ENTREPRENEURSHIP

- from the french word “entreprende” which means 'to undertake'.

• Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources
currently controlled" (Timmons, 1994).

• Onuoha (2007) is “the practice of starting new organizations or revitalizing mature organizations, particularly
new businesses generally in response to identified opportunities.”

• Entrepreneurship is the dynamic process of creating in ceremonial wealth. The wealth is created by individuals
who assume the major risks in terms of equity, time and/ or career commitment or provide value for some
product or services. The product or services may or may not be new unique, but value must somehow be
infused by the entrepreneur by receiving and locating necessary skills and resources (Ronstadt, 1984).

• Jean Baptise Say (1767-1832) expanded the ideas of Cantillon and conceptualized an entrepreneur as “an
economic agent who unites all means of production, - land of one, labour of another and capital of yet another
and thus produces a product. By selling the product in the market he pays rent of land, wages to labour, interest
on capital and what remains is his profit” (Say, 1827).

Characteristics/Traits of an Entrepreneur

1. Motivation

 Entrepreneurs are passionate, buoyant and highly self-motivated.

 They have high energy levels and are always willing to take initiatives.

2. Risk Tolerance

 Establishment of any entrepreneurial venture is risky and the entrepreneur has to assume risk.

 As risk and rewards are inseparable, in order to grow, the entrepreneur should have large appetite for assuming
risk.

 Vision

 One of the major responsibilities of an entrepreneur, as founder and head of the company, is deciding where
the business should go.

4. Mental Ability and Creativity

 The entrepreneur should anticipate changes and must be able to study the various situations under which
decisions have to be made.

Successful entrepreneurs have the creative ability to recognize and pursue opportunities

5.Clear Objectives

 An entrepreneur has clarity about the objectives to be achieved in the business, the nature of goods to be
produced and subsidiary activities to be undertaken.

 This clarity in objectives helps them to translate their business idea into reality.
 6.Good Communication Skills

 An entrepreneur who can effectively communicate with customers, employees, suppliers and creditors will be
more likely to succeed than the entrepreneur who does not.

7. Human Skills

 The most important personality factors contributing to the success of any entrepreneur include emotional
stability, good inter- personal relations, consideration and tactfulness.

 An entrepreneur has to maintain good relations with his customers so as to encourage them to continue to
patronize his business.

Ability to plan: Entrepreneurs must be able to develop business plans to meet goals in a variety of areas, including
finance, marketing, production, sales and personnel.

Communication skills: Entrepreneurs should be able to explain, discuss, sell and market their goods or services

Marketing skills: Good marketing skills, which result in people wanting to buy goods or services, are critical to
entrepreneurial success.

Interpersonal skills: The ability to establish and maintain positive relationships with customers and clients, employees,
financial lenders, investors, lawyers and accountants, among others, is crucial to the success of the entrepreneur's
business venture.

Basic management skills: Even if entrepreneurs hire others to deal with the day-to-day tasks of the business,
entrepreneurs need to know whether their company has the correct resources.

Leadership skills: The ability to develop a vision for the company and to inspire employees to pursue it is imperative for
success.

Personal Entrepreneurial Competencies (PECS)

 Opportunity seeking

 Persistence

 Commitment to work contract

 Demand for quality and efficiency

 Risk taking

 Goal setting

 Information seeking

 Systematic planning and monitoring

 Persuasion and networking

 Self confidence

Functions of An Entrepreneur
 • Innovation- implies doing new things or doing the same things in a new manner.

-According to Schumpeter (1934), the key ingredient of entrepreneurship is innovativeness of the individual

• Risk Measurement and Risk Taking- The risks are not only in relation to the uncertainty to the success of new
business venture, but also on the personal and professional front like career opportunities foregone for the sake
of starting the new venture, family relation and psychic well being .

-Palmer (1971) suggested that the entrepreneurial function primarily involves risk measurement and risk taking.

• Analyze the opportunities and threats - He should possess the capability and skills to formulate strategies for
the new business venture, keeping in mind the threats being posed to the venture

Functions of an entrepreneur

Preparing a Business Plan

• A business plan is a written document containing the details about every aspect of the proposed
business venture.

• It is a tedious task drafting a convincing and viable business plan.

Organization of the Venture

• The entrepreneur brings together various factors of production like capital, manpower, machinery, land
and building etc. to start a venture.

• He needs to have suitable skills to deploy suitable resource in the right activities at the right time in
order to avoid wastage and to optimally utilize the resource in starting up the new venture.

Development and growth of the venture

Supervision and control

 When routine matters are delegated to the subordinates, it becomes imperative to have suitable control
mechanisms in place so that the entrepreneur may track the overall wellbeing of the enterprise.

Personal observation, reporting and more sophisticated techniques of control may have to be employed

Types of Entrepreneurs
by: Kimanzi Constable

1.The skeptical entrepreneur

 This entrepreneur sees the success of others and immediately starts to question it. They examine that person's
business and looks for the “lucky” breaks, or inheritance they think that successful entrepreneur received.

2.The copycat entrepreneur

This entrepreneur sees the success of others and tries to copy them exactly. Their website is the same, their
business cards are the same, and the way they present themself is the carbon copy of a leader in their industry.

3.The research entrepreneur

  This entrepreneur loves to learn.

 They research every possible scenario and outcome for strategies to start or grow a business. There is
nothing wrong with learning, but when that’s all you do, it becomes a problem.

4. The determined entrepreneur

 This entrepreneur hasn’t “made it” but they will, no matter what.

They see the value in entrepreneurship, they see that success is possible without copying, and they do everything they
can to start or grow their business

5. The accomplished entrepreneur

 This entrepreneur has gone through all the stages of entrepreneurship and building a business, and has reached
success.

Development and Growth Theories

LAISSEZ FAIRE THEORY- government should not interfere in economic activities.

KEYNESIAN THEORY-government should play a role on economic development.

RICARDIAN THEORY- theory of DAVID RICARDO that focus on agriculture.

HARROD-DOMAR THEORY- more products can be produced by machines

KALDOR THEORY-NICHOLS KALDOR, key factor is technology

INNOVATION THEORY-JOSEPH SCHUMPETER, stresses the role of innovators

Role of Entrepreneurship in Economic Development

Capital formation. Entrepreneurship helps the formation of capital by bringing together the savings and investment of
the people.

Employment. Entrepreneurship provides large scale employment opportunities and increase the prchasing power of the
people.

Balanced Development. Entrepreneurship promotes balanced regional development in the country.

Power decentralization. Helps in reducing concentration of economic power

Socio-economic benefits of entrepreneurship

• Promotes self-help and employment

• Mobilizes resources

• Provides taxes to the government

• Empower individuals

• Enhance national identity and pride

 • Enhance competitive consciousness

• Improves quality of Life

• Enhances equitable distribution of income and wealth

• Make us less dependent on imports

• It offers an economical and faster method of distributing goods and services that accelerates economic
development

• Breed other entrepreneurs.

MSMEs- refer to any business activity/enterprise engaged in industry, agribusiness/services, whether single
proprietorship, cooperative, partnership, or corporation whose total assets, inclusive of those arising from loans but
exclusive of the land on which the particular business entity's office, plant and equipment are situated, must have
value falling under the following categories.

Filipino Values Favorable to Entrepreneurship

• Pakikipagkapwa (human relation)

• Lakas ng Loob (promotes risk-taking)

• Close family ties

• Utang ng loob(indebted/gratitude)

• Bayanihan (Camaraderie)

• Katapatan (Honesty)

• Kasipagan (industriousness)

• Gaya-gaya (copying)

• malasakit (concern)

• damayan (mutual help)

Attributes of an Entrepreneur

1. Innovative-doing new things

2. Reasonable risk-takers

3. Opportunity-seeking-to see and act on business opportunities

4. Committed to work contract -Accepts final responsibility for completing a job for the customers.

5. Perseverance-continued effort to do or achieve something despite difficulties

6. Demand for efficiency and quality-Setting high, but realistic standards of excellence for him, he finds it difficult to
compromise on those standards.
7. Information-seeking-seeks relevant information

8. Systematic Planning and monitoring-Evaluates alternative and ready to switch to alternative strategies when
necessary to achieve goals.

9. Persuasion and networking-Links positively with others in order to maintain contacts at high level

10. Confidence

11. Positive thinkers

12. Patience

13. Self-awareness

14. Self-motivated -“drive”

Motivations:

A. Early childhood experience,

B. Desire for independence,

C. Frustration with traditional careers,

D. Challenge and excitement of owning a business, and

E. Effective role model

15. Decisiveness

16. Experience

Important entrepreneurial traits according to William Bygrave

a.Self-awareness

b. Self-motivation

c. Courage

d. Confidence

e. Patience

f. Decisiveness-This is making one fast decision after another.

g. Experience

h. Knowledge

i. Perseverance

j. Drive-Believing in your goal and being determined to succeed.