appraising and developing yourself for an entrepreneurial career

Appraising and Developing Yourself for an Entrepreneurial Career

“You Need to Develop the Spirit of Entrepreneurship to Succeed in Business”(article by Bayo Bamitale; posted in slideshare.net by Patrick Jayver Vicente)

Many of us are interested in starting home-based businesses or quitting our full-time jobs. There is a marked difference between the psychology of the worker and that of the entrepreneur but the great flicker of hope is that the entrepreneurial consciousness could be developed. If you are tired of your day-time job and have been thinking of leaving your job and striking out on your own, you need to think about this properly. It is necessary to examine yourself and ask whether you have what it takes to be an entrepreneur; and if you don't to go ahead and start the process of developing that consciousness. This article itemises some of the characteristics of an entrepreneur as well as the method by which those characteristics could be developed.

First, be clear about why you are starting business. Why become an entrepreneur? There are various reasons that one may consider in striking to become an entrepreneur and starting one's own business. Some strike out because they hate their bosses, some because they hate their jobs, some because they hate poverty and some because they hate commuting. Becoming an entrepreneur because you hate something may not be the right attitude. It is better to strive to start your own business because you love something. When the chips are down, you will need the energy of love to sustain you in the days of adversity. It is your love of business or entrepreneurship which will keep you going when partners desert you, or a project fails, or the tax-man comes with harassment, or you face other negative circumstances. So the first thing to do is to first settle all the hatreds and rather replace them with the love of something this is done at the level of attitude. Your attitude to business will determine your altitude in success.

Second, don't go into business tabular rasa like a clean slate. You need to develop yourself along the business line. You need to learn some accounting skills, some law, some technology and some philosophy to be a good business-person. A good way to start is to join a network marketing system. When you join, don't join because of the money although you can make a whole lot of money from this business but don't make that your focus. Go with the intention of learning, especially learning to sell. To succeed in business, you need to know how to sell. You will need to sell your business ideas to partners, to sponsors, to customers, and even to members of your work-force. And one good way to learn to sell is by joining a network marketing system and taking advantage of the great training facilities provided there.

Assignment in Venture Capital 09-Jan-2013 by Maybelyn U. Catindig BSEM 4-1

Third, understand the difference between assets and liability. Many go out into business without understanding the difference between assets and liabilities. Your knowledge in this area is very vital to your success. So get some good training before you jump in.

Forth, understand the power of systems. A business is essentially a system. Not understanding the power of systems will convert a business-man into a self-employed, and there is a difference between a business-man and a self-employed. A good business-man puts in place a system, which works irrespective of whether he is sleeping or working. The ability to do this is the difference between a business-man and a self-employed.

One needs to take a closer look at him or herself before going into business, but every attitude and characteristics required for entrepreneurial success could be developed by paying attention to critical factors, most of which are essentially psychological.

The Philippine Environment for Entrepreneurship

“The Context: Entrepreneurship in the Philippines”(article by letsgo.com.ph)

Entrepreneurs are the backbone of our economy. The Philippines is an entrepreneurial country. Small and medium-sized enterprises (SME), including micro-enterprises, account for 99 percent of all business establishments and 60 percent of the exporting firms in the Philippines. According to the Department of Trade and Industry, SME’s currently employ about 55 percent of the Philippine labor force and contribute 30 percent to total domestic sales volume.

Among the current problems that Filipino entrepreneurs encounter today are the inadequate access to technology, financing capital, marketing advice and logistical problems in setting up and maintaining their competitiveness in their community. For this reason, the Philippine government has identified the need to foster entrepreneurial spirit to jumpstart our lagging economy.

To further emphasize the importance of developing entrepreneurship education, a recent study by the Center for Asia Pacific Studies reveals, “out of every 100 children enrolled every year, 66 will complete elementary education, 42 will finish high school and only 14 will earn a college degree.” A study by Smart Communications adds, ” only 7.7% of graduates get employed”. This means that out of 100 children that goes to school, only one will end up getting a job.


This has led LET’S GO to ask – What happens to the rest? Students who do not graduate or cannot find decent employment in the country usually fall into the trap of joining the unemployed population, or resort to dealing with illegal drugs and crime as a means of living. The scarcity of jobs has further contributed to the exodus of skilled workers abroad, where 2,000 Filipinos leave the country everyday to seek higher income and greater opportunities in career advancement.

With this in mind, LET’S GO believes that a viable solution to overcome these challenges today is by promoting Entrepreneurship and giving Filipinos the proper knowledge and tools in start their own businesses.

Opportunity Identification and Selection

“How Entrepreneurs Identify New Business Opportunities”(article from Knowledge@Wharton published on Nov. 9, 2009)

A key question that all would-be entrepreneurs face is finding the business opportunity that is right for them. Should the new startup focus on introducing a new product or service based on an unmet need? Should the venture select an existing product or service from one market and offer it in another where it may not be available? Or should the firm bank on a tried and tested formula that has worked elsewhere, such as a franchise operation? In the first of a series of podcasts for the Wharton-CERT Business Plan Competition, Raffi Amit, a professor of management at Wharton, discusses these questions and more with Knowledge@Wharton. In the process, he offers insights into how entrepreneurs can identify new business opportunities and evaluate their potential and their risks. An edited transcript of the conversation appears below:

Knowledge@Wharton: Our guest today is Raffi Amit, professor of Management at Wharton. We are going to be speaking with him about identifying new business opportunities. Professor Amit, thank you so much for joining us today.Amit: My pleasure.Knowledge@Wharton: The question that confronts anybody who is thinking of starting a new business or company is, how do you find the opportunity that's right for you? Could you offer some guidance on that?Amit: Sure. There are many sources for new venture opportunities for individuals. Clearly, when you see inefficiency in the market, and you have an idea of how to correct that inefficiency, and you have the resources and capability -- or at least the ability to bring together the resources and capability needed to correct that inefficiency -- that could be a very interesting business idea. In addition, if you see a product or service that is being consumed in one market, that product is not available in your market, you could perhaps import that product or service, and start that business in your home country.

Many sources of ideas come from existing businesses, such as franchises. You could license the right to provide a business idea. You could work on a concept with an employer who, for some reason, has no interest in developing that business. You could have an arrangement with that employer to leave the company and start that business. You can tap numerous sources for new ideas for businesses. Perhaps the most promising source of ideas for new


business comes from customers -- listening to customers. That is something we ought to do continuously, in order to understand what customers want, where they want it, how they want a product or service supplied, when they want it supplied, and at what price. Obviously, if you work in a large company, employees might come up with ideas. Indeed, you might want to listen to what they have to say. You could pursue these ideas by asking yourself some key questions such as, "Is the market real? Is the product or service real? Can I win? What are the risks? And is it worth it?"Knowledge@Wharton: Could you offer an example of a start-up that evaluated an opportunity and demonstrates some of the principles you just mentioned?Amit: Well, obviously in the age of the Internet, there is no shortage of examples of entrepreneurs who started a company based on a perceived need. You could go back to the beginning of E-Bay, where they saw an opportunity to connect people through launching a virtual flea market. It offered a platform that connected buyers and sellers directly. Other companies have found similar models. For instance, take PayPal, a company whose co-founder [Elon Musk] was a Penn and Wharton graduate. The company provided people the opportunity to pay online. Flycast is another company started by a former Wharton MBA student, [Rick Thompson]. It addressed issues of advertising on-line. All of these companies have one thing in common. They addressed an unmet need in the marketplace.There is no substitute for understanding the unmet needs of customers. That will allow you to discover whether you are able to supply those needs, at the price customers want to pay, and if you can still make a profit.Knowledge@Wharton: Let us suppose a would-be entrepreneur has identified what he or she thinks is a promising unmet need. Can you take us through the process of evaluating and identifying the risks that should be considered in deciding whether or not to pursue that business opportunity?Amit: The first step that everyone should go through is to ask the question, is the market real? In order to do so, the first thing you want to do is conduct what we call a customer analysis. You can do that perhaps in a very technical way, by conducting surveys. Or perhaps, in a less technical way, you can attempt to answer the question, "Who is my customer?" What does the customer want to buy? When does the customer want to buy? What price is the customer willing to pay? So, asking the "W questions" -- who, where, what, when -- is the first step. At the end of the day, the one thing every entrepreneur is looking for is revenue, and the revenue will come from customers. That is why you need to ask yourself, is there a market here?

The second thing you want to ask yourself is, who else is supplying that particular market? That is what we call competitor analysis. Ask yourself who else is in this market, and what are they doing for the customers. Are they supplying a similar substitute product or service as you have in mind? That is the second thing you have to establish, and by doing that, you can understand better what need is not met at the moment. That will also give you the opportunity to zero in on the price points and feature points ofwhere you can differentiate yourself from existing players in the market. You also need to conduct a broader industry analysis to understand the attractiveness of the industry you're going to enter. Is the industry growing or shrinking? What power do the suppliers have in this industry? How many buyers are there? Are there substitute products? Are there any barriers to entry? If so, what are they? That is very important for you to understand, because it will help you realize whether the industry you're thinking of entering is attractive.

In addition, you may want to look at regulations that affect that industry. Are there any regulations thatyou would be subject to? This especially applies in the life sciences sector, where there are strict regulations that control the supply of products into the market. In the United States, the FDA, the Food and Drug Administration, is a significant regulator. Every country around the world has a regulator in the


life science sector. So, these are the high level questions that you may want to ask yourself. Once you answer these questions, and you identify the need, given the competition and all the regulatory constraints that exist in that market, that will provide you with the opportunity to tailor your service orproduct -- or combination of the service and product -- to that marketplace. The logic we are suggestinghere is to understand the need, and tailor the product and/or service to that need, as opposed to saying,"Well, I have an idea. And now let me think how I can shove it down the distribution channel." More often than not, the latter doesn't work. More often than not, the former approach works. This is the approach where you identify the need, do a rigorous analysis of understanding who else is out there, andwhat constraints exist, and how you could differentiate yourself in a meaningful way. When you approacha new opportunity this way, when you introduce your product and/or service, you can expect to havesubstantial sales and growth for your company.Knowledge@Wharton: In addition to conducting market analysis and competitive analysis, and also looking at the industry and government, are there any financial risks that entrepreneurs should take into account? What would those be?Amit: When starting a business, there are many risks that need to be considered. One way to think about the various risks an entrepreneur is faced with -- or, for that matter, an investor in an entrepreneurial venture is faced with -- is to break them down into several buckets. Let's start with the first bucket, the company bucket. Well, here, the biggest sources of risk are the founders. Do they have the wherewithal not just to start the company, but also grow the company? Experience has shown that the prevalence of individuals such as Bill Gates or Michael Dell, Steve Jobs, that can not only start companies, but also manage its growth – the prevalence of such individuals is relatively limited.A second source of risk is technology risk. To the extent that your company employs technology, there are obviously issues of, how long will this technology be the leading edge? Secondly, are there any intellectual property issues that need to be addressed? Lastly, there exists the product risk. If you haven't developed a product yet, can you manufacture it? Will it work? All these issues are under the bucket of company risk.A second bucket for the sources of risk is the market for the product. You need to be aware of two big uncertainties. First, what is the customer's willingness to buy? And second, what is the pace, if you're successful, at which competitors will be able to imitate you? One of the things you have to think about when you enter that market is how you can create barriers to imitation, so that if you're successful, the competition won't be able to imitate you very quickly.A third bucket consists of risks associated with the industry. Are there any factors in that industry that relate to availability of supply? In some cases, you need to have certain raw materials that are in limited supply, and that some suppliers might be able to take advantage of that. Barriers to entry might change. Regulations might change, and adversely or positively affect your business.Lastly, there are financial risks. And here, the question is, will you be able to raise the money early on? At what valuation will you be able to do it? Will you be able to raise follow-up money? And then, from the investor's standpoint, obviously there's a risk that if the company is very successful -- and I can tell you that most early stage companies don't work out, but for the few that do, when it is time for, say, a public offering, will the public market be open? We have just gone through a substantial period of almost two years where IPOs were few and far between. At the time you make the investment, you don't know what the state of the capital market will be in five to seven years from the date you make the investment. That's a big risk the investor is assuming. Obviously, it's a big risk for the entrepreneur to be able to have some liquidity, and perhaps realize the fruits of her


investment, of her time, talent, and in some cases some of the money she puts into that venture.Knowledge@Wharton: Professor Amit, you have been studying new ventures and entrepreneurship for many years. What are the biggest mistakes you have found entrepreneurs make at the initial stage of identifying business opportunities, in your experience?Amit: The most frequent mistake that people tend to make is to think everybody in the market is like them. If they like the product, everybody else will. Sometimes -- too often -- entrepreneurs, and especially entrepreneurs with an engineering background, are too focused on the engineering features or technology features of the particular product, rather than on the need that they are trying to fulfill. Customers don't buy technology. Customers buy products that add value. Customers buy products that they need, in order to satisfy some issue that they wish to satisfy. But not the technology, per se; it is the services of the technology that matter.Very often, entrepreneurs -- particularly smart entrepreneurs -- are overwhelmed by the technological aspect, and they pay too little attention to what the customers want. If you ask me, this is the most frequent issue at the early stage that entrepreneurs are faced with.Knowledge@Wharton: One last question. What advice would you give potential entrepreneurs in the Middle East who are thinking about starting their own companies?Amit: My experience, having visited the Middle East numerous times, is that people are hesitant to start new businesses, because they think they don't have the characteristics of what would make for a successful entrepreneur. Also, it's too risky to be an entrepreneur. Research that I have done, research that my colleagues around the world have done, has shown that there are no unique characteristics, or traits, if you will, that distinguish entrepreneurs from non-entrepreneurs, and successful entrepreneurs from unsuccessful entrepreneurs.

My main message to entrepreneurs in the Middle East is that you have what it takes to be exceptionallysuccessful. It is no more risky to start your own business than working for General Motors. As you recall,General Motors filed for bankruptcy not so long ago. So, the perception that working for a large companyis somehow safer, is not, of course, borne out by the reality. My message is, you have what it takes; it istime to get started.

Marketing of Goods and Services

“Using Brands and Designs to Market Goods and Services Abroad”(article from www.wipo.int/sme)

The reasons for protecting trademarks and industrial designs in the domestic market fully apply to foreign markets too. Trademark registration, in particular, enables you to maximize product differentiation, advertising and marketing, thus enhancing recognition of your product or service in international markets and establishing a direct link with the foreign consumers. Depending on the nature of your service, a franchising agreement with firms abroad, could be a useful alternative way to earn revenue from your trademark abroad as well.

Companies that export unbranded products will face disadvantages such as:


Lower revenues as consumers demand lower prices for unbranded goods.

Lack of customer loyalty largely due to their inability to recognize the product

and distinguish it from the products of competitors.

Difficulties in marketing and advertising products or services abroad in the

absence of a suitable symbol or easy identifier that links your products or

services with your SME, as marketing an unbranded product is inherently

much more difficult.

With regard to industrial designs, protection in export markets will help not only to strengthen your overall marketing strategy but may also be important for customizing products for specific target markets, creating new niche markets for your company �s products, and strengthening your company �s image and reputation by linking it to a specific design.

For the purpose of developing marketing strategies, particularly product planning and

promotion, goods and services are categorized in two ways. One is to designate their position

on a goods and services continuum. The second is to place them into a classification system.

The goods and services continuum enables marketers to see the relative goods/services

composition of total products. A product's position on the continuum, in turn, enables marketers

to spot opportunities. At the pure goods end of the continuum, goods that have no related

services are positioned. At the pure services end are services that are not associated with

physical products. Products that are a combination of goods and services fall between the two

ends. For example, goods such as furnaces, which require accompanying services such as

delivery and installation, are situated toward the pure goods end. Products that involve the sale

of both goods and services, such as auto repair, are near the center. And products that are

primarily services but rely on physical equipment, such as taxis, are located toward the pure

services end.

The second approach to categorizing products is to classify them on the basis of their uses.

This organization facilitates the identification of prospective users and the design of strategies to

reach them. The major distinction in this system is between consumer and industrial products.

Consumer goods and services are those that are purchased for personal, family, or household

use. Industrial goods and services are products that companies buy to make the products they

sell. (Encyclopedia of Business and Finance, ©2001 Gale Cengage)

Producing Goods and Services

Operations/Production Management


Systematic direction and control of the processes that transform resources into finished

goods

Production Managers are responsible for creating utility for consumers regardless of

industry

Transformation Technology

Chemical processes

Fabrication processes

Assembly processes

Transport processes

Clerical processes

Customer Contact

Customer are involved in and can affect the transformation process

Low-contact system

customers do not need to be physically present to receive the service

• electric power, automatic bank transfers

High-contact system

customers need to be physically present

• haircuts, medical examinations, bus transportation

Focus on Process and Outcome

Most services have some goods attached to them

The emphasis is on the process of transforming the resources into a service outcome


Service staff need to have interpersonal skills to deal with the process as well as the

outcome, and the customer contact that is required

Source: Powerpoint presentation from “Business Fifth Canadian edition, Griffin, Ebert & ”


appraising and developing yourself for an entrepreneurial career

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