Entrepreneurial Mind Reviewer
Entrepreneurial Mind Reviewer
without using the senses. This is also known as intuition. Gut game also
Successful entrepreneurs are mindful connotes courage or “lakas ng loob” (strong intestinal fortitude).
We are currently living in the midst of a mindfulness movement. What Successful new products spring from the convergence of:
many people may not realize is that successful entrepreneurs have been
practicing mindful living for years. Mindfulness is more than meditation and 1. Creative mind
taking walks. A person who lives a mindful life is a person who is focused on 2. Technical mind
what’s happening in the present.Mindfulness means not being preoccupied 3. Business mind
with events that might happen in the future or replaying the past on repeat in
your head. Creative Mind conceptualizes and designs a product that consumers find
A mindful approach to a task-heavy day means carefully considering some use for. It likewise produces a product that is pleasing to see, touch,
the purpose and desired outcome of your actions and making sure you’re smell, hear, and taste.
doing them for the right reasons. Entrepreneurs who practice mindfulness Technical Mind is the technology originator. The entrepreneur may not
start from a self-aware foundation. They are better equipped to handle necessarily possess the technical mind but this is what drives him or her to
decisions without their emotions getting in the way, and they act with thought convert new knowledge into something highly functional and operational.
and purpose.
Business Mind harness the potentials of new products by creating the
Entrepreneurial mind involves the following: market space for them. It also organizes sufficient forces and resources to
1. entrepreneurial mind frame develop, launch, and commercialize the new product in order to maximize its
2. entrepreneurial heart frame market value.
3. entrepreneurial gut game
Entrepreneurial Mind Frame allows the entrepreneur to see things in a very Essential Characteristics of the Entrepreneurial Mind
positive way and optimistic light in the midst of crisis or difficult situations.
1. Creativity
In fact, in Chinese writing, the crisis. The first character means danger; the
The seed of entrepreneurship is the ability to see things differently.To
second character means opportunity.
see holes in the market place and devise innovations to fill them.
Passion is the great desire to attain a vison or fulfill a mission. It is
about wanting something so much that a person would be willing to totally 2. Suspicion of predictors
devote oneself to the quest. Entrepreneurs tend not to labor under the assumption that data is the
sole predictor of an outcome.
Entrepreneurial Heart Frame is also about emotional intelligence or EQ,
which is often manifested in the entrepreneurs’ effort to nurture relationship 3. Comfort with uncertainty
customers, employees, and suppliers. Similarly, a distrust of prediction and analysis creates an atmosphere
where uncertainty rules.
The entrepreneur looks after the interests of his or her people by
motivating and encouraging them to be the best way they can be. This 4. Openness to experimentation A comfort with experimentation goes
creates caring culture within the organization that brings about beyond educated trial and error. The ability to experiment with
synergy
products, processes and outcomes, no matter where the results may
lead, is the key element of this quality.
Disadvantages of Small Business Ownership
5. Functional humility
Ego can destroy the very best ideas. Entrepreneurs who are
committed to solving a business problem or reinventing a product or 1. Financial risk - The financial resources needed to start and grow a
service display a functional humility. business can be extensive. You may need to commit most of your
savings or even go into debt
The backbone of Philippines local economy are these small 2. Stress- As a business owner, you are the business. As the owner,
businesses. They require small capital and there is always a demand for you’re also responsible for the well-being of your employees.
any product and service we could imagine in this highly populated 3. Time commitment- People often start businesses so that they’ll have
archipelago. The government has always been pushing the entrepreneur more time to spend with their families. Unfortunately, running a
spirit among the Filipinos, after all they are known for their ingeniousness and business is extremely time-consuming
hard work. 4. Undesirable duties - When you start up, you’ll undoubtedly be
Advantage of Small Business Ownership responsible for either doing or overseeing just about everything that
1. Independence needs to be done. You can get bogged down in detail work that you
The number one reason that enticed people in running their own don’t enjoy. As a business owner, you’ll probably have to perform
business from the start is having that kind of freedom and the need of being some unpleasant tasks, like firing people.
their own boss. Freedom to operate independently is a reward for small
business owners Sole Proprietorship- owned and run by one person and in which there is
2. Lifestyle no legal distinction between the owner and the business.
Owning a small business gives you certain lifestyle advantages. Partnership- between two or more people and ahre its profits and
Because you’re in charge, you decide when and where you want to work. If liabilities
you want to spend more time on non-work activities or with your family, you Corporation- business structure that is legally separated from its owners,
don’t have to ask for the time off. who are knwn as shareholders
3. Financial rewards.
In spite of high financial risk, running your own business gives you a CHAPTER 3
chance to make more money than if you were employed by someone else.
You benefit from your own hard work. Entrepreneurship is the process of starting and running one’s own business,
4. Learning opportunities An Entrepreneur is an individual who undertakes the risks associated with
As a business owner, you’ll be involved in all aspects of your creating, organizing, and owning a business
business. This situation creates numerous opportunities to gain a
thorough understanding of the various business functions. The entrepreneurial process of creating a new venture is
5. Creative freedom and personal satisfaction
As a business owner, you’ll be able to work in a field that you really Creation of entrepreneurial idea
enjoy. You’ll be able to put your skills and knowledge to use, and you’ll Identification of Entrepreneurial Opportunities
gain personal satisfaction from implementing your ideas, working Opening of an entrepreneur venture
directly with customers, and watching your business succeed.
A patent is the granting of a property right by a sovereign authority to
an inventor. This grant provides the inventor exclusive rights to the patented
process, design, or invention for a designated period in exchange for a
Entrepreneurial Process comprehensive disclosure of the invention
Five Steps in Entrepreneurial Process 3. Resourcing – wherein the entrepreneur identifies the sources from
where the finance and the human resource can be arranged. Apply for
1. Discovery – an entrepreneurial process begins with the idea loans, grants, and assistance. Identify potential investors and hire
generation, wherein the entrepreneur identifies and evaluates the employees
business opportunities. They consider their hobbies and interests,
conduct surveys and questionnaires, consider the consumer’s needs 4. Actualization/ Managing the company – the stage in which the
and wants and study demographics. entrepreneur operates the business and utilizes resources to achieve
An opportunity has four essential qualities. These are: attractive, timely, its goal/objectives.
durable, and anchored on the product or service that create value for its
buyer and user. 5. Harvesting - wherein an entrepreneur decides on the future prospects
of the business, i.e. its growth and development. Here, the actual
2. Developing a Business Plan/Concept Development – Once the growth is compared against the planned growth and then the decision
opportunity is identified, an entrepreneur needs to create a detailed regarding the stability or the expansion of business operations is
proposal describing the business idea, choose a business location, and undertaken accordingly, by an entrepreneur.
determine if a patent or trademark is required.
Thus, there is need to identify the sources of entrepreneurial ideas, some of
A BUSINESS PLAN – is a written document that describes in detail how a which are as follows:
business - usually a startup – defines its objectives and how it is to go about
achieving its goals. 1. Changes in the environment
2. Technological discovery and advancement
An entrepreneur must dictate his sufficient time towards its creation, 3. Government’s thrust, programs and policies
the major components of a business plan are mission and vision statement, 4. People’s interest
goals and objectives, capital requirement, a description of products and 5. Past experiences
services, etc. at this stage, the entrepreneur has to choose the business
location and decide to secure patent or trademark. 1.CHANGES IN THE ENVIRONMENT
A trademark is a type of intellectual property consisting of a The physical environment includes: climate, natural resources and
recognizable sign, design, or expression which identifies products or services wildlife
of a particular source from those of others, although trademarks used to The societal environment includes the various forces like: economic
identify services are usually called service marks. Typically protects brand forces, sociocultural forces, political forces, and technological
names and logos used on goods and services. environment
The industry environment of the business includes: government,
A copyright the exclusive legal right given to an originator or an competitors, suppliers, customers, creditors and employees
assignee to print, publish, perform, film, or record literary, artistic, or musical
material, and to authorize others to do the same. It is the right to copy.
mark come from a unique source, distinguishable from all the other
sources for those goods or services.
And are common symbols associated with trademarks
Intellectual Property refers to creations of the mind. It can be an invention indicates that the mark is registeered trade mark and hence protected
(patent/ utility/ model), a design (industrial design), a brand name (trademark, under trade mark law.
or a literary and artistic work (copyright)
Is just a symbol used to indicate that the mark is being used by the
The rights of intellectual property can be about a brand, logo, corporate company as a trade mark. It does not denote that the is registered nor
identity, products, services, or even processes that differentiate the protected under the trade mark law. There is no requirement that you use any
commercial offer. These are the most valuable assets that a company can of the symbols, however there are two important advantages to using them.
own. Guidelines to consider to make sure your name is fully protected under
FOUR MAIN TYPES OF BUSINESS IDEAS PROTECTION trademark law.
1. PATENT - if the entrepreneur is facing an invention may consider 1. Fanciful - new words that had no meaning before their use as a
protecting it with a patent. A patent grants property rights to invention, trademark.
new products and innovative processes. That is, this gives the holder 2. Arbitrary – common words used so that their original meaning has no
the right to prevent other from making, using, importing or selling these relationship to the goods or services to which they are applied.
without your permission. 3. Suggestive – these trademarks allude to a quality of characteristics of
the product or service.
Three main types of patents: 4. Descriptive – these names describe the service or products such as
Autoway – a store for Autos, or Frosted Flakes to describe Flakes or
a. Utility Patents – these patents protect processes, machines, Frosted Cereal. Descriptive names may be easier to market but harder
manufactured items, or composition of matter. Some examples to register. To register a trademark, the company must show that
include medicine, electronics, etc. consumers identify it as a particular brand from a specific name.
b. Design Patents – these patents protect new, original, and 5. Generic – a generic term identifies a type of product or service, without
ornamental designs for manufactured items. Examples are the indicating any particular manufacturer or source.
design pf athletic shoes or an automobile body. 3. COPYRIGHT – the definition of copyright is in the word itself: it is the right
c. Plant Patent – these patents cover asexually reproduced and to copy. It describes the legal rights of the owner of intellectual property. A
distinct plant varieties. For example, plant patents cover hybrid tea person who owns the copyright to work, such as song lyrics or an original
roses, as well as Better Boy Tomatoes. drawing, is the only person who can copy that work or grant permission to
someone else to copy it.
2. TRADEMARK – the primary function of a trademark is to distinguish Writings: books, articles, reviews, poems, essays, blogs, plays,
the goods or services or services provided by the trader from those movies, and broadcasts
provided by other traders. A trade mark is therefore an important Website contents: text, pictures, graphics, and even the page layout
element of any business as it not only identifies a trader it also Computer programs: Business, personal and entertainment
communicates to consumers that the goods or services bearing the Motion pictures or audio: Movies, TV programs, and podcasts
Music: lyrics and instrumentals, both recorded and performed o Materials
Artistic works: Paintings, drawings, sculptures, graphics, maps, charts, o Markets
and photography
EXTERNAL ENVIRONMENT – constitutes factors and forces which are
Original architectural designs: designs for municipal, commercial, and
external to the business and on which the marketer has little or no control.
residential buildings, bridges, highways and tunnels
The external environment is of two types:
4. TRADE SECRETS – is information that a company keeps to give them an 1. Micro Environment – the micro-component of the external environment is
advantage over their competitors. Trade secrets can include formulas, also known as the task environment. It comprises of external forces and
patterns, plans, designs, physical devices, processes, software, and “know- factors that are directly related to the business.
Suppliers – include all the parties which provide resources needed by the
how’
organization.
CHAPTER 4 Market Intermediaries – include parties involved in distributing the product or
service of the organization.
CREATIVITY – is the capability or act of conceiving something original or unusual. It Partners – are all the separate entities like advertising agencies, market
id the ability to develop new ideas and to discover new ways of looking at problems research organizations, baking and insurance companies, transportation
and opportunities. companies, brokers, etc., which conduct business with the organization.
Opportunity is an idea for a new product or service with a market that is willing to pay Customers – comprise of the target group of the organization
that product or service so that it can form the basis of a profitable business. Competitors – are the players in the same market who targets similar
customers as that of the organizations.
INNOVATION – is the implementation of something new. It is the ability to apply Public – is made up of any other group that ahs an actual or potential interest
creative’s solutions to those problems and opportunities in order to enhance people’s or affects the company’s ability to serve its customers.
lives or to enrich society. 2. Macro Environment – the macro component of the marketing environment is
also known as the broad environment. It constitutes the external factors and
INVENTION – is the creation of something that has never been made before and is
forces which affect the industry as a whole but don’t have a direct effect on
recognized as the product of some unique insight
the business. The macro-environment can be divided into 6 parts.
Scanning the Marketing Environment
CHAPTER 5
This is the starting point of any venture that involves understanding FINANCE – is the area of economic activity in which money is the basis of the
and knowing the intricacies (complexities) of the whole environment. various embodiments, whether market investment, real estate, industrial,
Marketing Environment is the combination of external and internal factors and construction, agricultural development, so on.
forces which affect the company’s ability to establish a relationship and serve its
customers. Why the Business Needs Finance?
COMPONENTS OF MARKETING ENVIRONMENT
INTERNAL ENVIRONMENT – includes all the forces and factors inside the 1. Start – up a Business
organization which affect its marketing operations. It is under control of the
marketer and can be changed with the changing external environment.. To start-up a business you’ll need money to buy the resources,
These components can be grouped under the Five M’s of the business: equipment, and materials you need. You also need to invest where you will put
o Men your business.
o Money
o Machinery
In terms of buying equipment, and materials, you cannot say that your Crowd funding - method of raising capital through the collective effort of friends,
business is operating if you have no available resources. For example, you want to family, customers and individual investors.
put a salon, of course you will need materials like scissors, brush, etc.
Angel investors - Business Angles (a.k.a angel investor) are affluent and wealthy
individuals who invest their personal capital in start-up companies (that are typically
early-stage) in return for an equity stake.
2. Run the Business
In order to run the business, you need to have enough money to pay Private placements - Investors can influence nature and direction of the business,
for the wages of your worker (may include their SSS and Pag-Ibig), payment may be involved in the business operation, Entrepreneur needs to consider degree
for your supplier on time, money to buy products that will be needed to your of involvement.
business.
Venture Capitalists - Venture Capital is a type if funding for a new or growing
3. Expand the Business business. It usually comes from venture capital firms that specialize in building high
risks financial portfolios. The venture capital firm gives funding to the start-up
You also required a money to expand your business, if you can see
company in exchange for equity in the start-up.
that your business is going well and you know that your money is enough to
sustain a new business. Definition of Terms
New businesses find it difficult to raise finance because they usually have just 1. Lender - is an individual, a public or private group, or a financial
a few customers and many competitors, which lead many businesses fall for lender institution that makes funds available to a person or business with the
and credited their finances. Lenders are put off by the risk that the start-up may fail. If expectation that the funds will be repaid. Repayment will include the
that happen the owners may be unable to repay borrowed money. payment of any interest or fees.
2. Assets - are things owned by a person that have cash value. This can
Enterprise describes the actions of someone who shows initiative by taking a risk by
include homes, cars, boats, savings and investments.
setting up, investing in and running a business.
3. Bankruptcy - a proceeding that legally releases a person from repaying a
Look again at two key words above – initiative and risk. portion or all debts owed.
4. Borrower - the individual who is issued a credit card and/or any
Capital is the money or wealth needed to produce goods and services. In the authorized users.
most basic terms, it is money. All businesses must have capital in order to 5. Credit File - is usually used to indicate the full record of your credit
purchase assets and maintain their operations. history maintained by a credit bureau. Your credit report may not include
all the information in your credit file.
TWO FORMS OF CAPITAL 6. Credit Limit - is the total amount that a company will allow you to a
1. Debt - Debt capital or debt financing is obtained through borrowed funds for the charge to a credit card or credit line. It’s best for your credit score to keep
company. Asset-based financing, requires some asset to be used as collateral. your credit card balances below 10% of your credit limit.
7. Credit Obligation - is an agreement where a person becomes legally
2. Equity - Equity capital or equity financing is obtaining funds for the company in responsible for paying back borrowed money.
exchange for ownership. This form of capital does not require collateral and other 8. Credit Report - the individual records of consumer financial behavior kept
offers investor some form of ownership position. by credit bureaus and provided to businesses when they want to evaluate
Personal Funds (Savings, Life Insurance, Mortgage on a house or car) potential borrowers. Credit reports include records on: consumer names,
current and former addresses, employment, credit and loan histories,
Family and Friends - Likely to invest due to relationship with entrepreneur. inquiries, collection records, and public tax liens.
9. Credit Score - is a numerical evaluation of your credit history used by 3. Government - a system to govern a state or community. Even local
businesses to quickly understand how risky a borrower you are. Credit government resort to borrowings when expected revenues fall short of
scores are calculated using complex mathematical formulas that look at program expenditures.
your most current payment history, debts, credit history, inquiries and
other factors from your credit report.
10. Debt - is the amount of money owed. CHARACTERISTICS OF CREDIT
11. Equity - the fair market value of a home minus the unpaid mortgage
principal and aliens. You build up equity in a home as you pay down your There are four (4) characteristics of credit:
mortgage and as the properly value increases. Also called the lendable 1. It is a bi-partite or two-party contract.
value or net value. 2. It is elastic; can be decreased or increased.
12. Fixed Rate - an interest rate for a credit card or loan that remains 3. Presence of trust or faith.
constant. 4. It involves futurity; has a maturity date.
C’S OF CREDIT
Foundations of Credit The five C’s of credit is a system used by lenders to gauge the creditworthiness of
1. Confidence- Creditors must trust the debtor’s personal character. potential borrowers. The system weighs five characteristics of the borrower and
conditions of the loan, attempting to estimates the chance of default and
2. Proper Facilities- It should have credit information where can found
consequently, the risk of a financial loss for the lender.
the data about the debtor, and credit document which written document
signed by both parties. The five C’s, or characteristics of credit – character, capacity, capital, conditions and
3. Stability of Monetary Standard- It means that when you have more collateral – are a framework used by many traditional lenders to evaluate potential
stable value of money or source of income then it has the greater small-business borrowers.
possibility of approving credit. 1. Character - Although it’s called character, the first C more specifically
4. Government Assistance- Regulations protecting both parties are refers to credit history: borrower’s reputation or track record for repaying
highly considered. debts. This information appears on the borrower’s credit reports. Credit
5. Credit Risk- There is possibility that the debtor will not pay. reports contain detailed information about how much an applicant has
borrowed in the past and whether they have repaid loans on time. These
Who are the users of the credit?
reports also contain information on collection accounts and bankruptcies,
1. Consumers - persons or individual or a group who pays some amount of and they retain most information for seven to 10 years.
money for the thing required to consume goods and services for personal, 2. Capacity - Lenders want to be assured that your business generated
social, family, household and similar needs. enough cash flow to repay the loan in full. Capacity measures the
2. Businesses - defined as an organization or enterprising entity engaged in borrower’s ability to repay a loan by comparing income against recurring
commercial industrial, or professional activities. The term business also refers debts and assessing the borrower’s debt-to-income (DTI) ratio.
to the organized efforts and activities of individuals to produce and sell goods 3. Capital - The amount of money invested by the business owner or
and services for profit. Businesses use their credit in payroll, purchases of management team. Lenders also consider any capital the borrower puts
merchandise, construction of building and facilities, purchase equipment or toward a potential investment.
refinancing of maturing debts. They can also use their credit as initial 4. Conditions - The condition of your business – whether it is growing or
investment to start-up their business or an additional capital. faltering – as well as what you’ll use the funds for. It also considers the
state of the economy, industry trends and how these factors might affect side), it shows how these resources have been funded. By definition, the funding is
your ability to repay the loan. either by the owners (equity) or by others (liabilities).
5. Collateral - Assets that are sued to guarantee or secure a loan. Collateral
Assets: economic resources (with future value0, or things worth money.
can help a borrower secure loan. It gives the lender the assurance that if
the borrower defaults on the loan, the lender can get something back by Liability: an obligation resulting from a past transaction to pay money, render
repossessing the collateral. borrowing the money for. Collateral is a services, or deliver goods.
backup source if the borrower cannot repay a loan.
Equity: funding by the owners, or “residual claim” (to the assets), which always
Advantages and Disadvantages of Credit equals total assets minus total liabilities.
Credit is something everyone uses. Every time you use the telephone or turn
on a light or the air conditioning, you’re using credit just as you are every time you
use a credit card or take out a loan.
Credit represents an agreement to receive goods, services or money now
and pay for them in the future.
Only you can decide how to spend your money and whether you will use
credit. These decisions should be based on your ability to repay credit debt, not just
on what you want to buy at the moment. To help you decide whether to use credit,
consider the advantages and the disadvantages of credit.
FOUR BASIC FINANCIAL STATEMENTS
Now we are going to collect that information we have been recording in our
accounting records and out its “report” form. Then we can take that information and
analyze it to see how our business has been doing and what direction it is headed.
The financial statements for a small business are the maps of the business.
They show where you have been, where you are right now, and where you are
going.
The balance sheet and the income statement are two of the three major
financial statements that small businesses prepare to report on their financial
performance, along with the cash flows statement.
The income statement shows where you have been, the balance sheet
shows where you are now, and the cash flow statement shows if you got the
money to go where you need and want to go.
We will start with the Balance Sheet. The balance sheet shows financial position of
the firm at a point in time. The left side of the balance sheet (called the debit side)
shows the resources of the company (assets), whereas on the right side (or credit