ENTREP - Research and development

- Feasibility study and business plan

Introduction to Entrepreneurship
- Technical writing
What is Entrepreneurship? - Organization and management
 An Entrepreneur INNOVATES! - Marketing
 It is being an ENTERPRISE, while WORKING. - Operation
- Finance
1. Attitude
- Believe, determination 3. Interpersonal Skills
- Dive right in and learn the hard way - Non- verbal or verbal communication
2. Creativity - Listening
- New idea - Leading
- Push to the limits, pedal to the metal - Negotiating
- Ex. Uber
3. Relationship The Competitive Advantage of an Entrepreneur
- Customers
- Deliver more than what expected 1. Customer focus
4. Organization  Serving customer directly
- Manage and finance 2. Quality Performance
- Focus and doing it really well can get you  Highest quality
very far  Should be e part of the business culture
3. Integrity and Responsibility
Characteristics of an Entrepreneur  A solid reputation for honesty and
1. Mind: Open Minded and Innovative dependability to good customer service
 Business is ever changing and excellent product quality
 Take opportunities  TRUST is the foundation of all
2. Eyes: Vision and Direction relationships, including business!
 Goal (big and small)  Ex: Vloggers – Michelle Dy
3. Ears: Listens to people 4. Innovation
 Be with smart people  Originality
4. Mouth: Communicates well  Good at developing other’s ideas
 Sales talk  Improving existing producers
5. Nose: Smells what sells  Taking inventions or innovations
 Para makaisip ng bago developed elsewhere.
6. Hands: Action oriented  Ex: Steve Jobs
7. Heart: Passionate 5. Niche Market
8. Guts: Risk taker  Targeting a specific group of people
9. Skin (thick): Tough who have identifiable but very narrow
10. Legs: Perseverance range of product/ service interests and
compromise.
Core Competencies of an Entrepreneur  Specialized products
 Particular geographical area
1. Cognitive Skills  Ex: 18-21 Make ups
- Understand written materials
- Learn and apply new information 5 Levels of Entrepreneurial Development
- Solve problems
- Create new ideas 1. Self – Employed
2. Technical Skills - Do everything all alone
- Information technology - You have all the time in the world
 2. The Manager
- Make a team
- Find leaders
- Hire
3. The leader
- He/she knows how to run a business
- Characteristics to find
4. The Investors
- Growing the company
- Expand, learn from others
5. The True Entrepreneurs
- Invest- Financially Free
Entrepreneurs’ field of Expertise
1. Technopreneurs
o Who pull technology as the core of
business model
2. Social Enterprise
o Is the one who takes advantage of the
country’s social problems and turn
them into profitable institutions with
the intention of helping the
disadvantage community than making
profit
o Ex: good shepherd, happy skin, gawad
kalinga
o 3P’s
People
Profit
Planet
3. Intrapreneurs
o Entrepreneur in a large company who is
tasked to think, establish, and run a
new big idea or project.
o Intrapreneurs are usually the
productmanagers or the business
development managers of a company.
4. Extrapreneurs
o Hop within companies
o They pirate these
CHAPTER I: The Business Plan (Format and Process
Development)
What is a business plan for?
 A guide for the entrepreneur, like a navigational
course
 Conveys to investors and cautious financers
CONTENTS OF A BUSINESS PLAN
I. Cover
- Title page
- Table of Contents
- List of tables
II. Introduction
1. Business Model/ Business Concept
- A business concept contains the essence of
the enterprise in a concise but powerful
manner; It stresses the value of the product
offering to the target customers who would
likely buy it.
- The product concept must the translated
into a BUSINESS MODEL. A business model
is a formula on how the enterprise exactly
plans to make money out of the business.
2. The Business goals
- Show the future and long-term prospects of
the enterprise. It is composed of;
 Vision (direction, may time frame)
 Mission (purpose, general)
 Objectives (Marketing, Finance, Human
Resource, Operations)
 Key result areas – quality
 Performance indicators – quantity
III. Executive Summary
- A synthesis for the entire plan
- Contain major argumentation on why the
business will work and succeed
- Discuss and justify the ES and EDS.
- It should render all the major institutional,
market, operations, and organizational
strategies previously cited into output and
these output into outcomes.
- Investment requirements should be
presented along with the summaries of the
projected income statements, balance
sheets, cash flows, and funds flow and their
analyses and conclusions.
- It should also contain a section on the
environmental and regulatory compliance
of the proposed business, as well as the
more proactive programs and financial
forecasts of the enterprise.
- Last to be written, but for presentation
purposes it should be placed in the first part
of the business plan
- Highlights only
 IV. Business Proponents enable the business to implement the
- 4 types of stakeholders; Enterprise Strategy.
a. Resource mobilizers and financial - The EDS starts from Input (resources
backers mobilized), proceeds to the Throughput
b. Technology providers and applicators (the transformation process where
c. Governance and top management input are converted to output (the
d. Operating and support team products/services)) to achieve customer
satisfaction.
How do you determine your target
customers = Market Research!
7P’s of Marketing
V. Target Customer  Positioning – Main Value Proposition
- Target market description must be very  Product – Describe
precise about the target audience or  Packaging – Bundles
customers. Must be of sufficient size  Place – channels
and paying capacity.  People
- Main Value Proposition/ unique selling  Promotion
proposition: “Melts in our mouth, not in  Price
your hands.” M&M’s
VI. The Market 6M’s of Operations
- Market justification (demand and - it functions to cover the input portion
supply) of the EDS Design Framework
- Industry dynamics  Money
- Macro-environmental factors  Men
- Estimated market share  Machines
What is a Market Share?  Materials
 Methods
Calculated by taking company’s sale over the period  Management
and dividing by the total sales of the industry over the
same period. 8R’s of Human Resource

VII. Product and service offerings; Description,  Reviewing

Evolution and Justification  Rewarding
- Products must be described by  Retooling
highlighting the features and attributes  Recycling
that would most appeal to the target  Resonating
customers. The business plan should  Retaining
also prove that the products/services  Routing
would be accepted and carried by  Recruiting
distribution channels.
VIII. Enterprise Strategy and Enterprise Delivery IX. Financial Forecast: Expected Returns, Risks,
System And Contingencies
- The business plan should expound on - Expected returns on sales
the Enterprise Strategy by mapping the - Expected returns on assets or
competitive landscape and by situating investments
the enterprise and its competitors as to - Expected return on stakeholders equity
their strategies and chosen positioning. X. Environmental and Regulatory Compliance
- The BP should then show how the - The business plan must articulate the
Enterprise Delivery System would laws, rules, and regulations governing
 the business and the industry that the
enterprise is in.
XI. Capital Structure and Financial Offering:
Returns and Benefits to investors,
financiers, and partners.
CHAPTER II: Opportunity seeking, screening, and
seizing.
3’s of Oppurtunity
1. Opportunity Seeking
- Entrepreneurs are innovative
opportunity seekers. They have endless
curiosity to discover new or different
ideas and see whether these ideas will
work in the marketplace.
- They create value by introducing new
products or services or finding better
ways of making them.
ENTREPRENEURIAL MIND FRAME, HEART FLAME, AND
GUT FLAME
a. Entrepreneurial Mind Frame
- Allows the entrepreneur to see things in
a very positive and optimistic light in
the midst of crisis or difficult situations.
- Danger opportunity
- Opportunity now here
b. Entrepreneurial Heart Frame
- The surging passion to find fulfillment in
the act and process of discovery.
- PASSION is that great desire to attain a
vision or fulfill a mission.
c. Entrepreneurial Gut Flame
- Ability to sense without using the five
senses – INTUITION
- Being able to withstand adversity-
COURAGE
THE MANY SOURCE OF OPPURTUNITIES
A. The Macro Environmental Sources of
Opportunities
(SPEET)
1. Socio-Cultural Environment
- Demographics and cultural dimensions
that govern the relevant
entrepreneurial endeavor. It looks at
structure and shifts in social status and
behavior.
- Traditions and customs = trends
2. Political Environment
- Laws, rules, regulations
- Ex: 13th month pay
3. Economic Environment
- Supply and demand, import and export,
foreign exchange rate, purchasing
power.
- Ex: Inflation rate before is 3-4% only,
Now 6% (Exercise your right in the
government)
- New clark city
4. Ecological Environment
- The growing awareness in the world
today makes this factor more and more
important for countries and industries.
- Ex: Save the planet advocacy, Increase
usage of eco-bag
- No coal and plastic, Yes to Paper
Industries
- Bambike
- Sustainability
5. Technological Environment
- Leads to the commercialization of new
products
- The nature of technology used for
production of goods and services is an
important factor responsible for success
of a firm.
- Ex: increased in usage of smart phones
INDUSTRY AND MARKET SOURCES
Micro-Level
- Industry source of opportunities
- Defining industry provides many
opportunities.
- Jollibee vs Mcdo
- Ex: Agricultural Value Chain
- Tumataas value pag pinaprocess
- A thorough analysis of industry
structure and dynamics yield
opportunities for entrepreneur.
Market Source of Oppurtunity
- market trend analysis is conducted by
determining critical variable which
 would affect the future direction of the
industry
- Market traits, characters, and behavior
to match the product offerings of an
enterprise (EX: Combo meals)
- Market source of opportunities can be
discovered from increased or decreased
demand as well as higher or lower
supply.
Micro market
- Refers to the specific target market
segment of a particular enterprise.
These are the target customers that
represent the immediate customers of
an enterprise, meaning those who are
currently buying the goods or services
offered by the enterprise and its direct
competitors.
- The need for segmentation would be
crucial in micro market analysis because
the definition of value for money differs
from group to group.
Consumer Preferences, Piques, and Perceptions
1. Consumer Preferences
- Refer to the tastes of particular group
of people. (Clothes)
2. Consumer Piques/ Dislike
- Things that irritate customers
- Providing solutions to Traffic = grab
food
3. Consumer Perception
- Sometimes, product is changed by the
way consumers perceive them
- Ex: Listerine, Strabucks
Other Sources of Opportunity
1. Customer preferences changes over time
2. People’s taste in clothes, music, shoes,
entertainment, dance, sports, hobbies, and
even careers have evolved over the years.
3. What piques customers is a great source of
opportunities
4. Before the customer is won over; there is a
battle for the mind, the heart and last, the
wallet.
5. The longer the customer wants to use the
product, the greater the chances of creating
lasting loyalty.
6. Opportunities abound in shaping consumer
perceptions or occupying spaces in their minds
or places in their hearts that have not yet been
filled.
7. New inventions, new systems and work
processes, new insights about the human
psyche, new applications for old knowledge,
new revelation about how the physical world
works, new interpretations, new combinations
based on the convergence of previous
technologies, new outlooks about how life
should be led, and a host of other new things
are tremendous sources of opportunities.
8. Determining personal preferences, and
competencies lay the foundation for a new
business venture.
9. Unexpected occurrences in both the external
and internal environment of the enterprise
indicate that significant changes are happening
and opportunities are sprouting.
2. Opportunity Screening
After opportunity seeking comes the rigorous process of
Opportunity Screening because of the many
opportunities possible for the entrepreneur; it is
important to come up with a short list of a few very
promising opportunities, which could be scrutinized in
detail.
The 12R’s of Opportunity Seeking
1. Relevance – to vision, mission, and objectives of
the entrepreneur.
2. Resonance – to values. Other than vision,
mission, and objectives, the opportunity must
match the values and desired virtues that you
have or wish to impart.
3. Reinforcement of entrepreneurial interests-
how does the oppurtunity resonate with the
entrepreneur’s personal interests, talents, and
skills.
4. Revenues – business worth your effort. – it is
important to determine the sales potential of
the products or services you want to offer. Is
 there enough market to grab and nurture for
grwoth?
5. Responsiveness – needs and wants
6. Reach – similar – opportunities that have good
chances of expanding through branches
7. Range – the opportunity can potentially lead to
a wide range of possible product or service
offerings, thus, tapping many market segments
of the industry.
- Wide range of RELATED products
8. Revolutionary Impact – next big thing or game
changer
9. Returns – it is a fact that products with low cost
of production sold at higher prices will yield
high returns on investments. Returns can also
be intangible; meaning that they come in the
form of high profile recognition or image
projection.
10. Relative ease of implementation – doability.
Easy to implement or there will be a lot of
obstacles?
11. Resources required – few resources = favored
than those requiring more resources
12. Risks -
The Pre Feasibility Study
- The idea is to focus on a few key items
that could make or break the business
concept. The entrepreneur must go
down to the details and take time to
consider the following factors
 Market potential and prospects
 Availability and appropriateness of technology
 Project investment and detailed cost estimates
 Financial forecast and determination of financial
stability
Market Potential and Prospects
- Is based on the estimated number of
possible customers who would might
avail of the products or service in the
area where you want to operate your
business (micromarket)
Segmenting the market
- Using a set of demographics will be the
most basic approach in determining the
market segment.
- Look into the specific classifications that
are relevant to the market you are
targeting.
Assessing Competition
- Market potential is also affected by the
number of establishments supplying
and serving your target customers.
- The more suppliers and competitors
there are within an area, the greater
the level of saturation.
Estimating Market Share and Sales
- Quantify the market potential in a
systematic way
- Define the coverage of the market you
want to serve
- Determine the broad market segment
within this area or total targeted
population.
- Estimated sales volume x estimated
price
Technology Assessment and Operations Viability
- The entrepreneur would be able to
determine whether the product or
services offering will meet customer
demand or not.
1. Quantities demanded
2. Quality specifications demanded
3. Delivery expectations
4. Price expectations
Investment Requirements and Production / servicing
costs
- Determine how much money is needed
to start the business opportunity
1. Pre- operating cost - preparation
2. Production / service facility investment
– long term investment
3. Working capital investment – needed
to operationalize the business
- Good for 6mos
Financial Forecast and Determination of
Financial Feasibility
- Refers to the monetary transactions
that the business is expected to engage
in.
 - Income statement (revenues –
expenses= income/profit(loss)), balance
sheets (assets= liabilities + equity), cash
flows statement, funds flow statement
- Balance sheet – Assets (represent all
the investments in the enterprise
including the initial investments that
you considered in the pre-feasibility
study. Liabilities (represent the
enterprise’s debts to suppliers)
Stockholders (investors investments in
the stock or shares of the business
- Financial Ratios and Measurements –
payback period (payback p = total
investment / annual net income after
taxes)
- Return on sales – (ROS = netprofit after
taxes / sales)
3. OPPURTUNITY SEEZING
- The entrepreneur has an idea where to
locate the business and how she will
market the product or service.
- Determine the critical success factors
that enable other players in the same
industry to succeed
Crafting a Positioning Statement
- Advised to look others competitors (or
substitutes) in the marketplace
- MVP
Conceptualizing the product or Service offering
 Successful new products spring from
1. Creative mind
 Conceptualizing
 Designing
 Mind responsible for making the
product pleasing
2. Technical mind
 Converts knowledge into something
 Making an original technology (tech
originator)
 Uses old knowledge to new
applications (tech adaptor)
 Configures the tech design of
product. HE RESOLVES TO MAKE A
NEW PRODUCT WORK FOR THE
PRODUCT CREATOR BY
CONFIGURING AND
RECONFIGURING THE TECH DESIGN
OF THE NEW PRODUCT (tech
renderer)
3. The business mind
 Key task: harness market potential
 Organizes forces to develop, launch,
and commercialize product
 Manage the external and internal
environment of the new product
and continously do so beyond
development stage
 (lamp turn)
These three came together in the ENTREPRENEURIAL
MIND

Designing, prototyping and Testing a product

1. Designing – rendering the concept and

translating it into its very physical and real Assesing competition
dimensions
2. Prototyping – built based on the design made Direct mcdo and jollibee
for actual testing
Indirect iced tea and coke
3. Testing – using the prototype for focus group
discussions, surveys, product demo, and the
like.

Implementing, organizing, and financing

Lesson 4: New Product Development