ENTRPRENEURSHIP

The Concept of Entrepreneurship

The term “entrepreneur” comes from the French word entreprendre which means “to undertake” It is a reference to
individuals who have initiated the establishment of a business enterprise.

An Enterprise is created by an entrepreneur and the process of its creation is called entrepreneurship.

Entrepreneurship is a process of actions of an entrepreneur who is always in search of something new to exploit new
ideas into gainful opportunities by accepting the risk and uncertainty of the enterprise.

Enterprise are innovators, willing to take risks and generate new ideas to create unique and potentially profitable
solutions to modern-day problems.

Job Opportunities for Entrepreneurship graduates

1. Mid-level Management - it converts the idea into execution.

1. Business Consultant - to identify problems and fix them.
2. Teacher - to teach students the entrepreneurial skills
3. Business Reporter - to learn on how to write article in the field or concepts of bu Two Types of Entrepreneurs

Entrepreneurial Process

 Discovery - refers to the recognition of a business idea or the detection of opportunities that could make money
for entrepreneur.
 Development of a business concept - gives more details on how the general business idea can be realized.
 Organizing resources - describes the process of identifying, sourcing, and financing human, non-human and
other resources needed for the conduct of business.
 Implementation - is the process of carrying out the business plan.
 Reaping the returns - Pertains to strategies related to the expansion of the business firm

Two types of Entrepreneurship:

1. Mega Entrepreneur
o Individuals who have generated substantial value and profits from innovations in a very short period
o Contributed much to the economic progress of developed country
o Attract competitors and imitators
2. Micro Entrepreneur
o Value- added and profits are limited
o Contributions are minimal and attract few competitors and imitators
o Engage in micro and small businesses as an alternative to formal employment

 Positioning - Business location

 Distribution - Mode of Delivery/ How you will delivery or send your items or products
 Value Proposition – Capital

Steps in Business Plan:

 Management aspect - Composes of human/human resources

 Marketing Aspect
 Financial Aspect - Capital
 Technical Aspect- Machinery , manpower/ human skills and ability
 Socio Economic Aspect - Should be contributing and have impact on society, economy, and community.
ROI - Return of Investment

Factors affecting Entrepreneurship

Entrepreneurship is a complex phenomenon which is influenced by the interplay of a wide variety of factors that
include:

Personality Factors- Initiative, Proactive, Perseverance, Problem Solver, Persuasion, Self-confidence, Self-critical, A
Planner, A Risk-taker.

Environmental Factors - Political Climate, Legal System, Economic/Social Conditions, Market Situations.

LESSON SYNTHESIS:

 Entrepreneurship is an art of observing correct practices in managing and operating a self-owned wealth
creating business enterprise by providing goods and services that are valuable to the customers.

THE ENTREPRENEURIAL MINDSET

Importance of Entrepreneurship

 The benefits derived from entrepreneurship are compounded from one level to the next. It produces a chain of
progressive results from the individual entrepreneur to the community and finally to the whole Philippine
economy.

Entrepreneurship makes the following contributions to the lives of the Filipinos:

 It provides guidelines in their wealth-creating ventures.

 It helps improve their financial and social life.
 It helps broaden their creativity.
 It helps make their lives happy, fruitful, and successful.

Entrepreneurship, in one way or another, makes the following contributions to the local community

 It provides employment in the community.

 It creates new demand in the market.
 It makes a substantial contribution to the raising and collection of taxes.
 It facilitates the movement of the factors of production.
 It creates new business opportunities.
 It promotes a peaceful and loving community.
 It increases constructive competition.

Importance to the Philippine Economy

Entrepreneurship makes the following contributions to the Philippine Economy

1. It encourages competitiveness and thereby challenges entrepreneurs to keep improving their products and
services.
2. It helps find an entrepreneurial niche in the world market.
3. It helps hasten the economic recovery process of the Philippines during financial turmoil 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.

Characteristics of an entrepreneur?

The characteristics of an entrepreneur will vary depending on whether they are in a developed or developing country.
  Level of Education - Studies have shown that entrepreneurs need some formal education to be able to seize the
opportunities presented by inventions, innovations and other technological development.
 Employment status - Individuals who become entrepreneurs in developed countries are usually former
employees of companies in the formal sector.
 Entrepreneurs’ wealth - The wealth of the entrepreneur is one of the important factors in starting any
business ventures.
 Risk appetite - Risk is also an important factor in undertaking any business ventures. It is associated with
uncertainties in business operations. These uncertainties can threaten the survival and stability of a business
enterprise.
 Entrepreneurial Traits and Entrepreneurial Intentions - Every individual who sets up a business venture started
out by intending to do so.

2 Factors that may influence the formation of entrepreneurial intentions:

1. Internal Factors - Include mainly the qualities of individuals such as demographics, personal traits, psychological
characteristics, individual skills, and prior knowledge.
2. External Factors - Include environmental support and environmental influence.

How do entrepreneurs think and make decisions?

(3) Entrepreneurs thinking

1. Critical thinking
o It refers to the systematic and rational way of providing an answer to a question.
o It is useful in explaining how a firm can survive and remain stable.
2. Creative thinking
o It refers to thought processes that bring about discovery of new ideas.
o The intent is not to provide an answer but to ask questions that can lead to discovery and change.
o It is useful in developing new products and new systems in business operations.
3. Strategic thinking
o It involves thought processes that assess a current situation, which can be useful in the formulation of
plans for the future.

What is risk?

 In the process of implementing a business plan, an entrepreneur will be faced with numerous situations,
challenges, and opportunities that will require flexibility in decision making.

Types of Risk

1. Internal risk
o It pertains to dangers coming from the management of resources of a business enterprise that may
imperil its operations. For example, liquidity and financial risk, failure to hire the best talents, damage to
reputation and failure to innovate.
2. External risk
o It refers to the threats coming from various environments outside the business firm. For example,
increased competition, commodity price risks, regulatory risks, business interruptions and political risks.

LESSON SYNTHESIS:

 The benefits from entrepreneurship are compounded from one level to the next. It produces a chain of
progressive results from the individual entrepreneur to the community and finally to the whole Philippine
economy.
  The characteristics of an entrepreneur will vary depending on whether they are in a developed or developing
country. The level of education, employment status, wealth, and risk appetite of entrepreneurs differ depending
on the amount of value added or profit created by their enterprises.

GENERATING IDEAS

Sources of Ideas for Entrepreneurial Activities

 From the product – Entrepreneurs introduced new products and services by a product differentiating then from
those currently in the market.
 From the process – the production and distribution.
 From the person – the individual examines his/her interests, hobbies, skills dreams and even travels.
 From the relationship – Many Filipino-Chinese individuals sourced their entrepreneurial ideas from families and
relatives.

Generating Business Ideas through Logical Thinking

 Logical thinking – it refers to the systematic and rational way of providing an answer to a question.
 Statistical analysis – it refers to a systematic analysis of data generated from a survey of individuals.
 SWOT (strengths, weaknesses, opportunities, threats) analysis – is usually undertaken to describe the state of
competition within an industry.
 Delphi technique – it refers to the systematic way of generating ideas from a select group of individuals using
various rounds of consultations or sessions.

2 Generating Business Ideas through Creative Thinking

Creativity – it refers thought processes that do not follow systematic or analytical procedures but looks at things from
different perspectives.

 Lateral thinking – which connects ideas and reprocesses them to formulate new ideas.
 Rational thinking – the creativity puts emphasis on the role of imagination and inspiration.

 Brainstorming – it refers to an unstructured discussion of a group to elicit ideas.

 Problem inventory analysis – it uses the group discussion method to elicit ideas from participants.
 Free association method – it refers to another technique used in discovering business ideas.
 Checklist method – it is another creative way of obtaining business ideas from target participants by listing all
possibilities that ideas can be connected, reprocessed and associated with.

Generating Business Ideas through Trends in Business Environment

The systematic methodologies and creative ways of generating business ideas are focused on the product or service and
ideas.

Based on the trends on the business environment an entrepreneur can get business ideas from the bargaining powers of
its competitors and suppliers, government involvement in business, socio-demographic changes, as well as technological
developments.

Creativity

 It is the capacity of individuals to originate new ideas from ideas the individual has been previously exposed.
 The birth of new idea is done by connecting an idea with other ideas and transforming these connections.
 It can be done by comparing them, linking them, looking at similarities and differences and looking for trends.
Factors that Influence Creativity

Problem Solving Factors

 A creative person is someone who wants to provide an answer to a problem.

 An individual who is not satisfied with existing products and services may think of creative ideas to improve
them or to simply differentiate these products and services.
 Ability to solve problems, influenced by the knowledge of the individual, the extent of his/her experience and
the level of education.

Motivational Factors

 A creative individual is usually highly motivated person.

 A motivated person plans ahead.
 It is willing to take risks.

Situational Factors

 A creative person is an action person since he knows how to implement his plan.
 It requires that the individual must have the necessary skills in interacting with others and the ability to manage
time under pressure.

Organizational Factors

 A creative person thrives in an environment that is nurturing and not threatening

 An organization with foresight and that is forward looking can attract creative individuals since it has an appetite
for risks than a company that emphasizes short term profits
 A creative persons are also encouraged when the work place does not focus on rules but on outputs.

Creative Problem Solving

CPS – it is a procedure of answering a problem with mechanisms and techniques incorporating creativity.

Scientific method is also a procedure in answering a problem with the use of rational thinking.

(2) Important stages in Creative Problem Solving or CPS

 Divergent thinking process of enumerating possible problems, sub-problems, issues and challenges.
 Convergent process will be undertaken to evaluate the merits and appropriateness of various candidates and
end up with the selection of the problem.

LESSON SYNTHESIS:

 The importance of generating business idea creates a reason to invest and it also creates sales and profit. With
sales and profits come the scope to invest in more products and services, enabling the business to grow. It is the
pure essence of capitalism.
 The convergent divergent processes are used in our hypothetical example have been discussed previously in
various creative methods such as brainstorming, checklist method, free association method and problem
inventory analysis.