resources
3. Business inclination
4. Clientele
5. Availability of raw materials
6. Human resources
6. The nature of products

CHARACTERISTICS OF ENTREPRENEUR
1. Reasonable Risk Taker enjoy challenges, they are careful and calculating
2. Self-confident have strong faith in their abilities, they believe they can be the best in their field
3. Hardworking- successful people always attribute their success to hardwork Thomas Edison said that
success is 99% perspiration and 1% inspiration
4. Innovative they are creative. They do things ina new and different ways. They create new products
methods of production , new market and new sources of materials
5. Leadership leaders by nature and they are task-oriented
6. Positive Thinker they think of success and birght sides






BUSINESS- a commercial activity engaged in, as a means of livelihood
a person's regular occupation, profession, or trade.
defined as an organized effort of individuals to produce and sells goods and services

SMALL BUSINESS where the owner is the principal worker and he employs one or more assistants

CHARACTERISTICS OF SMALL BUSINESS
1. It is privately owned
2. Few or no layers of management
3. Has insufficient resources

FEATURES OF A SMALL BUSINESS
1. A small business is efficient in specialized skill or service. It can well produce goods or services that are
designed to the particular needs of an individual or a few clients
2. A small business is low in capital but high in labor intensity. Most small business do not have sufficient
financial resources
3.A small business succeeds in smal, isolated or overlooked markets. In rural communities where market
are small due to the few residents, a smal business is viable
4. A small business often operates in unstable markets. Big corporations are careful in their investments
5. A small business is closer to the market place. Not a small businesses conduct their operations rig
inside the market place
6. Generally, the owner of small businesses are also the managers. Most of our small enterprises in the
Philippines are like these. The owner-manager employs his wife and children
7. Capital comes from the owner or small groups in our country, a small business is usually financed by
the family through its own savings and/or loan
8. The area of operation is small, this means the business is community-based. The owner and the
employess live in the community where the enterprise is located
9. The size of the enterprise is small in rotation to the industry. For example, the shoe industry is a large
one. But there are very many stores of shoes

THE SEARCH FOR A SOUND BUSINESS IDEA
SOUND BUSINESS IDEA defined as the economic opprtunity which is within the reach of the
entrepreneur and which will provide him with a desirable value

IMPORTANCE OF SOUND BUSINESS IDEAS























Sound Business
Idea
New Venture
Success in
Competition
Successful
Market Entry
Established
Business
PROCEDURE IN DETERMINING THE BEST BUSINESS IDEA
1. Preparation of the lis of business ideas
2. Screening of the listed ideas
3. Final Selection

METHODS OF SEARCHING IDEAS
A. Unanticipated means when the entrepreneur finds business ideas without serious effort, the
method is referred to as unanticipated means. Included in this means are the following:
1. the persons work employees who are in direct contact with customers are sometimes
confronted with demand for products and services that are not currently provided by the company
2. the persons hobbies hobby is a useful means of developing some skill which could be useful later
when the hobbyist decided to operate a business
3. the persons acquaintances takes another person to make him aware of the wisdom or starting a
new business venture
4. a chance event encountered by the person when a person encounters an event that will provide
him with a clue to a business venture
B. Deliberate Search A disadvantage of unanticipated means in idea generation is the difficulty of
ascertaining the exact date when the ideas will come pouring in. To offset this problem, a deliberate
search for ideas is made. This type of idea generation takes the form of the following:
1. using search questions business ideas are expected to provide answers to some needs
2. idea Prompting encounters with someone elses idea or a customer request or some event may
provide hints or cues leading to a business ideas

STRATEGIC PLANNING FOR SMALL BUSINESS
Strategic Planning refers to a process of determining the primary objectives of the entrepreneurship
and then adopting courses of action and allocating resources to achieve those objectives





















Strategic Objectives refers to specific performance targets that the entrepreneurship hopes to
accomplish

Implementing Strategic Plans
1. Identifying Specific Methods determines the best way to use resources
2. Deploying the Resources specific aim of planning is to be able to deploy the right quality and
quantity of resources in the various activities required to achieve the objectives




Strategic Planning
Determination of
Primary Objectives
Adoption of
Courses of Action
Allocation of
Resources
Fundamental Strategies for Small Business
1. The Flexibility Strategy
2. The Strategy of effectiveness as priority
3. the strategy of staring simple

BUSINESS PLAN is a document that helps the small business owner determine what resources are
needed to achieve the objectives of the firm and provides as standard against which to evaluate results

Purposes of a Business Plan
1. to serve as managements guide during the lifetime of the business
2. to fulfill the requirement for securing lenders and investors

Parts of the Business Plan
1. Title Page and contents
2. Executive summary
3. Description of the business
4. The product or service
5. Market strategies
6. Analysis of the competition
7. Operations and management
8. Financial data
9. Supporting documents

POSITIONING STRATEGY refers to how the firm differentiates its product or service from those of
the competitors and serving a niche
PRICING STRATEGY how the firm prices its product or service is a very important component of the
business plan
DISTRIBUTION STRATEGY refers to the proces of moving goods and services from the firm to the
buyers
PROMOTION STRATEGY how the companys products or services will be promoted is an important
component of the marketing strategy
OPERATIONS AND MANAGEMENT how the firm will be operated on a continuing basis is an
important component of the business plan
Organizational structure
Operating expenses
Capital requirements
Cost of goods sold
ORGANIZATIONAL STRUCTURE well-defined and realistic organizational structure is an important
element of the business plan
Marketing
Production
Research and development
Management
Human resources
FINANCIAL DATA financial aspects of the business plan
The income statement shows income, expenses and profits of a firm over a period of time
The balance sheet type of financial statement that shows the financial condition of the business
as of a given date
Assets
Liabilities
Owners equity
Cash flow statement projects what the business plan means in terms of pesos
SOLE PROPRIETORSHIP business owned and operated by a single person. Majority of businesses are
owned by sole proprietors and this is an indication of the popularity of this particular form

Advantages of Sole Proprietorships
1. ease and cost of formation
2. Secrecy
3. Distribution and use of profits
4. control of the business
5. government regulation
6. taxation
7. closing the business

Disadvantages of Sole Proprietorship
1.Owners lack of ability and experience
2. Difficulty in Attracting Good Employees
3. Difficulty in Raising More Capital
4. Limited Life of the firm
5. Unlimited Lianility of the Proprietor

PARTNERSHIP legal association of two or more persons as co-owners of an unincorporated business.
Partnership is formed with the purpose of eliminating some of the disadvantages of sole proprietorships
while retaining some of their advantages

Advantages of Partnerships
1. eases of formation
2. pooling of knowledge and skills
3. more sources of capital
4. ability to attract and retain employees
5. tax advantages

Disadvantages of Partnerships
1. Unlimited liability
2. limited life
3. potential conflict between partners
4. difficulty in dissolving the business

TYPES OF PARTNERSHIPS
a. General partnership association of two or more persons, each with unlimited liability and who are
actively involved in the business
b. limited partnership arrangement in which the liability of one or more partners is limited to the
amount of assets they invested in the business

CORPORATION legally chartered enterprise with most of the legal rights of a person, including the
right to conduct a business, to own and sell property, to borrow money and to sue and be sued

Advantages of Corporations
1. Limited liability
2. ease of expansion
3. ease of transferring ownership
4. relatively long life
5. greater ability to hire specialized management

Disadvantages of Coporations
1. more expensive and complicated to organize
2. double taxation
3. more extensive goevrnment restrictions and reporting requirements
4. employees lack personal identification and commitment