ENTREPRENEURSHIP: Summary

ENTREPRENEURSHIP

Specific Objectives/Competencies:

1.    Identify the characteristics of entrepreneurs and their entrepreneurial competencies

2.    Analyze product and marketing process in an enterprise

3.    Develop a simple business feasibility study

Entrepreneurship and Entrepreneurs

          There is not a commonly accepted definition of entrepreneurship or entrepreneur and there are different understandings of the phenomenon. One definition is that “entrepreneurship is a phenomenon in the economy by which individuals or companies assume risks to create something new in order to reap the benefits from the new venture”. This very broad definition would also allow the inclusion of aspects such as... intrapreneurship (entrepreneurship possibilities within a given company).

          An entrepreneur may be defined as the owner or manager of an enterprise, its executive director, or a member of its managing board. Self-employed people are also commonly considered to be entrepreneurs, but not all data sources include self-employment in their definition of entrepreneurship.

          To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur's role as an innovator who markets his innovation. Still other economists say that entrepreneurs develop new goods or processes that the market demands and are not currently being supplied.

Entrepreneurs: Characteristics and Competencies

What Makes Someone an Entrepreneur?

          Who can become an entrepreneur? There is no one definitive profile. Successful entrepreneurs come in various ages, income levels, gender, and race. They differ in education and experience. But research indicates that most successful entrepreneurs share certain personal attributes, including: creativity, dedication, determination, flexibility, leadership, passion, self-confidence, and "smarts, etc."

• Creativity is the spark that drives the development of new products or services, or ways to do business. It is the push for innovation and improvement. It is continuous learning, questioning, and thinking outside of prescribed formulas.
• Dedication is what motivates the entrepreneur to work hard, 12 hours a day or more, even seven days a week, especially in the beginning, to get the endeavor off the ground. Planning and ideas must be joined by hard work to succeed. Dedication makes it happen.
• Determination is the extremely strong desire to achieve success. It includes persistence and the ability to bounce back after rough times. It persuades the entrepreneur to make the 10th phone call, after nine have yielded nothing. For the true entrepreneur, money is not the motivation. Success is the motivator; money is the reward.
• Flexibility is the ability to move quickly in response to changing market needs. It is being true to a dream while also being mindful of market realities. A story is told about an entrepreneur who started a fancy shop selling only French pastries. But customers wanted to buy muffins as well. Rather than risking the loss of these customers, the entrepreneur modified her vision to accommodate these needs.
• Leadership is the ability to create rules and to set goals. It is the capacity to follow through to see that rules are followed and goals are accomplished.
• Passion is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the ability to convince others to believe in their vision. It can't substitute for planning, but it will help them to stay focused and to get others to look at their plans.
• Self-confidence comes from thorough planning, which reduces uncertainty and the level of risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to listen without being easily swayed or intimidated.
• High Energy Level. One of the most important characteristics for success is personal energy – the ability to get up early, work hard all day and well into the night, return to work early the next day, and still be enthused by the work. Important for the entrepreneur to be able to survive with little sleep, with few if any vacations (especially in the early stages of the enterprise). There are few success stories for cases in which the business owner maintains an “8 to 5” daily schedule five times a week. Entrepreneurship means working round-the clock, no benefits, no sick leave, no vacation and no employment compensation of you fail.
• Positive Self-Image. Positive self-image includes faith in oneself to succeed. People who start businesses believe that they have control over their destinies. They are less likely to think that forces beyond their control, such as luck or fate, will determine their success. However, it is not easy to cultivate a successful self-image and still maintain the degree of humility (modesty) to succeed. Things go wrong _ resources are usually limited, vendors are sceptical and tough to work with, initial facilities are usually limited, and the hours are long. One must feel good about oneself if success, growth, and stability are to come.
• Communication Skills. The entrepreneur must have: oral skills to sell his/her product or service; interpersonal communication skills to create an internal organization; written communication skills to correspond, record and maintain records; and listening skills to utilize all of the other skills effectively.
• Ability To Analyse The Potential Success Of A Product/Service. A need and a market must exist for a product or service. An entrepreneur with all the discussed characteristics will not succeed if the product, service, or idea is not saleable. One must carefully analyse the product to determine its true saleability. Many persons’ life savings have been lost because of an idea that had no chance of success form the beginning. The entrepreneur was too close to the idea to evaluate it objectively. Successful entrepreneurs know that it is important to test the idea. The more information available, the better the chance of success will be.
• Decision – Making Skills. The very act of starting a small business requires a number of tough decisions, including: Financial, Family, Marketing and production, and Investment. Many of these decisions must be made in rather short spans of time with limited information. Some researches feel that entrepreneurs have to be born with the talent to do this successfully. Decision-making is not easily learnt, however, there is little question that experience seems to help. Tough decision-makers are known as being cold, heartless and even cruel.
• Ability To Marshal Resources. Entrepreneurs constantly need finance, people and supplies. A successful entrepreneur must know where operating capital can be found and at what price. He/she must know where and when to hire employees and how much money they can be trusted and paid. The entrepreneur must know how to get what is needed at the right time and the right price if success is to be achieved.
• Sense of Adventure. Entrepreneurs seem to thrive engaging in activities, which are unusual and exciting, i.e. sense of adventure.
• Willingness To Take Risk. Entrepreneurs have the courage to take a chance even though bankruptcy is almost a daily possibility.
• The Need For Independence. Entrepreneurs do not easily conform to authority, they prefer to be in control
• "Smarts" is an American term that describes common sense joined with knowledge or experience in a related business or endeavor. The former gives a person good instincts, the latter, expertise. Many people have smarts they don't recognize. A person who successfully keeps a household on a budget has organizational and financial skills. Employment, education, and life experiences all contribute to smarts.

          Every entrepreneur has these qualities in different degrees. But what if a person lacks one or more? Many skills can be learned. Or, someone can be hired who has strengths that the entrepreneur lacks. The most important strategy is to be aware of strengths and to build on them.

Entrepreneurial Skills/Competencies

          A skill is the ability to do something specific or to translate knowledge into action.

 

1.    Research Skills. Entrepreneurs need to identify what they need to know and use research techniques to obtain it.

2.    Gathering Information. Reliable and relevant sources of information may include

3.    Using Information. After information is acquired, it needs to be sorted into relevant data that answers the entrepreneur’s initial questions. These questions may lead the entrepreneur to look at new ventures.

4.    Management Skills. Management skills for entrepreneurs involve planning, organizing, directing, and controlling. These are then applied towards their personal, financial, and material goals.

·         Planning. Entrepreneurs develop financial, production, and marketing plans that comprise the overall business plan.

·         Organizing. Organizing the venture is vital. The key to this is time-management.

·         Directing. Entrepreneurs learn how to motivate their staff by encouraging initiative and self-direction. This inspires a sense of shared responsibilities to grow the business.

·         Controlling. Entrepreneurs need to develop budgets and keep accurate bookkeeping and accounting records.

5.    Relationship Skills. Running a business means building good relationships with staff, suppliers, and customers.

6.    Staff Relationships. Employees need to feel that they are treated fairly, are rewarded for their efforts, and have their needs met.

7.    Supplier Relationships. Communication is the most important relationship skill required to deal with suppliers. They act as sources of information for the new business. Suppliers also require feedback to know how to improve their service.

8.     Customer Relationships. In an entrepreneurial business, the customer is the “boss” and the key to the business’ success. Therefore, the entrepreneur and his or her staff must develop a positive relationship with the customer.

Product and Marketing Process

          A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities.

          There are three types of business processes:

1. Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management".
2. Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing, Manufacturing, Marketing and Sales.
3. Supporting processes, which support the core processes. Examples include Accounting, Recruitment, Technical support.

          A business process begins with a customer’s need and ends with a customer’s need fulfillment. Process oriented organizations break down the barriers of structural departments and try to avoid functional silos.

          A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level.

          Business Processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).

          Business Processes can be modeled through a large number of methods and techniques. For instance, the Business Process Modeling Notation is a Business Process Modeling technique that can be used for drawing business processes in a workflow.

          One of the first people to describe processes was Adam Smith in his famous (1776) example of a pin factory. Inspired by an article in Diderot's Encyclopédie, Smith described the production of a pin in the following way:

          ”One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them.”

          Smith also first recognized how the output could be increased through the use of labor division. Previously, in a society where production was dominated by handcrafted goods, one man would perform all the activities required during the production process, while Smith described how the work was divided into a set of simple tasks, which would be performed by specialized workers. The result of labor division in Smith’s example resulted in productivity increasing by 24,000 percent (sic), i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division.

          It is worth noting that Smith did not advocate labor division at any price and per se. The appropriate level of task division was defined through experimental design of the production process. In contrast to Smith's view which was limited to the same functional domain and comprised activities that are in direct sequence in the manufacturing process, today's process concept includes cross-functionality as an important characteristic. Following his ideas the division of labor was adopted widely, while the integration of tasks into functional, or cross-functional, process was not considered as an alternative option until much later.

          Finally, let us consider the process definition of Johansson et al. (1993). They define a process as

          ”a set of linked activities that take an input and transform it to create an output. Ideally, the transformation that occurs in the process should add value to the input and create an output that is more useful and effective to the recipient either upstream or downstream.”

          This definition also emphasizes the constitution of links between activities and the transformation that takes place within the process. Johansson et al. also include the upstream part of the value chain as a possible recipient of the process output. Summarizing the four definitions above, we can compile the following list of characteristics for a business process.

1. Definability : It must have clearly defined boundaries, input and output.
2. Order : It must consist of activities that are ordered according to their position in time and space.
3. Customer : There must be a recipient of the process' outcome, a customer.
4. Value-adding : The transformation taking place within the process must add value to the recipient, either upstream or downstream.
5. Embeddedness : A process can not exist in itself, it must be embedded in an organizational structure.
6. Cross-functionality : A process regularly can, but not necessarily must, span several functions.

          Frequently, a process owner, i.e. a person being responsible for the performance and continuous improvement of the process, is also considered as a prerequisite.

Importance of the Process Chain

          Business processes comprise a set of sequential sub-processes or tasks, with alternative paths depending on certain conditions as applicable, performed to achieve a given objective or produce given outputs. Each process has one or more needed inputs. The inputs and outputs may be received from, or sent to other business processes, other organizational units, or internal or external stakeholders.

          Business processes are designed to be operated by one or more business functional units, and emphasize the importance of the “process chain” rather than the individual units.

          In general, the various tasks of a business process can be performed in one of two ways – 1) manually and 2) by means of business data processing systems such as ERP systems. Typically, some process tasks will be manual, while some will be computer-based, and these tasks may be sequenced in many ways. In other words, the data and information that are being handled through the process may pass through manual or computer tasks in any given order.

The Four Major Process Improvement Areas

          The point to note here is that, irrespective of the class of the task - whether manual or computerised - it is important that each task - and hence the process as a whole – is designed and periodically reviewed, improved, or substituted by another task, with a view to continuous improvement in four major areas:

1.    Effectiveness

2.    Efficiency

3.    Internal control

4.    Compliance to various statutes and policies

          These areas are explained by highlighting typical deficiencies in each of them, as under:

Effectiveness

          The overall effectiveness of a process is the extent to which the outputs expected from the process are being obtained at all, and is therefore a first measure of the basic adequacy of the process and its capability to fulfill the logical and reasonable expectations of process uses and operators.

          For example, consider the material procurement process. One of its important tasks is the sub-process for supplier follow-up to ensure timely deliveries of materials. Such a task is considerably less effective if it does not provide accurate and timely purchase order status reports for use of the purchase department staff responsible for follow-up.

Efficiency

          Supposing it has been observed that the average time taken to prepare and send out a purchase order after receipt of a properly prepared indent from the end-user is unacceptably high, leading to delayed customer deliveries and consequent customer complaints.

          The process of “converting” the end-user’s indent to a purchase order is effective because a purchase order is being somehow generated, but its efficiency is very low since it takes an inordinate amount of time and costs considerably more in terms of the cost to the company of the salaries of staff members involved.

Internal Control

          In a scenario where quantities of major raw materials are regularly ordered and consumed, rates are fixed with selected, reliable, approved vendors for an extended period – commonly a year. Moreover, let us say that the rate contract does not contain a price escalation clause. This safeguards the organisation from unanticipated price escalation during the period. The rate contract data are stored in the ERP system’s database. Whenever materials are to be ordered (with or without a delivery schedule), purchase orders are generated mentioning the rate finalised in the rate contract. An internal control exists to keep the purchase rate constant throughout the year.

          Suppose, however, it is found that the rate on a purchase order based on a current rate contract is changed to a different value, and the purchase order then sent out to the supplier. This is a serious lapse in internal control, since a change to a higher rate exposes the company to a higher financial liability. Moreover, the editability of the rate in such a purchase order completely nullifies the internal controls provided by having a rate contract in the first place and including a no-escalation clause in it. There would be a further breach of internal control if it were found that such a PO amendment is actually authorised before sending the purchase order to the supplier.

Statutory and Policy Compliance

          There are certain situations where payments made to consultants or service contractors must be statutorily made after deducting tax at source (T.D.S.), and such T.D.S. amounts must be deposited in government treasury accounts with banks on or before a specified date in the month following the month in which the payments are made.

          In such cases, if a business process does not provide for deduction of T.D.S. and/or fails to ensure deposition into government accounts by the specified date, then this is a statutory compliance issue that makes the concerned executives liable to civil/criminal legal action.

Policies, Processes and Procedures

          The above improvement areas are equally applicable to policies, processes and detailed procedures (sub-processes/tasks). There is a cascading effect of improvements made at a higher level on those made at a lower level.

          For instance, if a recommendation to replace a given policy with a better one is made with proper justification and accepted in principle by business process owners, then corresponding changes in the consequent processes and procedures will follow naturally in order to enable implementation of the policy changes.

          Marketing is often defined as all the activities involved in the transfer of goods from the producer to the consumer, including advertising, shipping, storing, and selling. For a new business, however, marketing means selling. Without paying customers to buy the goods or services, all the entrepreneur's plans and strategies will undoubtedly fail.

          How does a new business get orders? Before launching the business, the entrepreneur should research the target market and analyze competitive products. "Most business sectors have specific marketing strategies that work best for them and have already been put into practice," entrepreneur Phil Holland said. In 1970, Holland founded Yum Yum Donut Shops, Inc., which grew into the largest chain of privately owned doughnut shops in the United States. He suggests analyzing competitors' successful selling methods, pricing, and advertising.

          For example, an entrepreneur can also develop a file of potential customers by collecting names or mailing lists from local churches, schools, and community groups or other organizations. This file can be used later for direct mailings – even for invitations to the opening of the new business.

          After the new firm is launched, its owners need to get information about their product or service to as many potential customers as possible – efficiently, effectively, and within the constraints of a budget.

          The most effective salesperson in a new venture is often the head of the business. People will almost always take a call from the "president" of a firm. This is the person with the vision, the one who knows the advantages of the new venture, and who can make quick decisions. Many famous entrepreneurs, such as Bill Gates at Microsoft, have been gifted at selling their products.

          Company-employed sales people can be effective for a new venture, particularly one aimed at a fairly narrow market. Direct sales conducted by mail order or on the Internet are less expensive options that can be equally successful.

          External channels also can be used. Intermediaries, such as agents or distributors, can be hired to market a product or service. Such individuals must be treated fairly and paid promptly. Some analysts advise treating external representatives like insiders and offering them generous bonuses so that the product or service stands out among the many they represent.

            Advertising and promotion are essential marketing tools. Newspaper, magazine, television, and radio advertisements are effective for reaching large numbers of consumers. A less expensive option is printing fliers, which can be mailed to potential customers, handed out door to door, or displayed in businesses that permit it. New companies can also compose new product releases, which trade magazines usually publish without charge.

          It is important to be listed in local telephone directories that group similar businesses under a single heading, such as the Yellow Pages in the United States. It is also useful to be listed on Internet search engines such as Google or Yahoo, which are used by consumers for locating local businesses. These often link to a company's Web site, thereby communicating more information.

            Publicity is also an extremely valuable way to promote a new product or service. New firms should send press releases to media outlets. A local newspaper might publish a feature about the startup. A TV or radio station might interview its owners. This can be very effective in generating sales, and it's free!

Marketing typically falls under the following Product Development Process:

1. Idea Generation- Ideas for products are obtained in the idea generation part. There are various sources of ideas like market research, competitors, focus groups, employees, trade shows etc.
2. Idea Screening-  There could be various ideas of products. Idea screening eliminates unsound concepts of products prior to developing products.
3. Concept Development and Testing-  Selected ideas go for the marketing and engineering details like target market, product features, product benefits, cost analysis etc.
4. Business Analysis-  Further business analysis like selling price base upon competition and customers’ feedback, break even analysis, profitability analysis are done here.
5. Beta Testing and Market Testing-  Product physical prototype is tested in this process by conducting focus group customer interviews, introducing at trade show etc.
6. Technical Implementation-  Technical implementation of the product is done after test marketing. Logistics plan, resource estimation, supplier collaboration etc. are done in this process.
7. Commercialization-  After all the processes are done, product is formally launched. Produce and place advertisements and other promotions are done in this process.

            It is often said that if Thomas Edison depended on marketing research he would have produced larger candles rather than inventing light bulbs.

Product Development has following inputs, outputs and personnel involved:

Tasks

1. Development of top-level product that satisfy consumers’ desires and wants.
2. Analyze, evaluate and select a preferred product concept considering product requirements, company technology and capabilities, customers’ need and wants.
3. Brainstorm and develop subsystem concepts to satisfy lower-level requirements.
4. Analyze, evaluate and select subsystem concepts considering requirements, company technology and capabilities, development risks, and business strategy.
5. Identify need for risk-reduction development or investigation and launch effort.
6. Document the concept.

Inputs

1. Product requirements document

Outputs/Deliverable

1. Product concept block diagram
2. Layout drawing
3. Concept selection matrix

Personnel Involved

1. Marketing
2. Project Manager
3. Design Engineers
4. Manufacturing Engineer
5. Test Engineer
6. Supply Management

          Companies produce products according to the customers’ needs and wants. And then a company tries to develop a market for the product. Marketing personnel itself fall under the product development process because the success and failure of marketing is entirely dependent upon the product specifications/features.

The Business Process Model

         

          An introduction to the terminology and icons used in the Business Process Model. Provides a quick

introduction to some Unified Modelling Language (UML) concepts and how they are applied in

Enterprise Architect's Business Process Model.

A business process:

1. Has a Goal

2. Has specific inputs

3. Has specific outputs

4. Uses resources

5. Has a number of activities that are performed in some order

6. May affect more than one organizational unit. Horizontal organizational impact

7. Creates value of some kind for the customer. The customer may be internal or external.

Business Process

          A business process is a collection of activities designed to produce a specific output for a particular customer or market. It implies a strong emphasis on how the work is done within and organization, in contrast to a product's focus on what. A process is thus a specific ordering of work activities across time and place, with a beginning, an end, and clearly defined inputs and outputs: a structure for action.

Business Feasibility Studies

          A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question: Will the idea work and should you proceed with it?

          Before you begin writing your business plan you need to identify how, where, and to whom you intend to sell a service or product. You also need to assess your competition and figure out how much money you need to start your business and keep it running until it is established.

          Feasibility studies address things like where and how the business will operate. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plan.

Why Are Feasibility Studies so Important?

The information you gather and present in your feasibility study will help you:

• List in detail all the things you need to make the business work;
• Identify logistical and other business-related problems and solutions;
• Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment; and
• Serve as a solid foundation for developing your business plan.

Even if you have a great business idea you still have to find a cost-effective way to market and sell your products and services. This is especially important for store-front retail businesses where location could make or break your business.

For example, most commercial space leases place restrictions on businesses that can have a dramatic impact on income. A lease may limit business hours/days, parking spaces, restrict the product or service you can offer, and in some cases, even limit the number of customers a business can receive each day.

The Components of a Feasibility Study

• Description of the Business: The product or services to be offered and how they will be delivered.
• Market Feasibility: Includes a description of the industry, current market, anticipated future market potential, competition, sales projections, potential buyers, etc.
• Technical Feasibility: Details how you will deliver a product or service (i.e., materials, labor, transportation, where your business will be located, technology needed, etc.).
• Financial Feasibility: Projects how much start-up capital is needed, sources of capital, returns on investment, etc.
• Organizational Feasibility: Defines the legal and corporate structure of the business (may also include professional background information about the founders and what skills they can contribute to the business).
• Conclusions: Discusses how the business can succeed. Be honest in your assessment because investors won’t just look at your conclusions they will also look at the data and will question your conclusions if they are unrealistic.

Summary: Feasibility studies contain comprehensive, detailed information about your business structure, your products and services, the market, logistics of how you will actually deliver a product or service, the resources you need to make the business run efficiently, as well as other information about the business.

Practice Test – Entrepreneurship

Name: ______________________________________                      Date: _________________

Lecturer: ____________________________________

I. MULTIPLE CHOICES. Choose the letter of the CORRECT answer for each of the questions that follow.

1.    Which statement best describes an entrepreneurs. They 

a.    come in various ages, income levels, gender and race

b.    are willing to bear the risk of a new venture if there is a significant chance of profit

c.    differ in education and experience

d.    share certain personal attributes including creativity, dedication, determination, flexibility, leadership, passion, self-confidence

2.    An entrepreneur is NOT creative when he/she

a.    Drives himself for the development of new products or services, or ways to do business.

b.    Deals with continuous learning, questioning, and thinking outside of prescribed formulas for products and services.

c.    Pushes through innovation and product developments

d.    Thinks and thinks of the future status of his/her products or services

3.    Rodel, owner of a big company in Cebu, works hard to get his business off the ground. He plans and formulates ideas to succeed in the business industry. What characteristic of an entrepreneur does he posses?    

a.    Flexibility

b.    Determination

c.    Dedication

d.    Leadership

4.    Susan has a strong desire to achieve success in her business. For her, money is not the motivation but success. Which of the following characteristics she possesses?

a.    Flexibility

b.    Determination

c.    Dedication

d.    Leadership

5.    ALL are competencies and characteristics of an entrepreneur EXCEPT:

a.    Deals with thorough planning to reduce risk levels and listens without being easily swayed or intimidated

b.    Convinces others to believe in their vision and ask for others’ ideas then substitutes it for planning his business

c.    Believes that he has control over his destinies and less likely to think that luck or fate determines success

d.    Possesses interpersonal communication skills to create an internal organization

6.    Which of the following describes “Positive Self-Image”?

a.    Deals with thorough planning to reduce risk levels and listens without being easily swayed or intimidated

b.    Convinces others to believe in their vision and ask for others’ ideas then substitutes it for planning his business

c.    Believes that he has control over his destinies and less likely to think that luck or fate determines success

d.    Possesses interpersonal communication skills to create an internal organization

7.    Entrepreneurs with high energy levels is the one who

a.    Constantly need finance, people and supplies and knows where and when to hire employees.

b.    Engages in activities which are extraordinary

c.    Makes decision in short span of time;

d.    Survives with little sleep, with few if any vacations especially in the early stages of the enterprise.

8.    Entrepreneurs is said to be flexible when he/she

a.    Stays focused and get other look at his/her plans

b.    Has the ability to create rules and set goals

c.    is able to quickly respond to the needs of the changing market industry

d.    possesses common sense and initiative and adopts to the changes of his mind

9.    Smarts is an American term that describes common sense joined with knowledge or experience in a related business of endeavor. Which of the following contributes to “smart”

a.    Good products, services, and goods

b.    Customers, needs, plans

c.    Employment, education, and life experience

d.    Capital, wealth, stocks

10.  Every entrepreneur possesses various characteristics in the same degrees.

a.    True

b.    False

c.    Either

d.    Neither

11.  Which of the following is TRUE to a business process?

a.    It includes three types of business processes as management processes, operational processes, and supporting processes.

b.    It begins with a customer’s feedback of the products offered.

c.    It produces a specific service or product for a particular customer

d.    It describes various characteristics of a business industry

12.  A manager may involved himself in the business process when it deals with

a.    Processes that constitute the core business and create the primary value stream

b.    Accounting, recruitment, and technical support to customers

c.    Governing of the operation of a system

d.    Breaking of down the barriers of structural departments

13.  Which of the following is true to operational processes?

a.    Processes that constitute the core business and create the primary value stream

b.    Accounting, recruitment, and technical support to customers

c.    Governing of the operation of a system

d.    Breaking down of the barriers of structural departments

14.  Supporting processes is evident when there is the

a.    Processes that constitute the core business and create the primary value stream

b.    Accounting, recruitment, and technical support to customers

c.    Governing of the operation of a system

d.    Breaking down of the barriers of structural departments

15.  Which of the following pair is the starting and ending point of business process?

a.    Customer’s need – customer’s feedback

b.    Customer’s need – customer’s satisfaction

c.    Customer’s need – customer’s payment

d.    Customer’s need – customer’s demand

16.  The four major process improvement areas are:

a.    Effectiveness-Efficiency-Internal Control-Complains

b.    Effectiveness-Sufficiency-Internal Effect - Compliance

c.    Efficiency – Sustainability-Effectiveness-Internal control

d.    Effectiveness-Efficiency-Internal Control-Compliance

17.  Which of the following best describes marketing?

a.    The activities involved in the transfer of goods from the producer to the consumer, including advertising, shipping, storing, and selling.

b.    Operated by one or more business functional units, and emphasize the importance of the “process chain” rather than the individual units

c.    An extremely valuable way to promote a new product or service

d.    The process of “converting” the end-user’s indent to a purchase order

18.  Which of the following is NOT be considered in the marketing process?

a.    Company-employed sales people

b.    External channels

c.    Advertising and promotion

d.    Commercialization

19.  Product development process begins with

a.    Testing of the physical prototype products

b.    Elimination of unsound concepts of products prior to developing products

c.    Studying various sources of ideas like market research, competitors, trade shows, etc.

d.    Further business analysis like selling price base upon competition and customer’s feedback

20.  Product development process ends with

a.    Formal launching of the product

b.    Technical implementation of the product

c.    Testing of the physical prototype products

d.    Marketing and engineering of details like target market, product features, etc.

21  – 30. Conceptualize your own business. From it, develop a simple business feasibility             study by employing various components of a feasibility study.

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