APPLIED

ENTREPRENEURSHIP

Prepared By:
KRISTINE DIANE C. CERDEÑA, LPT.
SAN ISIDRO SENIOR HIGH SCHOOL FACULTY
 WEEK 1

CHAPTER 1 :
THE MAKING OF AN ENTREPRENUER

CONTENT STANDARD

The learner demonstrates understanding of key concepts, underlying

principles, and core competencies in Entrepreneurship.

PERFORMANCE STANDARD
The learner independently creates/provides a quality and marketable product
and/or service in Entrepreneurship as prescribed in the TESDA Training Regulation.

SPECIFIC LEARNING COMPETENCIES:

1. Discuss the relevance of the course;

2. Explain the key concepts of common competencies;
3. Explain the core competencies in Entrepreneurship; and
4. Explore job opportunities for Entrepreneurship as a career.
 INTRODUCTION

Entrepreneurship is a major contributing factor to the economic well-being of a

country, both in terms of economic growth and job creation. It is also the process of

discovering the various ways of combining resources to offer a creative product,

process, or service. Industrialization triggers innovation and creativity to penetrate

the market. With this, an entrepreneur tends to create a new product design or

redesign the existing product to be available in the market. Improving the business

processes may consider in accord to the taste preference of the customer, prospect

investors and market requirements.

This module will provide you an advancement and grooming of

entrepreneurial skills into a person needed to establish and successfully run an

enterprise. It also provides the required encouragement and business skill to help

you establish your own business by understanding the opportunities available in the

market. It is all about building an enterprise from zero by coming up with new ideas

and turning those ideas into profitable and marketable. Your creative and visual

imagination, innate intelligent, determination, goal oriented, business inclined, and

hard work are significant for this course.

Let your passion be your business!

LESSON 1: The Concept of Entrepreneurship

ENTREPRENEURSHIP

It is the process of producing goods and services to improve

man’s quality of life. When the market value generated by this new combination of
resources is greater than the market value these resources can generate elsewhere
individually or in some other combination.

It is the process of discovering new ways of combining

resources. It is the creation or extraction of value. With this definition,
entrepreneurship is viewed as change, which may include other values than simply
economic ones.

ENTREPRENEUR

Entrepreneurs are first and foremost innovators among other unique

characteristics that they possess. They are creative. They do things in new and
different ways. They love to explore the unknown, and blaze new paths progress.
They are also known as innovators. Innovation has provided us the products
and services of modern civilization.

TRAITS OF AN ENTREPRENEUR
1. Entrepreneurs are reasonable RISK TAKERS.
They enjoy challenges and carefully calculate the pros and cons of
each step they take.

2. Entrepreneurs are CONFIDENT.

They have strong faith in their abilities. They believe thehy can be best
in their field.

3. Entrepreneurs are HARDWORKING.

Succesful people always atttribute their success to hardwork.
When people love their work, it is no longer work. It becomes a joy.
 4. Entrepreneurs are LEADERS BY THE VERY NATURE OF THEIR
FUNCTIONS.

They are people who are task oriented. They are effective planners,
organizers, implementers and achievers.

5. Entrepreneurs are DECISION-MAKERS.

They always make decisions on how to improve their products, how to
create new markets, how to increase sonsumer satisfaction, or how to maximize
profits.

SIX PHASES OF DECISION-MAKING

IDENTIFYING THE PROBLEM

GATHERING THE DATA ABOUT THE PROBLEM

ANALYZING THE DATA

FORMULATING ALTERNATIVE SOLUTION

SELECTING THE BEST SOLUTION

DECISION

LEADERSHIP

IMPLEMENTATION OF THE DECISION

 WORK ETHICS OF AN ENTREPRENEUR
1. Entrepreneus are careful about money.
2. Entrepreneurs are competitive by nature.
3. Entrepreneurs believe in the old adage “early bird catches worm”.
4. Entrepreneurs are risk takers who trust their hunches and act on them.
5. Entrepreneurs have a “head for business”.
6. Entrepreneurs are usually loners rather than joiners.
7. Entrepreneurs are usually honorable people who do business based on a
handshake or a promise.
8. Entrepreneurs set aside time for leisure activities and family.

TRY THIS!

TRUE OR FALSE (Individual task)

Read the following statement below. From the space provided, write T if they

are correct otherwise F if incorrect.

________ 1. Successful entrepreneurs are timid and shy.

________ 2. Running your own business is not difficult, and most companies started

by entrepreneurs are successful.

________ 3. An advantage of entrepreneurship is that nobody tells an entrepreneur

what to do.

________ 4. It is not necessary to determine how much money it will take to start a

business because you will be able to borrow all the money you need.

________ 5. An entrepreneur owns, operates, and takes the risk of a business

venture.
________ 6. One characteristic of an entrepreneur is that they can act quickly.

They are not afraid to make quick decisions when necessary.

________ 7. An entrepreneur can expect to earn large profits immediately after

starting a business.

________ 8. Successful entrepreneurs set challenging goals and focus on achieving

them.

________ 9. It is not necessary to determine how much money it will take to start a

business because you will be able to borrow all the money you need.

________ 10. Entrepreneurs invest in their communities by contributing to the local

economy and by providing jobs.

DO THIS!

WORLD OF WORDS
Work with your partner and write as
many words as you can that are
associated with the term inside the
circle.
Did you enjoy the activity? Now, from the words that you have identified, make a
sentence that would connect each word. Write your answer below.
_____________________________________ ____________________________________
_____________________________________ ____________________________________
_____________________________________ ____________________________________

LET’S EXPLORE!

Study and analyze the profile of the entrepreneur on how they become successful in
the industry. Answer the following questions based on your analysis.

1. What is the common humble beginning of the successful entrepreneur?

___________________________________________________________________
___________________________________________________________________
__________________________________________________________

2. What are the qualities of these entrepreneur that make them great in business
world?

___________________________________________________________________
___________________________________________________________________
__________________________________________________________

3. What risks did they take to continue these kinds of business?

___________________________________________________________________
___________________________________________________________________
__________________________________________________________
4. If you will be planning a business, what market are you willing to invest? Explain
your answer.

___________________________________________________________________
___________________________________________________________________
__________________________________________________________

5. Do you believe that majority of the entrepreneurs creates job employment

opportunities to the country? Justify your answer.

___________________________________________________________________
___________________________________________________________________
_________________________________________________________
 KEEP THIS IN MIND!

Entrepreneurship comes from a French word ‘entreprendre’ and the German

word ‘Uternehmen’ both meaning individuals who are ‘undertakers’.

Entrepreneurship can be defined as a field of business that seeks to

understand how opportunities to create something new (e.g., new products or
services, new markets, new production processes or raw materials, new ways of
organizing existing technologies) arise and are discovered or created by specific
persons, who then use various means to exploit or develop them, thus producing a
wide range of effects (Baron, Shane, & Reuber, 2008, p. 4)
According to Mclelland entrepreneurship is the purposeful activity of an
individual or a group of associated individuals, undertaken to initiate, maintain or
accredit profit by production or distribution of economic goods and services.

Entrepreneur is the one who brings resources, labor, material, and other
assets into combination to produce a socially viable product, and one who introduces
changes, innovation, and new order. It also defined as an individual who organizes,
manages, and assumes the risk of business (Kuratko & Hodgetts, 2001).

Comparison Chart between Entrepreneur and Entrepreneurship

BASIS FOR ENTREPRENEUR ENTREPRENEURSHIP

COMPARISON
Meaning Someone who invests time Refers to the concept of
and money to start a developing and managing
business a business venture to gain
profit by taking several
risks
What is it? Persons who has an idea Process which gives
and gives shape to it. shape to the idea
Represents An innovator, who chased A method through which
the dream, till it becomes an innovation is done
true
Business Venture Is the one who establishes It is the activity, which an
the business venture, to entrepreneur starts to set
turn the idea into reality up the business venture
CHARACTERISTICS OF ENTREPRENEURSHIP

Entrepreneurship is characterized by the

following features:

Process Entrepreneurship is a systematic,

purposeful, creative, and continuous
process, which an entrepreneur
undertakes to run the business smoothly.

Innovation Innovation is the key feature of the

entrepreneurship, which creates a
difference in the marketplace. Indeed, it
helps the enterprise to introduce the
product quickly, as there is hardly any
company which is selling the product in
the market.

Development of network Developing strong connections with the

parties such as suppliers, distributors,
banks, debtors, creditors and many more,
which are directly or indirectly related with
the business process, to have a good
worth, in the market.

Profit potential Profit is something, that keeps the

organization going, in fact, it acts as a
motivation for the entrepreneur, to do
better than before. So, before taking any
decision regarding the enterprise, priority
is given to the profit potential, i.e. while
taking any step further, the entrepreneur
identifies whether it is profitable or not.

Forecasting of Market Trends and The entrepreneur must keep a close

future possibilities watch on the market trends and future
demands so that the enterprise could
continuously work to improve the
products or services offered and grow
further.

Risk Assumption You might have heard the famous saying

“no risk, no gain”, which means that the
profit of business depends on the risk
factor. So, risks and rewards are inherent
to the enterprise; in fact, there is hardly
any business which survives without
taking any risks.
 ROLE OF ENTREPRENEURSHIP AND ENTREPRENUER IN ECONOMIC
DEVELOPMENT AND SOCIETY

1. Creates Large-Scale Employment Opportunities:

Entrepreneurs provide immediate large-scale employment to the unemployed
individual.
2. Creating innovation:
An entrepreneur is a person who always look for changes. He always tried to
introduce newer and newer technique of production of goods and services.
3. Entrepreneurs Create New Businesses:
Path breaking offerings by entrepreneurs, in the form of new goods & services, result
in new employment, which can produce a cascading effect or virtuous circle in the
economy.
4. Induces Backward and Forward Linkages:
Entrepreneurs like to work in an environment of change and try to maximize profits
by innovation.
5. Entrepreneurs Create Social Change:
Through their unique offerings of new goods and services, entrepreneurs break
away from tradition and indirectly support freedom by reducing dependence on
obsolete systems and technologies.
6. Personal Growth:
Entrepreneurship has created millions of good jobs. In a startup workplace, jobs
often call for creativity and collaboration, leading to personal development.
7. Entrepreneurship puts new business ideas into practice:
It creates jobs that facilitate personal development. With their innovative and
disruptive ideas, entrepreneurs can tackle social problems.

THEORIES OF ENTREPRENEURSHIP

Successful entrepreneurs show similar traits that make it necessary to

evaluate the importance each trait in supporting the entrepreneur. There have also
been attempts to investigate how specific traits make one a successful entrepreneur.

Economic Theories

These theories are the oldest entrepreneurship theories and they were
developed in the mid-eighteenth century. They view entrepreneurs as risk takers
who monitor the economic conditions with the aim of identifying opportunities
(Abosede & Onakoya 2013). The economic environment is dynamic and the
changes in the economic condition present opportunities and threats. According to
the economic theorists, successful entrepreneurs position themselves strategically to
reap maximally from changes in the economic conditions.

Resource-Based Theory
The resource-based theory argues that individual’s success as an
entrepreneur is based on leverage on different types of resources. These resources
include finances, human resources, and information among other resources (Fisher
2012). These resources are crucial in exploiting opportunities implying that a person
who has mastery in utilizing these resources establishes successful enterprises.

Opportunity-based Theory
This theory suggests that entrepreneurs seek to exploit opportunities
presented by all aspects of the environment that include technological, social, and
economic aspects. It, therefore, provides a more advanced perspective than the
economic theory as it brings into play the different aspects of the environment
instead of only focusing on economic conditions. The environment is dynamic, and
entrepreneurs stay close to the environment with the aim of identifying the
opportunities presented by the changes in environmental forces. According to Smith
& Chimucheka (2014), businesses are affected by broad dimension factors of the
environment and the success of a business is dependent on how best the manager
can react to the threats and opportunities presented by the environment. This theory
has therefore received a backing from other studies that recognize the role of the
environment in entrepreneurship.

Sociological Theories
These theories view entrepreneurship in a social context where entrepreneurs
are viewed as individuals who can control opportunities emanating from dynamics in
social contexts (Smith & Chimucheka 2014). According to sociological theorists, the
social-political environment is unstable, and it creates opportunities that are used by
entrepreneurs to develop and expand a business. The theory recognizes social
networks as a crucial resource in entrepreneurship where successful entrepreneurs
create.

Psychological theories
These theories attribute entrepreneurship to emotional and mental
characteristics. According to this theory, successful entrepreneurs have a belief that
their actions can influence the environment. Studies conducted to reinforce the
theory shows that personal traits such as optimism and creativity influence the
success of an entrepreneur. This theory, therefore, attributes the success of an
entrepreneur to personal attributes and not the environment. e the right networks to
support pursuing a certain course.
PROCESS OF ENTREPRENEURSHIP

The process of entrepreneurship involves the step by step establishment of a

new business venture.

Source:
https://bbamantra.com/introduction-to-entrepreneurship/

1. Identify the Opportunity

An entrepreneur senses opportunity and visualizes a market since they are
creative and open to new ideas and seek challenges. They look for needs, wants,
problems and challenges that are not met or deal effectively.

2. Establishing a vision
it involves generation of ideas using past experiences and creativity to
develop new and innovative ways to solve a problem, satisfy a need.

3. Persuade others
He forms a foundation team which consists of a group of individuals who
work together to turn his vision into reality. They maybe partners, financiers, family
members etc.

4. Gathering resources
It involves using a business plan to attract investors, venture capitalists,
partners, financial institutions, promoters. The main task is to research and identify
the resources that are needed to turn the idea into a viable venture.

Resources can be categorized into:

a. Financial Resources – personal savings, retained capital, banks, government
institutions, family, friends, partnerships, venture capital, public issue
b. Operation Resources – they can be tangible and intangible
i. Tangible – machines, raw materials, land and building, office equipment’s
(An entrepreneur must decide to buy, rent, or hire them)
ii. Intangible – company’s image, operating procedures, transportation, and
management

c. Human – temporary/permanent employees, amount of manpower needed,

Recruitment, Selection and training staff, compensation, Organization culture
d. Information – an efficient management information system is needed to have
timely info about customers, markets, competitors, and external environment. All the
data is networked on real time basis to speed up actions based on information.

5. Create new venture – when all the resources have been arranged, the next step
is creation and establishment of a new venture and running the business venture
successfully. It requires a lot of enthusiasm and persuasion to gather optimum
resources and it requires a lot of perseverance and passion to believe in self.

6. Change/adapt with time – it is necessary to monitor and upgrade the

organization with changing market conditions. It requires availability of funds to make
changes and the adaptability of human resource towards changed environment.

DOMAIN OF ENTREPRENEUR COMPETENCY

The entrepreneurs must perform various tasks that are complex. It is essential to
understand the detail of each competency area to understand the associated
behaviors with each competency area.

Strategic Competency This competency is related with the

establishing, evaluating, and executing the
strategies of the firm. This area of
competency by measuring the following
behaviors:
1. Clearly knowing the expected directions
and the impact of changes on firm’s
performance
2. Giving priority to work that aligns the
business goals
3. Redesigning the firm to achieve the
goal in a better way
4. Linking or associating the current
actions with strategic goals
5. Observing progress towards strategic
goals
6. Analyzing results against strategic goals
7. Establishing strategic actions by
assessing cost and benefit
Conceptual Competency This area involves different conceptual
abilities that the entrepreneurs reflect in
their behaviors. Such as innovativeness,
risk taking, decision skills, observing and
understanding complex information.
Opportunity Competency This competency refers to the ability to
recognize the opportunities in the market
through various means. And is
operationalized by measuring various
behaviors such as identifying the services
or products needed by the customers,
perceiving unmet needs of the customers,
looking for beneficial product and services
for the customers, and availing the best
opportunities.
Learning Competency This competency indicates the ability of
the entrepreneurs to learn from various
ways and means, keep themselves up to
date in the relevant field, learn proactively,
and apply learned knowledge and skills
into practical activities

RISK OF BEING AN ENTREPRENUER

The prospects of making your own destiny is worth it, to be a successful

entrepreneur, you must be prepared for the risks and challenges that come with it.
The following are the risks that every entrepreneur must take.

1. Potential Business Failure

– being responsible means a success or failure of your business rest on you.
The success or failure
2. Unexpected Obstacles
– problems can happen that you do not expect.
3. Financial Insecurity
– many new businesses do not make much money in the beginning, so you
may not always be able to pay yourself.
4. Long Hours and Hard Work
– it is not unusual for entrepreneurs to work a lot of extra hours to make their
businesses successful. This is especially true during the initial start-up process.
JOB OPPORTUNITIES FOR ENTREPRENEURSHIP AS A CAREER

After realization of the course, these are the career opportunities in

Entrepreneurship.

Science, Technology, Engineering Careers involving the planning,

and Mathematics management and providing of scientific
research and technical services

Business Management and Careers involving the planning,

Administration organizing, directing, and evaluation of
functions of essential to business
operations

Information Technology Careers involving the design,

development, support, and management
of software, hardware, and other
technology-related materials

Arts, Audio Visual Technology and Careers involving the design,

Communication production, exhibition, performance,
writing, and publishing of visual and
performing arts

Hospitality and Tourism Careers involving management,

marketing, and operations of
foodservice, lodging, and recreational
businesses

Education and Training Careers involving the planning,

management, and providing of training
services
Example: Tutorial

Government and Public Careers involving governance,

Administration regulation, national security, foreign
service, revenue and taxation, and
management and administration
 APPLY WHAT YOU HAVE LEARNED

A successful interview

Procedure
1. Form pairs of students. One student imagines him/herself to be a successful
entrepreneur (maybe 10 years from now).
2. The other student will act as Business VLOGGER who will interview this
entrepreneur.
3. The interviewer asks questions given in the table below and note down the
answers.

QUESTIONS YOUR ANSWER

What business do you do?

Why did you start this business and not take up

a job in the company?

How did you come up with the business concepts?

Were you successful when you first started?

What did you find most difficult?

How did you overcome this difficulty?

Have you faced any failures? If yes, what?

What advice would you give to others who are

trying to start their own business?
 RUBRICS IN GRADING YOUR OUTPUT

4 3 2 1

Explanation A complete Good solid Explanation Misses key points

response with a response with is unclear
detailed explanation clear explanation

Demonstrated Shows complete Shows Response Response shows a

Knowledge understanding of the substantial shows complete lack of
question and understanding of some understanding of
processes the ideas and understandi the problem
processes ng of the
process

Work shown All work is Most work is Some steps Student did not
meticulously shown meticulously for the show any work
shown problem are
missing

REFLECT

Reflect on your personal experiences.

1. Have you had personal experience with an entrepreneur or have thought about
starting your own business venture in the future? Briefly discuss your answer by
giving example.

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
________________________________________

LEARN MORE

1. What are entrepreneurial competencies that you need to have to become a

successful entrepreneur?
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
 ASSESS WHAT YOU LEARNED

Multiple choice. Select the best answer to the question.

1) What is an Entrepreneur?
A. Someone who invests time and money to start a business
B. Someone who makes a lot of money
C. Someone who takes a risk to make a profit
D. Both A and C

2) Which is NOT a disadvantage of Entrepreneurship?

A. Risky
B. Uncertain income
C. You are the boss
D. Work long hours

3) Which of the following is an example of an intangible products?

A. Equipment
B. Inventory
C. Office building
D. Account receivable

4) People who own, operate, and take risk of a business venture:

A. Employee
B. Entrepreneur
C. Employees
D. Entrepreneurship

5) Which of the following statements is TRUE about new venture risk-taking:

A. When the entrepreneur seeks at high profit, the risk is usually higher
B. When the entrepreneur seeks to limit risk, the reward tends to lower the risk
C. An entrepreneur financial risk is not closely related to reward
D. The entrepreneur who does not care about the profit is a high risk-taker

6) Evaluation of your strengths and weaknesses:

A. Self-Assessment
B. Entrepreneurship
C. Entrepreneur
D. Employee
7) An entrepreneur is someone who assumes the major risks of a new business by
committing which of the following?
A. Equity
B. Time
C. Career
D. All of the above

8) Which of the following is not a personal characteristic often found in an entrepreneur?

A. Self-confident
B. Independent minded
C. Perceptive
D. Follower

9) An entrepreneur senses opportunity and visualizes a market since they are creative
and open to new ideas and seek challenges.
A. Identify opportunity
B. Gathering resources
C. Establishing a vision
D. Create new venture

10) Path breaking offerings by entrepreneurs in the form of new goods and services,
result in new employment, which can produce a cascading effect or virtuous circle in the
economy.
A. Personal growth
B. Create Social Change
C. Create innovation
D. Create new business
Answer Key
PRE-TEST (TRUE OR FALSE)
1. F
2. F
3. F
4. F
5. T
6. T
7. F
8. T
9. F
10. T

POST-TEST (MULTIPLE CHOICE)

1. D
2. C
3. B
4. B
5. D
6. A
7. D
8. D
9. A
10. C
 REFERENCES

Abosede, A.J. & Onakoya, A.B., 2013, ‘Intellectual Entrepreneurship: Theories, Purpose
and Challenges.’ International Journal of Business Administration, vol.5,no.4, p.30.
Ahmad N. (2007). A cross-cultural study of entrepreneurial competencies and
entrepreneurial success in SMEs in Australia and Malaysia, Unpublished doctoral thesis,
University of Adelaide.

Baron, R. A., Shane, S. A., & Reuber, A. R. (2008). Entrepreneurship: a process

perspective (1st Canadian ed.). Toronto, ON: Thomson/Nelson.
Drucker, P.E., Innovation and Etrepreneurship, Principles and Practice, The Chaucer
Press, Suffolk, 1985, 5.21.

Fisher, G., 2012, ‘Effectuation, causation, and bricolage: A behavioral comparison of

emerging theories in entrepreneurship research.’ Entrepreneurship theory and practice,
vol.36, no.5, pp.1019-1051.

Man, T. W., Lau, T., & Chan, K. F. (2002). The competitiveness of small and medium
enterprises: a conceptualization with focus on entrepreneurial competencies. Journal of
Business Venturing, 17(2), 123-142.

Man, W. Y. T. (2001). Entrepreneurial competencies and the performance of small and

medium enterprises in the

Mclelland, D.C., "The Achieving Society", D.Van Norstrand Co. Inc, New York, 1961
Hong Kong services sector (Doctoral dissertation, The Hong Kong Polytechnic
University).

RM Hodgetts, DF Kuratko - 2001 - pdfs.semanticscholar.org

Smith, W. & Chimucheka, T., 2014, ‘Entrepreneurship, economic growth and
entrepreneurship theories.’ Mediterranean Journal of Social Sciences,vol. 5 no.4, p.160.