Entrepreneurship and Leadership

Description of the entrepreneurship and the good or service Purpose of an Entrepreneurship   To fulfill a need not met in the market, this is an opportunity for an entrepreneur.   An effective description process of a product (good or service) is that which, not only worries about the natural characteristics, but also to put a lot of emphasis on the differentiation. This can help the entrepreneur to take advantage over the weaknesses of the competition.   Creativity and innovation incorporated to a good or service.             A person that is thinking about creating a product must have creativity (new ideas) that later can be incorporated to the innovation (design) of a good or service.    Differentiation              When a good or a service is presented to the public, the entrepreneur must focus on the description of differentiating ele...

Research Plan Structure The market research plan guides the entrepreneur about the objectives and activities to be carried out, to obtain the data and information that will help them to decide whether or not to start a business. The main elements of a market research plan are: -         Formulation of the problem to investigate o     Before - Whether or not a business idea can have good or bad results in the market o     Is there an unsatisfied need of a good or service that is intended to be produced or commercialized in the target market? o     During – As a product of experiences in the management of the entrepreneurship -         Definition of market research objectives o     From the research question, the next step is to transform it into general and specific objectives o     General objective: To determine the existence or not in the mar...

  Administrative and legal formalization It is important to keep account of the transactions registered in the financial accounts of a business. This accounting must be done for two reasons: o     Administrative Formalization : The constant review of the financial accounts will help the entrepreneur to obtain vital information about possible losses, thefts and misuse of the resources that make the business work.  This information also helps with decision-making about the price of the product and to know the gains or losses the business is generating. Within the administrative formalization it’s important that the entrepreneur keeps a cash flow statement, where they register the daily income and cash outflow of the business. Date Description Income Cash outflow 5/12 Payment to flour supplier   $300 5/12 Day sale (bread) $150     o     Legal Formalization : When an entrepreneur responsibly meets the legal requirements when it comes to...

Quantitative Variables  - Variables whose values result from counting or measuring something. Qualitative Variables  - Variables that are not measurement variables. Their values do not result from measuring or counting. Unsatisfied Demand The unsatisfied demand of the good or service is a quantitative variable, that is obtained after the field study is done, from the analysis of other businesses and the number of buyers interested in the product with the characteristics of the entrepreneur.  Consumer Profile The entrepreneur must build the characteristics of the consumer profile, these are qualitative variables, of who is likely to buy the product. The main questions the entrepreneur must answer to build the consumer profile are the following: - What do they buy? - Who buys? - From who do they buy? - Where do they buy? - Why do they buy? - When do they buy? - How do they buy? (distribution mean) - What is the age, sex, study level, income level, etc of the poten...

Unsatisfied demand We refer to the product that the customers are looking for is not in the market. Or maybe that the products in the market do not fulfill the needs of the customers. Opportunity for a new business. The market research offers some advantages like the following: - Provides information for decision making - Allows to know the origin and location of goods and services - Enables different tools to work with  - Defines the characteristics of the clients - Makes known the changes in likes and preferences of the consumers Criteria for Market Segmentation There are a lot of criteria for market segmentation. Below you can see the main criteria:                             Demographic Variable: sex, age, social status, house size             Socioeconomics: level of income, study level, occupation, family type     ...

Classification criteria of costs and expenses o     When the entrepreneur acquires goods and services related to the production area and pays for them, a cost has incurred. On the other hand, when the entrepreneur has paid for administrative, commercial or financial aspect of the business, then an expense has incurred. ·        Fixed Cost: It’s a payment the entrepreneur makes which is always the same, despite of the amount produced of the good or service. For example: rent. ·        Variable Cost: The total changes depending on the amount of good or services produced. For example: In a bakery, the amount of flour. ·        Working Capital: When the entrepreneur knows the monetary value of costs and expenses needed for the monthly operation of the business, it is in capacity of establishing an estimated amount to the business can work normally.      The working capital...

Identifying the problem to solve. Needs Analysis Matrix Knowledge on the specific needs of potential buyers of the good or services is a key strategic requirement that the entrepreneur must pay a lot of attention. For this reason, it is important that in the phase of market research all preventive measures are taken so that, as part of the gathering and analysis of the market supply and demand data, the entrepreneur can know what the market is really asking for. Maslow's Hierarchy of Needs Maslow's hierarchy of needs is a theory by Abraham Maslow, which puts forward that people are motivated by five basic categories of needs: physiological, safety, love, esteem and self-actualization. In order to better understand what motivates human beings, Maslow proposed that human needs can be organized into a hierarchy. This hierarchy ranges from more concrete needs such as food and water to abstract concepts such as self-fulfillment. According to Maslow, when a lower...

Selection of the Product for the Entrepreneurship The selection of the product is generally determined by a personal interest, the intention help solve a problem and the positive impact it can have on the society and the environment. To select a product, it is necessary for the entrepreneur to have data and information from magazines, government statistics, university libraries; the entrepreneur can also interview people that have knowledge on the products that are thinking to choose. Market Segmentation Companies or businesses seek to satisfy the needs and desires of a group of consumers, which is called target market. Selecting the target market is a delicate task, since its location is within a large, indeterminate group of consumers The Market,  is the biggest group of people with varied tastes and preferences. For  example, everyone who consumes drinks.   The Segment,  is a smaller part of the market. For  example, everyone who consumes dark drinks. ...

Financial Concepts The economic management of an entrepreneurship has to do with key concepts such as: income, costs, expenses and investment. Knowing these concepts is important for the entrepreneur to calculate the break-even point and to make financial projections. Income Is the money that the entrepreneurship receives from the sale of goods and services developed to be sold in the market. To calculate the level of income (daily, monthly, annually or any other period) it’s necessary to know about the price and quantity of sales of the product.  (Example: If a bakery sells 200 pieces of bread daily for 0.20 cents their daily income is $40) Costs It has to do with the money the entrepreneur gives to the suppliers in exchange for goods or services. These costs, as a main characteristic, are related with the production area of the business.  (Example: In a bakery, flour and eggs are an example of costs because those are used to make the bread) Expenses They are related to the c...