ENTREPRENEUR

- originates from the French word “entreprendre” which means “to undertake“.
- It connotes a business paradigm which signifies the start of a business undertaking.
- The American Heritage Desk Dictionary definition: “A person who organizes, operates and assumes the risk of
business ventures.”
- It pertains to “a person who strongly advocates and correctly practices the concepts and principles of
entrepreneurship in operating and managing the self-owned business venture (or enterprise)”.

ENTREPRENEURSHIP
- comes from the word entrepreneur
- It refers to a particular field of practice or process, as compared to an entrepreneur which is a person practicing
entrepreneurship. Comparatively, the relationship is like that of a manager and the management in which a
manager is a person who practices correctly the concept of management.
- An art of observing correct practices in managing and operating a self-owned wealth-creating business
enterprise by providing goods and services that are valuable to the customers.

SMALL VS. ORDINARY SMALL BUSINESS

Small Business
- refers to a business or enterprise that correctly adopts and practices the principles of entrepreneurship.
- It is owned by one person with a limited workforce of not more than 20 persons.
- Also includes the small and medium enterprises (SMEs)

Ordinary Small Business

- pertains to a business enterprise managed and operated by an owner who is not an advocate of and does not
practice the concepts and principles of entrepreneurship.
- In the Philippines, small business, whether ordinary or not, are flourishing since it is the easiest way to augment
their income. In reality, many ordinary small businesses have not really progressed ever since they started.
Some gone bankrupt and collapsed.

CHARACTER TRAITS COMMON TO SUCCESSFUL ENTREPRENEURS

Character Trait
- Refers to the mark or attribute that distinguishes an entrepreneur from the owner of ordinary small business.

Based on the study conducted by the Small Enterprise Research and Development Foundation (SERDF) of the
Department of Trade and Industry (DTI), there are ten entrepreneurial characteristics grouped into three major
clusters: ACHIEVEMENT CLUSTER, PLANNING CLUSTER, & POWER CLUSTER.

ACHIEVEMENT CLUSTER
- Consists of entrepreneurial character traits that are directly related to the entrepreneur’s desire to be an
achiever in the field of entrepreneurship.

1. Opportunity-seeker
- Identify a business opportunity. Evaluates its viability. Seizes or exploits the opportunity.
- A business opportunity-seeker is an entrepreneur who:
1. sees and acts on new business opportunities; and
2. seizes unusual opportunities to obtain financing, equipment, land, work etc.

2. Committed
- A highly committed entrepreneur displays full commitment to the work or endeavor that he/she is undertaking.
He/she:
- accepts full responsibility for what has been promised to the customers,
- establishes proper coordination with and among workers, so that goods and services are delivered as
promised,
- seeks to prioritize the satisfaction and interest of customers.
- Commitment is directly related to INTEREST. Lack of interest means lack of commitment. For an entrepreneur,
going the extra mile is the very essence of commitment

3. Persistent
- Trials, sacrifices and failures challenge the entrepreneur to be persistent. He/she learns to:
- take repeated or different actions in order to overcome obstacles.
- make personal sacrifices or exert extraordinary effort to complete the required task, and
- stick to his/her own judgement in times of opposition and failure.
- The terms “quit” and “surrender” are NOT INCLUDED in the vocabulary of successful entrepreneurs. Being
humans, they may feel down and discouraged at times, but THEY KEEP MOVING FORWARD.
- Persistence is the foundation of COMMITMENT.As persistence advances in the life of an entrepreneur,
commitment increases its strength.
4. Risk Taker
- There is a risk in entrepreneurship because of uncertainty. It is inseparable from entrepreneurship.
- Three types of risk - takers:
- Aggressive risk-taker - not scared to take any risks in the business.
- Moderate risk-taker - more calculated in taking risks. He/she analyzes the situation before taking the
leap.
- Conservative risk-taker - not very eager to take any kind of risk . He/she is satisfied with managing a
small business and regular client.
- The entrepreneur weighs the PROS and CONS of a particular business opportunity before taking the risk.
He/she takes precautionary measures before engaging in a particular business endeavor. Often, the HIGHER
the RISK, the HIGHER the RETURN.

5. Efficient and quality-oriented

- A successful entrepreneur highly values efficiency and the concept of quality in all business undertakings.
- He/She:
- always performs the required tasks in accordance with existing standards of excellence of continuously
improves on his/her past performance and
- strives to do things better and faster with minimal cost.
- Basic rule: incur the LOWEST minimal cost in the production of goods and services without sacrificing the
QUALITY. Successful entrepreneurs are productive.
- Successful entrepreneurs generally work for zero defects. Quality of products and services is measured by the
response of customers to them. No complains means the product must be of GOOD QUALITY.

PLANNING CLUSTER
- Set of characteristics of successful entrepreneurs that basically supports the character traits in the achievement
cluster.

1. Goal-setter
- The basic concept of planning is setting goals and objectives. These are the guiding points that direct all actions,
efforts and struggles of an entrepreneur.
- Goals are long-term, while objectives are short-term.
- Entrepreneurs are usually guided by the SMART principle: Specific, Measurable, Achievable, Realistic and
Time-bound

2. Information-seeker
- Entrepreneurs constantly make decisions based on specific and relevant economic, financial and industry data.
- Successful entrepreneurs seek a strong basis to make sound decisions.
- A successful information-seeker:
- seeks relevant information on target customers, suppliers of raw materials and competitors
- verifies available information from various sources, both private and public, like printed materials and
agencies
- seeks opinions and advice from experts in the business field
- finds other possible ways to make sure that the desired information is complete.

3. Systematic in planning and monitoring

- Systematic implies that there is a rational and logical approach in performing the activities.
- Planning simply refers to the setting of goals and objectives. It serves as the preventive course of action
- Monitoring refers to the evaluation of the activities and adopted courses of actions whether they are carried in
accordance with the plans. It acts as the corrective course of action
- A successful entrepreneur:
- gathers all the qualitative and quantitative information before formulating the plans,
- develops a logical step-by-step approach in the formulation of plans
- monitors the progress of activities and switches to alternative strategies when deemed necessary
- evaluates constantly the alternatives in achieving the goals

POWER CLUSTER
- Includes a set of character traits that reflect the degree of interpersonal relations maintained by successful
entrepreneurs in the community. It defines how entrepreneurs project themselves in the business community.

1. Persuasive and positive networker

- Successful entrepreneurs are able to establish good and positive networking with almost all of the players in
the business community.
- They adopt specific strategies that will influence and convince others while maintaining the highest degree of
respect and makes use of positive contacts in the business community in order to meet the goals and objectives
of business endeavors.

2. Self-confident
- High level of self-confidence
- Project a favorable image of themselves which is founded on respect and good deeds in the business
community.
- Entrepreneurial self-confidence is actually a manifestation of the entrepreneur's strong trust or belief in
himself/herself.

SKILLS AND CORE COMPETENCIES IN ENTREPRENEURSHIP

Skills – personal abilities to do things well. These come from the totality of knowledge, practice and experience
of a person.
Entrepreneurial Skills – set of cognitive, technical and interpersonal skills required in the practice of
entrepreneurship.

SOURCES OF SKILLS
1. Knowledge
2. Aptitude
3. Practice/ experience

ENTREPRENEURIAL SKILLS
1. Cognitive Skills
- Mental ability of the entrepreneur to learn new things, generate new ideas and express knowledge in both oral
and written forms. Ability to:
-Understand written materials
-Learn and apply new information
-Solve problems systematically
-Create new ideas
-Innovate new products

2. Technical Skills
- Focus mainly on the mechanical or practical aspect of a person. It is an external replica of a person’s cognitive
skills. Proficiency in the following areas:
-IT
-Feasibility study and business plan
-Technical writing
-Marketing
-Management and Finance
- Entrepreneurs must develop their technical writing skills to:
1.respond immediately to the problems of customers
2.negotiate easily with suppliers
3.make the necessary financial agreement with creditors
4.attract prospective consumers without difficulty

3. Interpersonal Skills
- Relationship and interaction of the entrepreneur with the workers, suppliers, creditors, prospective customers
and other members of the community. Skills in:
-Verbal/Non-verbal communication
-Listening
-Leading
-Negotiating
- These must be developed to equip the entrepreneur in:
1.Saying what he/she wants and how he/she says it
2.Working with his/her workers and employees
3.Relating, negotiating and dealing with his/her customers, suppliers and creditors
4.Communicating his/her ideas, beliefs, values and opinions to the people he/she works with.

CORE COMPETENCY
- The harmonious combination of entrepreneurial concepts and principles, entrepreneurial character traits and
skills define the Entrepreneurial Competency.
- Entrepreneurial competency provides competitive advantage in the venture and becomes the core competency.
- Entrepreneurial core competency is defined as the combination of entrepreneurial concepts and principles,
entrepreneurial character traits and entrepreneurial skills that provide and become the ultimate source of
competitive advantage of an entrepreneur.
- Entrepreneurial Competency as the source of Entrepreneurial Competitive Advantage
COMPETITIVE ADVANTAGE
- Refers to the strategic position and condition of the entrepreneurial venture that:
1.Provides the necessary attributes to outperform competitors
2.Distinguishes the venture from competitors
3.Achieves superior performance in the industry
4.Produces a product or develops production methods that can hardly be copied by competitors
- Competitive Advantage is the solid foundation of sustainability of the entrepreneurial venture in the heart of the
competition.

Total Perspective of Successful Entrepreneur

- To ensure victory as a future entrepreneur, you must:
1.Understand fully the concepts and principles of entrepreneurship
2.Internalize and live out the character traits that are common among successful entrepreneurs
3.Acquire, develop, sharpen and focus your entrepreneurial skills.

CAREER OPPORTUNITIES

Considerations in choosing a job/career:

1.The job you choose may affect where you live
2.The amount of money may affect how you live
3.The job you choose may affect how you live
4.The job you choose may affect who your friends are
5.The job you choose may affect your family life
6.The job you choose may affect your personality

The following are examples of what an entrepreneur can do:

1. Self-employed: perform all the work and keep all the profit
2. Opportunistic Entrepreneurs: starts a business and expand as fast as possible in order to be able to hire
employees
3. Innovators: inventive abilities to design a better product and create companies to develop, produce and sell
the item.
4. Acquirers: Take over a business started by somebody else and use their own ideas to make it successful.
This often happen when there is financial problem in current operation.
5. Buy-sell Artists: Buy a company to improve it so that they can sell it again for profit.
6. Speculators: Purchase a commodity and resell it for a profit.

SALIENT FEATURES OF ENTREPRENEURSHIP

1st SALIENT FEATURE OF ENTREPRENEURSHIP

Entrepreneurship is an ART, not Science! Not governed by fixed and absolute rules. Thus, there is constant
change which denotes Movement & Innovation.

ENTREPRENEURSHIP IS AN ART OF CORRECT PRACTICES

As an art, entrepreneurship is:
- Dynamic. By the moment the economic activity changes, the political, social and entrepreneurial
activities will eventually change
- Creative. By this, there is a constant change or evolution that contributes towards the enhancement of
the enterprise. Creativity results in new ideas which are the backbone of entrepreneurship.

Entrepreneur vs. Ordinary Small Businessperson

Entrepreneurs keep on searching for something new. They find ways to transform new ideas into
entrepreneurial opportunities. They have to perform entrepreneurial activities correctly regardless of whether
they are undertaken easily or not.

Ordinary Small Businessperson only builds upon existing ideas to gain immediate earnings from his/her
business. They have the freedom to manage and operate his/her business according to what pleases him/her.
They prefer business activities which are done easily.

2nd SALIENT FEATURE OF ENTREPRENEURSHIP

Entrepreneurship is a wealth-creating venture. This feature sounds simple, but this has been MOST
MISCONSTRUED because of the word WEALTH.

ENTREPRENEURSHIP IS A WEALTH-CREATING VENTURE

We often hear the old maxims: “Health is wealth” or “Knowledge is wealth”. In most instances, ordinary small
businesspeople equate wealth with the term PROFIT.
Profit – represents the excess income or revenue from the cost and expenses.
Wealth – defined as the abundance of money, property or possession. It is created when the benefits derived
by the owner in providing goods and services to the customers are abundant enough to cover the costs incurred
by the business.

From the previous definition of wealth, it strongly underscores the word “abundance” in the conceptual definition
of wealth. This concept of abundance and not of accounting profit, is the very essence of wealth in
entrepreneurial endeavor.

REMEMBER: Wealth is created when the benefits derived by the owner in providing goods and services to the
customers are abundant enough to cover the costs incurred by the business. At the same time, it provides
personal benefits to the owner, which turn improve his/her life, and will cascade to the development of local
economy and eventually of the whole country.

Entrepreneurship is operating within the concept of wealth creation rather than profit generation. Ordinary Small
Businessperson equate wealth with the term profit. In the parlance of accounting, profit represents the excess
income or revenue from the cost and expenses.

Entrepreneur looks at his/her own business as a wealth-creating venture. Ordinary Small Businessperson
regards his/her small business as a source of income.

3rd SALIENT FEATURE OF ENTREPRENEURSHIP

Entrepreneurship provides valuable goods and services. The owner of the business, in most instances, is
engaged in the sale of goods and service. However, the mere act of selling goods or providing services does not
make a person perform or act within the concept of entrepreneurship.

- Goods and services must have VALUE in order to create wealth. Otherwise, they become wasted.
- One essential principle in entrepreneurship is “not to sell waste to consumers but only valuable goods and
services.”
- Anything of no value to anybody is definitely a waste.
- Valuable goods and services highly satisfy the target buyers in terms of quality and price.
- The entrepreneur convinces the consumers that they gain more benefits than what they pay for the goods
and services.
- The entrepreneur defines value from the perspective of the buyers and not only from his/her own because what
is valuable to the entrepreneur may not be of any value to the consumers. Therefore, value is subjective.

Creating Customer Value

Positive - Perceived benefits (Product benefits, Service benefits, Relational benefits, Image benefits)
Negative - Perceived sacrifice (Monetary costs, Time costs, Energy costs, Psychological costs)

A Value Proposition
Value (as perceived by consumers) = Benefits (solution to my problem) – Costs (financial & opportunity costs)
– Risk (unfulfilled promises)

Remember: As a future entrepreneur, it’s a must to ascertain first whether or not the additional value will be
placed on your product is valuable to the target consumers. It should be always remembered that adding
another value to a product or service will surely increase the cost of the product or service.

Entrepreneurship convinces the consumer that they gain more benefits than what they pay for the goods and
services. Business owners are engaged in the sale of goods and services.

4th SALIENT FEATURE OF ENTREPRENEURSHIP

Entrepreneurship entails opening and managing the self-owned enterprise. The entrepreneur opens his/her
own business under the principle of entrepreneurship and it must be self-owned in order to qualify as an
entrepreneurial endeavor.

- It is self-owned when the person managing its daily activities is also its owner.
- Business that are being managed by others for the benefit of the owners do not fall within the sphere of
entrepreneurship, such businesses are operating under the concept of INTRAPRENEURSHIP.

COMMON MISCONCEPTIONS
Entrepreneurship is generally been equated with ordinary small business.
1.ONLY Small businesses are managed by their owners
2.Most programs of non-government (NGOs) promoting entrepreneurship have been directed toward and are
participated in by ordinary small businesses.
3.Another misconception of entrepreneurship relative to self-owned business is that it is more inclined toward
production or manufacturing and is not applicable to buying and selling of goods or rendering services.
Planning – is an important principle in management. It refers to the process of setting the goals of the
business. The entrepreneur being the owner and manager, must clearly set the goals of his/her business. In
other words, he/she should establish a clear direction of his/her entrepreneurial venture. He/she must have a
definite answer to the question, “Where will my entrepreneurial venture be in five or ten years after?”

As a future entrepreneur, you have to constantly plan for the course of your entrepreneurial endeavor.
Planning does not cost anything but the benefit you will gain from exercising it can be rewarding.

5th SALIENT FEATURE OF ENTREPRENEURSHIP

Entrepreneurship is a risk-taking venture. Risk is inherent in an entrepreneurial venture. Business risk pertains
to the risk in entrepreneurship.

Entrepreneurs should face business risks intelligently. He/she cannot eliminate something ingrained in
entrepreneurship. Instead, he/she must find ways to minimize the effects of the risk. Business owners does not
understand the nature of business risk which in one way or another may lead to the failure of his/her business.
He/she avoids it which indicates that he/she only favors operating under favorable condition.

What is Social Entrepreneurship?

According to Business encyclopedia, Social Entrepreneurship is, at its most basic level, doing business for a
social cause. It might also be referred to as altruistic entrepreneurship.

Social entrepreneurs combine commerce and social issues in a way that improves the lives of people
connected to the cause. They don’t measure their success in terms of profit alone – success to social
entrepreneurs means that they have improved the world, however they define that.

Some believe the definition applies only to businesses that make money and work toward improving a designated
problem by selling something to consumers. Others say business owners who work to solve a social problem
using grant or government money are also social entrepreneurs.

In the “earned income” model – where the social entrepreneur makes money by selling something – the
company’s customers know that their purchase will help support a stated cause. People are often attracted to
businesses that use a social entrepreneurship model because they’re helping to solve a social problem when
they spend money on something they need or want.

Social Entrepreneurship Examples

TOMS: When the company was founded, it applied its “one for one” concept to shoes. For every pair of TOMS
shoes purchased, the company donated a pair to a needy child. The company has since expanded the one for
one concept to eye wear, coffee, and tote bags.

Grameen Bank: Founder Muhammad Yunus provides micro-loans to those in need to help them develop financial
self-sufficiency. Yunus received a Nobel Prize for his work in 2006.

Badala.org: Founded by Joelle McNamara while she was still in high school, Badala.org is an e-commerce site
that creates jobs for African women by selling the products they make. Products range from jewelry to wooden
kitchen utensils.

Characteristics
According to the Schwab Foundation for Social Entrepreneurship, social entrepreneurs share several
characteristics. They:
- Achieve large scale social change.
- Focus on the social or ecological change they want to make while earning money to support the change.
- Innovate when looking for a solution to a social problem.
- Use feedback to adapt and refine.

Social Entrepreneurship creates innovative solutions to immediate social problems and mobilizes the ideas,
capacities, resources, and social arrangement required for sustainable social transformation. It entails
innovations designed to explicitly improve societal well-being, housed within entrepreneurial organizations, which
initiate, guide or contribute to change in society.
The triple bottom line theory expands the traditional accounting framework to include two other performance
areas: the social and environmental impacts of their company. PEOPLE, PLANET, PROFIT
PEOPLE - Considers employees, the labor involved in a corporation’s work, and the wider community where a
corporation does business.
PLANET - The piece of the triple bottom line indicates that an organization tries to reduce its ecological footprint
as much as possible.
PROFIT - While every business pursues financial profitability, triple bottom line businesses see it as one part of
a business plan.
Functions of Social Entrepreneurship
- creates and maintains a stable level of employment
- creates jobs and provides support to socially vulnerable groups
- promotes development of entrepreneurial skills
- compensates countries narrow place
- creates social innovation and change in various areas, including education, health, environment and
business development
- reduces poverty risk

Elements of Social Entrepreneurship

1. Social Impact
Key Question: What social impact does the business or organization make on society?
✓ Social impact is a key element of a social venture.
✓ What is the issue or problem that the business or organization is being set up to solve?
✓ A social venture can make impact at different levels (for example: community, local, regional, national)
or with varying degrees of depth.
✓ How a social venture makes the impact and where it wants to make the impacts are important strategic
decisions.

2. Social Innovation
Key Question: Is the venture using a new (or improved) approach to addressing the social and/or environmental
issue?
✓ Social ventures break new ground, pioneer new approaches, or develop new models.
✓ These ventures need to creatively navigate the economic, social, and institutional barriers to addressing
the social need.
✓ Social entrepreneurs develop new approaches to addressing social problems or utilize technology to
facilitate problem solving.

3. Sustainability
Key Questions: Is this venture financially viable? Is this venture positioned to fulfill its mission over the long-
term?
✓ A sustainable social venture is financially viable and positioned to fulfill its mission over the long-term.
✓ Many social ventures are not sustainable because they rely upon unstable grant-making or government
institutions for their funding.
✓ How a social venture marshals its resources to be sustainable is an important strategic decision that often
separates traditional non-profit organizations and NGOs from social entrepreneurship.

4. Measurement
Key Questions: How does this venture measure its social impact and evaluate success? Are the measurement
tools appropriate for the social issue?
✓ Measurement and evaluation are essential to social entrepreneurship
✓ In addition to the financial metrics used by traditional ventures, social ventures must measure their impact
and evaluate its effectiveness.
✓ The key is that the social venture is using an appropriate type of measurement tool that is in line with
their theory of change.

Characteristics of a Social Entrepreneur

- Achieve large scale social change
- Focus on the social or ecological change they want to make while earning money to support the change
- Innovate when looking for a solution to social problem
- Use feedback to adapt and refine

Where do you find social enterprises?

Social entrepreneurs find opportunity in most economic sectors. The growth areas for social enterprises are
identified as:
✓ Environmental
✓ Housing
✓ Health and care
✓ Information services
✓ Public services
✓ Financial services
 ✓ Training and business development
✓ Manufacturing
✓ Food and agriculture

Example of Social Entrepreneur Businesses

“Gawad Kalinga,” translated in English means to “give care”, is a Philippine-based movement that aims to end
poverty by first restoring the dignity of the poor. It employs an integrated and holistic approach to empowerment
with values-formation and leadership development at its core

Push & Play

Market Driven: Selling Filipino toys that are fruits/vegetables and named after famous local celebrities
Innovation: Introducing educational, Filipino and locally made toys to children
Social mission: Flexible working condition for the mothers to balance their time for work and household chores
social cause: education, poverty eradication

Harvest
Market Driven: Selling different flavor of peanut butter
Innovation: Introducing new flavors using natural raw materials such as honey and rice
Social mission: Partners with farmers and mothers;
social cause: employment development & skills training, education, rural development

Why Become an Entrepreneur?

BE THEIR OWN BOSS

Many entrepreneurs want to be their own boss because:
-they have had a long-time ambition to own their own firm or
-they have become frustrated working in traditional jobs.
-results from a realization that the only way they’ll achieve an important personal or professional goal is to start
their own business

PURSUE THEIR OWN IDEAS

Some people are naturally alert, and when they recognize ideas for new products or services, they have a desire
to see those ideas realized. Some people, through a hobby, leisure, activity, or just everyday life, recognize the
need for a P/S that is not available in the marketplace. If the idea is viable enough to support a business, they
commit tremendous time and energy to convert the idea into a part-time or full-time firm.

PURSUE FINANCIAL REWARDS

This motivation, however, is typically secondary to the first two and often fails to live up to its hype. The average
entrepreneur does not make more money than someone with a similar amount of responsibility in a traditional
job. The financial lure of entrepreneurship is its upside potential. Money is also a unifier. Some entrepreneurs
even report that the financial rewards associated with business can be bittersweet if they are accompanied by
losing control of their firm.

STEPS IN SETTING UP AN ENTREPRENEURSHIP

Spark – Discover – Prepare – Launch