Entrepreneurship

Lesson 1:  Goods and services must have a

value in order to create wealth.
Entrepreneurship  One essential principle in
 Originates from the French word entrepreneurship then is, “not to sell
“entreprendre” which means “to undertake”. waste to consumers but only
 It connotes a business paradigm which valuable goods and services”.
signifies the start of new business 4. Opening and Managing Self-owned Business
undertaking.  It must be self-owned in order to
 The enterprise is created by an Entrepreneur qualify as an entrepreneurial
and the process is called “Entrepreneurship”. endeavor.
 The term “entrepreneurship” comes from the  Entrepreneurship is not about the
word entrepreneur. size of the business but rather about
 Entrepreneur which is a person practicing its sole ownership.
entrepreneurship.  Business manage by others for
ENTREPRENUER ENTREPRENEURSHIP benefits of the owners do not fall
Person / Process / Business within the sphere, such business
Businesswoman / Man operating under intrapreneurship.
Tangible Intangible  The concept of intrapreneurship
A person who has an Is a process which gives include business practices of
idea and gives shape to shape to the idea. franchising and buyout.
it.  Planning refers to the process of
Is the one who start the Is an activity which an setting the goals of the business.
business and turns an entrepreneur undertakes  It does not cost anything but the
idea into reality to start a business benefit will gain from exercising it
Is an innovator who As a process through can be rewarding.
chase the dream till the which the process is 5. Risk-taking Venture
dream becomes true. done.  The basic concept of risk in
entrepreneurship can be expressed
Salient Features of Entrepreneurship “Risk is inherent in an
1. Art of Correct Practices entrepreneurial venture”.
 Entrepreneurship is an art and not a  Closing the business means giving up
science. becoming a successful entrepreneur.
 It is not governed by fixed and
absolute rules, whereas science is. Lesson 2: Entrepreneurship Theories
 As an art, entrepreneurship is
dynamic. Economic activity changes. Theory
 As an art, entrepreneurship is closely  It is a generalization that explains a set of
related to Creativity. Creativity facts or phenomena.
results in new ideas which are the  It is not an absolute truth.
backbone of entrepreneurship.  It can be supported by another observation
2. Wealth-Creating Venture or proven to be otherwise.
 Most instances, ordinary small
business people equate wealth with Several Theories on Entrepreneurship
the term profit. 1. Innovation Theory
 Webster’s Dictionary wealth is  Contributed by Joseph Schumpeter an
defined as the abundance of money, Austrian economist and political
property, or possessions. Scientist.
 It is created when the benefits derived  He wrote about it in his book The
by the owner in providing goods and Theory of Economic Development.
services to the customer are  He argued that chances for economic
abundant enough to cover the costs development to take place would be
incurred by the business. slim unless revolutionary changes in
3. Providing Values to Customers the circular flow of economy would
happen.

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 Entrepreneurship
 Schumpeter strongly believed that
innovation is the force that will propel
the revolutionary change.
 It becomes the primary role of the
entrepreneur to introduce innovation
in any of the following forms:
1. New Product
2. New Production Method
3. New Market
4. New Supplier
5. New Industry
2. Keynesian Theory
 It was developed by John Maynard
Keynes.
 He is a British economist.
 He included in his book, The General
Theory of Employment, Interest, and
Money which is publish during the
Great Depression in 1936.
 His theory put so much emphasis on
the role of the government in
entrepreneurial an economic
development, most especially when
the economy was experiencing
depression.
 It suggest that entrepreneurial
activities may not be favorable in the
future unless the short-term problem
of economic disequilibrium is finally
resolved through the active
participation of the government.
3. Alfred Marshall Theory
 The theory was developed by Alfred
Marshall.
 He is an English economist and he
introduced in his book Principle of
Economic.
 He strongly asserted that there are
four factors in the production (land,
labor, capital, and organization) of
goods and services in economy.
 He considered organization as the
coordinating element.
4. Risk and Uncertainty Bearing Theory
 The theory was developed by Frank
Hyneman Knight.
 He is an American Economist.
 He conceptualized the risk and
uncertainly-bearing theory of
Entrepreneurship in his book Risk,
Uncertainly and Profit.
 By adopting some concepts of the
early economist, he viewed
entrepreneur as agent of the
production process where they
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connects the producers and
consumers.
Other Theories on Entrepreneurship
1. Weber’s Sociological Theory
 Sociological Theory was developed by
Max Weber.
 He is a German Sociologist.
 He stressed that social cultures are
the primary driving elements of
Entrepreneurship.
 The entrepreneur is expected to
perform the role of a good
constituent executing their
entrepreneurial activities with good
customs and traditions, religious
beliefs, and morals.
2. Kaldor’s Technological Theory
 The technological Theory was
developed by Nicholas Kaldor.
 He considered modern technology as
an essential factor in production.
 The absence of modern technology
application in entrepreneurship,
economic development would be
slow and growth might be expected.
3. Leibenstein’s Gap-Filling Theory
 This theory was developed by Henry
Leibenstein.
 He proposed that the primary role of
entrepreneurship in any economic
activity is to filling the existing gap.
 Entrepreneurship is responsible for
recognizing trends in the market.
4. Kirzner’s Learning Alertness Theory
 The main proponent of this theory
was Israel Kirzner.
 He pointed out spontaneous learning
and alertness as the two major
attributes of entrepreneurship in any
given economy.
Lesson 3: Entrepreneurship and Ordinary Small
Business Activity
 Entrepreneurship
Small Business
 Refers to a business or enterprise that
correctly adopts and practices the principle
of entrepreneurship.
 It is owned by one person with a limited
workforce of not more than 20 persons.
Ordinary Small Business
 Pertains to a business enterprise managed
and operated by an owner who is not an
advocates of and does not practice the
concepts and principles of entrepreneurship.
The Concept and Principle of Entrepreneurship
1. Do something important
2. Respect your customers
3. Respect your employees
4. Respect your investor’s Capital
5. Grow your Business
6. Strive to be the leader in your Space
7. Never give up
 Entrepreneurship differs from the activities
of ordinary small businesses.
 Entrepreneurship does not connotes small
business.
 The distinction lies in the descriptive word
“ordinary”.
Entrepreneurship and the activities of ordinary
businesses differ in the following areas.
1. Motive in Opening a Business
 Entrepreneur starts a business
venture based on entrepreneurial
concepts and principles and the
aspiration to become successful.
 They constantly on the lookout for
new and fresh ideas, which can be
found in the business environment.
 New and fresh ideas for entrepreneur
lead to business opportunities.
 Entrepreneurship is perceived as a
wealth-creating venture that will
ultimately improve the life of the
entrepreneur.
 The business environment is marked
by creativity and innovation.
 The owner of an ordinary small
business opens a business with the
primary goal of making it their source
of livelihood.
 The business becomes a major
provider of the family for their
financial requirements.
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 The owner of an ordinary small
business operates with basic motive
earning profit.
 However, the level of profitability is
sometimes neglected.
 The profitability aspect and the level
of profitability are two distinct
important issues.
2. Perception of Risk on the Business
 Entrepreneur takes and faces the
business risk squarely.
 They consider it inherent in the
business venture, prepares the
business for it, and find ways to
minimize its effects.
 The owner of ordinary small
business, believes that the business
risk is deterrent to the operation of
the business and must be avoided.
 The owner is not concerned with
coming up with appropriate
strategies to handle it.
3. Reactions to Change in the Environment
 Entrepreneur reacts positively to the
changes in the environment.
 Changes in business environment
brings new ideas for entrepreneurial
opportunities.
 They consider changes in environment
a creative mechanism for
development and growth in the
entrepreneurial activities.
 Entrepreneurs do not simply wait for
the changes to happen in the
entrepreneurial environment.
 The owner of ordinary small business
remains passive and static to changes
in the environment where their
business operates.
 They believes that change in the
environment is not a plus factor to the
daily operations but rather a source of
negative sequence.
4. View on Competition
 For entrepreneur the presence of
competition is a sign of a healthy
economic environment.
 Environment where the venture
operates can be considered neutral or
free-trade because of healthy
competition.
 Competition will undoubtedly force
entrepreneurs to continuously
improve their present products or
services.
 Entrepreneurship
 It will be one of the factors that will
make them creative in their endeavor.
 The owner of ordinary small business
view competition as an unhealthy
element in the business environment
and tries to avoid it.
 They are very uncomfortable working
in a competitive environment and
strongly discourages competition in
the business community.
5. Vision for Development and Growth
 Entrepreneur usually outlines the
course of their entrepreneurial
venture in terms of short-term,
medium-term, and long-term plans of
action.
 They make sure that the vision and
mission of their business is clear.
 Entrepreneur aligns the daily business
activities towards the attainment of
the plans.
 They properly manages the venture in
such way that the operations will
provide development and growth to
the venture.
 The owner of ordinary small business
relies upon chance or luck in
maintaining the status quo of their
business.
 They are not so much concerned
about its development and growth as
long as they are satisfied with its
earnings.
6. Horizon of Business Operation
 Entrepreneur thinks globally but acts
locally.
 Their sight is always focused on the
stars above, while their feet are
firmly anchored on the ground.
 They are primarily concerned with
the major economic events not only
in the local environment but also in
the global business market.
 The entrepreneur has both local and
global perspective.
 The owner of ordinary small business
is centered only local environment.
 They does not intend to participate
in the global environment.
 The concept or view of operating
outside the local market is
inconceivable.
 Expansion has never been an idea
worth entertaining for the owner of
an ordinary small business.
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7. Sources of Business Funds
 When entrepreneur finds that the
proposed business endeavor is a
wealth-creating venture, they
explore ways to generate the much-
needed funds from both internal and
external resources.
 They strongly believes that the
wealth that the venture may create is
more than enough to compensate for
the sourced funds.
 The owner of an ordinary small
business tends to limit the funding of
their business enterprise to personal
resources.
 Loans from external resources can be
a risky undertaking from them.
 They fears that financial institutions
will not be willing to extend financial
assistance to the business.
 They are already full convinced that
they are pursuing the unprogressive
type of business endeavor.
Importance of Entrepreneurship
Compounded Benefits of Entrepreneurship
 Important to have a background
understanding of the effects of
entrepreneurship on the lives of individual
Filipinos, the local community, and the
Philippine economy. Basically, the benefits
derived from entrepreneurship are
compounded from one level to the next.
 In the given diagram, the first party to receive
the benefits of entrepreneurship is the Filipino
people. The term Filipino People in this case
may include the entrepreneur himself/herself
and other people who have direct dealings
with the entrepreneur in the community.
Importance to the Filipino People
 Entrepreneurship

Entrepreneurship makes the following contributions welcomes changes in the external

to the lives of the Filipinos: environment.
1. It provides guidelines in their wealth-creating  External Environment
venture. - The physical environment includes:
2. It helps improve their financial and social life. Climate, Natural Resources, and Wildlife.
3. It helps broaden their creativity. - The social environment includes the
4. It helps make their happy, fruitful, and various forces like: Economic forces,
successful. Sociocultural forces, Political forces, and
Importance to the Local Community Technological environment.
Entrepreneurship, in one way or another, makes the - The industry environment of the business
following contributions to the local community: includes: Government, Competitors,
1. It provides employment in the community.
2. It creates new demand in the market
3. It makes substantial contribution to the raising
and collection of taxes
4. It facilities the movement of the factors of
production
5. It creates new business opportunities.
6. It promotes a peaceful and loving community
7. It increases constructive competition.
Importance to the Philippine Economy
Entrepreneurship makes the following contributions
Suppliers, Customers, Creditors, and
to the Philippine economy:
Employees.
1. It encourages competitiveness and thereby
2. Technological Discovery and Advancement
challenges entrepreneurs to keep improving
 Discovery and advancement in the use
their products and services.
of technology are another good
2. It helps find an entrepreneurial niche in the
source of entrepreneurial ideas and
world market.
opportunities.
3. It helps hasten the economic recovery process
3. Government’s Thrust, Programs, and Policies
of the Philippines during financial turmoil or
 The priorities, projects, programs, and
crackdown.
policies of the government are also
4. It facilities the smooth flow of money in the
good sources of entrepreneurial ideas.
local market
4. People’s Interests
5. It assist the national government in its desire
 The interests, hobbies, and
to have favorable economic ratings in the
preferences of people are a rich
world market.
sources of entrepreneurial ideas.
5. Past Experiences
Sources of Entrepreneurial Ideas
 Past experiences and exposures are
 The creation of an entrepreneurial idea leads
also a good source of entrepreneurial
to the identification of entrepreneurial
ideas. The expertise and skills
opportunities, which in turn results in the
developed by a person who has
opening of an entrepreneurial venture.
worked in a particular field may lead
Sources of Entrepreneurial
to the opening of a related business
1. Changes in the Environment
enterprise.
 Entrepreneurial ideas arise from the changes
that happen in the external environment with
entrepreneurial implications. Not everyone

Misconceptions on Entrepreneurship
1. Entrepreneurship Applies only to
Manufacturing Businesses

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 Entrepreneurship

 Entrepreneurship only applies to

manufacturing but not to
merchandising and service.
 It should be remembered that
merchandising and providing services
are also business ventures.
 However, creativity and innovation
appear limited in merchandising
because there is no transformation on
the appearance and content of the
product.
2. Entrepreneurship applies only to Small
Businesses
 Entrepreneurial concepts and
principles do not make any distinction
as to the size of the business venture.
 Corporate entrepreneurship is a
process that goes on the inside an
existing business venture and may
lead to new ones and the
development of the new products and
services.
3. Entrepreneurship applies mostly to persons
with good educational background in
Business Courses
 Nobody is born an entrepreneur.
 The practice of entrepreneurship does
not even require any entrance
examination in business courses.
 Successful entrepreneurs come from
all the walks of life and have different
educational backgrounds from
different colleges and universities in
the country.
 It is your inner driving force that
carries you towards becoming a
dynamic entrepreneur.
4. Entrepreneurship Applies only to a Good
Economy
 Entrepreneur finds business
opportunities in both flourishing and
distressed economies.
 Entrepreneurship can exist in both
good and bad economies.
 Even during financial crackdown, new
ideas can be created and new
business opportunities can be
identified.
5. Entrepreneurship is simply opening a Small
Business.
 Entrepreneurship does not merely
mean opening a small business.
 It is a long continuing process.

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 Entrepreneurship
Lesson 4: Successful Entrepreneurs
Top 3 Successful Entrepreneurs In the Philippines
1. Henry Sy (Shoe Mart)
 Henry Tan Chi Sieng Sy Sr.
 Born: October 15, 1924 at Jinjiang,
Fukien, Republic of China.
 Died: January 19, 2019 at the age of
94 in Makati City.
 Nationality: Filipino
 Education: He graduated at Far
Eastern University
 He is know as the “Father of modern
Philippine Retail”
 As of May 2023 there is a total of 90
SM malls (83 in Philippines and 7 in
the People’s Republic of China)
 The first SM was established in
Quiapo also known as SM Clearance
Outlet and SM Corriedo at November
4, 1972.
 Sy has an estimated net worth of
US$19 billion.
 He grew up in Jinjang, Xiamen, China
in a low-income household.
 They moved to Philippines in 1936
and opened a tiny convenience shop
in Manila.
 Shortly after, World War II broke out
and ruined the family business.
 Sy continued to pursue his
entrepreneurial interest by selling
worn military combat boots and other
items to America soldiers.
 This is where the name “Shoe Mart”
originates: it was Manila’s first shoe
store at that time.
2. Tony Tan Caktiong (Jollibee Foods)
 Born: January 5, 1953 in Manila with a
Chinese immigrants parents from
Fujian.
 Education: He graduated at University
of Santo Tomas
 He franchised Magnolia Ice Cream
House and at the age of 22 he opened
Cubao Ice Cream and Quiapo Ice
Cream.
 As of September 2023, there
were over 1,500 Jollibee outlets
worldwide.
 The first Jollibee was established at
Cubao, Quezon City at year 1975.
 Tan Caktiong has an estimated net
worth of US$1.2 billion.
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 His father worked in a restaurant in
China as a Cook in a Buddhist
Monastery before setting up his own
restaurant in Davao City.
 Tony bought an ice cream parlor shop
in 1975, but owing to low sales.
 He decided to add other items such as
fried chicken, fries, and burgers.
 Three years after he established the
ice cream parlor he founded the
Jollibee in the year 1978.
 He acquired the Greenwich Pizza
Corporation in the year 2006 and
become a 20% stake-holders.
 He become the most popular chain
fast food restaurants.
 Tan Caktiong estimated net worth
approximately $2.6 Billion.
3. Socorro Ramos (National Bookstore)
 Born: September 23, 1923 in a
poverty-stricken family.
 Education: She graduated from
Ateneo De Manila University
 She is known as “Nanay Coring”
 She is the Founder of the largest
retail bookstore chain in Philippines.
 As of September 2023 National
Bookstore has over 230 branches
nationwide.
 The first National Book store was
established at year 1942 in a rented
small-corner space of a Haberdashery
situated at the foot of Escolta Bridge
in Santa Cruz, Manila.
 Socorro has an estimated net worth of
US$3.1 billion.
 Her family used to run a small shop
through which they used to manage
their needs.
 Socorro and her husband started
National Book Store in year 1940.
 In their earlier days the building of
their merchandise store was
destroyed due to the devastating
typhoon.
 They constructed a double-storied
building as their permanent store.
 At that time, they used to sell
notebooks, pad papers, pencils, and
other office supplies.
 During 1950, they started creating
postcards and greeting cards using
Philippine Views and Artworks.
 Entrepreneurship
 In 1963, the construction of the
legendary Albever Building was
initiated.
Top 3 Successful Entrepreneurs In the World
1. Elon Musk (Tesla)
 Born: June 28, 1971 at Pretoria, South
Africa.
 Education: He graduated at University
of Pennsylvania, Philadelphia in 1977.
He also enrolled in Stanford University
in California but left after two days.
 At the age of 12 he created a video
game and sold it to a computer
magazine.
 He has 6 companies including Tesla,
rocket producer, SpaceX, Twitter,
Neuralink, and The Boring Company.
 He is the wealthiest person in the
world, with an estimated net worth
of US$241 billion as of September
2023, according to the Bloomberg
Billionaires Index, and $261 billion
according to Forbes
 In 1988, after obtaining Canadian
passport, he left South Africa because
he was unwillingly to support
compulsory military service and he
sought the greater economic
opportunities available in the US.
 In 1995 he founded Zip2, a company
that provided maps and business
directories to online newspapers. In
1999 Zip2 was bought by the
computer manufacturer Compaq for
$307 million, and Musk then founded
an online financial services company,
X.com, which later became PayPal.
 In 2002 he founded Space Exploration
Technologies (SpaceX) to make more
affordable rockets.
 In 2006 Tesla introduced its first car,
the Roadster.
2. Jeff Bezos (Amazon)
 Born: January 12, 1964 in Mexico.
 Education: He graduated at Princeton
University
 In 1994, Jeff Bezos started Cadabra,
an online bookstore.
 The name later changed to Amazon.
 As of 2023 Bezos is the third richest
person in the world with a net worth
of over $139 billion.
 He worked at Fintel to build their
system for International trade.
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 He later changed career to banking
industry in 1988.
 5 years later he decided to start his
own company.
 He got the capital of 300,000 from his
parents to start the company.
 His company later transitioned into an
ecommerce platform for all the
product.
 His company was almost bankrupted
in 2002 due to over spending of
funding.
3. Bill Gates (Microsoft)
 William Henry “Bill” Gates III
 Born: October 28, 1955 in Seattle,
Washington, U.S.
 Education: He is dropped out at
Harvard University
 Microsoft was founded by Bill Gates
and Paul Allen on April 4, 1975.
 As of September 2023, Gates has an
estimated net worth of US$123
billion, making him the fourth-richest
person in the world according to
Bloomberg Billionaires Index.
 Gates wrote his
first software program at the age of
13.
 In 1975 Gates, then a sophomore
at Harvard University, joined his
hometown friend Paul G. Allen to
develop software for the
first microcomputers.
 By the start of the 1990s he had
become the PC industry’s ultimate
kingmaker.
 He became a paper billionaire in 1986,
and within a decade his net worth had
reached into the tens of billions of
dollars.
 Entrepreneurship

Introduction to Business Plan

Description of the Business - A brief
Business Plan description of the business must include
 The business plan is actually the roadmap of information about the type of product or
the new business. It is the only single written service that the business intends to produce
document that must be prepared before or provided.
opening a new business or expanding an
existing business. It provides a clear direction Location of the Business - There are no rigid
to any uncertain business endeavor. rules in the selection of the business location
 Is defined as a detailed and integrated written since variables affect the selection of the
document that describes the various activities business location.
involved in opening and operating a new
entrepreneurial venture.

Major Parts of the Business Plan

1. Introduction
2. Executive Summary
3. Environmental Analysis
4. Organization Plan
5. Production Plan
6. Marketing Plan
7. Financial Plan

Classification of Businesses
 Service Business - Is a type of business that
provides labor and other services to
customers.
 Merchandising Business - Is a type of business
that purchases products from other
businesses like manufacturers sells them to
customers at a higher retail price.
 Manufacturing Business - Is a type of business
where raw materials are transformed into
finished goods through product-processing,
labor and other manufacturing processes.

Introduction
 The introduction presents the general
perspective of the business. It may consist of
one to two pages.

Proposed Name of the Business - The

formulation and drafting of the proposed
business name is not as simple as it sounds.
1. Name
2. Logo
3. Tagline – it consist of 3 to 8 words

Address of the Business - It is important that

the address of the business is correctly written
because all business correspondence are
mailed to the business address.

Name of the Owner - The name of the owner

must be properly stated.
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