Guide for the student

1. ROUTE
TO
ENTREPRENEURSHIP
Eleonor Reiza M. Garcia
Instructor

2. A. Reasons Why People Go Into Business
• Adventure
• Creativity
• Competitions
• Control
• Earning Potential

3. B. Current and Thriving Business
Retailing:
Clothing
Bicycle shop
Antique shop
Drugstore
Fashion boutique
Bookstore
Photo studio

4. Food and Recreation:
Fast-food franchise
Bar/Cocktail
lounge
Campgrounds
Motels
Convenience store franchise
Restaurants
Boat marina
Lodging places
Hotels

5. Services:
Transportation and public utilities
Modern-day railroads
Local and inter-urban passenger transit
Trucking and warehousing
Water transportation
Air transportation and delivery
Health care
Beauty care
Fitness centers
Telecommunications
Telephone services
Radio and television broadcasting
Other communication services

6. Other Commercial Fields
Industrial
Wholesaling
Delivery services
Manufacturing
Distributorship

7. C. SOURCES OF ENTREPRENEURIAL
INSPIRATION
Future and budding
entrepreneur may find
the following
materials helpful for
them to spot or find
opportunities.
Specific sources:
• Trade journals
• Trade associations
• Conventions
• Exhibits and Trade shows
• Country and government
affairs
• Product catalogs
• Consumers magazines

8. C. SOURCES OF ENTREPRENEURIAL
INSPIRATION
Optional Sources:
• Personal interest or
hobbies
• Limitations in existing
products
• A wish list
• Thinking and
experimenting with new
and different ways to use
existing products
• Technological advances and
their effects on currently
available products
• Possible spin-off from
existing products that might
be developed
• Currently established
businesses
• Booming products in other
places, regional and
international

9. D. ROUTES TO ENTREPRENEURSHIP
1. Family Business
One of the most successful routes to
entrepreneurship is family business, one
which includes two or more members of
the family with financial control over the
enterprise. Running and passing on family
business thrive on the principle, :When it
works right nothing succeeds like a family
firm. The flash of the fast buck is replaced
by long-term plans Tradition counts.”

10. The following are the advantages
of a family business:
Strength of family relationships
Willingness of family members to
make sacrifices for the good of the
firms.
Demonstration of high levels of
concerns for employees (family
oriented)
Ability to plan for long-term
Emphasis on quality values

11. Model of Succession of Family Business
Stage 1: Pre-Business
The children become aware of some facets of the firm and
industry. Orientation of the children by family members is very
formal.
Stage 2: Introductory
The children are exposed to business jargon, employees in
the business, and the business environment.
Stage 3: Introductory Functional
Children start to work as part-time employees. Work
gradually becomes more difficult. Usually, training includes
education and sometimes work for other firms.

12. Model of Succession of Family Business
Entry of Successor
Stage 4: Functional
Potential successor begins as full-time employee whose
functions include all non-managerial functions.
Stage 5: Advanced Functional
Potential successor assumes managerial positions,
which includes all management positions prior to becoming
president/ general manager of the business enterprise.

13. Model of Succession of Family Business
Transfer of Leadership
Stage 6: Early Succession
Successor assumes presidency/ general manager
position. This already the period in which successor
becomes de jure head of the company.
Stage 7: Mature Succession
The succession becomes de facto head of the
company.

14. 2. Franchising
Franchising is a marketing system
revolving around a two-party legal
agreement whereby the Franchisee
conducts business according to terms
specified by the Franchiser.

15. The following are the advantages of running and
operating a franchise:
• Experience of the business
• Training
• Technical, management and research development
• Proven whole system
• Manualized system
• Advertising efforts
• Buying
• Brand name recognition
• An investment business

16. The following are the dis-advantages of
franchising:
• The element of risk
• Working within the system
• Working within the franchisers
• False expectation
• Managing your business

17. People Involved in Franchising:
• Franchisee:
An entrepreneur whose power is limited by
contractual relationship with a franchising
organization.
• Franchiser:
The party in the franchise contract who
specifies the methods to be followed and the terms
that are to be met by the other party.

18. Structure of the Franchising Industry
• The franchiser is a producer/creator; the franchisee
is a wholesaler, such as a soft drink bottler.
• The franchiser is a wholesaler; the franchisee is a
retail establishment, such as a hardware store.
• The Franchiser is a producer/creator; the
franchisee is a retail establishments, such as a fast-
food restaurant.

19. Choosing A Franchiser
1) Look at your own interest.
2) Check your Family circumstances.
3) Check out the Franchise itself
4) Is the Franchise Reputable?
5) Check out the people running the franchise
6) Always check out what existing franchisees think of
the franchise

20. 3. BUY – OUTS
Buy-out is yet another way to be an
entrepreneur, unlike the start-up route, but-out, as
the term implies, mans that the entrepreneur simply
buys an existing business for sale on which he/she
introduces innovations and improvement. If the
same business is operated, it is as if there was only
change in management.

21. The following are the advantages of Buy-outs:
• A successful business may continue to be successful
• An existing business may already have the best location
• Employees and suppliers are in place
• Equipment is installed and productive capacity is known
• Trade credit has been established
• The new business owner can use the experience of the
business owners
• Finding financing is usually easier
• Potentially, it could be a bargain.

22. However, the following may be the
disadvantages of this route to entrepreneurship
• The previous owner may have created ill-will
• Employees inheriting the business may not be
possible
• The business location may have become
unsatisfactory
• Equipment and facilities may be obsolete or in
efficientChange and innovation may be difficult to
implement
• Inventory may become outdated or obsolete

23. Reasons for buying An Existing Business
• To reduce some uncertainties and unknowns that
must be faced in starting a business from the
ground.
• To acquire a business from ongoing operations
and established relationship with customers and
suppliers.
• To obtain an established business at a price below
what it would cost to start a new business.

24. Reasons for Selling An Existing Business
1. Age or illness of the owner/s
2. Death of the owner/s
3. Burnout experienced by the owner/s
4. Low profits
5. Economic conditions
6. Desire to retire
7. Slow growth or fast growth
8. To much competition
9. Technology outpaced in the business
10. Insufficient capital

25. Reasons for Selling An Existing Business
11. No interested managers to continue the
business
12. Problems with a partner
13. No interested heirs
14. Desire to buy another company
15. Going to work with another company
16. Changing a career
17. Selling a franchise

26. 4. START – UP BUSINESSES
Start -up businesses are those that are
relatively started new by an entrepreneur. These
are also sometimes referred to as a business
that starts from scratch.

27. Few reasons that may motivate entrepreneurs in
starting their own business ventures.
1. Inventions of new products or services that
necessitate a new type of business.
2. Freedom to select the ideal location,
equipment product and services, employees,
suppliers and bankers.
3. Avoidance of undesirable policies,
procedures and legal commitments of existing
firms.

28. Types of Start-Ups Business
1. Distributorships
2. Rack Jobbers
3. Wholesaler
4. Subcontracting

29. Kinds of Start-Ip Ideas
1. Type A Ideas- providing customers with a product or services
that does not exist in their market but already exist somewhere
else (new market).
2. Type B ideas- A technically new process (new technology).
3. Type C ideas- These are concepts for performing old functions
in new and improved ways (new benefits).