Entrepreneurship and Business Planning: Key Concepts and Strategies

Entrepreneur is a person who recognizes opportunities and takes risks while operating a business.

Free Enterprise freedom of private business to organize and operate for profit in a competitive system without interference by government

Capital is the money or property owned or used for business

Opportunity Cost is the value of what must be given up to get something else

Business Plan Elements :

• Idea/product : Know what the product is and what it does, Is it realistic or practical? Will it fill a gap in the market?
• Market Research : How can you use customer feedback? You can use that to implement changes to be successful.
• Production : What is the production cost? How will you test the quality of the product? How will you make it ?
• Finance : Know the start-up costs and operating costs. Know where will you get the money from (bank loans)
• People :Who will work in the business? What skills are they needed to have? Will people invest in your business?
• Marketing : How will you promote your product? Where will you sell your product? How much will it cost to sell it?

Benefits of Business planning :

• Clarified path, The business will be able to make effective decisions easily, you will know what difficulties your business may face.

Social Entrepreneurship is a business that only aims to achieve profit and implement solutions to social, and environmental issues.

Profit is the money remaining after total costs are deducted from Total revenue.
Porter’s five forces of competition :

• Threat of new entrants
• Bargaining power of supplies
• Bargaining power of buyers
• Threat of substitute products or services
• Rivalry among existing competitors

Five roots of opportunity in the marketplace

• Problems: Specific problems our business can solve, needs that our business can satisfy, and/or goals that our business can achieve.
• Changes: Shifts in trends, behaviors, situations, circumstance, and/or laws, statutes, policies, and/or mandates.
• Inventions: Innovative ideas and inventions of brand new products and/or services.
• Competition: Understanding and responding to competition. For instance, developing ways to underprice the competition, establish a more advantageous location, render better product and/or service quality, enhance reputation, perform more reliability, or provide product delivery expediency, can help us generate and sustain a competitive advantage over an existing product and/or service brand.
• Technological Advances: Advancements in technology. Engineers may likely be the ones who devise new technological breakthroughs, but it is the entrepreneur who decides how to use it and how to best sell it.

The 4 P’s :

• Product/Service : What does the customer want from the product /service? What needs does it satisfy?
• Place : Where do buyers look for your product or service?
• Price : What is the value of the product or service to the buyer?
• Promotion : Will you reach your audience by advertising online, in the press, or on TV, or radio, or on billboards?

Venture philanthropy : A segment of social entrepreneurship were in financial and human capital is invested in non-profits by individuals.

Green entrepreneurship : Business activities that avoid harm to the environment or help to protect it in some way.

• Sole proprietorship
• Advantages
• Complete control of the company - Coordination is less complicated
• All profits will go to one person
• Disadvantages
• Lots of energy & long hours of working for one person
• If there is loss one person loses all

• Partnership
• Advantages
• Two heads better than one
• Increased chance to raise funds
• More time, money & energy to the start-up
• A partner can provide the skills that the other lacks
• Disadvantages
• The profits will go to more than one person
• Harder to make decisions
• Disagreements are time consuming

• Corporation
• Advantages
• Generally, a corporation's shareholders are not liable for any debts incurred or judgments handed down against the corporation.
• Shareholders only risk their equity in the corporation.
• Corporations may be able raise additional funds by selling shares in the corporation
• Disadvantages
• Forming a corporation requires more time and money than forming other business structures.
• Governmental agencies monitor corporations, which may result in added paperwork.
• Corporate profits may be subject to higher overall taxes since the government taxes profits at the corporate level and again at the individual level, if such profits are distributed to the shareholders

• Franchise
• Advantages
• No need for business experience
• Easy to secure finance
• Ongoing support
• Disadvantages
• Doesn’t have control of rules and regulations
• Limited time of agreement

Qualities and traits of an entrepreneur

• Risk-taker
• Confident
• Innovative
• Competitive
• Determined
• Open minded

Niche Market : A profitable segment of a market suitable for focused attention by a marketer.

Market research : is the process that links the producers, customers, and end users to the marketer through information

Sources of finance : equity, debt, retained earnings, term loans, venture funding.