entrep

How do interest rates affect businesses?

Increased interest rate (mo pay more ang borrowers/consumers; less ang sales kay mas expensive man; negatively affect business) Decreased interest rate (better for the business; mo pay less ang borrowers which makes it more inviting to purchase)

Why is inflation a concern for businesses?

Increased prices will make create hesitation to consumers to purchase goods and services

Tight Monetary Policy

OVERHEAT OF ECONOMY bank will raise interest rates to make lending more expensive; increase of demand

systematic in planning and monitoring

Planning and monitoring are inseparable entrepreneurial activities.

under macroenvironment

Political Economic Sociocultural Technological Legal

Problem-solving Skills

The scientific approach in solving business problems involves (STEP 1. defining the real problem STEP 2. gathering information about the problem STEP 3. formulating alternative solutions STEP 4. evaluating alternative solutions STEP 5. selecting and implementing the optimal solution STEP 6. evaluating the decision)

persistent

Trials, sacrifices, and failures challenge the entrepreneur The terms "quit" and "surrender" are not included in the vocabulary of successful entrepreneurs.

Workers' benefits

indirect and non _____ (Sick leave, child care, health insurance, dental insurances, life insurance, retirement plan, vision care, fitness, paid vacation leave, personal leave) (Employees' benefits (Philippines) mandated by law: Pag-ibig, SSS (14%), PhilHealth (3.5% of salary), GSIS (government employee))

under Technological Forces

internet social media e-commerce technological advancement technological infrastructure

Trade regulations

laws enacted by congress and/or by a state to ensure a free and competitive economy

quotas

limit on the amount of goods that can be imported To reduce imports and increase domestic production

goals

long-term

consumer confidence

measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation

Cognitive Skills

mental ability of the entrepreneur to learn new things, generate new ideas, and express knowledge in both oral and written forms

income

money earned from work, investments, business

moderate risk-taker

more calculative in taking risks. He or she analyzes the situation before taking the leap

Election practices

new laws or policies, or taxes when there are new government officials

aggressive risk-taker

not scared to take any risks in business

conservative risk-taker

not very eager to take any kind of risk

External Environment

outside factors that impact the operation of business; cannot be controlled by the firm

Supplier

provider of raw materials needed for production

DISTRESSED ECONOMY (expansionary)

putting more money into the hands of consumers and businesses; i-lower ang taxes so people can afford

Fiscal policies

refers to government spending and taxation policies of the government

Power Cluster

reflect the degree of the interpersonal relations maintained by successful entrepreneurs in the community establishes the relationships with the suppliers of raw materials, financial institutions, customers, competitors, the government, employees, and all other stakeholders

human brain

responsible for the development of cognitive skills, which are essential in making systematic and effective plans and monitoring them

Planning:

setting of goals and objectives

objectives

short-term

embargoes

stops export; gov't order that restricts commerce with a specified country/ exchange of specific goods Result of health, economic, or political relationships

Consumer behavior

study of activities related to the purchase, use and disposal of goods & services

consumer psychology

study of consumer behavior; provides opportunities to examine issues such as what factors are most important

opportunity-seeker

successful entrepreneur: a seeker of business opportunities identifies a business opportunity and then thoroughly evaluates its viability

committed

successful entrepreneur: displays full commitment to the work or endeavor that he or she is undertaking does not entertain negativism and skepticism Commitment is directly related to interest.

under trade regulations

tariff quotas embargoes

tariff

tax imposed by one country on the goods and services imported from another country Why does gov't impose tariffs? - to raise revenue, to protect domestic industries

Political forces

taxes, workers' benefits, trade regulations, election practices, government stability

employment

the act of being hired by a company

Interpersonal Skills

the relationship and interaction of the entrepreneur with the workers, suppliers, creditors, prospective customers, and other members of the business community

monetary policies

the setting of interest rates by the central bank (BSP); depending on condition of economy if i-lower or increase ba ang interest rate

exchange rates

the value of one nation's currency versus the currency of another nation

Sociocultural

- age - culture - lifestyle pattern - consumer psychology

Technological

- internet - social media - e-commerce - technological advancement - technological infrastructure

Legal

- product control, pricing, and labeling - advertising and promotion - health and safety of workers

Political

- taxation - worker's benefits - trade regulations - election practices - gov't stability

A successful information-seeker:

1. seeks relevant information on target customers, suppliers of raw materials, and competitors 2. verifies available information from various sources 3. seeks opinions and advice from experts in the business field 4. finds other possible ways to make sure that the desired information is complete and updated

under Political forces

Taxation Workers' benefits Trade regulations Election practices Government Stability

Contractionary fiscal policy

decrease gov't spending; increase taxation

Achievement Cluster

directly related to the entrepreneur's desire to be an achiever in the field of entrepreneurship

Internal Environment

elements present inside the organization; directly controlled and can be freely modified by the firm itself

under internal environment

employees board of directors managers

Wildlife

ensure that business contributes to the preservation and not the destruction of the ecological system of the local community Entrepreneur's task is to become a model of social responsibility and environmental awareness

Monitoring:

evaluation of the activities and adopted courses of actions whether they are carried in accordance with the plans

SUGAR SWEETENED BEVERAGE (SSB) TAX

excise tax of P10 on beverages sweetened with locally produced sugar and P20 on other sugar sweetened ___________ ; It decreased demand and income of business owners for SSB due to more expensive products

Microenvironment

factors in this environment have a direct relevance to the business operations but are uncontrollable

Macroenvironment

general factors that a business has no control

OVERHEAT OF ECONOMY (contractionary)

gov't either cuts spending or raises taxes; demand & prices will increase = inflation

Regulatory agency

government bodies implemented by government that set standards or law in a specific field

Expansionary fiscal policy

increase gov't spending; decrease taxation - gov't spend money through public services like road widening

inflation rate

increase in the general price level of goods and services in an economy over a period of time (deflation - decrease of prices)

The technical skills of an entrepreneur include proficiency and ability, in the following areas:

1. Information technology 2. Feasibility study and business plan preparation 3. Technical writing skills 4. Marketing 5. Management and finance

The interpersonal skills of an entrepreneur may include the following:

1. Skills in verbal communication 2. Skills in non-verbal communication 3. Skills in listening 4. Skills in leading 5. Skills in negotiating

cognitive skills of an entrepreneur include the following:

1. ability to understand written materials 2. ability to learn and apply new information 3. ability to solve problems systematically 4. ability to create new ideas 5. ability to innovate new products and procedures or methods

A successful entrepreneur adopts a systematic and coordinated planning and monitoring activities where he or she:

1. gathers all the qualitative and quantitative information before formulating the plans 2. develops a logical step-by-step approach in the formulation of plans 3. monitors the progress of activities and switches to alternative strategies when deemed necessary 4. evaluates constantly the alternatives in achieving the goals

under achievement Cluster

1. opportunity-seeker 2. committed 3. persistent 4. a risk-taker 5. efficient and quality-oriented

under planning cluster

6. a goal-setter 7. an information-seeker 8. systematic in planning and monitoring

under power cluster

9. a persuasive and positive networker 10. self-confident

efficient and quality-oriented

A successful entrepreneur highly values efficiency and the concept of quality in all business undertakings. (The basic rule is that you should incur the lowest minimal cost in the production of goods and services without sacrificing quality to make them competitive in the market) An efficient entrepreneur produces more output using less input.

ENTREPRENEURIAL CHARACTER TRAITS

ACHIEVEMENT CLUSTER PLANNING CLUSTER POWER CLUSTER

Government Stability

Characteristic of a government's ability to maintain itself in power and keep fiscal, monetary, and political policies predictable

under physical environment

Climate Physical or natural resources Wildlife

under skills

Cognitive Skills Technical Skills Interpersonal Skills

under microenvironment

Customer Supplier Regulatory agency Competitor

Easy Monetary Policy

DISTRESSED ECONOMY central bank reduces interest rates so that there is more borrowing, It hopes this boosts the economy.

TYPES OF MONETARY POLICIES

Easy Monetary Policy Tight Monetary Policy

Economic

Economic - fiscal policies - monetary policies - interest rates - inflation rate - exchange rate - employment - income - consumer confidence

types of fiscal policies

Expansionary fiscal policy Contractionary fiscal policy

under economic forces

Fiscal policies monetary policies interest rates inflation rate exchange rates employment income consumer confidence

a goal-setter

Goals and objectives are the guiding points that direct all actions, efforts, and struggles of the entrepreneur The goals and objectives are guided by SMART principle

Why do exchange rates matter to companies?

It can affect to business engaging in export or import; higher exchange rate = higher production costs

under external environment

Microenvironment Macroenvironment

SMART principle

Specific Measurable Achievable Realistic Time-bound

a risk-taker

Successful entrepreneurs are business risk-takers.

an information-seeker

Successful entrepreneurs primarily seek a strong basis to make sound decisions.

interest rates

a percentage of a loan that a borrower pays to creditor as a fee for borrowing

Technical Skills

abilities and knowledge needed to perform specific tasks Without this skills, an idea will remain to be an idea and a business opportunity will remain to be a business opportunity

Sociocultural forces

age, culture (clothing, religion, belief, language), lifestyle pattern, consumer psychology, buying habits

Three Types of Risk-takers:

aggressive risk-taker moderate risk-taker conservative risk-taker

Taxation

amount of money paid to the government based on your income or cost of goods or services you have bought

Physical or natural resources

availability or lack of raw materials will determine the cost of the products; products made from rare raw materials will cost more than those made from common ones; should be sufficient for long-tern operation

Planning Cluster

basically supports the character traits in the achievement cluster.

Customer

buyers of products

Climate

climatic condition of where business will be conducted must be evaluated must be considered to determine whether it can withstand or is fit to climatic condition in the local area

Competitor

companies who provide similar or substitute products or services

Physical or Natural Environment

composed of natural elements that are inherent in Earth.

ENTREPRENEURIAL SKILLS

considered as the personal abilities to do things well acquired and developed by a person through constant and correct practice