ENTREP CHAPTER 3 - Prior knowledge of the 3 FACTORS IN OPPORTUNITY
market is extensively shaped RECOGNITION
Recognizing, Assessing and
by educational background
Exploring Opportunities 1. Market Awareness
- Aside from formal training,
2. Entrepreneurial Readiness
personal experiences
Opportunity including travel and precious 3. Connections
employment can provide
- a situation or occasion that valuable information on the
makes it possible to do market he wants to enter Market Awareness
something that you want to
do. Ex. We had to eat at several - Prior knowledge of the
restaurants to experience market
- an exploitable set of their food (food tasting)
circumstances with uncertain - Refers to the personal
outcome requiring a Conception exposure of the market and
commitment of resources its components including
- Gestation phase,
and involving risk. customers and suppliers
Entrepreneurial intentions
1st – you want to do and ideas are generated - Information on the market
something using logic, creative thinking can be acquired from formal
or both. training
2nd – there are conditions
for the realization of the Visioning - Experience can be a major
objective source of understanding the
- Provides the individual a
hunch (feeling, intuition) that market
3rd – you must make
decision to realize your can serve as an opportunity - Your work experience can
objective for business (follow your gut) provide knowledge about the
- Bread toasted siopao (from market
classic steamed siopao) Ex. A teacher can put up a
5 STAGES OF OPPORTUNITY
Assessment tutorial center or a school of
RECOGNITION
her own.
1. Precondition - Involves the evaluation on
whether the idea can be
2. Conception realized or not Entrepreneurial Readiness
3. Visioning - Can the idea be realized? - Refers to the variety of
4. Assessment - Can we really toast siopao? features of an individual to
start a business venture
5. Realization Realization
- Covers all the types of
- Production of a prototype resources that the individual
Precondition possesses including financial,
- The idea is now felt in its
physical, and human
- Preparatory stage tangible of physical form
resources.
- Ability of an individual to 3. It serves as a tool in 3 INFORMATION NEEDED
take risks and management helping get financing for the FOR BUSINESS PLAN
uncertainties business
1. Market information
Who reads a business plan?
2. Information about
Connections 1. Entrepreneur operations
- Business Opportunity is 2. Lender 3. Financial information
heightened when the
3. Investor
individuals have a diversity of
networks Entrepreneur Market information
- Families and friends as well - Business plan = roadmap - who is the primary market?
as business associates can
bring about opportunities - Business plan allows the - demographics, male or
that we can pursue entrepreneur to anticipate female, high-income or low-
potential risks, he can decide income?
Example: Suppliers can be on whether or not to pour
people you know - #of establishments similar
resources into the business
to this
- Likened to courtship
Information about
CHAPTER 4: THE BUSINESS Lender operations
PLAN
- 4c’s of credit - location, service operation,
Business Plan equipment, space
- Collateral, Capital, Capacity,
requirements, labor
- a document that describes Character
requirements, raw materials
the various external and
- Does the entrepreneur needed and potential
internal elements involved in
have a good credit record? suppliers, utilities
starting a business
- Will cash flows be sufficient - location (where is it
- guide for short term and
to pay debts? located? How far from other
medium-term decision-
milktea establishments?
making and managerial - Are collateral and tangible Accessible to students?
action assets present?
Financial information
Why is a business important? - How much of the
entrepreneur’s money was - list of all sources of revenue
1. It helps determine
whether a proposed business invested?
- list of all possible
venture is viable given its Investor expenditures
target market
- Roi in 5 years or sooner? - the entrepreneur can get
2. It guides the entrepreneur estimates of the expenses by
in mobilizing the resources - Will be able to see financial soliciting quotations from
needed by the business projections furniture and ingredient
- Are the projections suppliers
reasonable?
MAJOR SECTIONS OF A Financial Plan 12 MAJOR SECTIONS OF
BUSINESS PLAN BUSINESS PLAN
- the one that is likely to
Introductory Page receive scrutiny 1. Introductory Page
1. Name and address of - indicates if an investment is 2. Executive Summary
business economically viable
3. Environmental and
undertaking
2. Name and address of industry analysis
principal - must include (summary of
4. Description of the business
assets, summary of projected
3. Nature of business
sales, cash flow statement) 5. Production Plan
4. Statement of financing
Assessment of Risk 6. Operations plan
needed
- price cutting by competitors 7. Marketing plan
5. Statement of
confidentially of report - operating costs that exceed 8. Organizational Plan
initial estimates
Executive Summary 9. Financial Plan
- failure to achieve sale
- Highlights of the business 10. Assessment of risk
forecasts
plan summarized in 2-3
pages - increase in the price of raw 11. Timetable/Milestones
materials 12. Appendices
- Overview of the business
plan - difficult in raising additional
capital
Environmental Analysis
- advances in technology that
Description of the business
might render new product
Production Plan obsolete
Operations Plan - unforeseen environmental
conditions
Marketing Plan
Timetable/Milestones
- Pricing, Distribution,
Promotion, and sales Appendices
forecasts
- the appendix is used to
- marketing strategy support the rest of the
(strategy and business plan
implementation)
- projected income
Organizational Plan statements, technology,
product/service details,
- owner, general manager, customer lists, expanded
bookkeeper, competitor reviews,
partnership and customer
letters.
