Chapter 3.

The Characteristics of an Entrepreneur

1. Entrepreneur Defined
2. Characteristics of Entrepreneurs
This chapter provides information on the characteristics and explains each traits of 3. Choosing the Best Decision
an entrepreneur. In addition, this chapter discusses the different concepts or definitions of 4. Concept of the Filipino Entrepreneur
entrepreneur and the qualities of a successful entrepreneurship. 5. Determinants of Successful Entrepreneurship

There are several

Introduction D – Content Focus definitions or
meanings of
Entrepreneurs are certainly not supermen. Neither do they perform miracles. They entrepreneur.
are just human beings. However, they are different from many of us (Fajardo, 2008).

An entrepreneur possessed several positive characteristics that are responsible for

their business success. Of these characteristics, few only have these qualities. Most of us have
no interest in putting a business, sometimes shy to do business. Some of us prefer to become
an employee, doing jobs that do not require great risks like bankruptcy.

Being optimistic and positive thinkers, made entrepreneurs great difference between
success and failure. Being a positive thinker produces favorable outcomes in business. Being
hardworking and opportunity seekers, entrepreneurs acquire more profits. In this process,
businesspersons or entrepreneur creates better goods and services for the consumer. Through
their innovations, they contribute to the improvement of the standard of living. Thus, help
economy and society as well.

B – Desired Learning Outcomes (DLOs)

Entrepreneur Defined
At the end of the unit, the students must have:
1. Cantillon defines an entrepreneur as one who bears uncertainty, buys labor and
1. Explained the characteristics of the entrepreneur. materials, and sells products at uncertain prices.
2. Discussed what best decisions as factors of becoming a successful one. 2. In French concept, is an adventurer, undertaker, and projector.
3. Schumpeter said an entrepreneur is an innovator.
C. Topics 4. Peter Drucker, says that entrepreneur always searches for change, responds to it and
exploits it as an opportunity.

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 5. Say, an economist, explains that an entrepreneur is one who shifts economic
resources from an area of lower productivity to an area of higher productivity and
greater yield.
6. The American Heritage Dictionary defines an entrepreneur as a person who
organizes, operates, and assumes the risk for business ventures.
7. Geoffrey Meredith, author of ‘The Practice of Entrepreneurship,’ entrepreneurs are
people who have the ability to see and evaluate business opportunities, to gather the
necessary resources and to take advantage of them, and to initiate appropriate action
to ensure success.
Characteristics of Entrepreneurs
2.
According to Fajardo (2008), characteristics are distinguishing traits or qualities,
like honesty, courage, integrity or punctuality. Entrepreneurs have many favorable
interdependent characteristics that make them successful and extraordinary persons. However,
3.
their business success depends on realistic goals and hardwork. Usually, goals are based on
the abilities, interests and resources of individuals.
Here are the most important characteristics of entrepreneurs:
1. Reasonable risk-takers. Entrepreneurs enjoy challenges. However, they are careful
and calculating. A risk situation exists when results are not certain. Either a success
or failure. In business, it is a profit or loss. Without the will to explore the unknown,
one cannot discover something unique. Moreover, this uniqueness might make all the
difference.
2
As an entrepreneur, making decision is not an easy task especially when investing
money to a business that is unknown or something new. But as an entrepreneurs,
decision making must have a prepared solution for the outcomes. They gather
complete data on the situation they are about to take, analyze the data, and decision
making come after. Based on the data gathered, an entrepreneur is not afraid to make
difficult decisions.
In view of risk taking abilities of the entrepreneurs, they make things happen rather
than let them happen.
Self – Confident. Entrepreneurs have strong faith in their abilities. They believe they
can be the best in their field. They do not accept thins as they are, because they
believe, they can do things better.
Confidence is one of the key characteristics of an entrepreneur. This one goes hand
in hand with passion. True entrepreneurs believe that they have the ability to bring
their product to market. Sometimes this means trying a new approach if the first one
does not work, as well as having the ability to overcome the obstacles that will
inevitably come your way.
They always think of success. Such deep faith drives them to work hard with
enthusiasm and perseverance to reach their goals. As the Bible verse said, “if ye
have faith as a grain of mustard… nothing shall be impossible unto you.’
Hardworking. Successful people always attribute their success to hardwork.
Thomas Edison said that success is 99 percent perspiration and 1 percent inspiration.
This implies that achieving success comes with working far beyond 8-hour schedule.
It is very rare to see lazy people achieve success their own effort and resources. On
the other hand, success smiles on hardworking people. Henry Sy, the known business
tycoon, owner of SM Chain of Malls, BDO, and many others is just a boy who sell
rags in his young age. There are many others like Mr. Sy. They started with
practically nothing-except hardwork and determination-and now they are rich.
 Entrepreneurs, although they are hardworking, enjoy challenges and difficult tasks,  Purpose and vision
and they love their work. Thus, being hardworking is not really a sacrifice. It  Courage
becomes joy. In fact, people who are always busy forget their worries or problems  Conviction
 Enthusiasm
4. Innovative. Entrepreneurs are creative. They do things in new and different ways.  Integrity
They love to explore the unknown, and to blaze new paths of progress. For Example,  Tact
they create products orr services, new methods of production, new markets, and new
 Hardwork
sources of raw materials.
Leaders treat their fellowmen like human beings. They respect human dignity, and
Innovations are introduced for the benefit both the economy and society. Changes
are aware of other human needs like belongingness, security, fulfillment and love.
are made in response to the needs of the people (consumer).
Entrepreneurs do not exploit their workers or employees. Instead promote the
welfare of their employees.
For instance, the high cost of production serve as an opportunity for the
entrepreneurs to introduce a technology that can reduce costs of production. Much
In our country, the Labor Code of the Philippines (Labor Code) is the general labor
better, they should introduce an innovation, which creates jobless masses. According
law that regulates employment relationships in the Philippines. It also applies to
to the legendary Mohandas Gandhi, the progress of the country depends not on mass
foreign nationals working in the Philippines. Employment status, recruitment,
production, but on the production of the masses.
restrictions of managers and directors, restrictions on working, health benefits and
other benefits were stated to ensure that both parties were not aggrieved.
Innovations have provided us the products and services of modern civilization. We
have wonder drugs, LED Television, touch screen laptop computers, iPhones,
6. Positive thinkers. Entrepreneurs think of success and bright sides. Dr. Charles
wireless appliances, automatic cars, airplanes, hi-tech gadgets like phone tabs, and
Flory, a noted American psychologist, said that wealth does not always comes to the
many other innovations that creative business persons introduce that made people
most intelligent of to the most ambitious individuals, but tot those individuals who
life easy and on the go. Ready to eat foods, and instants foods were developed to
think money.
keep the fast changing life environment. However, the negative side of these
innovations have given us pollution and diseases.
Positive thinking can make you a better problem-solver, improves decision –making,
and builds resilience (business.com). Barbara Fredrickson, a psychology professor
Entrepreneur therefore should not only innovate for profit, but also ensure the
who has written extensively about positivity, found that those who think positive
protection of our environment.
thoughts have a greater capacity to take on board new information. This then
improves a person's perspective and ability to "connect the dots," enabling them to
5. Leadership. Entrepreneurs are leaders by the very nature of their functions. They are
tackle any problems and obstacles that may arise.
people who are task-oriented. They are effective planners, organizers and
implementors, also achievers.
Individuals who always think of failures and other negative thoughts get exactly
what they think. Their failure consciousness or defeatist attitude gives them failure
Here are the essential leadership qualities:
after failure. The poor become poorer because they think of poverty. While the rich
 Selfless dedication become richer because they think of wealth.

3

7. Decision-makers. Entrepreneurs makes decisions. They cannot avoid this. Being
creative or innovative, they always make decision on how to improve their product,
how to create new markets, how to increase consumers’ satisfaction, or how to
maximize profits. The success of their business depends on their ability to make the
right decisions.
Decision-making has six distinct phases:
1. Identifying the problem
2. Gathering the data about the problem
3. Analyzing the data
4. Formulating alternative solution
5. Selecting the best solution
6. Implementing the solution/decision
The aforementioned phases of decision-making is a method of decision-making.
However, implementation of the decision-making is a different matter. It requires leadership,
which involves skills in dealing with people.
In fact, there are many unschooled entrepreneurs. Yet they are successful. They do
not know anything about the scientific method of decision-making or modern management
strategies, such as PERT-CPM, forecasting methods, break-even pint analysis, or linear
programming. They just rely on experiences, ideas or hunches. They are not afraid to make
decision because of their risk-taking nature and self-confidence.
CHOOSING THE BEST SOLUTION
In entrepreneurship, the problem has to be identified and defined. Then gather the
data relevant to the problem. Organize and analyze the data to be able to come up with
alternative solutions. The next step is to determine the best solution. Naturally, the best
solution is measured in terms of profitability. However, is the solution implementable?
In the final analyses, it is the implementation of the solution that counts. A best
solution which cannot be put into practice is not a solution. Peter Drucker, a renowned
economist and management consultant, mentions four criteria of choosing the best solution.
1. Presence of Risk
4
2. Economy of effort
3. Time factor
4. Availability of resources
An ideal solution is one that does not create another problem, and it is most
economical in term of time, labor and money. But of course, the final determinant is the
availability of resources. For instance, are there competent employees, adequate funds,
necessary materials and facilities to implement the decision or solutions?
IMPLEMENTING DECISIONS
Entrepreneurs are generally careful. They implement their decision on a trial basis or
limited scale. This is to test the feasibility or profitability of their decisions. If they happen to
be right in their decision, they implement their business projects in full-scale. The idea is that
if they were wrong in their decisions, their losses have been minimized.
However, the problems of implementing a decision can be eliminated or minimized
if the decision has been the product of group action. As a democratic process, the
beneficiaries, the affected ones and those concerned in the implementation should be involved
in decision-making process. In community development, the implementors and beneficiaries
of the project must be involved from planning to the implementation of the project.
Japan has many successful entrepreneurs, because it considers employees the most
important resource of business. Employees are involved in planning, decision-making and
implementation. Top management allows them to participate actively-within their areas of
competence – in the vital aspects of the business. Through this approach, it is much easier to
implement programs or projects. This is planning from below or participative management. A
former president of a poor country said, “Planning from the top is planning for the top.’
Obviously, such kind of planning is not only undemocratic, but also ignores the right and
capabilities of people.
CONCEPT OF THE PILIPINO ENTREPRENEUR
The Development Bank of the Philippines defines the qualities of an entrepreneur:
1. Self – Reliant. An Entrepreneur counts mainly on his own effort, and succeeds
mainly by doing a good job. HE relies mainly on his own merit and work. His self-
reliance is founded on hard work
2. Risk – taker. He rises to a challenge and transfers problems into opportunities. His
daring is built on his competence that is marked by openness to new ideas, new skills
and new developments. Despite his setbacks and mistakes, he is willing to start all
over again.
3. Industrious. He has a strong sense of pride in the workmanship of his product. He is
quality conscious in all the components of his business. He is also precise in
counting costs and in ensuring the value of money for his product or service.
4. Humble. The true entrepreneur has the humility and single-mindedness of purpose.
Where there is a chance to earn, no matter how lowly the task, he is at work
patiently, unmindful of his social status. To him rolling up his sleeves, getting his
hand dirty is nothing to be ashamed of. Patience is hid badge of security. Humility is
the quality that enables him to build a business from resources of opportunities,
simple needs and humble beginnings.
5. Helpful. He learns how to work with others from different fields, conscious that with
their help, effectiveness can be multiplied. He think of others, especially those
working for him, and of the opportunities for advancement, he can provide for them.
Through appropriate words and works, he shows that he truly cares for their personal
welfare and development,
6. Creative. He has a sense of perseverance and a spirit of initiative. Never satisfied
with the things as they are, he continues to improve, trying new and better ways of
doing things. In addition, when difficulties, frustration and failures come, he is never
discouraged. Often, out of these, come something new-another success, another
problem solved, another opportunity opened, another “first.
7. Happy. The joy of this entrepreneur lies in the satisfaction of a customer, whom he
puts first over everybody else. He therefore attend to the real needs of his customers
with dispatch, efficiency, and graciousness. A service-oriented person, he is a happy
man for he has discovered that the joy of giving is its own reward.
5
Determinants of Successful Entrepreneurship
Business enterprise failed due to poor management. Being industrious is not enough.
Efficient management counts most in business. The entrepreneur must possess the following
managerial skills:
1. Ability to conceptualize and plan- An entrepreneur must view all the aspects of the
business, such as product, price, cost, inventory, etc., in a related and coordinated
manner. He ability to foresee the future problems of his business is an excellent
asset.
2. Ability to manage others – Good management skills is important for the
entrepreneur. As business grows, more people are needed. Good human relations
and communications are very important for the entrepreneur. By letting others
achieve the objectives of the enterprise, the entrepreneur has more time for
conceptualizing the planning.
3. Ability to manage time and to learn –The entrepreneur is a generalist. Especially
when the business is small, the owners does everything: clerk, salesperson and
manager. He/she should acquire basic training in small business management and
specialized course in accounting, finance, marketing and personnel relations. He/she
can also do them by reading, attending seminars, online classes, or by enrolling in
the college.
4. Ability to adapt and change – As an entrepreneur, you are flexible to any change.
Be ready to adapt the new or modern practices in business (if afford). An
entrepreneur should be innovative, creative, quickly respond to changes for
comparative advantage.
Summary
1. The word entrepreneur have several definitions. However, common terms show that
an entrepreneur is a risk-taker, innovator, adventurer, searcher of change, and
exploiter of opportunities.
 2. The most important characteristics of entrepreneurs are the following: reasonable I. Analyzing the data
risk – takers, self-confident, hardworking, innovative leader, positive thinkers, and II. Formulating alternative solution
decision-makers. III. Gathering the data about the problem
3. The decision-making process includes identification of the problem, gathering of IV. Implementing the solution/decision
data, analysis of data, formulation of alternative solutions, selection of the best V. Identifying the problem
solution, and implementation of the solution. VI. Selecting the best solution
4. Drucker enumerated the four criteria in choosing the best solution; presence of risk,
economy of efforts, time factor, and availability of resources. a. I,II, III, IV, V, VI
5. Entrepreneurs implements their decisions on a trial basis or on a limited scale to test b. V, III, I, II, VI, IV
feasibility of their business ventures. This is to avoid huge losses in case of failure. c. IV, III, I, II, V, VI
6. The DBP issued a list of the qualities of Filipino entrepreneur such as, self- reliance, d. VI, III, I, II, V, IV
industry, humility, helpfulness, and being creative and happy. e. IV, I, III, II, V, VI
7. The determinants of successful entrepreneurship are 1) ability to conceptualize and
plan, 2) ability to manage others, 3) ability to manage time and learn, and 4) ability ________4. A Filipino entrepreneur is known to have a quality of __________ if he learns
to adapt to change how to work with others from different fields, knowing that together with them,
workloads can be done effectively and harmoniously.
E – Self-Check/Assessment
a. Creative
Instructions: Fill the blank the letter of your answer before the number. b. Happy
c. Humble
________1. He defined entrepreneur who always look for change, responds to it and exploit it d. Helpful
as an opportunity. e. Industrious
a. Say
_______5. An American Psychologist stated that wealth does not always come to the most
b. Drucker
intelligent or to the most ambitious individuals, but those individuals who think money.
c. Meredeth
a. Peter Drucker
d. Cantillon
b. Charles Flory
e. Schumpeter
c. Geoffrey Meredith
d. Mohandas Gandhi
________2. If you enjoy challenges, then you are.
e. Henry Sy
a. Self-confident
b. Risk-taker
_______6. The key concept of Entrepreneurship is innovation. This means that creating new
c. Hardworking
products or services, new methods of production, new markets, and new sources of raw
d. Innovative
materials blaze to new paths of progress. However, these innovations may result to
e. Positive-thinker
_______________________________.
a. Growth in economy
________3. Arrange the decision-making phases accordingly. Select the correct answer.

6
 b. Open doors for opportunities a. Autocratic and manipulative
c. Decrease the rate of inflation b. Courageous
d. Urbanization of non- agricultural land c. Hardworking
e. Pollution and diseases d. Tactful
e. With purpose and Vision
_______7. Entrepreneurs Implement decisions carefully to test feasibility or profitability of
their business ventures by…. F – Self-Reflect

a. Forecasting 1. What makes a person becomes an entrepreneur? (10 points)

b. Case study analysis ____________________________________________________________________
c. Trial basis or limited scale ____________________________________________________________________
d. Comparative analysis
____________________________________________________________________
e. SWOT Analysis
____________________________________________________________________
______8. Entrepreneurs has several definitions but some common terms described by Fajardo
____________________________________________________________________
that an entrepreneur are EXCEPT
____________________________________________________________________
a. Risk-taker
____________________________________________________________________
b. Innovator
c. Decision-makers ____________________________________________________________________
d. Adventurer
e. Opportunity-seeker
2. Do you think if a person is a businessman/businesswoman, they are already a
f. Catalyst of change
successful in this field? (Yes or No, and why?) (10 points)
_____9. DBP listed the Filipino entrepreneur qualities EXCEPT ____________________________________________________________________

a. Creative ____________________________________________________________________
b. Humble ____________________________________________________________________
c. Helpful ____________________________________________________________________
d. Happy
____________________________________________________________________
e. Industrious
f. Resourceful ____________________________________________________________________
g. Self-reliant

_____10. Entrepreneurs are leaders by nature in their functions. The following are the
essential qualities of being a leader EXCEPT Rubrics for Essay Question

7
 Criteria for Written Exercises (As Agreed by the whole class) Prepared by:

Content (Correctness and Appropriateness of Ideas Presented) – 10

point MARY GRACE ARCENAL- APOLONA
Convention (Linguistic Appropriateness – Grammar, Phonology, Semantics) Course Instructor
– 5 point
Quality (Neatness, refinement and skillfulness) – 5 points
Total = 10

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https://www.investopedia.com/articles/economics/08/economic-
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%20hatred%20of%20mercantilism.

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Fajardo, Feliciano. 2008, Third Edition. Entrepreneurship. Philippine Copyright (1994).

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