il

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ENTREPRENEURSHIP
I

STUDYAND PRAGTIGE

Paz H. Diaz
Herminia R. Fajardo

,ffi

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{s€norr}

Small Enterprises Research and Development Foundation (SERDEF)

i
It

Project Team

Paz H. Diaz, Ph.D. Co-Author

Herminia R. Fajardo, Ph.D Co- Author
Serenidad F. Lavador Content Editor
Editha A. Reyes Content Editor
lVlyrna R. Co Editor
Celia R. Pascual Editor
Lance Uriel F. Pormarejo Research Assistant
Teresita V. Lopez Research Assistant
Elizabeth S. Veridiano Research Assistant
Cassandra R. Teodosio Ad m i n istrative Assista nt

Dedicated to all students and practitioners of entrepreneurship

who have the potential to create a better future for themselves,
their families, their communities, and the country.

Copyright O2015

All rights reserved. No part of this book may be reproduced in any form or by
any means without written permission from the publisher.

lsBN 978-971-8838-07-5

Published by:

Small Enterprises Research and Development Foundation (SERDEF)

 Foreword tttttt'l)tt'tu,ursltist Study and Practice (ESP) is premised on the
,,'rrtr,rl rolr. the entrepreneur plays in running and growing the
!,ir'.rnr,,,r. IVlore than capital resources, more than a supportive
Entrepreneurship is often mentioned in the same breath as
lr,r .rl r lirrr.tte, more than a receptive market, more than all
being in business, and as long as one runs his own company, , lrr.r l,rr tors said to make business initiatives thrive and grow,
't
that person is often referred to as an entrepreneur. However; inir.rrr,rint.tin it is the entrepreneur's personality and skills that
since its inception in L976, the small Enterprises Research and
rrr, rl..r' I lrt. difference between a flourishing and a failed business.
Development Foundation (SERDEF) has maintained a clear
distinction between entrepreneurship and being in business.
i,,1'r,tlrr.r with previous publication, Windows to
SERDEF's
tutn'l)t(!neurship: A Teoching Guide, ESP hopes to orient
What distinguishes the entrepreneur from the ordinary rir, )r{' young minds to entrepreneurship as a career, every bit
businessman?
,r'. lrrcstigious, fulfilling and challenging as the practice of law,
r r ri .r rr ne, engineering, education, the arts, a nd other traditional
I i
Together with its partner, the university of the philippines
; ,r , r lr '.,tionS.
lnstitute for small-scale lndustries (Up lssl), sERDEF has been
committed to nurturing entrepreneurs in the philippine society.
lndeed, entrepreneurs are the hope for a bright future.
I'At ERNO V. VILORIA, Ph.D.
l'r r',,irlent
SERDEF maintains that entrepreneurs are more creative,
',rr r,rll [-nterprises Research and
innovative, and revolutionary; they make things happen
I ),'vr,lopment Foundation
and find ways to contribute to economic growth. For the
ordinary businessman, his business gives him a living. For
the entrepreneur; his drive gives life to the business. The
ordinary businessman tends to stay safe and be profit-oriented.
The entrepreneur takes calculated risks and makes himself
accountable to his employees, customers, and publics.

The entrepreneur, at least, at the start, is all things to the

enterprise - from business planner to general manager to
financier to producer to seller. During enterprise growth, he is
reluctant to give up some of these responsibilities, but delegate
he must when the business reaches that stage at which he has
to professionalize.

4 I ENTREPRENEURSHIP STUDYAND PRACTICE

FOREWORDI s
 Gontents ACRONYMS
Foreword
AFMP Agri Fishery and lVlicroFinance Program
ACRONYMS 7
Azt Access to Finance
PART l: THE CONCEPT OF ENTREpRENEURSHTp: Meaning, lmportance, A2M Access to [Vlarkets
Competencies, Roles and Functions ARC Agrarian Reform Communities
LL
BAI Bureau of Animal lndustry
Chapter L: The Meaning oI Entrepreneurship 13
BDO Banco de Oro
Chapter 2: Elements of Entrepreneurship ............,...... 23 BDS Business Development Services

Chapter 3: Entrepreneurship and Economic Development ..,,.......... 29 BE Business Environment

BFAR Bureau of Fisheries and Aquatic Resources
Chapter 4: Ethics in Entrepreneurship ......... ............,,. 35 BMBE Barangay Micro Business Enterprise
Chapter 5t Types of Entrepreneurs .......,.... ................, 43 BMSMED Bureau of Micro, Small and Medium
Enterprise Development
Chapter 5: Roles and Responsibitities oI the Entrepreneur .,,...,,..... 65
CARD Center for Agriculture and Rural Development
chapter 7; chqracteristics ond competencies of the Entrepreneur ......... 7r
CHED Commission on Higher Education
Chapter 8: Rewards and Risks Faced by the Entrepreneur ,............. g5 DA Department of Agriculture
DOLE BRW Department of Labor and Employment Bureau
Chapter 9: Encouraging Entrepreneurship in the philippines .....,.... g7
of Rural Workers
PART ll: THE PRACTICE OF ENTREPRENEURSHIp: tdentifying, DOST Department of Science and Technology
Choosing, Planning and Starting the Enterprise DOST BAC Department of Science and Technology
L2L
Business Assistance Center
Chapter LO: Enterprise Entry Strotegies ............, ,...... 121.
DOST DEC Department of Science and Technology
Chapter LL Environmental qnd Economic Trends Afiecting Display and Exhibit Center
DOST DTTC Department of Science and Technology
Entrepreneurship .............. ..................... 127
Technology Trai ni ng Center
Chapter t2: Entrepreneuriql ldeos qnd Opportunities 133 DOST IBED Department of Science and Technology
Chapter L3: Enterprise Stdrt-up lnvention-Based Enterprise Development Program
DOST IBID Department of Science and Technology
Chapter L4: Survivol dnd Growth of the Enterprise ..,....,.,.......,..... Ig7
I ndustry-Based I nvestment Development Progra m
Chapter L5: Closing the Business Enterprise, 207 DOST IDD Department of Science and Technology
lnvestment Development Division

INDEX 22L

ACRONYMSI 7
 DOST IPR Department of Science and Technology NtDC National Livelihood Development Corporation
lntellectual Property Rights Program N Pow Need for Power
DOST SET-UP Department of Science and Technology OK.MF2 Opportunity Ka-Partner Microfinance 2 Program
Sma ll Enterprise Technology Upgrading Program P&E Productivity and Efficiency
DOST TIPD Department of Science and Technology PBSP Philippine Business for Social Progress
Tech nology I nformation and Promotion PCE Philippine Center for Entrepreneurship
DTI Department of Trade and lndustry PCFC Peoples Credit and Finance Corporation
eBNRS Enhanced Business Name Registration System PhilExrM Philippine Export-lmport Credit Agency
EPPA Easy Pondong Pang Asenso PMAP People Management Association of the Philippines
EVFI Entrepinoy Volunteers Foundation, lnc. PNB Philippine National Bank
FIDA Fiber Development Authority R2R Rags to Riches, lnc.
FPA Fertilizer and Pesticide Authority RA Republic Act
GFB GSIS Family Bank RCBC Rizal Commercial Banking Corporation
GFI Government Financing lnstitutions ROt Return on lnvestment
GOCC Government Owned and Controlled Corporation sBc Small Business Corporation
GSrS Government Service I nsurance System SBL Small Business Loan
FSSI Foundation for a Sustainable Society SEA.K Self-Employment Assistance- Ka u nlaran Program
IPO lntellectual Property Offi ce SERDEF Small Enterprises Research and Development
lsP lnvent School Program Foundation
LCAP Livelihood Credit Assistance Program SK Sangguniang Kabataan
LGU Local Government Units SME Small and Medium Enterprise
SRA Sugar Regu latory Ad m in istration ST-DtP Short-Term-Direct Lend ing Program
LBP Land Bank of the Philippines TESDA Technical Education and Skills Development
LDPO Livelihood Development Program for Authority
Overseas Filipino Workers TIN Tax ldentifi cation N um ber

MEEP Micro Finance Eco-Enterprise Program TSPI Tulay sa Pag-unlad, lnc.

MFI Micro Finance lnstitutions UNU United Nations University
Micro LEAP Micro Lending Through Small Micro Finance Providers UNU WIDER United Nations University World lnstitute for
MLT.DLP Medium and Long-Term-Direct Lending Program Development Economics Research
MSMEDC lVlicro, Small and Medium Enterprise uP rssr University of the Philippines lnstitute for
Development Council Small-Scale lndustries
NCR National Capital Region VAT Value Added Tax
NICE National lnvention Contest and Exhibits YES Young Entrepreneurs Society

I II\l llir I'rit I'il lltt';l ill,r;il jt)YANI) t,t(Ao|CI ACRONYTVSI 9

 THE GONGEPT OF
ENTREPRENEURSHIP:
Meaning, lmportance, Gompetencies,
Rolesn and Functions

THE CONCEPT OF ENTREPRENEURSHIP | 11

 Ghapter 1
'l'he Meaning of Entrepreneurship

1-lrr, r lrapter provides an overview of entrepreneurship as a

I
L,,,',,rn endeavor that is as old as humanity. lt surveys how
rlr, tr,trl "entrepreneurship" came to be used as an overall
' ',;rrr,',sion that could be understood worldwide to indicate
r l,, tn ocess of giving and receiving goods, or exchanging goods

, rrlr.r in the form of barter or through an accepted currency

, i , r( ,n1,, the people exchanging those goods.

llrr, lollowing topics are covered in this chapter:

Early exchange of goods

Early usage of the term "entrepreneurship"
2Oth-centu ry a uthors explai n "entrepreneurship"

t .rrly Exchange of Goods

llrc exchange of goods among people has been practiced for a

h time. Historical records show that human beings depended on

rrrg
r,,rch other in order to survive. Hunters exchanged their catch with
t lre root crops grown by farmers. Natural goods like salt and spices

\^/ere common items of exchange. ln order to survive, people had

trr exchange with one another whatever they had. Whenever they
lrird more than enough for their family, they offered these goods to
others and in turn received some other goods that they needed.

Exchanging goods with other goods is called bartering. Without

these exchanges, people had to do everything by themselves,

THE MEANING OF ENTREPRENEURSHIP I 13

 whiclr was quitc irnpossible. So hunters exchanged with rr, ,n(,y, which the entrepreneur uses to turn more raw materials
farmers, and farmers exchanged with fisher folk, people who
rrrt. lrrrished goods. The value added in the final product
built shelters were paid with goods that were gathered by those
, r( r(,,r,,(,s its worth, thus the entrepreneur gets back more than
who needed shelters. Bartering became the norm for acquiring r i,,. ( )r iliinal sum he spent on producing the goods or services.
what people needed to survive.
tlrr. il,,(' of the word "entrepreneurship" became popular among
This kind of exchange, in anticipation of the needs of other rtr. r,,11l! French philosophers and economists who discussed the
members of the community became widespread as early as
rrlrr,rrt)rrehon of this "give and take" activity. ln the thirteenth
10,000 B.c. Towns began to be formed and peopre settred
as ', r rt ru y, the word "entrepreneur" emerged. ltwas a combination of
farmers, producers, consumers, and later; as traders. As early r,arr r I lcnch words , entre, which rneans "in-between" and prendre,
as
then, there were people who started to gather goods that they
lr is a verb meaning, "to take." Literally, when the two terms
,!rr,
judged others would need at certain periods in
the year. ,,, rr. t.offlbihed, the new word meant "to take in-between." Other
lr rrr',l,rtions say that entre means "under" and prendre means to
Before long, money was invented because people who traded r ,l ,., which put together is "to undertake."
their ox with a sack of wheat were not sure they were getting
the worth of their ox for the wheat they acquired. with money
I lr,. Iirench word entreprise first appeared in the French
as the means for trade, peopre found it easier to acquire
what ,1,, rronary Dictionnoire Universel de Commerce, compiled by
they needed in the amounts that they wanted or needed. They rrr rlues Savary des Bruslons and published in L773. Entreprise
kept the goods, especiaily the imperishabre ones, and offered
r rlrc p0St participle of entreprendre in French. Entreprise has
these for sale to others whenever these goods were needed.
l,,.r,rr translated to "enterprise" in English.
some other people acquired more wheat and baked it into
bread, which was also bought by others who wanted ready
llro French economist Richard Cantillon, who wrote his Essoi
to eat food instead of having to bake their own bread. others '.trr la Nature du Commerce en Gendrol (Essay on the Noture of
gathered flax, whose stems they turned into cloth,
which in It ttrle in General) in l-755, is regarded as the first to use the word
turn was sold for use by community members. "('nt-repreneur." Cantillon defined the entrepreneur as a person
rrulro pays a certain price for a product and resells it at a given price.
Early Usage of the Term ,,Entrepreneurship,,
I L, is also a risk-taker "making decisions about obtaining and using

llrc resources while consequently admitting the risk of enterprise."

"Entrepreneurship" is the term we use today to exprain
this tlt' adds: "Entrepreneurs are non-fixed income earners who pay
activity of gathering, producing, and exchanging goods and l,nowr"r costs of production but earn uncertain incomes." (1755)
services, with the advantage of earning a riving for oneserf.
The
person involved in this process is called the "entrepreneur,,,
Another economist, Jean-Baptiste Say wrote Traitd d'Economie
someone who herps people to satisfy their needs in return
for Politique or A Trestise on Political Economy: The Production,

14 I ENTREPRENEURSHIP STUDYAND PRACTICE

THE MEANING OF ENTREPRENEURSHIP I 15
 Distribution, ond Consumption of Weolth in 1"g03, where he also
used the term "entrepreneur." ln the original French book, Say
(1-803) attributed to the entrepreneur a combination of moral
qualities seldom found together in one person: good judgment,
perseverance, world wisdom, not to mention business acumen.
lrr ,'xpl,rinirrg the term entrepreneurship, Schumpeter gave
r lr. tcr rn two sets of meanings.
',, lrurn[)eter's first definition of entrepreneurship covered
rlr,,lrrrrcfions and activities related to innovation. For him,
r lrr. r.nl repreneur is someone who adds new features to an

ln l-836, Charles Robert prinsep translated Say,s book on ,..r',trng technology in order to produce a new commodity
economics, Traitd d'Economie politique, and published it in ,,r ro prodUCe an old commodity by using new technology
, rr ',()rneohe who sells existing commodities to new buyers
English. ln his translation, prinsep preferred to use the term
rmlro rnzl7 be hearing of the product for the first time. Thus,
"adventurer" instead of "entrepreneur,, because he could
not find a suitable English term to mean ,,entrepreneur.,, To
lrrr Schumpeter, an entrepreneur breaks with the old
rr.rrlition and finds new or novel ways to produce and sell
Prinsep, "adventurer" was a term reminiscent of investors who
I r r', prod ucts.
had "adventured" or lent money to a business undertaking.
Therefore, he used the term "adventurer,, instead of
He distinguished between the inventor's inventions and
"entrepreneur;" which in those days was literally translated to
the entrepreneur's innovations. Schumpeter pointed out
"u nderta ker."
that entrepreneurs innovate not just by figuring out how
to use inventions, but also by introducing new means of
Prinsep said that the adventurer himself provides the necessary
production, new products, and new forms of organization.
funds to start the enterprise. "Not that he must be already rich;
These innovations, he argued, take just as much skill and
for he may work upon borrowed capital; but he must at least
daring as does the process of invention.
be solvent, and have the reputation of intelligence, prudence,
probity, and regularity; and must be able, by the nature of his
Schumpeter also thought that the entrepreneur might be
connections, to procure the loan of capital he may happen
a person who is not the owner of a capital. For him, the
himself not to possess." (1836)
entrepreneur is the innovator, who may borrow capitalfrom
banks or other sources but who thinks of the whole concept
20th-Centu ry Authors Expla in',E ntrepreneu rsh ip,,
of production or trade, using borrowed capital, which he
promises to repay later. Thus, banks and other lenders
The following 20th century authors and researchers in the field
were, in Schumpeter's idea, essential to the innovative side
of entrepreneurship were selected for this book because of
of entrepreneurship.
their prominence and thorough studies in the field.

For Schumpeter then, the entrepreneur is the only one

Joseph AIois Schumpeter. ln the early 1930s, Joseph
who carries out new combinations. He adds that when a
Schumpeter discussed the concept of entrepreneurship.
person organizes and formalizes his company, he may lose

16 I ENTREPRENEURSHIP STUDY AND PRACTICE

THE MEANING OF ENTREPRENEURSHIP I 17
 his "cntrepreneur" functlon and become a leader; manager;
or head of a company. There is no guarantee that the
entrepreneur will remain one in the future. He may have
to become a manager in the full sense of the word, no
longer venturing into new territories but making his current
business grow as owner of the company.
Late6 in the 1"940s, Schumpeter began to move awayfrom his
earlier theory of entrepreneurship. He introduced his new
theory in his book, Capitalism, Socialism, ond Democrocy
(1942), where his emphasis was that the entrepreneur
is
primarily less "individualistic,,, saying explicitly that the
entrepreneur does not have to be one person (which is
a radical departure from his earlier recognition of the
entrepreneur as being an outstanding individualist). The
evolution of Schumpeter's entrepreneurship theory was
caused by his direct personal observation of American
economic life. Thus, in Copitolism, Sociolism, ond Democrocy,
Schumpeter wrote:
The opening up of new markets, foreign or
domestic, and the organizational development
from the craft shop to such concerns as U.S.
Steel illustrate the same process of industrial
mutation-if I may use that biological term-
that incessantly revolutionizes the economic
structure from within, incessantly destroying
the old one, incessantly creating a new one.
This process of creative destruction is the
essential fact about capitalism. (1942)
For Schumpeter, at this stage, an entrepreneur is someone
who replaces in whole or in part inferior innovations across
markets and industries, or who enthusiastically creates new
18 I ENTREPRENEURSHIP STUDY AND PRACTICE
;,r , rrllrr ls and business models. This creative destruction
1,,r,',lr,rdowed not only the growth of new industries but
.rl,,,r tlrc fresh combinations of existing ones and various
rr,.w ittpUtS.
u.rvid Clarence McCIelland. ln 1961-, David McClelland
rr,,,carche d on the three highest needs of individuals,
wlrich, according to him are the need for achievement, the
rrtcd for power, and the need for affiliation. He found these
rror:ds to be present in varying degrees among individuals,
lrrrt the highest motivating factor he observed among
lr)trepreneurs was the need for achievement.
A person with high need for achievement (N-Ach), also
called an "achievement-motivated" person is a moderate
risk-taker. He seeks attainment of goals that are both
realistic and challenging. This person has a strong need for
feedback to measure his progress. He also has a strong need
for a sense of accomplishment.
McClelland argues that N-Ach people with strong "achievement
motivation" make the best leaders, although there can be
a tendency to be too demanding of others in the belief that
others are all similarly and highly achievement-focused and
results driven, which of course most people are not.
The person with a high need for power (N-Pow) is "authority-
motivated." This person needs to be influential, effective,
and make an impact. There is strong motivation and need
for increasing personal status and prestige.
The need for affiliation (N-Aff), or emotional attachment,
or affection is manifested in a strong need for friendly
THE TVTEANING OF ENTREPRENEURSHIP I 19
 relationships- The person with a high need for affiliation is ( ') rlr.vr',irr1t.r new business model; (3) creating a better or
strongly motivated toward positive interaction with other , lrr.,rlr(,r vcrsion of an existing product; or (4) targeting an
people. , " r',r ilrtl productto newsetsof customers.These opportunity
ri1rr.,, tnJ| overlap. For example, an entrepreneur might
Peter F. Drucker. lnL964, peter F. Drucker said that 'li \/r'.r..1 fiew business model for an innovative product, or
entrepreneurship is the "maximization of opportunities., lr'' rn,rV hnd a new market for an old product.
He implies that effectiveness rather than efficiency is
essential in business. The pertinent question is not how to ,,uit," according
t'r rr to Stevenson, implies a singula6
do things right but how to find the right things to do, and to r, .lr,nlless focus.
concentrate resources and efforts on them.
I lr,yo nd resou rces control
led" i m pl ies overcom i ng resou rce
ln L97 o, Drucker wrote that entrepreneu rsh i p is a bout ta king ,,,rr',traints. At the beginning, the entrepreneur controls
risks. The behavior of the entrepreneur reflects a kind of ,,rrly his human, social, and financial capital. Many keep
person willing to put his career and financial security , ,,pcns€s to a bare minimum while investing only their
on the
line. He takes risks in the name of an idea, spending much rrnrr.i1fld, as necessary, their personal funds. This is often
time as well as capital on an uncertain venture. Drucker said rrlr,rludte to bring a new venture to the point where it
that an entrepreneur searches for change, responds to it Irr'( olr€s self-sustaining and thus, profitable.
and exploits opportunities. rnnovation is a specific tool of
an entrepreneur; hence, an effective entrepreneur converts ',tcvc-nson's definition provides a guidepost for
a source into a resource. , nlr epreneurial action; it points to tactics entrepreneurs can
t,rkc to manage risk and mobilize resources. He put it well
Howard H. stevenson. tn r-983, professor Howard stevenson
'rulron
asked to give advice to aspiring entrepreneurs: "For
of the Harvard Business School said, ,,Entrepreneurship is
the rrrt','pursuing opportunity beyond resources controlled'
pursuit of opportunity without regard to resources currently
,unrs up perfectly what l do day-to-day. You need to be
controlled." Many find this definition hard to understand. ln rrrventive, creative, opportunistic, and persuasive, because
explaining his definition, stevenson said that he focuses on you rarely have enough resources. Embracing this definition
"entrepreneurship as a process.,, Entrepreneurs, according lrclps me in my role."
to him, "see an opportunity, and pursue it; they don,t feel
constrained from pursuing it because they lack resources.
They're used to making do without resources.,,

"Opportunity" implies an offering that is novel in one or

more of four ways: (1) pioneering a truly innovative product;

20 I ENTREPRENEURSHIP STUDY AND PRACTICE

THE MEANING OF ENTREPRENEURSHIP I 21
 Ghaptet 2
Elements of Entrepreneurship
lrr', chapter enumerates the factors or elements of
fI ,.ntr.cpreneurship
as it is practiced in this ena. These elements
i ,,r^/ [he would-be entrepreneur that many facets need to be
rrr,lrr,rl and understood in the realm of entrepreneurship.

e facets include the following:

I I rl"repreneurial spirit
tiisk-ta king and ncertainty
u

r reativity and innovation

t ompetition
lrrdependence

I nlrepreneurial Spirit

lhe entrepreneurial spirit is an inner strength that the entrepreneur

acquires from what surrounds him. lt includes the culture in which
lhe person grows. Some cultures (from small communities to whole
r,ountries) encourage entrepreneurship as a way of life while other
r.ultures do not consider it that important. The strength of one's
rntrepreneurial spirit will indeed depend on the people involved -
the entrepreneur himself and any partners, advisers, employees, or
rven family members - who exhibit a passionate, almost compulsive
desire to succeed.

lhe intangible quality that comes from persons who are fully
cngaged and doing what they want to do is the entrepreneurial

ELEMENTS OF ENTREPRENEURSHIP I 23
spirit. lt is the atmosphere of fun and excitement that is
generated when people work together to create an opportunity
for greater success than is otherwise available. ln other words,
synergy can be achieved where a group of individuals working
together will produce more than the sum of the individual
members' abilities and efforts.
Risk-taking and Uncertainty
Most authors and economists consider risk-taking and
uncertainty as inherent elements of entrepreneurship.
One of earliest studies on risk-taking was done by Frank Knight
(192\), who made a distinction between "risk" (randomness
with knowable probabilities) and "uncertainty"(randomness
with unknowable probabilities).
Risk is measurable statistically, such asthe probability of drawing
a red ball from a jar containing five red balls and five white balls.
Ambiguity is hard to measure statistically, such as the probability
of drawing a red ball from a jar containing five red balls but with
an unknown number of white balls.
True uncertainty came to be known as Knightian Uncertainty,
which is impossible to estimate or predict statistically, such as the
probability of drawing a red ball from a jar whose number of red
balls is unknown as well as the number of other colored balls.
According to Knight (1,92Ll, the acts of entrepreneurship were
often associated with true uncertainty, particularly when
bringing something novel to the world whose market does not
even yet exist. ln addition, even if a market already exists, there
24 | ENTREPRENEURSHil' :;il'r)Y ANI) PRACTTCI
i ,,, tiu,rrantee that a market exists for a particular new player
rr, ,nv lirven category of products or services.
I rrr r '.rrrrlies, howeveL particularly David McClelland'sAchieving
,,, i,'t \/ ( I 961), viewed entrepreneurship as calculated, informed
'i I l.ll\||lg.
Ir rrrr' ,rnd Venkataraman (2000) define entrepreneurial
.,1rp,r i rrrrities as "those situations in which new goods, services,
, , rri,rlcrials, and organizing methods can be introduced and
.,1,1 rl ,r price greater than their cost of production." According
r' , r lrr'n r, cntrepreneurship has two components: "enterprising
i,,r I i, rr Ir r,rls" and "entrepreneurial opportunities." Researchers
t,',,rlrl ,,tudy the nature of the individuals who respond to
ri,, , ,lrportunities when others do not, the opportunities
il,, r r.r'lvcs and the nexus or the progression of events that
r. i'I r, rlre meeting between individuals and opportunities.
r
', .rtrvity and lnnovation
i:,.r,, rr li.;her (7OO7l presented his paper "Creative Minds:
tr, il,lrrrli (,ommunities of Learning for the Creative Age" at the
i ',ii rrrr.to Foruffi in London where he described creativity and
i, r, ',r.11 r( )n very extensively. The basic processes of creative
. ',lrrtrorr, whether of ideas or of species, are, according to
Ii li, r licrrcration, variation or innovation, and uniqueness.
,.' rr.r.rlron is making, forming, or bringing something into
!,. rr1, I ltc generation of ideas, of experiments and innovations,
i *,.( ('ssary part of creative effort. However, generation by
ir , ll rlor's not guarantee creativity.
r rr, ;,r r rr iple of variation or differentiation ensures that
ELEMENTS OF ENTREPRENEURSHIP I 25
 (r(.,ltivity is not mere repetition.
New knowledge or new lnr lr.;rr.trdenc€
cr.;rfions seek variations of what is given.
This is founded on
experimentation, which wiil sometimes
succeed and sometimes
fail. Entrepreneurs must be ready for that.
i, rlly, lltere is the element of independence. The freedom
,,' , t,,.r,rte independently is both a need and a reward for
The principle of uniqueness provides the
rr,, , iltrtlpreneur. Entrepreneurs desire to make their own
erement of surprise. t, , , , ,rr,,, take their own risks, and reap the rewards of
It is expressed in differing revers of originarity. creativity ,

means generating one or more different

rr,,, (,llorts. They need the satisfaction of making their own
or unique expressive ,t, ,,r,ns within the constraints imposed by economic and
responses.
,,rl,, r ('nvironmental factors. Achievement of independence,
q, , ' lr,logical satisfaction, and financial success cap the
creativity and innovativeness enabre the mind
to represent . t, rr rr.rrls that support entrepreneurship in society.
images and ideas of what is not actuaily
present to the senses.
It can refer to the capacity to predict, plan,
and foresee possible
future consequences.

Competition

The element of competition was emphasized

by peter Drucker
(20L1) whose famous words on competition
are ,,Hit ,em where
they ain't," meaning taking the substance of
an invention by
imitating it and creatively improving upon
it in a way that
the original deveroper was not abre to do.
Technicaily, this is
called "perfecting and positioning". This
erement is seen in
rapid market growth where competition
is about serving new
.,r'gments, not
simpry taking the market away from
existing
r, r ; r.titors' The entrepreneu r's a rertness,
r r
fl exibi rity, wir i ngn ess
r
1,r,11 1,,,1 rrrarl<et verdict, and hard
work are required t,er". nn
' rrrr.r,'r'rr.'r ''t;rys ahead of the competition through
specific
rrrrr',\i rrrrrr. '1s71.,1,,,, itnd
substantial and continuing efforts to
I ! I rrr lr..rrlr-r.,lrl1r
;ro,,tliftn.

20 I INllil I,lil i\lt l,ti,.|il,,,t1t, \ lt) t,liA( lt{tl

ELEMENTS OF ENTREPRENEURSHIP I 27
 Ghapter 3

Erutreprenearship and
Economic Development

Ll o* entrepreneurship affects a country and its economy

I I is going to be discussed in this chapter. The role of
entrepreneurship must be spelled out so that it can be
a;tpreciated as a nation building strategy.

Itrrportant points to be discussed are the following

Role of entrepreneurship inthe 2L't century

Role of government in entrepreneurship development

ii, rlr. of Entrepreneurship in the 21't Century

ir rir';rrcneurship continuously plays an increasingly important

r,,lr rn ,r country's economic development.

',' ',,r(lrrrg to research done by the United Nations University

itttltl), r.ountries in the West are becoming more reliant on
rrrrllr.r lirms for specialized knowledge-driven goods and
' r ,/,, ,.', lrecause of their flexibility and creativity. For example,
r, ,, ', I ( ( )nsumption, apparels, and requirements for home

i, tr,rl'r,rrrent are now being better served by small-scale

. rrr,,t)r(.nours. Reliance on big business and mass production
rr r '.t.rrtcd to give way to the entrepreneurial economy in
,,, ,r,.r ..1rr'r ilic areas.

ENTREPRENEIJRSHIP AND ECONOI\4IC DFVI'I0I'I\4I t\.] II

'E
ln emerging countries, innovative entrepreneurship makes
economic growth possible through new resources, technology,
ma rkets, and envi ronmenta ly-friend ly prod uction processes.
I
Donor countries have recognized that in developing countries,
private sector development is more practical and beneficial
than large-scale assistance to governments. Many young people
in these places are motivated to work better at starting and
making small-scale enterprises grow. Youth entrepreneurship
has become a vital strategy among development organizations.
According to UNU, entrepreneurship will contribute to growth
and employment creation in advanced, emerging, and least
developed economies alike. This expectation is supported by
recent findings of historians, economists, and management
scientists. The role of entrepreneurship in economic
development has been the focus of a two-year United Nations
University World lnstitute for Development Economics
Research (UNU-WIDER) project, which resulted in the recent
book Entrepreneurship and Economic Development.
The need for innovative, high-growth entrepreneurship is
emphasized in the book, together with the country's important
role in supporting entrepreneurs in different ways to match the
needs of the enterprises at different stages of development.
The book also shows the need for entrepreneurial solutions to
intricate global challenges such as climate change, migration,
and terrorism.
Two warnings must be sounded, however. The first is that the
role of the state as regulator and overseer is important more
than ever to make sure that undesirable social outcomes
including crime, speculation, corruption, and financial crises
30 I ENTREPRENEURSHIP STUDY AND PRACTICE
rr',rverted and prevented from taking root. During natural
,lr',,r',lr-rs, these crises may easily arise, so the state must be
'
, ,,ly lo help save businesses.
rl,' ,,(.cohd warning is that people's well-being might be
r,' 1,lr,r ted in everyone's struggles to raise social and economic
1'r,,rnrtlr. The measurement of people's well-being is still the
lrrr,rl 1,1161 and the touchstone of a country's progress.
Ir r.lrreneurs' satisfaction over what they are doing should be
Ir
ri , r rrtcome of development so that being an entrepreneur is
,,, ,r l.rced upon people; rather, it is taken as a matter of choice.
It , lrrt,akdown of family solidarity may cause the economy to
, t, , lrn(' in the long run.
I ir , r'ntrepreneurship may push economic development upward
,r rt ,',,l.rte appropriately supports it. Relationship and goodwill in
i r,, l, the community will matter just as much as physical
rrrrily and
,,,, I I 11,111';i6l wgalth.
r I ,
ornbination of production, profit, and savings of
,
. r r .i ,r ('neurs will contribute to the nation's overall economic
,1, r'lr,1rrr)eflt. This means an economy can produce more
, ,,,,,1 . ,rrrd services if the savings of individuals and of investors
, ,
r., r( lo available for the expansion of the nation's capacity to
r.,,,,lrrr {, ntore goods and services. These combined resources
,, ,,,,,()n)ote employment, which will lead to improvement in
r r,, i, rrrr l.rrd of living of the population.
l,' rr tlrc volume of production increases, the potential for
r,' rlr r rrrvcstment expands and this eventually increases the
. , | , ,rny'., r-apacity for growth. The population is given a greater
r,,,,.,' lo .,1v1s61 from the goods and services available forthem.
FNTRFPRENEURSHTP AND ECONON/tC DEVELOPTVIENT | 31
 This can help improve the standard of living, provide more job
opportunities, greater prosperity, and economic growth.
While economic growth has to do with an increase in the
production capacityof the economy (i.e., the capabilityto deliver
more goods and services), economic development signifies an
increase in economic growth that results in the improvement
in people's quality of life, which includes improved access to
education, housing, and other basic infrastructure.
It is desirable that the entrepreneur sets aside savings from the
business that can be reinvested into the business.
Small businesses also serve the requirements of
businesses and can even participate in internationaltrade.
Role of Government in Entrepreneurship Development
The government should create an environment where
entrepreneurship can grow. Access to finance should be made
easier so that most entrepreneurs are helped in raising funds in
the early stages of their business. Access to technorogical, legal,
and socio-psychological support must be made available through
government's assistance and stimulation to help entrepreneurs
that are just starting their businesses.
Policies, laws, regulations, and procedures should be simplified
to ease the way for new entrepreneurs as they go through the
administrative complexities of starting a business. Bureaucratic
delay, otherwise known as red tape, is one of the barriers to
new business creation.
32 J ENTREPRENEURSHIP STUDY AND PRACTICE
I r, ,^i llqr'.u r(,!5(,s need support in their lifecycle phases, especially
;r rlr,' ,l,rrl. Many new businesses fail during their first three
.; ,r tlrr,y therefore need an appropriate support system to
t,, 11, rlr,,rrr in these crucial years. Because of limited resources
;rr,t ,,, l,,.rit'nce, new and small businesses suffer much from
',,,,1,11,.rtr,d compliance procedures and stringent taxation
,i ,t,rr, rrrr,nts, unlike large corporations that employ staff to
!, irr,lir. llrt'se problems for them. Legal requirements for social
,,,, itv,rrrd other benefits forthe self-employed must be easy
r., l, ,ll, ,w ,rrld comply with.
r,, r 1 1, business opportunities have become numerous
r l rl ir t.r l age,
',,,1 i,.rrrcd. Entrepreneurs must adopt new information and
larger ., rrrrrrri(-otion technology to thrive. Web entrepreneurs in the
. ,rr! ontinuously create new digital services and products
r
ir,rr rr.r,rl the lnternet as basic component. They will require
,,;'1,, rr I measures to strengthen their start-up attempts.
r r' ,,,i r( l,rys, entrepreneurs no longer have a choice but to invest
,', ' l 1,rt,rl technologies and embrace the digitalworld. They have
r,, , r.rl nceds of their own that the government must respond
r ,, ,tir,lphic groups that are underrepresented in the
r, r,
. r r';,r t'neurial population are young people (especially
r
rt , rrrrtlereducated), women, the disabled, members of the
,,,,lr1,r,noUS population, and the unemployed. Government
ir ,l ,llrer institutions must open paths to empower them
, , , ,r,,,nrically and socially and leverage their creative and
.,,,,,\/.rlive capacities.
ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT I 38
 Ghaptet 4
Ethics in EntrepreneurshiP

fthics includes the decisions, choices, and behaviors that

L people believe to be worthwhile and important in their lives.
What is important is taken to be what is valuable in one's life.
l"hls includeswhat one regards as right, fair, and good in terms
nf one's actions and interactions with everyone'

llrr', chapt€r encompasses the ethical norms and behaviors

, " lrccted of entrepreneurs which include the following:

ttzloral virtue and good character

tthical challenges
/\pplication of ethical principles and values
l'o,.itive results of ethical practice
l ortiflB ethical standards for the enterprise
',rr1lgested coverage of a code of ethics

tul,,r,rl Virtue and Good Character

i,, r, I r'llcctively, one must possess both moralvirtue and good

r ri ,l.r. These must be developed in a person earlyon in life.
, ' , t , rr rl 11ood practice and habits of ethical actions ensure that
l , rr ,r l)(,rson matures, the value of ethics is ingrained in him.

i.,r rlr(' (,lrtrepreneur, effective action must help move the

' ,,r, rt,rr',r. lrr:yond the narrow focus on technical competence
.,,, I L r r rr r, rl goa ls. Although these a re fundamentally i mporta nt,
r

ri,,, rr,. rro[ .,r]fficient. Effecfive action helps resist self-centered

Eil-llcs rN ENTREPRENFURSHIP I 35
approaches, defines the irnportance of stal<eholders in the
entrepreneurial process, and emphasizes the social nature of
the person's relationship with others.
Ethical action should be practiced by the entrepreneur in all
his dealings with the community within the enterprise, and the
community surrounding the enterprise including the market,
government agencies and other stakeholders.
Ethical Challenges
Facing today's entrepreneurs are decades of erosion of general
ethical standards in society. Politicians misusing taxpayers'
money as well as questionable foundations and private
organizations acting as conduits to stolen funds, government
employees asking for grease money to hasten transactions and
other similar anomalies, have become all too common,
ln addition, entrepreneurs worl< under many pressures, especially
time pressure, which leaves little tirne for reflection to check the
ethical standards of their actions and mal<e rectifications when
necessary. Distractions surrounding the entrepreneur increase
the risk of making wrong choices and undermine his responsibility
toward investors and clients. The entrepreneurs are constantly
bombarded with the idea that they are the driving force in the
economy and thus must act fast in managing, overcoming risks,
and creating novelty all the time.
A deliberate effort should be made by the entrepreneur to
develop and actively promulgate a code of ethics to be his
and his connpany's guide right at the start or even before
business operations begin. This is the basis for the company
to define what is moral, ethical, and fair. lt spells out the
36 I ENTREPRENEURSHIP STUDY AND PRACTICE
,,r,uu , to lrc lollowed in transacting business honestly. Ethics
,,,,1 rrr,r,rl lrrinciples must underpin all the entrepreneur's
i: ri, r.
rrulrt'lher in communication, taking risks, dealing with
,rr lrr lrtron.lnd customers, and in his interactions with family,
I,r. r,,i. ,'rrrployees, business associates, and investors.
!r r ,irr.'n(,urS are also challenged by the many changing
i.. , ir,rl rr.lationships essential to their new ventures that may
i. ,, I r , , rr rlcntial conflicts of interest.
1
i r, ,11, rlrr'('ntrepreneur has to define the values he will consider
i ' for his entrepreneurial success. Examples of ethical
rrrrrrrg
'1, ' trr lrc considered are the following: improved quality and
,,,,ilrly of olcl and new products or services, increase in market
r, , ,
1,r owth in profits, and contribution to the community.
:ri,r,lrr,rtio!'r of Ethical Principles and Values
i r,, l, rllowing are some usual situations that affect the
,1r,, t,r('neur's practice of ethics and values:
t,'r lrnical competenee. The ethical entrepreneur knows
Ir,rl his business is all about and meets the required
t rrrr l,rrcls set by the industry.
fsr new and improved ways of work. The ethical
"r',rrch
, rrtrr'[)r€i"leur constantly seeks new and better ways to
, ,lir()ve his business process.
r ,irrrpleto nesponsibility. The ethical entrepreneur accepts
,i',1 prar:tices full responsibility over everything that goes
,rr rrr [[rc business; he does not point his fingers at others or
I ( r ( rinlstances to blame for negative incidents and failure.
EIHICS IN ENTREPRENEURSHIP I 37
 Respect for the needs of those around hlm The ethical
entrepreneur makes sure that customers, employees,
investors, suppliers, business associates, and other
stakeholders receive what is due them.
Fair pricing. This is the touchstone of entrepreneurship. The
ethical entrepreneur always establishes revenue forecasts
that are realistic based on fair pricing.
Rewards for good action. The ethical entrepreneur
encourages his employees to do good by giving both intrinsic
and extrinsic rewards.
Correction for those doing wrong. The ethical entrepreneur
follows a set of disciplinary actions and sanctions that are
known to his employees and which are calibrated according
to the degree of the wrongdoing.
Sound financial management. The ethical entrepreneur
manages finances effectively to allow for stable employment
for everyone in the business even during times of crisis or
temporary slowdown.
Efficient and rigorous business monitoring and reporting;
The ethical entrepreneur is open and honest. He develops
a sound and rigorous financial monitoring and reporting
system that provides full and accurate information leading
to rea listic forecasts.
Sharing financial success. The ethical entrepreneur shares
the company's financial success with his employees,
partners, suppliers and others who helped create the
business.
38 I ENTREPRENEURSHIP STUDY AND PRACTICE
',rr irl responsibility. The ethical entrepreneur gives back to
tlr(' ( ornmunity by contributing to its welfare.
I rrvironmental awareness. The ethica I entrepreneu r ma kes
'.rric that the environment is not degraded or further
rlr',,t"royed by his negligence and irresponsibility.
t",..rrrvc Results of Ethical Practice
rt , t)r,rctice of ethics within and outside the company projects
, L, r r';rutation of the entrepreneur as a good partner in business.
, ,i ,l travels fast among business associates and suppliers who
r,, , l,'r Io deal with an ethical person. The entrepreneur's ethical
,1, , , ,r()ns will make others trust him and the business he runs.
i, irrl,r,rS prefer working with ethical entrepreneurs who are
r,' ,rrr",l in their disclosure of information. Bankers establish
,,,,',1 relations with entrepreneurs who provide timely and
,' , rrr,rte financial reports and reliable forecasts.
.,r1,1rlicrs are happy when they are paid promptly for goods
, ,r,lr.rt!d or money owed. They know that the entrepreneur has
r.rlrlished cash forecasts that are based on an assumption
,r srrohlpt payment of all invoices submitted by suppliers and
, r rr lr)[S.
t',,',rtive and healthy community relations also result from
, r lrrr .tl entrepreneurship.
t Ethical Standards for the Enterprise
'r'ating
lr,tting ethical standards is the first step in creating an ethical
urganization. The ethical values of the entrepreneur and the
ErHrcs rN ENTREPRENEURSHTP | 39
enterprise should be clear to everyone. Here are the steps the
entrepreneur could take when creating a code of ethics for the
enterprise:
1-. ldentify the general principles that would lead the
enterprise to fair business practices.
2. Check with pertinent government agencies, industry
associations, and business chambers for ethical
standards to review and use as pattern.
3. Allow for the fact that ethical questions do not always
have a unique, perfect answer.
4. Write out specific statements that will assist everyone,
including the entrepreneur, and all stakeholders, in
making day-to-day ethical decisions.
5. lVleet with groups of stakeholders according to interest,
role, or function and present the draft of the Code of
Ethics.
6. Ask for opinions, suggestions, and recommendations for
im provement from the stakeholders.
7. Make a final draft of the Code of Ethics taking into
consideration all the gathered suggestions and
recommendations.
8. Apply the accepted Code of Ethics throughout the
enterprise through written policies and procedures.
9. Train everyone involved to make ethical decisions.
Suggested Coverage of a Code of Ethics
The Code of Ethics should cover the following aspects:
1. Environment-friendly business practices
2. Supporting advertising promises
3, Telling customers the truth
40 I ENTREPRENEURSHIP STUDY AND PRACTICE
,l lnsurance coverage adequate to protect the business
and employees
', Handling cash and checks from customers
(,. Special prices for selected persons
z Accepting gifts from suppliers and business associates
:r Selling damaged merchandise
'r Warranties on products
ttt [Verchandise-return policies for customers
t t Returning merchandise to suppliers
l.t Handlingshoplifters
t t. Accounting procedures for cash sales
ta Theft or pilfering by employees
t', Checking in merchandise when received from suppliers
It, Keeping the premises clean and free from harmful
substances
rz Handling employee performance problems
tti Safety and security issues
t't IVedia relations (print and digital media).
t lir'. lr,,t can be expanded and modified depending on the needs
, ,l r lrr, enterprise.
ErHrcs tN ENTREPRENEURSHIP | 41
 Ghapter 5

Types of Entrepreneurs

r,t ,rs there are many personality types, many types of

, rrtropr€fl€urs flourish around us.

r, i lrr', chapter; the different types of entrepreneurs are

,tr , rr',',ed. This chapter does not cover all the possible types
,r 'rrlr'€preneurs. Ratheri it only aims to make the broad
, I , ,'.rlications that are obvious and easy to spot.

ri,, iy;rical entrepreneurial activities could be classified for ease

,r ,r,rrlr:rstdnding of the countless possibilities one could study
,,,, i u',c as a guide for developing entrepreneurial inclination.

r t,,. lr rllowit'lg topics are discussed in this chapter:

I ,r( tors that influence enterprise choice

l lrc IVlanufacturer
tlrr:Trader
tIrc Solo Entrepreneur
t lrc Specialty Service Entrepreneur

I lrc Street Entrepreneur

I lrc Franchisee

I lrc Serial Entrepreneur

t I rt' Social Entrepreneur

I lrc lntrapreneur

TYPES OF ENTREPRENEURSI 43
 Factors that lnfluence Enterprise Choice
ll,',r lor ,r product or service, from which he could get
The p erso n who ch oos es to be CO
,,, ,..(,rr,rlrlo profit with which he will be able to continue
m e a n entre pre ne U r ,ttr,rr1, tlrr':;c products or services in a selected place and
nfl u enced by t h e nte rp lay of two facto rs:
h s pe l) o n a ty a t,,r rrr.,rlr,,lic amount of time.
the cu tu re a n d enviro n me n t n W h ch h e ives
a n d gro WS Th
fa cto rs wi a lso dete
rm ne the type of e n t rep re n e u he
beco me Th e c h o ice m ay o r may n ot be
wi i r, t,r(.n('rtrs are ready to spend personal time, talent, and
de be rate So m eti me
t h e ent rep ren e u r sel ects th e typ e of entre pre
. ,,,, r,', on d product or service that people will want to pay
,

be co me afte r s eriously stud yr ng what

ne u r h e WI r I rrtr('l)rcneurs spot and exploit opportunities and are able
is be st fo r h m o r w h r,' trrrrl llrc resources and competencies required to exploit
h e is m ost nterested n At ot h er
ti m ES, the p ro cess co iL, ,
n atura il Y a s whe n th e e ntrep ren eu 'pportunities by being creative and innovative. As such,
,
r a uto m a ti ca ly bo ravi tates . ,r ,l,r,nclrrs make a significant difference in the lives of
wh a t interests h m o r wh at h e s a cc ustom
ed to H OWEVC r, it r , r , u',lorners. An entrepreneur is someone who organizes,
p ossi b le to st u m b le o n a ty p e
of bu s n ess an d the e nt rep re ne , r,, ",, ;rnd assumes the risks of a business or enterprise.
se izes t h e o pp o rtu n ty q U ick ly befo re
it p a sses h m by.
r r',t,rrringoutto realizethe dream of starting a business,
r,,
Personality fa ctors. Th e e n'tre pre ne u r' s pe
rso na ity r,, , r ,.ntrepreneurs set up small, solo or individually-run
nfl u nces h s choi ce H S pe rsona VA ue s,
tra its a nd m n , ,'lrrrti or manufacturing outfits called micro and small
d flve h m to a c h eve som et h ng su
d eterm n ed to fac e th e r isks a nd
ccessfu Y, wh le b ei , r, rtrrisos. Some grow through the years into medium or
ch a e n ges of u n d erta ki r r1,. lrrr,;inesses but many stay in the small-scale category
the se le cted VE n tu re
i r IILrtty reasons.
From the time of conception to implementation
of an id ea r,rlrrir.rl and environmental factors. The culture and
and the emergence of results, an entrepreneur
assume risk. Witho ut assuming risk and
has ; , ,r',rrrnent in which the entrepreneur lives affect the
responsibility in 1, ,rlr rlr,rt the entrepreneur will take. Culture provides a
the whole process, the entrepreneur will not
succeed. ln , r ,,1 ( onrmunally-held values, customs, and meanings
addition to being ab le to bear risk, the entrepreneur
is self_ i t, ,i l rr'( orne part of the entrepreneur's personality from
motivated. He is unfazed by competition.
He is not put off ir,, trnro h€ was young to the time he becomes an adult.
by failure.
' i, rt r', important in one culture may not be as important in
lndeed, the venture starts as one person,s
, , ,r lrr.r, even if both cultures belong to the same country.
idea. The
entrepreneur spots a gap in the market
or detects an , ,,r . (
rltnres approve of independence among its children
r
economic opportunity' He turns the idea
into a marketabre ,,, lrr lrnrrr the very start. At an early age, children in these
product or service. He starts the business
by developing ,,lrirr", are given responsibilities and tasks to do. Other
44 I ENTREPRENEURSHIP STUDYAND PRACTICE
ryPES OF ENTREPRENEURSI 45
 t,,llowit'lg are some types of entrepreneurs that reflect the
cultures are very protective of their children and shelter
rl, rvcrne fitioned factors:
them even after completing college education.

Some cultures are less approving of girls growing up in a I lrr Manuf?cturer

free and lenient environment and yet allow the boys to play
,, r .n)r'noll image of an entrepreneur is that of someone
and roam far from home "because they are boys and can judgment to
,1,, l)roduces useful goods' He exercises sound
take care of themselves."
,1,1,1y l<nowledge and develop a
product that is of value and
has the
it, rr r t)r'lsuffters will buy' ln addition, the manufacturer
Cultural conditions favoring entrepreneurship, such as business' This
gender roles, traditions, patriotism, importance of status, ,l,rlrty to supervise and manage production and
i , 1,,' ot entrepreneur is familiar with the nature
and purpose of
high value on relationships, and high value on mutual
trust influence the choice of the individual to become an irr, lrroduct to be manufactured' He has scientific knowledge
.,r l,w the product will be made, applies this knowledge
to a
entrepreneur and to select the kind of enterprise he will set product'
up.
', , lrrl purpose, and then proceeds to manufacture the

rt,rrrrl,rctut'iog, therefore, is the process of transforming

A culture that encourages an entrepreneur to have the
patience to see his efforts bear fruit is very important. This
culture is aware of the benefits of entrepreneurship and
encourages it so much so that a person who chooses to
become an entrepreneur is considered a hero.
marketing'
, , , ilr,rterials into finished goods for subsequent
i ,url)les are meat processing, fruit preservation' stuffed-toy
,,, rl rrr11, packed-meals preparation, home-d6cor
making' and
t, rl rrrll (breads, cakes, and pastries)'

' r,'l,rlrvely higher investment is required in manufacturing

Awareness of the need for ecological restoration may
i,, t,r.vide for factory site, capital equipment and machinery'
influence an individual to go into businesses such as in-process
,r,, r,rling capital for inventory of raw materials'
the "generation of renewable energy; construction of and benefits
green buildings; operation of sustainable transportation i,,,,,1',,tnd finished products as well as salaries
i , \^/,)rl<ers. There may be a need for customer credit to
push
systems; water management; waste management; and land
management" that results in improved human well-being
,1, ,l finished products. Manufacturing also means a longer
. ,t,rr,rl payback Period.
and social equity, while significantly reducing environmental
destruction and ecological degradation. (Burkart, 2009)
,, r rrrr rl.rctufer may be one of the following:

tt,rrrdicraft producer. A craftsperson would

produce
and sell these
1',,,r1\ mostly without much machinery'

TYPES OF ENTREPRENEURSI 47
46 I ENTREPRENEURSHIP STUDY AND PRACTICE
 to wholesalers or to individual buyers In a marl<et or;r
"tiongge." He could supply his goods to the tradesperson
who willsellthe goods at a certain rate of profit. Handicrafts
are also sold internationally. Especially in the Philippines,
handicraft manufacturing is a very common and easy source
of income because Filipinos seem to be naturally endowed
with artistic talent and dexterity in creating handmade
products.
Cooked food producer. Depending on where one lives, and
one's ability to cook, he may be able to sell food as specialty
items.
Processor or subcontractor. There are businesses that do
not produce a product from start to finish but rather only
performs one or several steps in the transformation of
materials into products. Persons engaged in these businesses
are known as processor or subcontractor. Some examples
are cleaning and drying water hyacinth leaves for bag
makers, embroidery of bedroom slippers for the footwear
manufacturers, woodcarving and upholstery-making for
furniture manufacturers, and garter-making for garments
producers. Another example is the sewing of garments by
small shops from materials, designs, and processes provided
by big exporters that put their labels on the products.
A modified type of manufacturing or processing involves
the production or manufacture of components, parts, and
supplies or undertaking specialized operations for relatively
large enterprises that finish and market the final product.
Another example of a subcontractor is a contract-grower of
chicken to whom big poultry-processing business (parent
48 I ENTREPRENEURSHIP STUDY AND PRACTICE
lrrrn) supplies day-old chicks to grow untilthe time these are
I t'nough to be turned over to the parent firm for a fee.
, ,lr
llir lrlder
rl,, t r r(ler here refers to the person who transfers goods f rom
,
rl,, rrr,rnufacturer who produces the goods to the consumer
r,, lrr rys the goods. Trading is the process of buying and selling
'
.,r 1'rrr(ls and services involving transfer or exchange of goods
,r,,1'.r.rvices for money. The trader can be a wholesaler who
r,'r,,, lry the bulk and stores the goods in warehouses before
ri, ,r. lloods are sold to retailers. The retailer is also called a
, r r,l.r who then sells the goods ultimately to the consumer.
r, r,lr.r., sell products physically or join the popular trend of
, tlrrrli products through the lnternet. They are also called buy
,,,,1 '.r,ll businessmen. This activity often does not need a large
! ,,r ut) capital and has a sense of urgency about it. Foresight,
. ,,,irr ,urce, and familiarity with the specific products being sold
.,,,1 lrought are helpful for this entrepreneur.
i r ,rv cntrepreneurs start small by selling physical products.
ri,, y lru1l a large quantity of certain goods and sell these in a
i.,,,' Stores or retail outlets in shopping malls are physical
i.., ,rr( )ns where brisk sales take place. Similarly, vacation
,' rrt', abound with vendors selling physical products such as
,r or home d6cor, as well as magazines and
ri,.11i[g, accessories
.. r,lrnll materials. On main roads leading to the provinces, stalls
;,, .r'l up to show off agricultural produce for sale.
TYPES OF ENTREPRENEURSI 49
r
examples of virtual goods that can be sold online are videos,
Trading business could be any of the following
courses, subscription newsletters, access to private areas of
websites, and downloadable music. The range is endless.
Wholesaling. This pertains to bulk selling of products to
retailers or organizations. Some trading operations are
Various physical products are now sold through the lnternet.
done on a distributorship scheme, where the manufacturer
ldeally, the entrepreneur should be able to generate interest
and the trader enter into a contract or agreement for the
ln his products by building a mailing list of people who are
exclusive sale bythe trader of specific brands without ca rrying
already satisfied customers. Participating actively in groups
the company name of the manufacturer. Wholesalers may
and communities online that sell similar goods and discuss
handle several items from the same supplier or from several
ppliers. these activities is one wayto make people aware of available
su
products and to find out the types of products buyers need

Retailing. This is the selling of products directly to the

and want.

end-users. Examples of retailing enterprises are groceries,

Vending machine operation. Here, the entrepreneur sells
gasoline stations, convenience stores, stores-on-wheels,
I rr oducts through several vending machines insta lled where
car-dealer shops, and bookstores. The most basic retailing
tlrcre is high volume of foot traffic. Products are either
business is the ubiquitous sari-sari store. sidewalk vendors
',,,|f-produced by the entrepreneur or procured from other
and hawkers are also among the retailers we commonly see'
lrroducers. Vending machines commonly sell sandwiches,
, ,rl(es, snacks, or juices. There are also shopping malls that
Repacking. This is very simple and easy, requiring minimal
lr,rve vending machines in comfort rooms where sanitary
capital and equipment; it can be home-based' All one needs
rr,rlrkins and baby diapers are available. Several vending
are pouches and other packing materials' Articles being
rrr,ir:hines owned by the same entrepreneur must be
repacked range from food (candies, peanuts, corn chips,
in',l.rlled at locafions not too far from each other for easy
and other snack items), to household needs such as cooking
r,,1 rlcnishment of stocks.
oil, garlic, onions and detergent.

lr,. ',1pls Entrepreneur

E-trading. One of the least expensive ways to get startetl
I

with online product sales is by selling virtual products. A

il, tylro of entrepreneur is independent and has autonomy
virtual product is something digital that can be distributerl
ir., 11 11rtlrority structures. Acting solo may sometimes be lonely
directly to the customer over the lnternet as soon as it lq
r.,,r rr r,,rrld well become a good way of entering the business
purchased. With virtual goods, there is no need to creatt"l
,,, l, I rr',irrg one's personal and specialized talent that others
physical inventory. once the initial product has been creatt'rl,
:il r! nirt lrave. The customers are willing to pay a good sum to
the entrepreneur can sell as many copies as the market wlll
=:,,,,, ',rrl who has the abilityto do or perform something that
pay for, and satisfy his customers' needs instantly' Sottto

ryPES OF ENTREPRENEURSI 51
50 I ENTREPRENEURSIIIP srtJDY AND PRACTICE
is unique and specialfor others. Working as a solo entreprenert
provides a steady income to the one giving the specialty servict'.
Examples of solo entrepreneurs are listed below
Event organizer. Organizers of special events, parties,
christenings, and weddings can be considered specialty
service entrepreneurs. They prepare for the party or the
event as if they are preparing their own and put very special
care and attention to ensure the success of the event.
Show host, clown, magician, fireworks specialist. These
specialty service entrepreneurs for individual events carry
on with their business alone most of the time. They depend
on their talent and ability to entertain guests in exclusive
parties and they get paid highly for their services. Fireworks
and other special entertainment features are part of the
specialty service in these events.
Writer of specialized reports. A solo entrepreneur can
serve as writer of specialized reports that companies buy
or publish. This service is offered by experts who can create
specialized reports about different industries, and who
can write exclusive whitepapers and statistical analyses
about these industries. This is a business for anyone who
has specialized knowledge in an area or several areas,
He can build a reputation around this business activity. A
good researcher with the time and energy to go out and
gather information that would otherwise be difficult to put
together in one place may also be placed in this category.
Online consultant. This entrepreneur offers consulting
services online. lt is perfectly possible for a person with a
52 I ENTREPRENEURSHIP STUDY AND PRACTICE
rorl reputation in any field to set up a private website with
1,,
.r nr('nu of consulting services, and make them available to
t Irr' public by telephone or e-mail. Online personal coaching,
,,,r r,rl media consulting, web design, as well as writing and
, ,lrtirrg services are among the more popular opportunities
,',,ril,rble widely. ln addition, an independent consultant
, ,ur l)e paid to update Twitter feeds, to respond to business
rrrrlrrtri€s and posts, to maintain Facebook newsfeeds, and
r,, t)crform a wide variety of support services for social
,,,,.r lia tools. With the ability to communicate in an effective
,rr,l cngaging manner and relate with people, one can sell
, ,,n.,ulting services as a social media expert.
t lrrlin€ teacher. While consulting is usually done one on one,
,,nlrne teaching programs can be set up so that hundreds
rl rrot thousands of potential students can learn from one
lr.',,,or.t. This is one of the most exciting new opportunities
irr roceht years for anyone to remain employable or capable
,,1 {'arning a respectable income. Online outfits are on the
l,,ol(out for talents who can present information to a virtual
,l,r,,s in an interesting manner. ln Hong Kong, individual
Iut()rs for students who want to pass their subjects or their
!'{,ur-ls exceedingly well are treated like rock stars.
online book publisher. There is now a renaissance in
rrrlr'p€flde flt publishing. The older business model of large
l,,rlrlishers who have exclusive access to a market is getting
, ,l, ,olc.te . lt is now possible to create a digital version of a
1,,,oli ilod sell it online.
tlrrlin€ business program creator. One who has a
,srr,r ial talent for coding or who is proficient in computer
1,r,,1iramming can create a "killer" program or product
TYPES OF ENTREPRENEURSI 53
 in school or at home in the same way that Facebook w,ti
created without even doing any paperwork at the start.
Digital newsletter writer. one variety of informati,rr
product facilitated by the existence of the lnternet is thr,
e-newsletter. For those who have a need for specific type ol
information that the entrepreneur can collect and providr,
to them on a regular basis, an attractive and useful e_mail
newsletter will be well accepted. The newsletter coulcl
provide links to products that people might want to buy
and thus create advertising revenue. of course, the writer
should be sure to let the readers know when they have to
pay for information and when they get materials for
free.
Lifestyle entrepreneur. The lifestyle entrepreneur is one of
the latest additions to the current types of entrepreneurs,
They enjoy the flexibility of working at their own pace; they
take the time to enjoy their hobbies, spend time with friends
and family, as well as attend to any social and charity work
they want to pursue. They differ very much from traditionar
entrepreneurs in that their life has a deliberate balance
between work and play, thus creating rifestyre businesses
where they can keep doing things they enjoy while making
money. For example, those who love fashion may start a
blog where they review the latest on the catwalk and link
their story to an online store where customers can buy
similar items.
Plumber, electrician, house painter and similar service
providers. This type of solo entrepreneur has his tools
in
hand when he goes to the household or the company that
needs his expertise. He is highly paid for his talent and skills.
54 I ENTREPRENEURSHIP STUDYAND PRACTICE
ill' ',pr.t ialty Service Entrepreneur
i !,, ,r .,r, rl ,,pecialty service enterprises in the Philippines include
rr,. rrlrrrlrritous beauty salons, barbershops, sauna and massage
i. ,r t, 'r'.. wellness and fitness centers, and funeral parlors.
i ,.t,il1.il, too, around colleges and universities are photocopying
i., r rr ,.,.,(-rs and internet cafes.
r r,, g,,'r.ialty
service entrepreneurs' businesses have expanded
rrrr.[y and in number in recent years, as shown by the
i,,,,lrl',r,ttion of call centers for information and technical
i r t,rrce, medical transcriptions, and business process
, !,5. Many business functions are outsourced nowadays,
,ir(
., ,,,rlly by large global enterprises.
r lrr. 'rtre€t Entrepreneur
r,,,('t entrepreneurs are common in the Philippines and other
, i,rrr coUfltries. They are the street sellers, sidewalk vendors,
,,',llr,lwkers,
,ir('('tpreneur" is a term coined by an official of the People
I t rrr,rgenleht Association of the Philippines (PMAP) Foundation
r 'o l4) which refers to micro entrepreneurs selling various home
r rrr lt-,s and food items to motorists stuck in traffic or bus riders at
r, r rrrinals and stations. They are seen selling snacks and other items
,rr.rllenough to be carried around such as cigarettes, hand towels,
, l,,,rrrinB rags and the like.
\treet entrepreneurs in the Philippines usually need very
rrrinimal capital investment. The goods they sell are usually
home-produced or sourced from stores that grant them
TYPES OF ENTREPRENEURSI 55
some special arrangements. These arrangements include
consignment or allowing sellers to pay for the goods after
they are sold at the end of the day. Counting on good will,
street entrepreneurs are assured of goods to sell for as long as
they comply with such liberal payment terms. ln most cases,
however; street entrepreneurship is a daily-sustenance activity
providing minimal income that augments the family budget.
Other streetpreneurs are itinerant peddlers who go around
communities selling fish, native products, and food needs of
households located far from public markets or groceries. Some
streetpreneurs operate small cooked food stands along side
streets catering to the needs of pedestrians and communities.
The Franchisee
A franchise is a form of business organization in which an
established firm (franchisor) with an established product or
service and proven business model, allows another business
(franchisee) to offer to the market the franchisor's product or
service for a fee.
For the franchisor, franchising is an alternative to setting up
chain stores or branches to distribute its goods and services
while avoiding the investments and liabilities of a chain.
For the franchisee, though franchising has been called a busines,,
"with the least tears and fears," there are pros and cons to br,
considered. The advantages are as follows:
a The franchisee is able to go into business even withoul
previous experience.
a Product or service is already known in the market.
56 I ENTREPRENEURSHIP STUDY AND PRACTICE
Management systems are already in place.
There is continuing training a nd guidance from the franchisor
as well as advertising and promotion support.
Facilities and equipment have been proven to be efficient.
There is an established system for maintenance of standards
and controls.
Ihere to financial assistance as well as readily
is easy access
available help in locating sites.
Probabilityof success is higherthan when startinga business
from zero.
. ,,, rlr('other hand, the prospective franchisee should be aware
,t tlr,,following risks and disadvantages:
Itclatively higher capital investment is needed, including
lr,rnchise fees and other services.
( )t)erating decisions must conform with established systems
,rrrd consequently the franchisee has limited autonomy.
llrc franchisee's personal management style may not be
,rlireeable with the established systems.
I xtensive records-keeping is required.
llrcre is danger that the franchisor may not deliver on his
lrromiseS in terms of guidance and assistance.
, r1
; ,r I unities for business franchising have proliferated through
rr,i for small and medium-sized enterprises, mostly in
yr',rrs
i,,,,irltailing, such as "siomai and siopao" kiosks, tea stands,
=,r,1 l,()d cart products. Mid-sized restaurants are available
.', li,rrrrhise arrangements as may be seen in many cities and
!., ,,, , rr the Philippines.
TYPES OF ENTREPRENEURSI 57
The Serial Entrepreneur
This type of entrepreneur is more concerned about startirrll ,r
new enterprise each time the one he has set up is starting to go
well. The serial entrepreneur constantly feels the urge to kcr.p
finding new products or services to offer to new or untappt.rl
markets. He may also start different businesses altogether ont n
the previous one has started to take root. Serial entrepreneurr
are not afraid to stumble or fail with their new business idear
They recover quickly despite the failures they may meet.
Serial entrepreneurs either bring a venture to a stage etf
development where they can move on by selling according to
a pre-determined exit strategy, or by placing the enterprisc
in the hands of a successor or group of successors. They will
maintain some degree of investment and other resources whilo
starting their next venture, with intention to repeat the process
whenever they are inspired to do so.
I
Aserial entrepreneur hands overthe reins of running a successful
undertaking to a good manager so he can move on to a new
idea and a new challenge. lf the first venture needs help, tho
entrepreneur goes back and attends to it while simultaneously
addressing the challenge of creating a new one.
Here are some characteristics of serial entrepreneurs:
. They get restless after three or four years in a business.
. They are curious about their customers and always involve
them in making decisions.
. They have more fear of regret than fear of failure.
. They start a business while young.
. They recognize a failure in the current business and work ter
rectify it.
58 I ENTREPRENEURSHIP STUDY AND PRACTICE
llr,,y rirnply just want to start a new business after the
I'r,,vr()us one has started running in a stable way.
t lr'y 1,tcr1€r'olly run two or three projects simultaneously'
,r,., , rru,rnLing to be entrepreneurs must not view restlessness
= i lr rr I I lring. They should simply try out their different venture
.i. r from each attempt to start a new one. Most
rrrrl learn
:=:rrl r.nlr(tpreneurs are motivated by the challenge of taking
=., lr r lrom conception to execution to management and then
=
.l,r rlrother one again.
tlr.. '.,,r r.rl Entfepfeneuf
i,l i'nlrepreneurs are those who provide products and
,'
=-, rr, . with the overall desire of creating social good,
," r rrili1i from the perspective of benefitting the people and
,i,. 1,1 11rr,t while earning profit. They also engage in enterprise
.i. ir , .,", business tools, disciplines, and strategies to pursue
= ,,i rl .rrvironmental and humanitarian objectives.
',=,, rllv rrrrdertaken by non-government and civic organizations,
= ., i r cpreneurship came about in the l-980s as an alternative
I r' || Ir
= .r,rrir rrr to th€ problem of poverty and underdevelopment. The
... ',''nt sought to harness resources to create and sustain
= ,.ll v,rlue in a target community as social and economic
r= , l,,trrilr,nt programs are implemented. As it is also premised
rl,, r,rrCept of making profits, social entrepreneurship aims
,,
i.., rl,r. ,lt.velopffie nt of the business skills and knowledge of a
.?rrirrilillly.
,. .,, r rl .rrterprises, profit is often reinvested into the business
=!t* r llr,rn distributed to shareholders. There are different
....,t, l.,rl operation and varied legal structures to create such
ryPES OF ENTREPRENEURSI 59
 Community
and always followed in making decisions'
companies that become self-sustaining through income from of
and fair distribution
support and improvement, creation
the products or services they provide' building and provision
yobs and income, as well as, capacity
be of paramount
of services for community needs should
Many people seeking to find meaning in their work are turning
rmportance.
to social enterprise as a means of combining their desire to help
lthicalvaluesofthesocialenterpriseincludecommitment
others with the pursuit of their ambition to succeed' of local skills and
to local development goals, improvement
and accepted impacts
l.lents, as well as sustainable, tangible,
social entrepreneurs are innovators who focus on creating the economy as a whole'
on the society, the environment' and
products and services that solve social needs and problems, and palpable' The whole
' ',ocial ownership must be tangible
Their goal is to make the world a better place and not to takl the financial surplus earned'
, ommunity must benefit from
market share nor create wealth from the enterprise. They arO to members or used
which are distributed as profit sharing
motivated by a desire to remedy some of the ills of society,
Ior the benefit of the communitY'
This could be undesirable socio-economic, educational,
environmental, or health condition. They use their business al lnc')' a
,,rr.x.l'flPle of a social enterprise is R2R (Rags2Riches'
a driver for change. Applying innovative solutions to problemt where
,, r,rl enterprise based in Barangay Payatas' Quezon City'
sends social entrepreneurs on a mission to create value, whilt creates
, r'.ul)age dumpsite is located' The social enterprise
pursuing endless opportunities to meet their goals, adaptinE
, rr {'lhical fashion and home accessories out of scrap cloth'
and changing as required. fabrics'
,, 1'. rr riC materials, and indigenous

some important factors for the success of the social enterprisa making cleaning rags out
, , rr'u r,llly, the women in Payatas were
are listed below Disturbed by
,l I.rlrr ic scrap and selling them to intermediaries'
of
ir,, r'xtrefile poverty inlhe area and the meager earnings
a Social enterprises evolve very quickly' The social
ir,, wt)flI€fl of Payatas, the organizers of R2R mobilized
them
entrepreneur therefore must anticipate change and be Afashion designerwas called in to
help
r.,, rrli,tg€ in business.
prepared to react swiftly. Time is of the essence, especially wine-bottle
r, ,,.1,1) innovative products such as purses, bags,
since ideas and solutions continue to change within the
,,.r 1.,, and home accessories. Getting access to
department
business environment. the women increased
=r,,rr"' ltrrough the organizers of R2R'
a The social enterprise must have a strong business base R2R has trained
ri,, rr r',rIrillgs substantially' Within six years'
and business orientation' lt cannot live on dole outg' . , r ')00 workers producing items out of scrap materials
in
profits must be enough for reinvestment and for use of thF
-ii ru', (.ot"r'lfflunities in Metro Manila'
enterprise in uplifting the lives of members and workers of
the community where the business operates' lnc' (GK)'
a The social aims of the social enterprise must be very explir lt
' , r ,rll(alinga Community Development Foundation'
TYPES OF ENTREPRENEURSI
61
60 I ENTREPRENEURSHIP STUDY AND PRACTICE
 another social enterprise was formally established in 2003,
the work began as early as 1994 in Bagong Silang, Caloocan City,
big informalsettlers' relocation site in Metro Manila. Enterpris
within the communities developed by GK are instrumental
improving the quality of life of the community members. H
the poorest of the poor may be able to contribute their ti
and talent to running social enterprises. These include the Gl
Enchanted Farm in Angat, Bulacan; Human Nature, a cosmetie
group that uses organic ingredients coming from the Enchan
Farm; and Plush and play, a toy factory turning out stuffed
shaped like vegetables.
Another notable example of a social enterprise is the Jollibee
Corporation outreach program, which harnesses groups
farmers to provide the needs of the giant food company for
farm produce, like chicken, beef, and vegetables.
on a smaller scale, some civic organizations such as Zontt
Club of Pateros-Taguig has been training women in
communities to produce rags from fabric scraps obtained
nearby garment factories. The club provides them with sewi
machines, and establishes access to marketing for sustainability,
The Girl scouts of the philippines also undertakes social
enterprise projects where the girls take part in the production
and selling of handicrafts in their communities.
G2 I ENTREPRENEURSHIP STUDY AND PRACTICE
ll*e lrrir.rlu(iltcuf
i.rr.rl)r(,n(.ur may be a manager or a salaried employee
rir,l..r way of making innovations in the company where
, L, wr lrl(S.
:.,ri tyr! nr,ur5 detect the needs inside a corporation and use
...l; i' lr r,
r I rr ritiative to take action to suggest an idea and even start
=.. ;r I ,r r',r. lrroject. Some companies use a suggestion box; others,
!:r; r, r,1,lr', 11ive employees 20 percent of their time to work on
!!:: ir,,\^/rr lrlt)jects.
!,r,,t,r,'rrcrrrs lead in what iscalled process improvement. Smart
,, i !nr", are always looking to make their current products
!.. ri, .rrrrl there are many ways to do this. For example,
.,i,,t r,.n(,rrrs can help reduce component cost, introduce a line
i, i , r( )rr, or create new versions of the existing product. These
rti,ns do not require change in a company's existing
!., , .', rrrodel; ratheL they help ensure the stability of the
,, lrrr,,ill0SS.
i..i ,l'r( n('urs devise ways to infuse new elements into the
,,,,1v r,xistingmodel and helpthecompanygain morestrength
, , ,,l,lrrr1g distribution channels or developing expertise in new
' r,, , l'. rrot currently present in the company.
r,,,,,,nrployees in a large organization undertake something
. ,,r innovative (e.g., a new product, process, or system)
rl iir tlrc organizational environment, the initiative is known
,,,rr,rt)reneurship. The business unit that is put up as an
ir lr.r rt of such initiative is called an intraprise.
ryPES OF ENTREPRENEURSI 63
 The practice by big corporate enterprises of encouragl
intrapreneurship has led to spin-offs into subsidiary orga nizatrrrrr
Ghapter 6
and related products or services.

Roles and Responsibilities of the

lntrapreneurship may also evolve as a spin-off enterprise ol a
family business. An example of an intraprise spinning off frorrr
the parent company would be when the original busint.,,:
decides to outsource some of its services like labor; security,
janitorial, delivery, and warehousing services, to children or
employees of the owner who happen to recognize the businesl
opportunity. with the knowledge and guidance from original
business owners or employers, the new enterprise has minim,rl
risk and accountability; thus reducing the risk of failure.
EntrePreneur
; that society
=,,rr,,oliddted in this chapter are the expectations
L-=,,,', of the entrepreneurs. These individuals create better
. r )nrIe hts, improve the lives of others, and make progress and
,irr
,, r,rrr r,rble development possible.
i |,r r.r I I repreneur is crucial to the mai ntenance and sustainability
.t itrI economy from the grassroots to the national level. This
,il rrr,tnifest as entrepreneurs continue to perform their roles
,, r,l r lspoflsibilities effectively.

it,, l1vpi65 to be explored in this chapter are as follows:

the entrePreneur
Roles of
Responsibilities of the entrepreneur

trr rlr.s of the EntrePreneur

vl..ioning role. The entrepreneur is sometimes called a dreamer

,^rlr0 follows his vision. without the vision, the entrepreneur will
n,,r ilrder soon enough and the dream will disappear. This role
of the
r,r rt I epreneur inspires those that choose to
join him in the pursuit of
lri,, vision, believing that something good and useful will be realized'

mrplementation role. After empowering himself towards

.i, trieving his dream, the entrepreneur has to take practical steps

64 I ENTREPRENEURSHIP STUDY AND PRACTICE ROLES AND RESPONSIBILITIES OFTHE ENTREPRENEURI 65

so everyone can live according to the organization's mission
and direction. Proper implementation of the business ideas will
enable the entrepreneur to harness the talents and skills of the
organization's team members to pursue the mission, goals and
objectives of the business. ln this role, the entrepreneur must
not forget that he should serve and be responsive to the needs
of the organization, including its human resources.
Sage Accountant Solutions Vice-President and General lVlanager,
Jennifer Warawa, wrote about the five important roles of the
e ntrep reneu r. (Septem ber 2OL2)
According to Warawa, following are the five key functions of the
entrepreneu r:
Ch i ef custo m e r office r. Cu sto m e rs a re mtheost
business. They do not simply need great customer service;
they need great customer experience. The entrepreneur
should create a true customer experience strategy and
execute it. He and his sales or service staff should know
the products and services, as well as be familiar with every
touch point that will induce the customers to patronize the
business continuously.
Chief finonciol officer" Bookkeeping, accounting, and
taxation are some of the most important aspects of the
enterprise. Numbers actually tell the story of the business:
where it has been, how healthy it is, where it is going, anrl
what should be changed for it to become successful.
Chief people olficer. Regardless of the number of employer',,
he has, the entrepreneur should take care of them as wr,ll
as the people surrounding the business. As someone in tlrr
66 | ENTREPRET\E|.IRS|-ilp STUDY AND PRACTTCE
lcadership role, the entrepreneur should deal with people
l,r irly a nd objectively.
Chief executive officer. As CEO, the entrepreneur needs to
Iook at the whole enterprise from the very beginning and
lrlan for its future based on a clear vision. He must spend
r,rrough time on strategies that will spell future success for
tlre company.
('hief innovotion officer. Although this is not a commonly-
rr.,cd title, its essence is very important to the enterprise.
llris role is crucial in making the enterprise relevant and
,rirnpetitive to ensure long-term success and sustainability.
llrC entrepreneur must constantly challenge the ways the
,()rnpany is performing, both internally and externally.
lrrrrovating and trying out new systems, new products,
i m po rta nt fo r
.rrrrl new services that continuously delight the customers
rlr.111.1pi time and effort on the part of the entrepreneur.
r r,rrs1..1.ling role. The entrepreneur should realize that the
!.,, ,,,{',', is not simply all about his own goals and dreams.
t ri rr rlr' ,l<i counselor is important
and he must realize that
,,,,, ,,1rr1,, has a powerful, long-term impact on people and
,i'. , ll,.( lrveness of the whole organization. Counseling means
! 'il ,lt wrlh a person in a way that helps that person solve a
;,,..r,1, rrr or helps to create conditions that will cause the person
. i ,trr,vl his behavior. lt involves thinking, implementing,
i.,,. rrrJ. lrrrrnan nature, timing, sincerity, compassion, and
1:.;,l r ','. ll involves much more than simply telling someone
!:,r i,i rlo,lbout a problem. To be an effective counselor, the
=..!,, t,ri'n(,ur must have a good amount of self-awareness,
.= r,, ,I l,r {'verfone in the team, credibility, and empathy. The
--... , ir , ,,nlrcpreneur helps everyone achieve organizational
=,.,t ir, lrrir, lrr,tl goals.
Ror [s AND RESPONStBtLtTtES OF THE ENTREPRENEUR | 67
 I
the
M,ilr.rl,.('itrl€nt.The work of an entrepreneur involves
Evaluator role. Performance appraisal and other metrics wlll
:, , ,,1 rn,'tnagerial skills which he develops while planning'
help the entrepreneur maintain the quality and effectivenest
,rr, rrrr,'rll[',, staffing, directing, controlling' and coordinating
of his enterprise. As evaluator, the entrepreneur should ba
!:i, ri,,",', operations. The entrepreneur's managerial skills
are
able to measure performance fairly and objectively against job
i,r rlrr r ',trengthened when he aligns his organization with
requirements and standards. Additionally, developing career goall grows/ he can I

will help the team members keep pace with the requirements of a
dynamic organization. The appraisal should be a joint effort in tho
whole enterprise. This motivates people to work as one in achieving
the vision, mission, and goals of the enterprise.
Responsibilities of the Entrepreneur
The following are the important responsibilities assumed by
entrepreneur:
lnnovation. The entrepreneur is an innovator who triet
to develop new technology, products and markets in thc
community. lnnovation may involve doing new things or doing
existing things differently. He uses his creative faculties to do
new things and to exploit opportunities in the market. He does
not believe in status quo and is always in search of change'
' ,\/r onment. However, when the business management'
-,1,q,l ry professional managers for more effective
rri,..rrorning resistance to change' lnnovations are generally
change their existing
, r,, ,'( I lry people because it makes them
r.. l, !,,rrlr patterns. The entrepreneur always tries new
ideas at
i.i l, ,,,'l lirst. lt is only after the successful implementation of
r!', , rrllr)s that he makes them available for the benefit of
an
of
.ir,, r ln this manner, he paves the way for the acceptance
i.' r,lr',1.,- This is a reflection of his willpower, enthusiasm, and
. ,., , lv tr.rits that contribute in overcoming society's resistance
, .,1, rrr1,t'.
I ir rtvrng economic development' The entrepreneur plays
r,rpor[aht role in accelerating the pace of economic
new uses of available
;. ' l,,prrrt:nt of a country by discovering
illl(" and maximizing their utilization

Assumption of risk. The entrepreneur is a risk taker and not a

risk shirker. He is always prepared to assume losses as a result
of introducing new ideas and projects. This willingness to take
risks allows an entrepreneur to take initiatives in doing new
things and marching ahead in his efforts.

Research. The entrepreneur is a practical dreamer who tal<t't

time to study his moves, including the groundwork, beforn
taking a leap In his ventures. He finalizes an idea only afl|t
considering a variety of options by analyzing their advantages attrl
disadvantages. lt is then that he applies his ideas into practice.
ENTREPRENEURI 69
ROLES AND RESPONSIBILITIES OFTHE
68 | ENTREPRENEURSI'llP STUDY AND PRACTICF
 Ghaptet 7
Characteristics and Competencies of the
Entrepreneur
tlrr', clrapter; the characteristics and competencies of
,rrr'l)rcneurs will be scrutinized. Studying these traits wi[l
l; , ,trrrlcnts to become entrepreneurs.

ri,, r,irrr S covered in this chapter are based on the research

i;r,,11111,', of David McClelland. (1961)

I l, ( l('lland's research on successful entrepreneurs

I lri. Noc'd for Achievement (N-Ach)

t 1,, l\r'r:d for Power (N-Pow)

Ilr, Nlcd for Affiliation (N-Aff)

l l ,, u nl)ortance of passion
| , ,,)"r,rcises to uncover passion
[or successful entnepreneurship
I , ,r n u rl,l
I r ! \^/,rys to tell if someone is an entrepreneur
l,r,,rrrr,,,rre impOftant

F.1' r r, ti.in(l's Research on Successful Entrepreneurs

l|lrl ( l,rrence McClelland conducted entrepreneurial

noted for his
hFElFncy studies in the 1970s and 1980s. He is
lH *,r' tlrt'Achievement Motivation Theory and has published
ftlft, u", worl<s in the 1950s to the 1990s that developed much
]hrr l'. r onsidered the foundation of the current knowledge
Intt n1,' t, rrc u ria I cha racteristics a nd com petencies.

( ll/\ll/\( jll l.tlSllCS AND COIV1PETENCIES OFTHE ENTREPRENEURI 71

 their personal responsibility if they lose'
lrr.,tif y
believe that the need for
McClelland's research led him to llrc conservative individual chooses low risks where the
achievementisadistincthumanmotivethatcanbedistinguished 1i,rin is small but secure, perhaps because there is
little
motive can be isolated and
from other needs' The achievement rl,rnger of anything going wrong for which he might be
is chiefly known for his work
assessed in any group' McClelland lrl,rmed.
his research interests extended
on achievement motivation, but Ar hievement-motivated people take the middle ground,
to personality and consciousness' ;rrcferring a moderate degree of risk because they feel
tlrcir efforts and abilities will influence the outcome' ln
famous book' The Achievinq
ln l-961, McClelland published his lrtrsiness, this trait of being realistic is the mark of the
Society, in which he examined
how some societies produce
',r rccessful entrePreneur'
The book was a result
more entrepreneurs than others do'
in the relationship
of the interest McClelland had developed .. rr , I , !\/r.r 20 years of experimentation and researCh, McClelland
and economic development'
between achievement motivation .rssociates concluded that at least three general
lr'.
achievement will induce =,,,1
According to him, the need for ,i, r',,r(", of social motives and competencies are important
entrepreneurial behavior, which
in turn will translate into
l, r' r rirrrr,rnts of human entrepreneurial behavior:
higher economic growth'
Ihe Need for Achievement (N-Ach)
McClelland asserted that competencies are based on
Ihe Need for Power (N-Pow)
specific self-image, values, traits'
and motive dispositions'
Ihe Need for Affiliation (N-Aff)
outstanding from mediocre
These competencies distinguish
Therefore' competency
performance in a given job or role' tr,, Nr.r.d for Achievement Cluster
and skills' and their
r
comprises ttre speci-ification of knowledge
performance required to complete
application to the standard of i r,, tt,'r'rl for Achievement (N-Ach), the achievement motive,
training and learning' as well
a task. lt can be acquired through : l[ r to do well, to strive for excellence and to overcome
,lr rve
as through exPerience' i, ril,.rrtics and obstacles in the pursuit of a goal. High N-Ach has
i., , rr I l,.ntified in most good business founders. The person with
McClellandmaintainsthatachievement-motivatedpeopleare !,,s.tr rrr.r,tl for achievement is an internally driven self-starter
a problem rather than
not gamblers. They prefer to work on irlr.r',lrong desire to compete with others, to excelwith self-
They will undertake a project only
leave the outcome to thant"' :::rr, ' ,'rl ',tandards, and to pursue and attain a challenging goal'
differentiates gamblers
if they can influence the outcome' He
a nd conservatives from
achievement-motivated persons:
ii,, t,,'r',on with high N-Ach does not believe that the success
.,, I ritrrr,. of hiS ventures would be determined by fate or luck.
Gamblers choose high risk because
the outcome is
a
i,, r, ,il, with self-confidence and the desire to take personal
beyond their power and, therefore'
they can easily

CHARACTERISTICS AND COMPETENCIES OFTHE ENTREPRENEURI 73

PRACTICE
72 I ENTREPRENEURSHIP STUDY AND
responsibility, he believes that he can influence the outcomc.,
of his efforts and hard work. To do this, the entrepreneur seel<s
feedback and uses it to know how well he is doing and how to
improve his performance.
Within the N-Ach cluster, the following competencies havc
been identified:
Opportunity-seeking behavior. The successfu I e ntrepreneur
is someone who is able to find business opportunities
where other people do not. The entrepreneur usually thinks
of those who might need a certain product or service and is
able to devise ways to satisfy these needs.
Moderate risk-taking. The entrepreneur is a moderate risk
taker. He calculates the chances of success before taking a
risk and examines his strengths and weaknesses that will
affect his decision.
High demand for efficiency and quality. This is the ability to
meet or surpass the existing standards of excellence in the
business. The successful entrepreneur strives for excellence
in everything. He demands high quality and efficiency
from himself. He also expects this from other people. He
spends time and effort in making sure that his products arc
of high quality. Because of his desire for high quality, the
entrepreneur innovates and creates new and better ways to
serve the customers and make the products.
Commitment to work contract. The entrepreneur exhibits
the ability to accept responsibility in completing a job. This
competency means that an entrepreneur fulfills whatevc't
he has promised to the customer. He makes sure he delivers
goods on time and honors his commitments except in case,
74 I ENTREPRENEURSHIP STUDYAND PRACTICE
l,r'!on(l his control. He even sits down with his workers and
rnrrrrk., with thenr in order to finish a delivery on time. He is
rr,,t ,rlr;rid to use his hands, to perspire, and get tired along
,n, I r r is workers just to fulfi I his promises and commitments.
r I I I
t".r.,istence. This is the ability to keep on doing somethirfg
, ,,,.n when faced with difficulties. The road to success is
rr, vr,r casV. The successful entrepreneur works hard to reach
lrr'. 1ir),r1. Tolerance for failure is an indicator of persistence.
t lr1'lr ,rchievers take failure as a learning experience. They do
r, ,t r',rsilI become discouraged by any setback.
I lrr ruq.1'61 for Power Cluster
1,, I li ,'rl for Power (N-Pow), the power motive, is the drive to
.,r,,,1, rrrl'luence and have an impacton others. lndividualswith
i.,; lr II I'ow t'lot't"r1olly seek positions of leadership. Successful
., r, tirr,ncul'S are able to use the power motive in a positive
, I lrr,y strive to exercise authority to monitor arqd control the
!,, , r,rrn', t)f others towards the realization of their objective.
i i., , rr. outspoken and demanding in order to get things done
= 1,1 rnrr,'rl. There is a strong urge to lead and enforce or sell
'!'. ri r(1,,,r., for implicit compliance. There is also motivation
='.,1 ir, ,'r I towards increasing personal status and prestige. The
.,,,;,, tr,rrr ies under Need for Power are the following:
rril,rrnatioh-seeking. This is the ability to seek and find
rl,, rrlilrI and valuable information needed by the business.
', , nlrcpreneur takes action to seek information on how
r,, , ,ur achieve his objectives or clarify venture goals. He
, ,,rr .rrlls experts or experienced people to get relevant help.
ti, rr",r'.rrches on how to solve his problems. He personally
,, ,1.rl,rl<es market research and analyzes his customers'
CHARACTERTSTTCS AND COMPETENC|ES OFTHE ENTREPRENEURI 75
 llr. Need for Affiliation Cluster
needs. He also studies his suppliers and makes sure they
knowhisneedssohedoesnotdelayproductionbecauseof
rlr,lrl'r'clforAffiliation(N-Aff)isthedrivetoestablish'maintain
untimelydeliveryofrawmaterialsandservices'Attending the
ol ,,, r, n{'w personal relationships with others' N-Aff represents
seminars and listening to experts are important sources
, t, rr. lt) interact with people socially'
The affiliation drive produces
information for the entrepreneur' with strong
rt,,.ri(,(,rl to be liked and held in high regard. People
suggested that
,nrlr,rtron drive are good team players. McClelland
Goal-setting. This is the ability to set short-term and long- affects the
,ttrlr,rlr()n-motivation, when too strong, negatively
term goals which are clear, realistic, and attainable' The capability'
, sr r'l )r,'neur's objectivity and rational decision-making
successful entrepreneur identifies new and potentially
1 1

contribute to
l,,r,r'V('r, a healthy need for affiliation will greatly
unique ideas to achieve his goals and generates new or
. ti, ,Irvc business networking'
alternative strategies to reach these'

,,',,rt)('lt,-'ncies under the N-Aff Cluster are as follows:

SystematicPlanningandMonitoring.Astheentrepreneur
sets goals, he also plans on how to ensure the achievement being able to
I'r.rsuasion and networking. Persuasion means
of these goals. This is what systematic planning and ,,,rrvince people that whaLyou are doing is right and
useful'
monitoring is all about. Monitoring is continuously following the enterprise
Ir r', the ability to make other people work for
up on whether the goals are being achieved' Daily, weekly' rrrr I lrelieve in what the entrepreneur
stands for' lt also means
monthly and yearly goals must be monitored closely and ,,,rrvincing other people that the business is
good and that
continuously. Constant monitoring is important so that rt r', worthwhile to do business with the entrepreneur'
An
others
things that go wrong are prevented from getting worse' , rrlropr€fl€ur can successfully persuade or influence
production' and
t,r ilrobilize resources, obtain inputs, organize
, ll products or services' He can convince customers
to buy his
The entrepreneur can monitor the enterprise performanc(r
bankers or investors to
through many ways' The budget is one' lt tells the' 1
,r, rr luct or service. He can also convince
resources to the company'
entrepreneur how much he can and cannot spend on I rr,vitle financing and

specific items. Another is his daily goals (both in terms ol

goods produced or sold and in terms of money earned)
against which he can check if the business is doing right.
Tht'
entrepreneur can also talk with the customers regularly to
get feedback on how the business is doing. Additionally, thr'
entrepreneurcanmonitorthebusinessbytalkingtohisteant
to ask if they think the business is doing right. N/onitoring
ensures the health and well-being of the business'
tl,'lworking means the ability to create strong bonds
,,,,rllr people who may be involved in the business
and
,,1 l,('r entrepreneurs including competitors'
With effective
rr,'lworl(ifl$, the entrepreneur can possibly find
cheaper
,,rir(eS of raw materials or better ways of doing
things'
I that people are willing to help the entrepreneur
lrr', rtteans
will
l .r.rtlse they know that someday the entrepreneur
1,, .rltle to help them in turn' He acts
positively to develop

CIIARA(]IIIII:iII(]:]ANDCOMPTIENCIESOFTHEENTREPRENEURITT
76 I ENTREPRENEURSHIP STI]DY AND PRACTICE
 business contacts such as through active membershi;l lrl
industry and trade chambers and other civic organizatiorrr.
Self-confidence. This means believing in oneself and in ortr,'q
ability to get things done. Self-confidence ensures that one r,ur
take charge and take responsibility for decisions made. The sr,lf
confident entrepreneur is sure that he can overcome obstar.h,r
and challenges because he knows he isworking hard enough arrrl
that he deserves to succeed. He is sure of his ability to compk'le
a task, stick to his own plans, and meet a challenge in the facc of
opposition or early failures. This includes asserliveness whert,lrr
the entrepreneur confronts problems and issues with courage
and poise. He gets bigger satisfaction out of winning or solvirrg
a difficult problem than from earning money or praise. He h
interested in learning from others that he is doing well rathr,r
than how well he is liked.
The lmportance of Passion
Passion has been mentioned many times by authors anrl
entrepreneurs as a distinctive trait of successful entrepreneuri,
Passion makes the entrepreneur leave the comfort of a
hammock or of a paying job, scrape some money togethe,r,
and venture into entrepreneurship. Deep in their hearts,
entrepreneurs believe that they will make a difference in the
world and in people's lives.
Passion helps the entrepreneur find ways to please and satisfy
his customers and make them come back for more. lt gives thtr
entrepreneur the motivation to strive for "execution intelligence,"
This means that the entrepreneur is able to assemble a solid idc,r
into a viable business because he is passionate about it.
78 I ENTREPRENEURSHIP STUDY AND PRACTICE
Fi.'t. I xr.rr isr.s to Uncover Passion
] atr,rrd (20L1"), a writer on small business topics, suggests
ftt r rlativity Exercises to Find Your Passion." She quotes
[n1art't,r Disraeli, ].9th century British Prime Minister, as
plng ',,rid, "Man is only great when he acts from passion."
fr tuggests five exercises that can help today's aspiring
$trn;,,,,n.urs explore avenues of creativity to find their
l-hese exercises could be the quickest route to increase
)rlnrr
Dt'r , lr,rnces of launching a successful business.
r ,r'r( r.,c 1: Think back on your childhood. What were your
i rr",ls then? Girard quotes Rob Levit (2009), creativity
, r,, r t, speaker and business consultant who says "lt's
, r.'rrr11 how disconnected we become to the things that
t,r,,r11ilrI us the most joy in favor of what's practical." Levit
,rr:r:r",ts making a list of all the things one remembers
r ,,,ll cnjoyed as a child. Would you enjoy that activity
,,r^/.) | or example, Frank Lloyd Wright, America's greatest
, 11111'.1, played with wooden blocks all through childhood
,r ,l pcr haps well past it. "Research shows that there is much
i', 1,,'rliscovered in play, even as adults," Levit says. The
t,r nrfl entrepreneur could revisit some of his childhood
, ri r{,.,ts and activities. Girard also suggests asking these
' 1 r ".111;J15 to get started: "What can be translated and added
r r !our life now? How can those experiences shape your
, ,rr,(,t chOiCeS nOW?"
lxercise 2: Put up a 'treativity boardJ'Girard suggests that
tlrr aspiring entrepreneur take a large poster board, put the
wnrds "New Business" in the center, and create a collage
ol lmages, sayings, articles, poems and other inspirations.
Mlchael Michalko (201,411, a creativity expert and author of
CHARACTERISTICS AND COMPETENCIES OFTHE ENTREPRENEURI 79
 creativity books and tools says: "The idea behind this is tlr
when you surround yourself with images of your intcrrllr
- that is, who you want to become or what you warrt lrl
create - your awareness and passion will grow.,, As yoilf
board evolves and becomes more focused, you will begirr t0
recognize what is missing and imagine ways to fill the bl,rrrkr
and realize your vision.
Exercise 3: List down the names of people who are whon
you want to be. Study people who have been succesrlrrl
in the area you want to pursue. Aspiring entrepreneurs ,uE
advised to study these people, figure out how and why thny
are able to remain successful when everyone else is failirrg
and then think of ways to emulate them. Levit continues hls
advice: "lf you want to be creative, create a rigorous arrrl
formal plan. lt's not the plan that is creative; it,s the procr,rq
that you go through that opens up so many possibilities.,,
Exercise 4: Start doing what you tove, even without r
business plan yet. Many people wait until they have arr
extensive business plan written down, along with angel
investors wanting to throw cash at them. consequently, tholr
ideas never see the light of day, according to cath Duncarr
(201.0), a creativity expert, and life coach who works with
entrepreneurs and other professionals. she recommenclr
doing what you enjoy - even if you have not yet figured out
how to monetize it. Test what it might be like to work in arr
area you're passionate about, build your business network
and ask for feedback that will help you develop and refino
a business plan. lt is a way to show not only the value you
would bring, but also of getting testimonials that will inspiro
you to launch your business when you are ready to make ll
official.
80 I ENTREPRENEURSHIP STUDYAND PRACTICE
l",.rr i',r. 5: Take a break from business thinking. While it
,,, i1' I I llr.l rrncomfortable to step outside of business mode, the
r
,,ir., | ,,,rrrt'[imes needs a rest from such bottom-line thinking,
r, I , .v;1, who has recently taken up Japanese haiku, a form of
r,, ,, r r v l,rking a break could mean engaging in creative writing,
1, rrrrlrrryi, running, or even gardening. After taking a mental
,, ,tr(,n ,rnd indulging in something you are passionate about,
I ' , rl ',rrligests coming back to a journal and writing down any
t,r I 111q,,,., ideas that come to mind.
I i.,r rtu.rys to Tell lf Someone ls an Entrepreneur
f,llrlra Krrufman (21t4l discusses five ways to tell if someone is
lF pnlrcpreneur:
tirrlrr.rtor No. 1. The entrepreneur is not afraid to embrace
rrr, lrrture and thinks that his destiny is in his hands. He
,,,^,rr,, his destiny, particularly his financial destiny, even
,lrirnl,, uncertain times. He is empowered enough to think
ilr.rt Ire can pull himself together even if everything seems
r', lrl collopsing all around him.
irrrlicator No.2. The entrepreneur invests in his brand and in
lrr', rt'pUtation. He believes that his brand is his reputation.
nrr',rness success will come from customers who will keep
r, Irrrning to his brand.
lndlcator No. 3. The entrepreneur is willing to fall and rise again.
lor him, life is not perfect. When beginning his adventure, the
entrepreneur is open to failures and ready to learn from them.
lndicator No. 4. The entrepreneur is aware that establishing
lrls niche will take a few attempts. ln the beginning, he keeps
CHARACTERISTICS AND COMPETENCIES OFTHE ENTREPRENEURI 81
 i,,,,;,,,,iillr i ,r,.1 , I i |
,1l,ill',1,,' ir,,l trrti|l| 1,, rlrrrl'lrr ,tll|tillll
Irrrlrr.rt,)i N() 'r llrr' (.ntrcpreneUr knoWS that passion is
ili., r..,,,.ily ilr wll(t L he is doing. The entrepreneur believes
',tr.vt. lobs (2005) when he told a gathering of Stanford
lir,l(lU.ltes: "You've got to find what you love... your work is
going to fill a Iarge part of your life, and the only way to be
truly satisfied is to do what you believe is great work. And
the only way to do great work is to love what you do. lf you
haven't found it yet, keep looking. Don't settle."
Dreams Are lmportant
An entrepreneur dreams of high adventure. He does not
get tied up in wishful thinking. He dreams of clear ideas and
innovations. He is not afraid to dream in the face of doubt and
skepticism. People with a dream act differently; they seem to
have meaning and purpose to their lives.
Children dream and make believe when they play. For some,
as they grow oldeL they are instructed to stop dreaming and
face reality. For many parents, education has top priority while
dreams have low priority. Yet, every achievement usually begins
with a dream.
During the dreaming stage, one is alone with seemingly
impossible ideas. When talking about ideas, the first reaction
is "Where did he get that nutty idea?" All great inventors and
achievers go through this phase, especially during the failurt:
days. After a few successes, people say nothing about wild
ideas. With more success, everyone will support any idea.
82 I ENTREPRENEURSHIP STUDY AND PRACTICE
,1 ,r,l , tvlce Ghapter 8
Rewards and Risks Faced by the
Entreprerueur
details of what
1-,,nsolidated in this chapter are some
\-rr,wards an entrepreneur can expect, as well as the risks he
,,rrv l.rce on his way to success. Entrepreneurs are promised
rrr rn! rewords but theyface as many risks. As many have found,
l,, rrr.lits usually do not outnumber risks. The wise and astute
, rrlrr'1)re fl€ur, however, can continue his pursuit of success
,lrill facing and overcoming problems and challenges. Although
' rrr,rr(ls await him, he must also be aware that he has to face
,,rrrr, riskS as he puts his plans into reality.
tlrr', r hapterdiscussesthe rewards and risks of the entrepreneur.
It,.w.rrds of Entrepreneurship
self-fulfillment. The entrepreneur is pleased when he achieves
,rrrd accomplishes his plans through his hard work. He feels
',r'lf-fulfilled when he makes use of his talents, creativity and
',1<ills as he performs the various tasks required in the business
lrom conceptualization and planning, to implementation.
I)ersona! independence. The entrepreneur earns the
prestige of being his own boss, the person in charge, and
tlre one who calls the shots.
Flnancial reward. Through his earnings, the entrepreneur
receives substantialfinancial rewards when running his own
REWARDS AND RISKS FACED BYTHE ENTREPRENEURI 83
 business rather than when working for someone else ll.rrrl and demanding work. Starting an enterprise entails
lr.rrrlworl<. lt may seem easy at first but the entrepreneur
Social rewards. The entrepreneur is able to crealr, rrr,rr,, r'r)counter difficulty later. He will have little time for
employment that contributes to the reduction ol l, r'.ur('and he may have to give up his holidays, hobbies
unemployment and alleviation of poverty. rr rr I oIher pleasures.

Risks and Challenges Faced by the Entrepreneur

The entrepreneur finds abundant rewards when starting antl

running his own business. However, he must be aware that hr,
will face risks and challenges. Considerable difficulties will br,
experienced by the entrepreneur because of many uncertaintier
that he cannot anticipate.

Risk of failure. Although a calculated risk, starting an

enterprise still hasto face the probability of failure. Potential
loss of resources invested in business can be a reality.

Risk to health and well-being. The entrepreneur needs to keep

his body fit and his mind alert. Exercise and fitness should be
part of his lifestyle. The entrepreneur must have time for rest
and recreation. He should keep a positive outlook in life.

Socia! risk. The work of the entrepreneur can be a sourcc

of conflict with his family and social relationships that can
make his life stressful. The entrepreneur then has to learn
to deal with stress creatively.

Limited access tospecialists and consultants. Thr,

entrepreneur has very limited access to specialists an(l
consultants to help him at the beginning of the enterprisr',
Consultants often charge very high fees, which tlrl
entrepreneur may not be able to afford.

84 I ENTREPRENEURSHIP STUDY AND PRACTICE REWARDS AND RISKS FACED BYTHE ENTREPRENEURI 85
 Ghapter 9
Eruc ouragin g Entrepre ne urship in
the Philippines
fhis chapter acquaints the student or would-be entrepreneur
I about the efforts of both government and private sectors in
rrraking sure that entrepreneurship is given a place of honor in the
rkrvelopment roadmap of the country. lt discusses the enabling
lirws 0nd the assistance programs available to the entrepreneur.

Iullowing are the topics i,n this chapter:

Status of micro, small and medium enterprises (MSMEs) in

the Philippines
lhe role of the Department of Trade and lndustry (DTl) in
promoting lVlSIVlEs
Organizations involved in the promotion and development
of MSMEs
laws and policies on MSMEs
Assistance programs for IVlSlVlEs

5tatus of Micro, Small, and Medium Enterprises (MSMEs) in the

Phllippines (Source: Department of Trade ond lndustry: http://
www. dt i. g ov. p h/dti /i n d ex. p h p/ re so u rce s/ s m e - re so u r ce s/s m e -
statistics)

Nrrmber of MSMEs in the Philippines

A:; of 2012, there were 944',897 business enterprises operating

lrr the Philippines. Of these, 940,886 (99.58%) were micro,

ENCOURAGTNG ENTREPRENEURSHTP rN THE PHILIPPINESI 87

small, and medium enterprises (lVlSlVlEs). The remainder of
4,0L1- (O.42%) were large ind ustries.
Of the MSMEs, 844,764 (89.78%) were micro enterprisct,
92,0279 (.78%) were smallenterprises, and 4,095 (0.44%)wcrtr
f nrploytnC])t
*i .l ll , 1it'nerated 4,93O,85L jobs in 20L2 versus 2,658,740 for
r!,; | ,rr,(' cnterprises. This indicates that MSMEs contributed
, ( ()lyo of the total jobs generated by all types of business
=r,,1, I ,4

medium enterprises, = -r rl,lr'.lrnrcnts that year. Of these, 47.0% or 2,3L6,664 jobs were

==,,', rrl,.rl by micro enterprises; 4L.8% or 2,OGL,O90 by small

of =,,,, llrrr.,,,s; and 1,1,.2% or 553,097 by medium enterprises.

Wholesale and retail trade, repair of motor 436,809

vehicles and motorcycle industries
lnformation and communication, financial
and insurance activities, and other service
activities
Accommodation and food services
Manufacturing
Human health and social servicel professional
c a nd tech nica l, ed ucation, administrative
scientifi
and support services, arts, entertainment and
recreation industries, and real estate
MSMEs in operation in 2OL2
i: rrr,lu,try sector, lVlSlVlEs in the wholesale and retail trade,
-r, !,r ,,1 rnotor vehicles and motorcycles generated the most
,,,,r,, r oljobs with l-,760,394 jobs in201-2followed by IVISMEs
!33,157
' , ' , lirrrl,rcturing, 8L8,748; accommodation and food services,
i !: !:' I t . r,tl ucation,282,884;and otherservice activities, 195, L60.
t26,LO3
i r11,,;1ry of the jobs were generated by MSlVlEs in the National
117,601.
=s, r I rir,gion (NCR) with1,577,748 jobs;followed by MSMEs in
105,927
..:-.., r, r A (CALABARZON), 7O9,L56; Region 3 (Central Luzon),
i ' t',r,, Iiegion 7 (Central Visayas), 374,925; and Region 6
i i r, rrr Visayas\,266,L17.
9L9,602
-==1,. .,rrtl Census Value-Added

Geographical Spread of MSMEs
Majority of the MSlVlEs in operation in 20L2 can be founrl
in the National Capital Region (NCR), with 210,576 businect
establishments; Region 4-A (CALABARZON) with l-44,81L; Region
3 (Central Luzon) with 105,33L; Region 7 (Central Visayas) wlllt
65,637; and Region 6 (Western Visayas) with 53,746. These top
five (5) locations accounted for about 6L.65% of the total number
of MSIVIE establishments in the country.
88 | ENTREPRENEURSHTP STUDY AND PRACTTCE
r,lrrrli [o the MSMED Plan 201,1,-2OL6, in terms of value-
,) ,l rlrt' MSME sector contributed 35.7% of the total value
I !. ,l r,vrIh manufacturing contributing the largest share of
$nler,rle and retail trade and repair contributed 6.58%
ftwu,l by financial intermediation with a share of 6%. Within
] r*, tor, small enterprises accounted for the largest share
Il[} r'u;,. Medium enterprises followed with a share of LO.3%
]1, ,,,,,'ro enterprises registered a share of 4.9%.
ENCOURAGTNG ENTREPRENEURSHTP tN THE PHtLtPPtNESI 89
 Among small enterprises, wholesale and retail tradc and rt,1t,r
had a share of 4.o7% followed by manufacturing with a str,rr€
of 3.82% while financial intermediation was next with a sh,u€
of 3.35%. For medium enterprises, manufacturing accourrtr,(
for the biggest share of 2.77% followed by electricity, gas, irrrrl
water with a share of L.92% and financial intermediation witlr
L.87%. For micro enterprises, wholesale and retail trade anrl
repair represented the largest contribution of LJ3%.
The Role of the Department of Trade and Industry in promotin;
MSMEs
Through its Bureau of IVicro small and Medium Enterprise
Development (BSMED), the DTI is the primary governmc,rrf
organization mandated to promote, support and spur the
growth and development of MSMEs in all productive sectors of
the economy. The secretary of the DTI heads the Micro, Small
and Medium Enterprise Development (MSMED) Council whieh
formulates the IVISMED plan.
The Micro, Smalland Medium Enterprise Development (MSMEDI
Plan 2011--2016 serves as the framework for the convergene€
of initiatives adopted and implemented by multi-stakeholderr
towards the growth and development of the tvlstvlE sector in
the country.
The lvsMED Plan has four major outcomes or result portfolios,
namely Business Environment (BE), Access to Finance (A2F),
Access to IVlarkets (A2M), and productivity and Efficiency (p&E),
It also takes into consideration global themes and crosscuthng
issues related to gender, climate change, corporate social
responsibility, a nd migration.
90 I ENTREPRENEURSHIP STUDY AND PRACTICE
llr. I ) I I provides programs and servicesto enterprises registered
itlr llrr, SME center of the DTI Provincial Office. The services
r,r,,\,r( l('rl through SIVIE Counselors are the following:
With assistance from an expert, diagnose the needs of
the participants,
With assistance from an expert, provide the
(.ntrepreneurs, or would-be entrepreneurs, with general
.rdvice on the needed training,
ln coordination with network partners, inform the
ontrepreneurs when and where they may be assisted,
track adaptation by the entrepreneurs of the business
development services provided,
Determine if the entrepreneurs need additional services
within the current stage of assistance or endorse them
to the next stage.
l't,,urizations lnvolved in the Promotion and Development of
r"*l',lvl[s
. the organizations extensively involved in the promotion
,,,r,. of
,,,1 rlr,velopment of MSMEs are:
The University of the Philippines lnstitute for Small-Scale
lndustries (UP lSSl)
I tr.pu blic Act Nu mber 6041'AN ACT DEFI N I NG TH E FU NCTIONS
I II THE INSTITUTE FORSMALL-SCALE INDUSTRIES, UNIVERSITY
tII THE PHILIPPINES, PROVIDING FOR ITS FINANCING AND
loR OTHER PURPOSES" established UP lSSl through the UP
Itoard of Regents pursuant to the bilateral agreement made
{tn lvlarch L, 1966 between the Republic of the Philippines
,rrrd the Government of The Netherlands.
91
ENCOURAGING ENTREPRENEURSHIP IN THE PHILIPPINESI
 The major purposes of the University of the philippirrr,,,
the establishment of this lnstitute are the following:
a To train competent people up to a level where tltey
will be able to assist existing small-scale industrir.,, trl
increase productivity and to promote and develop n(,w
ones
a To provide consultancy and extension services to exisilrrg
small-scale and medium-sized industries,
a To conduct research on plant operations and make llrc
result of such research available to interested partir.s,
a To lead the way in overcoming the various problemr nf
small-scale and medium-sized industries needing tlre
advice, stimulation, and assistance of consultants.
The Small Enterprises Research and Developmenl
Foundation (SERDEF)
The Small Enterprises Research and Developmorrl
Foundation (SERDEF)was established in L976to assist in thc
promotion and development of entrepreneurship and sm,rll
and medium enterprises in the country. ln particular; it aiml
to complement what its partner government organizatiorr,
the UP, lSSl provides for the small business community.
SERDEF's vision is to build an enterprising culture witfi
Philippine society thus increasing the pool of citizfl
t'n""t"income and jobs tr.'ol
]ff"rii:'"'rTlolo
SERDEF's goals are the following
a To foster an enterprising culture in Philippine society,
92 I ENTREPRENEURSHIP STUDY AND PRACTICE
I Io pioneer initiatives on new and innovative enterprise
r lcvelopment tools and strategies,
lo initiate, sponsoL promote, and conduct research,
lr.rining, extension, and information programs geared
I owards small enterprise promotion.
',1 ItDEF offers programs for both existing and aspiring
.nlrcpreneurs, schools, as well as government and non-
r:( rv()rnment organizations engaged in enterprise promotion.
( llED Programs on Entrepreneurship
!rr recognition of the important role of entrepreneurship in
rr,rlional development, the Commission on Higher Education
(( llED) has introduced since the l-990s, programs which later
I collectively known as entrepreneurship courses. Some
r,'1 .11'11"
rrl lhese were offshoots of business administration programs
vulrile others were developed independently by reform-minded
l,rr ulty members.
lrr .'005, CHED issued CHED lVlemorandum Order (CMO) No.
t z cntitled Policies and Standords for Bachelor of Science in
t tltt epreneurship. Since then, many colleges and universities
lr,rvc offered entrepreneurship courses including degree
l,r( )flrams.
(,o NegOSyO
t',tablished in 2005, Go Negosyo is the advocacy arm
,rl the Philippine Center for Entrepreneurship (PCE), an
,
'rltanization that promotes change in mindset and attitude.
t't t, believes that Filipinos can address poverty in the
r ( )untry by engaging in entrepreneurship and developing an
ENCOURAGTNG ENTREPRENEURSHTP lN THE PHILIPPINESI 93
 optinristic, passionate, creative and innovative, resourr rfgl i, n r( l('r, lormer President Corazon Aquino, from the business
'
diligent, and persevering character. Everyone is encour,rgsl ,,,nrnrrrnity. PinoylVE sees itself as an intermediary between
to take charge and make the most of available r."r.,,,,,r1 ,r, r() ('ntrepreneurs and microfinance institutions. lt has three
and abilities. I ,rrtloals: (1) to provide micro entrepreneurs with access to
r,rrrilrrr1,,, (2) to provide IVlFls with advice that will guide their
Go Negosyo aims to create an entrepreneurial clirtr,rl l, r,rrrt'ss decisions and make their operations more efficient,
for the Philippines, one that would lead to a country ,,,,1 (l) to create a market for microenterprises by promoting
enterprising and progressive Filipinos who are optimi,,ilr, , , ,ll. rlroration and business partnerships among private

empowered, and do not rely on dole-outs. , ,rrrp,rnies, MFls and business development service providers.

Entrepinoy Volunteers Foundation, lnc. I nl 1 epreneur Philippines

Entrepinoy Volunteers Foundation, lnc., founded in 1()(l/, Ilrr,ugh its publications, Entrepreneur Philippines is
provides guidance to Filipino entrepreneurs to be glob,rlly ,r! r,xtensive resource for both aspiring and existing
competitive with the involvement of volunteer experts ,rrrd , rtr('preneurs in starting and expanding their businesses.
institutions. I lr,'y provide expert business advice and know-how to help

, rtr('preneurs succeed in business. The organization also

The extensive and diverse expertise, experience, and netwotk l,,rlrlrshes a franchise directory that lists available franchises
of Entrepinoy volunteers make it a unique organization uf t,,r rnterested entrepreneurs, a suppliers'directory, and a
practitioners committed to provide consultancy, trainlrrg l,r r',r rcSS opportunities directory.
r

and networking services. practitioners are driven by e

strong spirit of volunteerism, nationalism and concern lof vt s rhilippines
the economy.
t lr.
Youflg Entrepreneurs Society (YES) Philippines is an
PinoyME Foundation ,,r1,,rnizatioh of young entrepreneurs who share a common
1,,r',',ion for excellence in business and professional growth.
The name PinoyME stands for "Filipino microenterprisil l', Philippines was established to promote and develop
is also a colloquial way of expressing the Filipino,s beliil , rrtr(,preneurship among the youth.
and his ability to defeat poverty through his oil
ff.e]|, I rw'. .p161 Policies on MSMEs

The PinoylVE Foundation was established in June 2007 as a policies, and assistance programs have been put in place
yv,,,
non-stock, non-profit organization seeded by funds raised by llr Fnsure that entrepreneurs especially in the MSME sector are

94 I ENTREPRENEURSHIP STUDYAND PRACTICE ENCOURAGING ENTREPRENEURSHIP lN THE PHILIPPINESI 95

 not only protected but also encouraged to work and enjoy llrc
fruits of their labor.
The Go Negosyo Law. Republic Act (RA) No. 1,0644 or the (,rr
Negosyo Act signed on July 1.5,201,4, seeks to promote ,,jolr
generation and inclusive growth through the developmt,rrl
of micro, small, and medium enterprises in the country.,,
The most salient feature of the law is the establishment of
"Negosyo Centers" in all provinces, cities, and municipaliti(,t
to promote ease of doing business and facilitating accr,,,1
to services for MSMEs within their jurisdiction. The Centert
assist MSMEs in the following areas: (1)technologytransft,r;
(2) production and management of training programs; anrl
(3) marketing assistance.
The Department of Trade and lndustry (DTl), Departmerrt
of Science and Technology (DOST), Up lSSl, Cooperative
Development Authority (CDA), Technical Education anrl
Skills Development Authority (TESDA), and other agencir.t
concerned shall provide such assistance to MSMEs.
A unified and simplified business registration shall also
be developed and made available in all Negosyo Centeru
The law guarantees fast approval of business registratiorr
through the automatic approval of business permits antl
licenses that are not approved for any reason within fifteerr
(15) days.
A Philippine Business Registry Databank shall also be
established under DTI to serve as a repository of informatiorr
of all business enterprises in the Philippines.
96 I ENTREPRENEURSHIP STUDY AND PRACTICE
Finally, the law mandates the putting up of a Startup Fund
"to provide financing for the development and promotion
of MSMEs in priority sectors of the economy as specified in
the MSMED [MSME Development] Plan."
rhe Barangay Micro Business Enterprises (BMBE) Law. The
llarangay Micro Business Enterprises Act of 2002 (R.A. 9178,
Iuly 22,2002l,was enacted to hasten the country's economic
rlevelopment by encouraging the formation and growth of
harangay micro business enterprises and integrating those
rrr the informal sector with the mainstream economy.
lhese goals will be achieved through the rationalization
of bureaucratic restrictions, active intervention of the
llovernment especially in the local level, and granting
of incentives and benefits to generate employment and
,rlleviate poverty.
The main attraction of the BMBE is that it exempts micro
enterprises from taxes and fees for a number of years. Here
are the major provisions of the BMBE law:
A barangay micro business enterprise refers to any
business entity or enterprise engaged in the production,
processi ng or ma n ufactu ri ng of prod ucts or com mod ities,
including agro-processing, trading and services whose
total assets shall not be more than 3 million pesos.
Any qualified person (natural or juridical), cooperative or
association may apply for inclusion in the BMBE Registry
of a city or municipality. A Certificate of Authority
is issued by the office of the treasurer of each city or
municipality. This certificate, which is valid for two years
and renewable every two years, enables the BMBE to
avail itself of benefits under the law.
ENCOURAGTNG ENTREPRENEURSHIP lN THE PHILIPPINES | 97
 Following are the bencfits available to a registered BMII
a Exemption from taxes and fees. All BMBEs sh.rll
exempt from income tax. LGUs are also encou
either to reduce the amount of local taxes, fees,
charges imposed, or to exempt the BMBE from p
local taxes, fees, and charges.
a Exemption from minimum wage law. The bara
micro business enterprise shall be exempt from
coverage of the Minimum Wage Law, but the empl
shall nevertheless be entitled to the same
given to any regular employees like social security
PhilHealth benefits.
a Specific assistance programs: Technology
prod uction, ma nagement trai ni ng a nd ma rketi ng
a Access to credit: Certain government institutions like
Land Bank of the Philippines (LBP), Development
the Philippines (DBP), Small Business Corporation
and Peoples Credit and Finance Corporation (PCFC)
required by law to set up a special credit win
service the credit needs of BMBEs either through
or wholesale lending, or both. The Government
lnsurance System (GSIS) and the Social Security
(SSS) are also required to set up special credit p
that will serve the financing needs of their res
members who may wish to establish a BMBE.
banking and financial institutions are also
to lend to BlVlBEs.
The Magna Carta for Small and Medium Enterprises.
Magna Carta for Small and Medium Enterprises or RA
was passed in 1991, and amended by RA 8289 in L991,
by RA 9501 in 2008.
98 I ENTREPRENEURSHIP STUDY AND PRACTICE
llrc l,rw is considered a landmarl< legislation which reflects
tlrr, current national policy to foster a dynamic SIV1E sectol
1,,rr ticularly rural and agri-based manufacturing ventures.
tlrr,, is guided by three principles in setting the pace for
,irr,rll and medium enterprise development:
Minimal set of rules and simplification of procedures
and requirements
Participation of private sector in the implementation
of SME policies and programs
Coord i nation of govern ment efforts.
llrr,ro ore three major provisions contained in the Law
. Creation of the Small and Medium Enterprise
Development Council
. Creation of the Small Business Corporation
' Mandatory allocation by lending institutions of a
portion of their loan portfolio for lending to small
and medium enterprises.
ntlrr.r salient provisions of the Magna Carta are the following:
Establishment by the Bangko Sentral ng Pilipinas
of an incentive program to encourage lending to
MSMEs beyond mandatory credit allocation to said
enterprises, such as possible reduction in bank's
reserve requirements,
lVlonitoring by the SMED Council of all loan
applications by MSMEs in order to account for the
absorptive capacity of these enterprises,
Quarterly reporting to the SMED Council by lending
ENCOURAGTNG ENTREPRENEURSHIP lN THE PHILIPPINESI 99
 institutions on the status of their compliance with
the ma ndatory allocation provision,
a lmposition of administrative sanctions and
other penalties including a fine of not less than
PHP500,000.00 by the Bangko Sentral on non-
compl iant lend ing institutions
The law has spurred private-sector lending to
enterprises. Government financing institutions, on the other
hand, like the Small Business Corporation, Development
Bank of the Philippines and Land Bank of the philippines
have put up wholesale credit programs using private
commercial, rural and thrift banks as conduits or retailers.
Banks and other lending institutions that fall short of
complying with the credit allocation requirement are subjecl
to penalties and other sanctions. However, they have thl
option to avail themselves of alternative compliancr,
instruments being offered bythe Small Business Corporatiorr
in the form of MSIV1E notes and preferred shares.
Assistance Programs Available to MSMEs
There are various assistance programs provided by differetfl
agencies and organizations that are available to MSMl|
particularly on financing and technical skills training. I
a Financing Programs
DEPARTMENT OF AGRICULTURE - AGRICULTURAL CREDII
POLICY COUNCIL
28th Floor, One San Miguel Avenue Building, San lVlillrrr,l
Avenue, Ortigas Center; Pasig City
l.OO I ENTREPRENEURSHTP STUDY AND I'RAOTICE
Program Title: Agri-Fishery and Microfi nance Program (AFMp)
This financing program not only caters to farmers and
fisherfolk but also to other alternative livelihood projects.
DEPARTMENT OF LABOR AND EMPLOYMENT - BUREAU OF
RU RAL WORKERS (DOLE-BRW)
small 9th Floo6 G.E. Antonino Building, T.M. Kalaw and J. Bocobo
Streets, Ermita, Manila
Program Title: Workers' Microfinance Program lKolinga
poro sa mgo Monggagowct Fund)
This program extends micro financing to displaced workers,
workers planning to expand existing micro business, and
those with no existing micro enterprise but who are willing
to engage in business and have participated in appropriate
livelihood or entrepreneurial training.
DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT
{DswD}
IBP Road, Batasan Hills, Quezon City
Program Title: Self-Employment Assistance - Kounlaran
(SEA-K) Program
lhe DSWD SEA-K Program aims to enhance the socio-
{'(onomic skills of poor families through the organization
oI community-based associations for entrepreneurial
r lcvelopment.
ENCOURAGTNG ENTREPRENEURSHTp tN THE pHtLtpptNESl 1o1
 Program Title: Financial Capital Assistance
Each Sangguniang Kabataan (SK) can avail itself of capital
seed fund amounting to a maximum of pHP15O,OOO.00
(PHP5,000.00 per member), which can jumpstart or sustain
micro-enterprises. This is non-collateral and non-interest
bearing.
DEPARTMENT OF SCTENCE AND TECHNOLOGY (DOST)
DOSTBuilding, Gen. Santos Avenue, Bicutan, Taguig City
1631 Metro Manila
www.dost.gov.ph
Program Title: DOST Academe Technology-Based
Enterprise Development (DATBED) program
Through the Technological Assistance program lnstitute (TApl),
DOST provides technical and funding support for project
proposals with science and technology components specifically
for students needing capitalization for their project proposal
with technology or science components.
Program Title: Academe/lndustry prototype Development
Assistance Program
This program provides financial support for the fabricatiorr
and testing of commercial prototypes in order to shorten the
interval between the development stage and actual use of
avai la ble tech nologies.
102 J ENTREPRENEURSHIP STUDY AND PRACTICE
Program Title: Promotion Materials Assistance Program
This program grants financial support for the preparation
and publication of promotional materials such as brochures/
leaflets/ flyers and tarpaulins.
Program Title: lndustry-based lnvention Development
(lBlD) Program
This program funds inventions that have industrial
application. lt is implemented through a partnership
between the inventor and a private enterprise. ln this
collaboration, the private firm finances the fabrication of
one prototype of the invention that will undergo testing,
debugging, and refining while it is being run in an actual
industrial environment.
Program Title: lnvention-based Enterprise Development
(IBED) Program
llris aids an inventor in developing invention into an
r,rrterprise commodity to make it available to the consumers
lry financing the pilot production, including the purchase or
l,rbrication of the machinery and equipment needed.
Program Title: lnvention Testing and Analysis Assistance
Program
I lris program grants up to 50,000-peso fund to technologists,
rrrvcntors and researchers to cover cost of laboratory
',r,r vices, analyses and performance testing.
ENCOURAGING ENTREPRENEURSHIP IN THE PHILIPPINESI 1O3
 DEVELOPMENT BANK OF THE pHlLtpptNES (DBp)
Sen. GilJ. Puyat Avenue, cor. JVlakati Avenue, lVlakati City
https ://www.devbn kph l.com/
Program Title: Microfi nance Program
The program provides the following direct loans lrr
microfi na nce institutions:
a Business development loans -
intended for capit,rl
expenditures and/or working capital for expansiorr
of MFI's operations directly related to microfinanro
services
a Capacity-building loans - intended for
institution,rl
strengthening (e.g. installation of Management
lnformation System); professional development of Mll
board, management and staff.
The program also provides technical assistance, marketing
support, and business development advice to micro
entrepreneurs.
Program Title: DBP Lending Program for Small and Medium
Enterprises
The program provides small and medium enterprises accesi
to market, finance and technical assistance to effectively
encourage the development and growth of the sector.
Program Title: IVegosyo Credit Program for Government
Employees or Puhunong Pangnegosyo Pora So Kowoni ng
Gobyerno
104 I ENTREPRENEURSHIP STUDYAND PRACTICE
llrt: program has the following objectives
To provide government employees through their
cooperatives andlor employee associations access
to GFls/GOCCs negosyo funds to finance alternative
livelihood projects which the employee and/or his
family wish to engage in
To support government thrust of providing income-
augmentin g negosyo projects to government employees
GSIS FAMILY BANK (GFB)
AIC Grande Tower, Garnet Road, Ortigas CenteL Pasig City
Program Title: GSIS Family Bank Microfinance Lending
llrogram
Ihe program targets self-help groups (SHGs) that are
romposed of five persons and conducts weekly meeting
logether with other SHGs to form a center. SHGs are the
lrrimary structures utilized by this microfinance program'
LAND BANK OF THE PHILIPPINES (LBP)
L598 M.H. Del Pilar corner Dr' J. Quintos Street, Malate,
Manila
https ://www. a nd ba n k .com /
I
Program Title: Microfinance Program for MFI Retailers
The program provides funds to MFI Retailers that in turn
lend the fund to micro loan sub-borrowers.
ENCOURAGING ENTREPRENEURSHIP lN THE PHILIPPINES I 105
 Program Title: Easy pondong pong-Asenso (EppA)
This is a program specifically packaged to address tlre
financing needs of small entrepreneurs. The progr,ul
accommodates new/start-up and existing projects wirlr
easy collateral requirements and simpler documentati,rr
procedures. Eligible projects include manufacturing, a1;rl
business, agro-processing (except farm-level productiorr),
and services (including trading and merchandising).
Program Title: Cooperative Lending program
Eligible borrowers are agricultural cooperatives such ,rr
small farmers, fisher folk, and poultry/ livestock raisers;
and non-farmers/credit cooperatives like market vendors,
employees, teachers, rural workers, and women.
NATTONAL UVELIHOOD DEVETOPMENT CORPORATTON (NLDC)
7th Floor; One Corporate plaza, 945 A. Arnaiz Avenue 1223
http ://www. n ldc.gov. phl
Program Title: Livelihood credit Assistance program (LcApl
LCAP seeks to provide livelihood and enterprisc
development assistance to small farmer-beneficiaries in
the agrarian reform communities (ARCs) and members
of the marginalized sectors by providing access to micrcr
credit through accredited NLDC program partners/
conduits, supported by capability building and institutional
development i nte rventions.
106 I ENTREPRENEURSHIP STUDY AND PRACTICE
l)rogram Title: Livelihood Development Program for
overseas Filipino Workers
llris program aims to help oFWs and their families start
()r sustain their own business through access to credit,
r,rpability building, market linkage and other forms of
livelihood or entrepreneurial assistance.
FOUNDATION FOR A SUSTAINABLE SOCIEry !NC. (FSSI)
Unit E, 46 Samar Avenue corner Eugenio Lopez Street, South
Triangle, Quezon CitY
http ://www.fssi.com. ph/what-we-do/
Program Title: Microfinance Eco-Enterprise Program
(MEEP)
The program assists and sets up windows of financing
schemes for microenterprises in eco-enterprise ventures.
OPPORTUNITY MICROFINANCE BANK
OMB Building, Robinsons Homes East, CommercialArcade-1,
Robinsons Homes East, Circumferential Road, Barangay San
Jose, Antipolo CitY
www.omb.org.ph
Program Title: Microfinance 1 (MF 1) Program
The program helps enterprising individuals improve their
business by providing access to additional working capital.
ENCOURAGING ENTREPRENEURSHIP lN THE PHILIPPINESI 1o7
 Program Title: Opportunity Ka-Partner Microfinance
(OK-MF 2) Program
Itseeks to help enterprising individuals improve tlrr,tr
business by providing access to additional working capit,rl
and acquisition of fixed assets for business use.
PEOPLE',S CREDIT AND FTNANCE CORPORATTON (PCFC)
2F, Accelerando Building, 395 Sen. Gil J. Puyat Avenue, IVak,rtl
City
http ://www. pcfc. ph/d n n/
Program Title: Microfi nance Program
This program aims to provide the poor with access to
livelihood credit and other microfinance services througlr
accred ited pa rtner m icrofi na nce i nstitutions.
SMALL BUSINESS CORPORATION (Small Businerr
Guarantee and Finance Corporation)
17th & l8th Floors, Antel Corporate Centre, 139 Valoro
Street, Salcedo Village, Makati City
http ://www.sbgfc.org. ph/
Program Title: mSME Wholesale Lending Program
Provides funding to financial institutions nationwide krr
lendingto mSMEs. lt improvesthe abilityof these institutiorrt
in mSME lending. The Program provides funding access ev('n
to small conduits in the countryside that have positionr,rl
themselves as mSME lenders. lt provides funding at terrrrt
properly matched with the requirements of mSMEs.
1O8 I ENTREPRENEURSHIP STUDYAND PRACTICE
I Program Title: Wholesale lending facility for graduating
micro enterprises
This program aims to increase the credit access of graduating
micro enterprises and those registered under the Barangay
Micro Business Enterprise (BMBE) Law. ln addition to
banks and NBFls, this wholesale lending window is open
to microfinance institutions such as cooperatives and non-
government organizations that have graduating micro
borrowers. Funding options and loan terms are the same as
under the SME Wholesale Lending Program.
Program Title: Micro-Financing Program
The Micro Finance Facility of Small Business Corporation is
a lending program to microfinance institutions (MFls)which
have the organizational capability or strength to provide
sustainable credit access to borrowers in the livelihood
sector. Target end-borrowers are the pre-enterprise micros,
which are either start-up or graduating micros.
ASIATRUST DEVELOPM ENT BANK
1424 Quezon Avenue, Quezon City
Program Title: Term Loan
It provides financing assistance to small and medium
onterprises for permanent working capital requirements
.;uch as acquisition of equipment or other fixed assets,
r:onstruction of buildings for expansion purposes and others.
ENCOURAGTNG ENTREPRENEURSHIP lN THE PHILTPPTNESI 1o9
 Program Title: Loan Line l'ro1,,ram Title: Smalland Medium Enterprise Credit (SMEC)
l'r o;'.ram
The Loan Line program provides SIVIEs with short-tr,rrfl
working capital requirements. tvtl ( has the following objectives:

Program Title: Checks/Receivables Discounting Line
This program addresses gaps in the cash flow of small ,rrrd
medium enterprises by turning their receivables and potl=
dated checks from customers into cash by discounting thlta
at the Bank.
To provide loans through its accredited intermediary
financing institutions (lFls) such as thrift banks, rural
banks, MFls, and cooperatives as conduits
To provide business support to lFls to enhance their
lending capabilities and improve SME productivity
and competitiveness.

Program Title: Domestic/lmport Letter of Credit/Trurt PH I Lrpp! NE EXPORT-|MPORT CREDTT AGENCY (PHILEX! M)
Receipt I lth Floor; CitibankTower, Citibank Plaza, Valero Street, MakatiCity
Ittp: / / tLZ.199.tLg.213lmai n3 1 L/i ndex. ph p?option=com-
This seeks to facilitate the timely delivery of the domesllr r ontent&view=a rticle&id=35
or imported purchases of raw materials and merchandlsp
by providing a credit facility whereby the payment is to hp Program Title: Short-Term Direct Lending Program for
made to the beneficiary (seller) against presentation of tMEs (ST-DLPI
commercial documents. The payment to the beneficiary lt
guaranteed by the bank, provided all documents conforrn I lrr ,re ar€ short-term loans to exporters aimed at raising working

to the terms and conditions of the credit. , ,rlrital requirements of firms involved in priority projects of the
r r, rt ional government. The program includes short term loans to
PHTLTPPTNE BUSTNESS FOR SOCIAL PROGRESS (pBSp) ',rrr,rll and medium sized exporters to fund their pre-shipment
Philippine Social Development Center; Magallanes cornFf , rr rr I post-shipment financing requirements.
Real Street, lntramuros, Manila
http ://www. pbsp.org. ph/ Program Title: Medium to Long term Direct Lending
Program for SMEs

llris program grants medium and long-term loans

lo exporters to finance asset acquisition, expansion,
rrrodernization of production techniques, improvement of
1,r oduction capacity and permanent working capital.

11O I ENTREPRENEURSHIP STUDY AND PRACTICE ENCOURAGTNG ENTREPRENEURSHIP lN THE PHILIPPINESI 111
 Program Title: Wholesale Direct Lending Program for
The program provides short-term loan and capa
building assistance to SME export sector. Lending is avail
for working capital as well as for the following:
a Rediscounting facility to finance purchase
and letters of credit,
a Acquisition of equipment and tools,
a lmprovement of workplace, storage, or wal
facility,
a Advertisement and product promotion, p
and other quality maintenance and upgrading
a Participation of exporters in local and inte
trade shows.
Program Title: Soft Loan Facility for Capacity Building
This program is used in building up data bank,
service and business support facility improvem
marketing and networking, as well as upgrading
Management lnformation Systems (MlS), and accou
and internal control systems of the borrower.
Program Title: SME Unified Lending Opportunities
National Growth (SULONG)
This is a financing program where PhiIEXIM collaborates
other government financial institutions (GFls) to
SMEs access to financing under a uniform lending st
112 I ENTREPRENEURSHTP STUDY AND PRACT|CE
t,lilLtPPINE NATIONAL BANK (PNB)
l'Nll I inancial Center, Roxas Boulevard, Pasay City
I rt t 1
r://www.pnb.com.ph/
I'i()gram Title: Small Business Loan (SBL)
t lrr. objective of the program is to provide financial support
ro,,rndll businesses.
I,tANTERS DEVELOPMENT BANK (PDB)
l'l,rnters bank Building 31-4 Sen. Gil Puyat Avenue Makati City
I rt t p://www.plantersbank.com. ph
I'rogram Title: SME BizLoan
',lVlE loan packages are available for small- and medium-
'.r ,rle entrepreneurs. Available for loans are the following:
Credit line for working capital,
a Term loan for business expansion, equipment
acquisition or factory construction,
Liquefy customers' post-dated checks through check
discounting.
nANCO DE ORO (BDO)
/t199 Makati Avenue, Makati City
Irt t ps://www.bdo.com.ph/
p llrogram title: SME Loan
llre BDO SME Loan program includes term loan facility for
,rr quiring property and equipment for a business. The SME
Itcady Check is a revolving credit line for working capital
ENCOURAGTNG ENTREPRENEURSHIP IN THE PHILIPPINESI 113
 requirements of small businesses. Payment term:,,u€
flexible and loan amount is up to 20 million pesos.
BPI FAMILY SAVINGS BANK
l-09 Paseo de Roxas corner de la Rosa Street, Makati City
http ://www. ka n egosyo .com/
Program title: Ka-Negosyo Loan
Under this program, the bank offers short and long t(,nn
financing. The short term loan is given on the spot trl
cover for unplanned expenses or bridge working capital
requirements. This is accessible with an ATM card. The krng
term financing can help in business expansion, franchi:c
financing and purchase of fixed assets and equipment. lt tc
also used for the purchase, construction, and renovation nf
commercial property. Long term financing is also avail;rlrle
for refinancing of existing commercial loan or mortgage.
RtzAL COMMERCIAL BANKTNG CORPORATION (RCBC)
Yuchengco Tower, RCBC Plaza, 681-9 Ayala Avenue, lVlakati Clly
www.rcbc.com
Program Title: Rizal Biz Access Line
This is a short-term secured revolving credit line I lrat
provides additional working capital and financing for d,ry
to-day expenses of micro and small businesses.
Program Title: Small Business Loans
Financing assistance for small business includes stancl lry
letters of credit, import and domestic letters of credit, trrrrl
114 I ENTREPRENEURSHIP STUDY AND PRACTICE
r financing, export advance and foreign bills purchase
r.t oi1)t
l,rr rlity, pre-delivery and post-delivery financing, as well as
ru.tlium and long-term loans
I ntrepreneurial and Technical Skills Training
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
AUTHORITY (TESDA)
E Service Road, Taguig, Metro Manila
www.tesda.gov.Ph
llrrough the Technical Vocational Education Training (TVET),
ll SDA provides training using four modalities, namely school-
I r,rsed, center-based, enterprise-based, and community-based.
I lrcse training programs are conducted in TESDA administered
',r lrools and enterprise-based training centers, usually in
, ollaboration with localgovernment units'
DEPARTMENT OF SCIENCE AND TECHNOLOGY (DOST)
DOSTBuilding, Gen. Santos Avenue, Bicutan, Taguig City
1631 Metro Manila
www.dost.gov.ph
Program Title: Small Enterprise Technology Upgrading
Program (SET-UP)
',1 t-UP is a nationwide program to encourage and assist SMEs
rrr .rdopting technological innovations that will boost productivity
, rrcompetitiveness of the enterprise. The program enablesfi rms
rd
to address their technical problems through technology transfer
,rrrd technological interventions. lndustry sectors covered include
Iood processing, furniture making, gifts, house decors, marine
,rrrrJ aquatic products, horticulture and metals engineering.
ENCOURAGING ENTREPRENEURSHIP lN THE PHILIPPINESI 115
 Program Title: Technology lnformation and prom
Division (TIPD)
TIPD promotes DOST's key technological innovation stratt,gle;,
It has a wide range of programs designed to raise the k.vel
of awareness of various clients in the areas of technohrgy
application and utilization.
Program Title: Technology-Based Enterprise Developmont
Assistance Program
This Program boosts the country's technology-b.t,,ed
enterprises by giving financial and technical assistanct trr
micro, small, and medium enterprises (MSMEs) in the arr,ar
of setting up and operation of pilot ventures.
Program Title: DOST Expositions and Fairs Program
This serves as an excellent platform for the multi-sectorel
dissemination, sharing, and exchange of scientific ilntl
technological ideas and information. Under this progranr,
recognition is awarded to exhibits and exhibit materials strr lr
as product/technology displays, publications, and othpr
promotional items.
Program Title: Investors' Forum Program
This program seeks to convert technology-basnd
opportunities into actual business investments by bringirrg
together technology generators and potential investors trr
discuss possible new business ventures.
116 I ENTREPRENEURSHIP STUDY AND PRACTICE
l'ro1,.r.rn) Title: DOST Technology Training Center (DTTC)
l'trilittlm
ilrr , l)roflram is envisioned to expedite technology transfer
rr rlrr, t-ountry by providing assistance in the preparation
rrrrl r orrduct of technology training courses, development
,,1 tr,rrrring modules and production of self-learning videos
, ,r ',t)('cific DOST technologies.
I',,rt,,ram Title: lnventors Training and lnvent School
l'r I rllrJmS
t lr,, lrrventors Training program subsidizes costs for training
rlr.rt ,u'c designed to strengthen competence in the areas
',1 rrrlcllectual property protection, business policies and
,,;r.r,rtiofls, manufacturing, research and development
(f r:,1)), and information technology.
,rlrcr assistance programs provided by DOST include
i , ur ing intellectual property protection for inventions
rirrrrtr[]h advisory and consultancy services, and
, rrrlofsefilent of tax and duty exemption privilege to the
lrur (',lu of lnternal Revenue.
ENCOURAGING ENTREPRENEURSHIP lN THE PHILIPPINESI 117