CONCEPT OF ENTREPRENEURSHIP

At the end of the lesson, you should be able to:

1. give the importance of entrepreneurship; and
2. explain the role of entrepreneurship in socio-
economic development.

Words to Study
Economy is the system by which the production and
consumption of goods and services is organized in a country or
community.
Employment is the state of being employed or having a job; the
occupation for which you are paid.
Enterprise is any activity which provides customers with a
product (goods/services) with a view to making a profit.
Entrepreneurship is the practice of starting new organizations,
particularly new business, generally in response to identified
opportunities.
Small business is one that is independently owned and
operated by the owner.

One of the current issues under consideration at the moment is

“the problem of unemployment”. As you can understand, the
importance of getting work for all citizens has become a
priority concern for the government.

Entrepreneurship and Socio-Economic Development

 Transforming ideas into economic opportunities is the index

of entrepreneurship. You only have to be a keen observer of
what is happening in your environment. There and then you
can formulate what business you can later on engage in.

 Entrepreneurship is the capacity for innovation, investment

and creation and expansion in new markets, products and
techniques. It has an extra ordinary feature which is the
creation of something new or something unique. It is also a
new way of making something out of something that already
exists thus, creating new markets.
 Economically, entrepreneurship invigorates markets. The
formation of new business leads to job creation and has a
multiplying effect on economy.

 Socially, entrepreneurship empowers citizens, generates

innovation and changes mindsets. These changes have the
potential to integrate developing countries into the global
economy.

 Entrepreneurship is an important factor in economic

development. This means that a country or society with a lot of
entrepreneurs would tend to be a productive community and
thus produce wealth and spur economic development.

The following benefits that result from entrepreneurship

explain why development takes place when a society becomes
entrepreneurial

1. Entrepreneurship creates employment

2. Entrepreneurship improves the quality of life

3. Entrepreneurship contributes to a more equitable

distribution of income and therefore eases social unrest.

4. Entrepreneurship utilizes resources for national

productivity.

5. Entrepreneurship brings social benefits through

government.

Remember….
Entrepreneurship can bring valuable benefits such as self-
employment for people, improvement in goods and services,
use of local raw materials, and increased income for
themselves which help improves the quality of life of the
people.
1.Integrity - someone once said, “Right is right even if no one is doing
it, and wrong is wrong even if everyone is doing it” We all hear stories
about corporate greed and corruption
2. Self –discipline – to become a successful entrepreneur you have to
be highly disciplined. If you are trying to build a business from the
ground up, you will be faced with doing all the job functions of a
company, such as accounting, marketing and costumer service.
3. People skills - another critical factor among successful
entrepreneurs is having good people skills. You should make an effort
to genuinely like, respect, and appreciate other people
4. Strong work ethics – there’s no substitute for hard work when it
comes to becoming a successful entrepreneur. Most people want to do
the fastest and easiest solution when it comes to work.
5. Passion – you need to be passionate about your business. This
doesn’t necessarily mean you have to build a business around
something you love.
6. Strong leadership qualities- being able to communicate effectively,
motivate others, sell your ideas, and be decisive, are just a few
qualities of a good leader
7. Competitiveness – competition is everywhere. In business, it is the
survival of the fittest. If you can out market and outperform your
competitors, your chance of being a successful entrepreneur will be
much better.
8. Well-organized – One of the main reason why small businesses fail
is lack of organization. Everyone can learn organization skills with
enough hard work, practice and persistence.

9. Sales ability- The ability to convince others to make a conscious

decision is a key of becoming a successful entrepreneur “People don’t
buy for logical reasons. They buy for emotional reasons”. Being able to
appeal to other people emotions is the key to selling your ideas,
products or services.

Personal Entrepreneurial
Characteristics Clusters and
Achievement Cluster

Successful entrepreneurs are people who accomplish things. They

have what psychologists call the “need to achieve” They want to
perform tasks excellently not only for prestige or money but for the
sake of excellence itself.
Achievers rate high in the following PECs

1. Opportunity-Seeking. An entrepreneur is said to be a

good opportunity- seeker if he sees and acts on new
business opportunities and seizes unusual opportunities to
acquire financing, equipment, land and work space or
assistance.

2. Persistence. A persistent individual is one who

a. takes different actions to overcome an obstacle

b. makes personal sacrifice or spends extraordinary efforts
to complete a job
c. sticks to his judgments in the face of opposition or early
lack of success

3. Commitment to the Work Contract. The true-blue

entrepreneur is committed to the work that he has agreed
to do. When he accepts a job, he takes full responsibility
for its completion. No job is too small, too dirty or too
difficult to be done. When necessary, he pitches in for
workers to get things done. He exerts extra effort to satisfy
the costumer. In the end, if he fails he would take full
measure of the blame. But if he succeeds, he expects to get
full credit.

4. Risk Taking. A gambler is a person who takes high

risks and so he tends to lose all his money and even his
shirts in the end. An entrepreneur is not a gambler. A
successful entrepreneur takes calculated, moderate, or
reasonable risks where he perceives the chances for
winning to be good. In other words, he states a preference
for situations that involve moderate risks.

5. Demand for Quality and Efficiency. A true

entrepreneur is not satisfied with mediocre work. He sets a
high standard of performance. The high standard of
performance makes him act to meet or exceed existing
standards of excellence or improve on past performance.
He strives to do things better, faster, or cheaper.

I. Planning Cluster

Going into business is the result of deliberate goal-setting,

tireless information-seeking and systematic planning and
monitoring by the entrepreneur.

a.Goal-Setting. An entrepreneur always thinks not

only of what he wants to accomplish day-to-day but
also in one, two, or five years from now. In other
words, he sets clear and specific short-and-long term
objectives. He thinks of today’s activity as a small
step towards that which he eventually wants to
accomplish.

b. Information-Seeking. As a careful planner, the

successful entrepreneur always makes it a point to
seek information that is relevant and useful to his
present or future business. He obtains information
from clients, suppliers, experts, competitors,
contacts, and information networks. He also consults
experts for business or technical advice.

c. Systematic Planning and Monitoring. The

successful entrepreneur does not only set short-and-
long –term goals. He does not only seek information
regularly. He also systematically plans and monitors
his activities and performance. He develops and uses
alternatives and monitors his progress. He is ready to
switch to alternative strategies when necessary to
achieve his goals.
 II. Power Cluster

The personal motto of a successful entrepreneur is “I

can”. He thinks that he can achieve things; he can
convince people to his way of thinking; he can
influence the outcome of events. He is a natural
leader. He is decisive and he believes in his power.

a. Persuasion and networking. A persuasive person

who readily establishes a network or personal
business contracts around him usually makes a good
entrepreneur. In order to persuade others, the
entrepreneur uses deliberate strategies. In order to
accomplish his business objectives he uses his
network of useful friends and acquaintances.

b. Self-Confidence. The entrepreneur exudes self-

confidence. He strongly believes in himself and his
own abilities. No challenge is too difficult nor is a
task too big that the entrepreneur would indulge in
self-doubt. When he enters a business, it is because
he is confident that the business would be successful
and profitable.