LESSON 2:

Entrepreneurship vs. Ordinary Small Business Activity

Different areas of activity: Entrepreneurship vs. Ordinary Small Business Activity

1. Motive in opening in business
2. Perceptions of risk in the business
3. Reactions to changes in the environment
4. View on competition
5. Vision for development and growth
6. Horizon of business operation
7. Sources of business funds

1. Motive in opening in business

Entrepreneurship Ordinary Small Business

 An entrepreneur starts a business
venture based on entrepreneurial
concepts, principles and the aspiration to
become successful.
 He/she is constantly on the lookout for
new fresh ideas, which can be found in
the business environment.
 The basement is marked by creativity and
innovation, it continuously changes and
involves.
 The owner opens a business with the
primary goal of making it/her source of
livelihood.
 The business becomes a major provider
to the family for their financial
requirements.
 Operates with the basic motive of
earning profit

2. Perceptions of risk in the business

Entrepreneurship Ordinary Small Business

 the entrepreneur takes and faces the  the owner believes that the business risk is
business risk squarely. a deterrent to the operation of the
business and must be avoided.
 He/she couldn't see the risk as inherent in
the business venture, prepares the business
for it, and find ways to minimize its effects.

3. Reactions to changes in the environment

Entrepreneurship Ordinary Small Business

 the entrepreneur reacts positively to
the changes in the environment
because it brings new ideas for
entrepreneurial opportunities.
 He/she considers changes in the
environment a creative mechanism for
development and growth in the
 the owner remains passive and static
changes in the environment where
his/her business operates.
 He/she usually believes that change in
the environment is not a plus factor to
the daily operations but rather a source
 entrepreneurial activities.
4. View on competition
Entrepreneurship
 the presence of competition is a sign of
healthy economic environment
 the environment where the venture
operates can be considered neutral or
free-trade because of healthy
competition
5. Vision for development and growth
Entrepreneurship
 the entrepreneur usually outlines the
course of his or her entrepreneurial
venture in terms of short-term,
medium-term, and long-term plans of
action
 he or she make sure that the vision and
mission of his or her business is clear
6. Horizon of business operation
Entrepreneurship
 An entrepreneur thinks globally but
acts locally
 He or she sight is always focused on the
stars above, while he's feet are firmly
anchored on the ground
 he or she primarily concerned with the
major economic events not only in the
local environment but also in the global
business market
7. Sources of business funds
Entrepreneurship
 the entrepreneur finds that the
proposed business endeavor is a
wealth-creating venture, he or she
explores ways to generate the much-
needed funds from both internal and
external resources
of negative consequences.
Ordinary Small Business
 the owner views competition as an
unhealthy element in the business
environment and tries to avoid it
 he or she is very uncomfortable
working in a competitive environment
and strongly discourages competition in
the business community
Ordinary Small Business
 the owner relies upon chance or luck
in maintaining the status quo of his or
her business
 he or she is not much concerned about
its development and growth as long as
he or she is satisfied with its earning
Ordinary Small Business
 the owner is centered only on the local
environment
 he or she does not intend to participate
in the global environment
 the concept or view of operating
outside the local market is
inconceivable
Ordinary Small Business
 The owner tends to limit the funding of
his/her business enterprise to personal
resources
  he or she strongly believes that the  Loans from external resources can be a
world that the ventures may create is risky undertaking for him/her.
more than enough to compensate for
the sourced funds.
IMPORTANCE OF ENTREPRENEURSHIP

THE FLOW OF ENTREPRENEURIAL BENEFITS

Contributions of Entrepreneurship

Filipino People Local Community Philippine Economy

 Importance to the Filipino people

Entrepreneurship makes the ff. contribution to the lives of the Filipinos:
1. It provides guidelines in their wealth-crating ventures
2. It helps improve their financial and social life
3. It helps broaden their creativity
4. It helps make their lives happy, fruitful, and successful.

 Importance to the Local Community

Entrepreneurship, in one way or another, makes the ff contributions to the local community:
1. It provides employment in the community.
2. It creates new demand in the market
3. It makes a substantial contribution to the raising and collection of taxes.
4. It facilitates the movement of the factors of production.
5. It creates new business opportunities
6. It increases constructive competition.

 Importance to the Philippine Economy

Entrepreneurship makes the ff. contribution to the Philippine Economy:
1. It encourages competitiveness and thereby challenges entrepreneurs to keep improving
their products services.
2. It helps an entrepreneurial niche in the world market.
3. It helps hasten the economic recovery process of the Philippines during financial turmoil
(great disturbance) or crackdown.
4. It facilitates the smooth flow of money in the local market.
5. It assists the national government in its desire to have favorable economic ratings in the
world market.
 LESSON 3:
SOURCES OF ENTREPRENEURIAL IDEAS

Entrepreneurial process of creating a new venture

Creation of Identification of Opening of

entrepreneurial entrepreneurial entrepreneurial
idea opportunities venture

SOURCES OF ENTREPRENEURIAL IDEAS

1. Changes in the environment
2. Technological discovery and advancement
3. Government’s thrust, programs, and policies
4. People’s interest
5. Past experiences

 Changes in the environment

Entrepreneurial ideas arise from the changes that happen in the external environment with
entrepreneurial implications.
1. Physical environment
a. Climate
b. Natural resources
c. Wildlife
2. Societal environment
a. Economic forces
b. Sociocultural forces
c. Political forces
d. Technological environment
3. Industry environment
a. Government
b. Competitors
c. Suppliers
d. Customers
e. Creditors
f. Employees

 Technological discovery and advancement

 Discovery and advancement in the use of technology are another good source of
entrepreneurial ideas and opportunities.
 A person with entrepreneurial interests looks at the possibility of business opportunity in
any new discovery or advancement in technology.

 Government’s thrust, programs, and policies

  The priorities, projects, programs, and policies of the government are also good sources of
entrepreneurial ideas.
 The programs and agenda of the Philippine government intuitively address the needs of the
Filipino people.
 Whenever there are changes in the policies and programs of the government, new
entrepreneurial ideas are likely born.

 People’s interests
 The interests, hobbies, and preferences of people are a rich source of entrepreneurial ideas.
 An entrepreneur must be keen in identifying the cycle of interests and trends of his/her
target market since these tend to continuously change.
 As a future entrepreneur, your business venture should be adaptive to the interests and
hobbies of the people to protect and sustain your business
 Keep evaluating your target customers.

 Past experiences
 Past experiences and exposures are also good source of entrepreneurial ideas.
 The expertise and skills developed by a person who has worked in a particular field may
lead to the opening of a related business enterprise.

CHARACTER TRAITS COMMON TO SUCCESSFUL ENTREPRENEURS

Character traits
 Valued aspects of a person’s behavior.
 Refers to the mark or attribute that distinguishes an entrepreneur from the owner of an
ordinary business.

ENTREPRENEURIAL CHARACTER TRAITS

1. ACHIEVEMENT CLUSTER
2. PLANNING CLUSTER
3. POWER CLUSTER

1) ACHIEVEMENT CLUSTER
 It consists of entrepreneurial character traits that are related to the entrepreneur’s desire
to be an achiever in the field of entrepreneurship.
 The entrepreneur ordinarily does not settle for mediocrity but instead aspires for quality.
 Entrepreneurs are achievers by nature and they strive to achieve.
 Successful entrepreneurs constantly set the things to be achieved and repeatedly find ways
to achieve them.

o Characteristics of an entrepreneurs who aspires to achieve

1. Opportunity- seeker
2. Committed
3. Persistent
4. Risk-taker
5. Efficient and quality-oriented
 i. Opportunity- seeker
A business opportunity seeker is an entrepreneur who:
1. Sees and acts on new business opportunities; and
2. Seizes unusual opportunities to obtain financing, equipment, land, work, space, or
assistance.

ii. Committed
He/ She:
1. Accepts full responsibility for what has been promised to the customers
2. Establishes proper coordination with and among workers, so that goods and services are
delivered as promised, and
3. Seeks to prioritize the satisfaction and interest of customer.

iii. Persistent
He/ She learns to:
1. Take repeated or different actions in order to overcome the obstacles;
2. Make personal sacrifices or exert extraordinary effort to complete the required task
and
3. Stick to his/her own judgement in times of opposition and failure.

iv. Risk taker

3 Types of Risk-Takers
1. An Aggressive risk-taker is not scared to take any risks in business.
2. A Moderate risk-taker is more calculative in taking risks. He/she analyses situation
before taking the leap.
3. A Conservative risk-taker is not very eager to take any kind of risk. He/she is satisfied
with managing a small business and a regular clientele.

v. Efficient and quality-oriented

He/She:
1. Always performs the required tasks in accordance with existing standards of excellence
or continuously improves his/her past performance.
2. Strives to do things better and faster with minimal cost.

2) PLANNING CLUSTER
 It is a set of characteristics of successful entrepreneurs that basically supports the character
traits in the achievement cluster.
 He/she often begins the day with a specific plan and ends it with a review of the progress or
status of the plan.

o Characteristics of a planner
1. Goal-setter
2. Information-seeker
3. Systematic in planning and monitoring
 i. Goal-setter
 The basic concept of planning is setting goals and objectives.
 Goals and objectives are the guiding points that direct all actions, efforts, and
struggles of the entrepreneur.
 SMART
Specific, Measurable, Achievable, Realistic, Time-bound

ii. Information-seeker
 A successful information-seeker
1. Seeks relevant information on target customers, suppliers of raw materials,
and competitors.
2. Verifies available information from various sources, both private and printed
materials agencies;
3. Seeks opinions and advice from experts in the business field;
4. Finds other possible ways to make sure that the desired information is
complete.

iii. Systematic in planning and monitoring

 A successful entrepreneur adopts a systematic and coordinated planning and
monitoring activities where he/she:
1. Gathers all the qualitative and quantitative information before formulating
the plans,
2. Develops a logical step-by-step approach in the formulation of plans,
3. Monitors the progress of activities and switches to alternative strategies
when deemed necessary, and
4. Evaluates constantly the alternatives in achieving the goals

3) POWER CLUSTER
 It includes a set of character traits that reflect the degree of the interpersonal relations
maintained by successful entrepreneurs in the community.
 The term power simply refers to the ability of the entrepreneur to maintain the highest
degree of interrelationship in the business community and influence others over to
his/her line of reasoning.
 The power clusters refer to the relationship and image of the entrepreneur in the
community.

o An entrepreneur in the power cluster is

1. Persuasive and Positive Networker
2. Self-confident

iv. Persuasive and Positive Networker

 As a persuasive and positive networker, the successful entrepreneur usually
1. Adopts specific strategies that will influence and convince others while
maintaining the highest degree of respect, and
2. Makes use of positive contacts in the business community in order to meet
the goals and objectives of the business endeavor.
 v. Self-confident
 Entrepreneurial self-confidence is actually a manifestation of the entrepreneur’s
strong trust or belief in himself/herself.
 Building self-confidence is a gradual process where the past experiences have
significant contributions to the present.

ENTREPRENEURIAL CHARACTER TRAITS

1. ACHIEVEMENT CLUSTER
 Opportunity-seeker
 Committed
 Persistent
 Risk-taker
 Efficient and quality-oriented
2. PLANNING CLUSTER
 Goal-setter
 Information seeker
 Systematic in planning and monitoring
3. POWER CLUSTER
 Persuasive and Positive Networker
 Self-confident
 LESSON 4:
SKILLS AND CORE COMPETENCIES IN ENTREPRENEURSHIP

SKILLS
 Are considered as the personal abilities to do things well.
 Skills are acquired and developed by a person through constant and correct practice.
 They connote dexterity, excellence, and expertise in the performance of particular
tasks.

THE SOURCE OF SKILLS

o KNOWLEDGE
o APLITUDE
o PRACTICE/EXPERIENCE

ENTREPRENEURIAL SKILLS
 COGNITIVE
 TECHNICAL
 INTERPERSONAL

 COGNITIVE SKILL
 Refers to the mental ability of the entrepreneur to learn new things, generate new ideas,
and express knowledge in both oral and written forms.
The cognitive skill of an entrepreneur include the following:
 Ability to understand written materials
 Ability to learn and apply new information
 Ability to solve problems systematically
 Ability to create new ideas
 Ability to innovate new products and procedures or methods

o Problem Solving
 Problems are common in the life of an entrepreneur as he/she manages the day-to-
day operations of the business venture.
 Whatever the nature, type, or size of the business problem, the entrepreneur must
face it, solve it, and make a decision.
The scientific approach in solving business problems involves
1. Defining the real problem
2. Gathering information about the problem
3. Formulating alternative solutions
4. Evaluating alternative solutions
 5. Selecting and implementing the optimal solution
6. Evaluating the decision

 TECHNICAL SKILL
 The technical skills mainly focus on the mechanical or practical aspect of a person rather
than his/her abstract or theoretical thinking.
 The technical skills are the external replica of a person’s cognitive skills.
 In this age of advanced computer and information technology, entrepreneurs must be fully
equipped with the right technical skills.
The technical skills of an entrepreneur include proficiency and ability, among the others, in the
following areas:
 Information technology
 Feasibility study and business plan preparation
 Technical writing skills
 Marketing
 Management and finance

 Learning by doing is the best approach in enhancing technical skills.

 INTERPERSONAL SKILLS
 The relationship and interaction of the entrepreneur with the workers, suppliers,
creditors, prospective customers, and other members of the business community.
The interpersonal skill of an entrepreneur may include, among others, the following:
 Skills in verbal communication
 Skills in non-verbal communication
 Skills in listening
 Skills in leading
 Skills in negotiating

CORE COMPETENCIES
 A person who aspires to become a successful entrepreneur must fully understand and apply
the concepts and principles of entrepreneurship.
 He/she must possess and internalize the character traits and skills that are common among
successful entrepreneurs.
 Entrepreneurial
Entrepreneurial
concepts and
character traits
principles

Entrepreneurial
skills

The Entrepreneurial Competency

The entrepreneurial competency indicates that successful entrepreneurs possess a full
understanding of the concepts and principles of entrepreneurship, strong character traits, and
sufficient and competent entrepreneurial skills that provide and become the ultimate source of
competitive advantage of the entrepreneur.

COMPETITIVE ADVANTAGE
 It generally establishes the solid foundation of sustainability of the entrepreneurial venture
in the heart of the competition.
Competitive advantage refers to the strategic position and condition of the entrepreneurial venture
that
1. Provides the necessary attributes to outperform competitors,
2. Distinguishes the venture from competitors,
3. Achieves superior performance in the industry,
4. Produces a product or develops production methods that can hardly be copied by competitors.

TOTAL PERSPECTIVE OF SUCCESSFUL ENTREPRENEUR

A successful entrepreneur overcomes all obstacles and problems in entrepreneurship.

Equipped with character

traits common among
successful entrepreneurs

Fully understands
Acquires, develops, and sharpens
entrepreneurial concepts
entrepreneurial skills (cognitive,
and principles
technical, and interpersonal skills)

Core competencies defining competitive advantage

Strategic support