LESSON

The Concept of
Entrepreneurship
 Entrepreneurship
The concept was first established in the
1700s and has evolved ever since. Most
economist and business people agree that
entrepreneurship is a necessary component
in encouraging economic growth.
 Joseph Schumpeter
(1883-1950)

In the 20th century, Schumpeter

studied how the entrepreneurs are
motivated to look, innovate and create
new and better ways of doing
business.
 What is
Entrepreneurship?
it is defined as the process of creating
something new whether be it a product or
service that brings value by devoting the
necessary time and effort considering the
financial, psychic and social risks, and
receiving the resulting rewards of
monetary and personal satisfaction and
independence.
to be an entrepreneur or a businessman
means someone has to be able to create
something new that can offer value to its
chosen market to be able to get something
in return and convert it to a profitable
business.
products are created because of a birth of
an idea, which is then turned into either a
physical product or non-physical product;
i.e eBooks, audiobooks, and other
educational programs.
 Who is an
Entrepreneur?
 Peter Drucker
(1909-2005)
He is a business expert who described an
entrepreneur as someone who searches for
things to change, responds to it by researching
and taking new ideas and trends, and exploits
these changes as an opportunity to create and
deliver something better.
 To most business people, an
entrepreneur is someone who is willing
to bear and take the risk of creating a
new venture if there is a substantial
potential for growth and profit.
An entrepreneur:
 is someone who plans, organizes and
operates a business or businesses, taking
greater than normal financial risks.

 is someone who creates or look for

ideas for businesses, which is then
implemented to become a business.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

1. Initiative – the entrepreneur should take

initiative in learning their industry they
belong to, go the extra mile, and do more
than what is expected from them, always
look for new and better ways of doing
things, getting ahead of others and aims to
lead in their chosen industry or line of
business
 Examples:
 greeting customers upon entering the
door of a fast food shop, and thanking
them when leaving
 extending and serving more customers by
opening outlets in new areas, and creating
new products or services by proactively
researching what the market needs.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

2. Sees and Acts on Opportunities – an

entrepreneur always has the eyes open for
new opportunities and most importantly
acting on them. It is important to always
look at the industry trends, anticipate needs
of customers, even new technologies that
will help them give value to customers.
 Examples:
 an Apple company known as personal
computer manufacturer expanding its
business to iPods, iPhone, iPad, and even
iTunes. The company saw the demand of
consumers for communication and
entertainment, and created products that
enable them to provide for their
customers.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

3. Persistence – in today’s business world,

there are lot of competitors that are trying to
take a share of the pie or the so-called market.
The entrepreneur’s ,main job when it comes to
competition is to be able to persist in aiming
and taking actions for the firm’s growth by
getting the most number of customer.
 Examples:
 KFC’s new products come out every three
months and test how customers accept it
as part of their effort to pull more
customers to their restaurant.
 Samsung competing head to head with
Apple in providing electronics and
technology products to consumer.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

4. Information Seeking – access to information

has never been easy as today. In fact, there is so
much information that the question now is how to
find the right information and use it to the
company’s advantage and create better products
and services for the customers. It is very important
to get the appropriate information, the quickest
time possible.
 Examples:
 augmented realities being introduce now with
the use of Virtual Reality (VR) devices.
 consulting industry experts in getting relevant
and up to date information.
 seeking information or asking questions to
clarify customer’s needs and concerns.
 doing market research, analysis or
investigation.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

5. Concern to Work Quality – each entrepreneur

started an enterprise because of an idea, but it
doesn’t end there. They should strive to improving
and enhancing the products or service in order to
deliver the best work for its customers. This is the
reason why companies have their Research and
Development (R&D). Additionally, there should also
be company standards to have consistency in
delivering to its customers.
 Examples:
 strong yearn to produce and sell a top or
best quality product or service.
 Jollibee having a standard from
measurement of every ingredient up to
number of minutes a meal should be
served to the customers.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

6. Commitment to Work Contract –

starting a business is one but to execute and
delivering on time to customer is another.
An entrepreneur should always bear in mind
that company’s reputation builds by
delivering great products and services to
customer, and delivering on time is very
important.
 80/20 Rule, known as Pareto Principle,
states that the last 20% of the task needs the
80% effort, and if the entrepreneur doesn’t
understand that finishing task is important,
the customers will short changed and
therefore company loose it’s chance in
proving itself in the market place, and will
likely lose customers and it business.
 Examples:
 doing all extraordinary effort to complete
a job to satisfy customers
 accepting full responsibility for problems
and therefore ready to provide resolution
 having a customer service hotline for
customer complaints
 real concerns for satisfying customers
 Entrepreneurial Competencies
by McClelland and McBer (1985)

7. Efficiency Orientation – in order to

succeed, an entrepreneur must always find
ways of doing things more efficiently and
effectively, with fewer resources and at a
lower cost as possible. Companies
constantly think of efficiency in operations,
and delivering it to customers.
 Start-up companies normally have
lesser financial resources therefore it is
very important for them to understand
their situation and be able to deliver
great products with the resources
available.
 Examples:
 using internet to sell products rather than
opening a physical store
 using video presentation product write-
ups and posted on social media platforms
as marketing tools.
 Jollibee using video content such as “Best
friend”, “Cashier”, “Crush”, “Perfect
Pair” and “Apo”.
 Entrepreneurial Competencies
by McClelland and McBer (1985)

8. Systematic Planning – as the saying goes,

“Failing to Plan is Planning to Fail”. There are
lots of individuals that started business and just
closed shop after few months because of lack
of careful and systematic planning. The
entrepreneur should develop a logical, timely,
step-by-step plan to reach the company’s goals.
 Examples:
 making and formulating plan of actions to
follow for smooth operations
 anticipating expenses by creating a good cash
flow projection
 evaluating alternatives
 taking a logical and systematic approach in
executing activities
 having back-plans in place to solve anticipated
problems
 Entrepreneurial Competencies
by McClelland and McBer (1985)

9. Problem Solving – Business problems are

inevitable. Having said that, there will always
be something that an entrepreneur can do to
minimize the impact of problems to continue in
operation. The challenge of thinking what to do
in tough times is in the hands of the
entrepreneur.
 A song goes, “What Doesn’t Kill You
Makes You Stronger”, means every
problems solved makes the entrepreneur
more knowledgeable and prepared for the
next challenges. The point is, it is a
requirement to know how to solve problems
if one wants the business to be in the market
for a long time.
 Examples:
 changing strategies in case of problems
to reach organizational goals.
 generating new ideas or innovative
solutions
 looking at problems as an opportunity
 Entrepreneurial Competencies
by McClelland and McBer (1985)

10. Self-Confidence – who would like to do

business with a person who is not confident
about his or herself, or the products or services
that he or she sells. It’s safe to say that if you
will transact for a business, you will always
want to look for someone who can carry a
conversation and will be able to sell his or her
products effectively.
 Examples:
 show confidence in one’s ability to
perform tasks especially in difficult
situations
 persist with own judgment in the face of
opposition or early lack of success
 Entrepreneurial Competencies
by McClelland and McBer (1985)

11. Assertiveness – as stated, problems are

inevitable and therefore, the only way to avoid
more problems is to face and solve the existing
ones. As an entrepreneur, you must have the
courage in looking for solutions, and find for
resources, and even people who can help in
those tough times.
 Examples:
 communicate to others what they have to
do and not to
 reprimand those failing to perform and
inform them of the possibilities for
continuance of the behavior
 Entrepreneurial Competencies
by McClelland and McBer (1985)

12. Persuasion – this means influencing others

reach company goals. Great entrepreneurs are
great salespeople. Finding resources is a tough
task that requires guts in proving oneself that a
certain business will work and grow in order to
get approval for loans.
 Examples:
 convincing someone to buy a product or
service
 convince a firm to provide financing
 Entrepreneurial Competencies
by McClelland and McBer (1985)

13. Use of Influence Strategies – developing a

great relationship with other business people is a
very important task of an entrepreneur.
Collaboration is one great way of expanding a
business and great networkers are sure-fire of
becoming a success in business. As an
entrepreneur, one must learn tow work with
influential people to reach business goals.
 Examples:
 use influential people as champions to
accomplish objectives
 uses a strategy to influence or persuade
others towards organizational goals.
 The Rewards of Entrepreneurship

Entrepreneurship requires and demands a

lot of hard work. An entrepreneur must be
willing to work long hours to ensure that
every part of the business is running
smoothly.
 Below are some of the rewards:

1. Financial Reward – this is the ultimate

reward of being an entrepreneur. Every
business venture aim for profitability.
Money is what let us buy what we want so it
is just normal that it is one of the most
awaited aimed motivations of an
entrepreneur.
 Below are some of the rewards:

2. Freedom – truly entrepreneurship is a

ticket to freedom. As an entrepreneur, you
have the freedom to work at your pace and
decide on how to grow a business.
 Below are some of the rewards:

3. Psychological Rewards – every person

wants to have a feeling of not worrying
about the future. As stated, if financial goals
are reach, one feels less stress and therefore
will be able to sleep good at night.
What do you think are the
possible problems faced
by entrepreneurs?
 Possible Problems Faced by
Entrepreneurs
1. Usually, business demands more hard
work
2. It demands long working hours
3. It requires a lot of sacrifice
4. it can cause a lot of emotional and
psychological stress
5. Unforeseen event
 Possible Problems Faced by
Entrepreneurs
1. Usually, business demands more hard
work
2. It demands long working hours
3. It requires a lot of sacrifice
4. it can cause a lot of emotional and
psychological stress
5. Unforeseen event
 Entrepreneurship as a Career
As an entrepreneur, you need to work hard.
Be smart in making decisions, creative and
think about improvement of the business, be
willing to take risks accompanied with plan of
actions, and be good with people since they
will be the one aside from you who will do the
work for the business and your clients.
 Entrepreneurship as a Career
The opportunities in entrepreneurship are
ultimately endless. The rewards can be high as
well as the risks. It requires maturity from the
owner in making hard decisions. But, if you are
driven, creative, willing to learn and have the
desire to be your own boss, this may very well
be the career for you.