UNDERSTANDING aa SU ld ‘At the end of this chapter, the learner should be able to define entrepreneur and entrepreneurship, describe the salient features of entrepreneurshij discuss the different theories on entrepreneurship, ee Ne distinguish between entrepreneurial venture and ordinary small business activity, a determine factors that contribute to the misconceptions on entrepreneurship, 6, describe the importance of entrepreneurship, and 7. identify the sources of entrepreneurial ideas.cto Defining Key Terms Atthe end of this lesson, the learner should be able to define entrepreneur and entrepreneurship. NATURE AND CONCEPT What comes into your mind when you hear the words entrepreneur and entrepreneurship? ‘You may initially refer to an entrepreneur as a business person and entrepreneurship as the business. Others may specify the former to be the ordinary businessperson and the latter to be a small- to medium- scale business. Some may even consider that there is no difference between the two terms. So what does this lesson provide for your entrepreneurial journey as a student? 1. It outlines the operational definitions of the terms “entrepreneur” and “entrepreneurship” and makes a clear distinction between them. 2, Itdefines their differences in terms of concepts, beliefs, understanding, and approaches adopted by an entrepreneur and an ordinary businessperson. 3. Ithighlights the basic theoretical concepts, principles, approaches, and strategies used in entrepreneurship. 4. It aims to build a strong entrepreneurial foundation to pique an interest among students to become successful entrepreneurs. Do you imagine yourself becoming an entrepreneur and managing your own business in the future? Thus, acquiring basic working knowledge in entrepreneurship becomes a necessity for you. Plain ignorance of the fundamental entrepreneurial concepts may contribute to the failure of your endeavor. Lesson 1 | Defining Key TermsAcquiring sufficient knowledge of entrepreneurial principles equips you with the necessary tools in handling and maximizing entrepreneurial opportunities. However, even a full understanding of the concepts and principles of entrepreneurship is not an assurance that you will become a successful entrepreneur. You have to work hard to go through the whole entrepreneurial process. Knowing the entrepreneurial principles is one thing and becoming a successful entrepreneur is another. So why learn entrepreneurial principles when it cannot provide you the assurance of becoming a successful entrepreneur? Knowing the various concepts and principles in entrepreneurship may not completely guarantee success in a competitive position in making entrepreneurial decisions, OVERVIEW OF THE DEFINITION = There is no universally accepted definition of entrepreneurship, even among universities and colleges offering entrepreneurship program in the Philippines and abroad. Some of the reasons for this are as follows 1. Different views and theories have been developed in the field of entrepreneurship. 2. The scholars who provided the definition for entrepreneurship are largely influenced by their own individual personal beliefs. 3. The entrepreneurial models introduced by scholars are predominantly influenced by the prevailing economic situations during specific periods in history. 4. The frameworks and methodologies of researches on entrepreneurship are highly dependent on the theories and the contexts of the research endeavors. For example, the Austrian economist and political scientist Joseph Schumpeter gave much emphasis on the concept of product innovation, marketing, and production methods. Schumpeter categorically described an entrepreneur as an individual with distinct social characteristics or attributes. According to him, there are very few among the millions in the population who can be considered as entrepreneurs. Some scholars supported the concept of Schumpeter’s, but others disagreed with his views. Several sources such as books and researches on entrepreneurship offer various definitions of the term, Therefore to avoid confusion, this lesson provides an operational definition of entrepreneurship based on the ultimate objective of the concept and the expected direction and demand in the future. The various activities conducted by small businesses in the Philippines are equally considered in the formulation of the operational definition. BWM | chapter | Understanding EntrepreneurshipEntrepreneur ‘The term “entrepreneur” originates from the French word entreprendre which means “to undertake.” It connotes a business paradigm which signifies the start of a new business undertaking. On the other hand, the term “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. The American Heritage Desk Dictionary defines an entrepreneur as a person who organizes, operates, and assumes the risk of business ventures. In this book, however, an entrepreneur is defined as a person who strongly advocates and correctly practices the concepts and principles of entrepreneurship in operating and managing the self-owned business venture. This venture is also called enterprise. This operational definition puts emphasison the concepts of advocacy and correct practices. These two concepts outline the primary difference between the owner of an ordinary small business and the entrepreneur. Furthermore, another key feature of this definition is that an entrepreneur owns and manages the small entrepreneurial endeavor or small business. Entrepreneurs! This book operationally defines entrepreneurship as the 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. All discussions in this book are made within the peripheral concept of this operational definition. Understanding the. correct meaning of the term dispels the doubts and misconceptions with the definition; promotes and enhances better comprehension of the entrepreneurial field; and helps build a strong foundation about entrepreneurship. Small Business and Ordinary Small Business ‘A small business is different from an ordinary small business. Small business refers to a business or enterprise that correctly adopts and practices the principles of entrepreneurship. Itis owned by one person witha limited workforce of not more than 20 persons. The term Lesson1 | Defining Key Teesincludes the small and medium enterprises (SMEs) that have been strongly promoted by both government and non-governmental organizations (NGOs) in their desire to improve the lives of the Filipino people through entrepreneurship. On the other hand, 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 businesses, whether ordinary or not are flourishing and sprouting like mushrooms. They can be found almost anywhere and everywhere —along city streets, municipal roads and national roads, and in public markets, hospitals, schools, and amusement places. Why does this happen in the Philippines? The reason could be that many Filipino families resort to opening ordinary small businesses since it is the easiest and most practical way to augment their income, A small amgunt of money can be used to start up a simple sari-sari store business, or a small stall or pushcart in which food and other staff can be sold in quantities. However, the mere opening of a business enterprise is not entrepreneurship and the person owning and running its day-to-day operations is not an entrepreneur but rather a a businessperson. Most of the owners of ordinary small businesses in the Philippines may not be considering entrepreneurship as an advocacy. Some of them may not have even heard of the term and merely intend their businesses to serve as the source of their livelihood or as a means to lessen. their financial problems. In reality, many ordinary small businesses in the Philippines have not really progressed ever since they started some years ago. What is worse is that others have gone bankrupt and collapsed after some time. pe 1. Entrepreneur refers. to a person who strongly advocates and correctly practices the concepts and principles of entrepreneurship in operating and managing the self-owned entrepreneurial venture. 2. Entrepreneurship is the 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. Chapters | Understanding Entrepreneurship