ENTREPRENEURSHIP

Chapter 1 Understanding Entrepreneurship

LESSON 1 – DEFINING KEY TERMS
What comes to your mind when you hear the words “entrepreneur” and
“entrepreneurship”?

 Entrepreneur Entrepreneurship
business person business
small-to-medium scale
business
Some even consider that there is no difference between the two
terms (entrepreneur and businessperson). BUT…There is a clear
distinction between them.
Businessperson VS. Entrepreneur
What is Entrepreneurship and Entrepreneur?

The term “entrepreneur” originates from the French word entreprendre

which means “to undertake”.
It connotes a business paradigm which signifies the start of a new
business undertaking.

Entrepreneurship comes from the word entrepreneur. It refers to a

particular field of practice or process.
Definitions
An entrepreneur is a unique
individual who has the innate
ability and extraordinary
dedication to establish and
manage a business,
acknowledging all the risks
and reaping its rewards
Entrepreneurship – Operational Definition
Is a proactive process of developing a business venture to make a profit.
It involves seeking opportunities for a market , establishing and
operating a business out of the opportunity, and assessing its risks and
rewards through close monitoring of the business.
Small Business VS. Ordinary Small Business
Small Business and SMEs
SMALL BUSINESS refers to a business or enterprise that correctly
adopts and practices the principles of entrepreneurship.
It is owned by one person with a limited workforce of not more than 20
persons.
It also includes the small and medium enterprises (SMEs) that have
been strongly promoted by both government and non-governmental
organizations (NGOs) in their desire to improve the lives of the Filipino
people through entrepreneurship.
 Ordinary Small Business
Ordinary Small Business pertains to a business enterprise managed and
operated by an owner who is not an advocate of and does not practice the
concepts and principles of entrepreneurship.

Examples: Sari-Sari stores, food carts and stalls

 Societal and Economic
benefits of Entrepreneurship
1. Entrepreneurship produces more jobs that equate to an increase in
the national income – Millions of unemployed people will have the
opportunities to have a decent occupation.
2. Entrepreneurship amplifies economic activities of different sectors
of society

3. Entrepreneurship introduces new and innovative products and

services – products that are unique due to ingenuity of entrepreneurs.

4. Entrepreneurship improves people’s living standards.

6. Entrepreneurship disperses the economic power and creates equality- It
balances the economy by distributing national income to more businesses
rather than to only few monopolies.

7. Entrepreneurship controls the local wealth and balances regional

development-appropriate allocation of resources.

8. Entrepreneurship reduces social conflicts and political unrest-enough

supply resolving conflicts .

9. Entrepreneurship elicits economic independence and capital information-

entrepreneurs are financially independent.
The flow of Entrepreneurial Benefits

Contributions of
Entrepreneurship

Filipino People Local Community Philippine Economy

Jenny’s Hair Salon
Jenny, upon seeing a promising and brilliant business opportunity in the
community, opened a beauty shop.
She went to the Department of Trade and Industry, the City Government of
City A, and the Bureau of Internal Revenue to process, pay and comply
with all the documentary requirements and fees in opening a business.
The total taxes and licenses paid by Jenny in opening the business
amounted to P5,000.
Upon receipt of the business permit, Jenny immediately bought all the
needed tools and materials for her beauty shop. For all these equipment
and fixtures, she paid P 60,000. She then rented a business space at P
10,000 per month.
Assessing the case of Jenny’s Hair Salon,
what benefits will it produce?
She hired and employed five beauticians and provided them salary
above the minimum salary and all statutory benefits. The total annual
compensation and benefits paid by Jenny to her employees for the
year amounted to P540,000.

Jenny at the end of the year is enriched by P590,000 after paying the
annual income tax of P110,000 to the BIR.
Who is an entrepreneur?
- Is a unique individual who has the innate ability and extraordinary
dedication to establish and manage a business, acknowledging all the
risks and reaping its rewards.

 A successful entrepreneur is one who has created value for his or her
customers. The opportunity to create such value arises when one sees
viable solutions to everyday problems.
Entrepreneurship in the Philippines
The 1987 Philippine Constitution recognizes entrepreneurship as an engine of
economic growth. Article XII Section 1 highlights the role of private enterprises in
supporting equitable distribution of income and wealth, sustaining production of
goods and services and expanding productivity, therefore raising the quality of life.

• In 2011, there were approximately 830,000 business enterprises in the Philippines.

Of these, 99.6 percent are classified as micro, small, and mediumsized
enterprises (MSME) which are responsible for 38 percent of total job growth.
FIVE LEVELS OF ENTREPRENEURIAL DEVELOPMENT
1. SELF-EMPLOYED- not comfortable with routine jobs, they want to
do things on their own.
2. THE MANAGER- In this level, entrepreneurs feel the need to step
up and ask for some help from people around them.
3. THE LEADER-focuses on big picture and strategic direction of the
business rather than in sales generating.
4. THE INVESTOR- look for more opportunities for their business to
grow.
5. THE TRUE ENTREPRENEUR- aim for quality and excellence for
their work, follow the 4 step process of thinking
Four-Step Process of Thinking
I When you dream of what you want to achieve, dream larger than life and include
everything you ever wanted in this dream. We all have our ideal worlds, why not
create it in your dream. 

VI The next step is to work on making this dream a reality. Visualize your dream as
reality

VE Don’t only keep this vision internal, no go out and talk about it.  When talking
about your vision, set your goals which you are working towards, which will help
you achieve your vision.

M Things will start falling in place and you will see that actions start happening.
 You will be reaching your goals and your dream will start materializing.
ACTIVITY

NEW PRODUCT
IDEAS