ENTREPRENEURSHIP

NSTP-CWTS 1
LEARNING
OBJECTIVES

After studying this module, you as a learner should be able to:

1. Define and understand the integral meaning of entrepreneurship and entrepreneur;

2. Be acquainted with the role of an entrepreneur in economic development;
3. Recognize government roles and undertaking in the development of entrepreneurship;
4. Identify and describe the essential qualities of an entrepreneur;
5. Identify and understand how entrepreneurship and franchising are connected;
6. Have a more in-depth knowledge of the difference between entrepreneurship and social
entrepreneurship;
7. Better understand the economic significance of social entrepreneurship in the poverty
reduction agenda of the government; and
8. Develop their skills on how to successfully start, manage, diversify, and expand business
enterprises.
Topic outline:

1. Entrepreneurship and the Entrepreneur

2. Qualities Needed to Succeed in an Entrepreneurial Environment
3. Entrepreneurship and Community Development
4. Government’s Role and Undertaking in Entrepreneurship Development
5. The Entrepreneurial Process
6. Entrepreneurship and Franchising
7. Entrepreneurship and Social Entrepreneurship
 ENTREPRENEURSHIP AND THE ENTREPRENEUR

•Entrepreneurship Defined
The following are the definition of entrepreneurship from some educators, experts, and
authorities:

Entrepreneurship, according to Howard Stevenson of the Harvard Business School, it is

"exploiting an opportunity regardless of the resources currently available." Stevenson goes on to
say, "The key to this perspective is the focus on opportunity" (not resources).
As defined by Prof. Nathaniel Left (cited in Fajardo, 1997), entrepreneurship is the capacity for
innovation, investment, and expansion in new markets, products, and techniques. According to
him, entrepreneurship always gives birth to innovation, whether it is a product, service, or simply
creating a new concept out of an existing one. It promotes an individual's creativity and enables
him/her to share his/her products or innovativeness.
Entrepreneurship Defined

Entrepreneurship is the process of creating something new with value by devoting the
necessary time and effort, assuming the accompanying financial, psychic, and social
risks, and receiving the resulting rewards of monetary and personal satisfaction and
independence (cited in Hisrich, Peters and Shepherd, 2008).

Prof. Hirsh states that entrepreneurship is more than a word. It is a mission. According
to him, we must perceive opportunities inherent in changes; we must create an
environment in which success is possible. The consequence of failure is tolerable (cited
in Fajardo, 1997).
 Entrepreneur Defined

•Entrepreneur Defined
•The word entrepreneur originates from the French word "entrepreneur," which
means "to undertake." An entrepreneur is an individual who organizes, manages, and
assumes the risk of business or enterprise (Webster Dictionary).

•Jean Baptiste Say, the French economist, described entrepreneurs as "the

venturesome individuals who stimulated economic progress by finding new and
better ways of doing things." For him, entrepreneurs optimize the allocation and use
of resources to generate maximal profits.
 Entrepreneur
•Entrepreneurs thrive on problems and are motivated by the idea of altering an unpleasant
situation. Rather than waiting for instructions, entrepreneurs have to initiate direct action.
Suppose the entrepreneur sees a more useful scheme of doing things. In that case, they will
not hesitate to do away with existing systems in favor of a whole new approach to a
problem. An entrepreneur dares to take calculated risks; he sometimes has to do things
that others think are unwise and is undoable. The entrepreneur also carries projects
throughout completion and is unconstrained by occasional setbacks or challenges.

•An entrepreneur brings resources, labor, materials, and other assets into combinations
that make their value more significant than before and introduces changes, innovations,
and a new order to an economist.
 Entrepreneur
•To a psychologist, such a person is typically driven by specific forces- the need to obtain or
attain something, experiment, accomplish or perhaps escape others' authority.

• To one businessman, an entrepreneur appears as a threat, an aggressive competitor. In

contrast, another businessman, the same entrepreneur may be an ally, a source of supply,
a customer, or someone who creates wealth for others, as well as finds better ways to
utilize resources, reduce waste, and produce jobs others are glad to get (Hisrich, Peters,
and Shepherd, 2008).
• An entrepreneur, therefore, is an innovator; he innovates and sells. He must find,
evaluate, and develop an opportunity by overcoming the forces that resist creating
something new (Hisrich et al., 2008).
Joseph Schumpeter, the 20th-century economist, explained that the function of
entrepreneurs is to reform or revolutionize the pattern of production by exploiting an
invention or, more generally, an untried technological possibility for producing a new
commodity or producing an old one in a new way, by opening up a new source of supply of
materials or a new outlet for products, by reorganizing an industry and so on." Entrepreneurs
could achieve their economic objectives if their mindsets are innovative, creative, and goal-
oriented.
 Schumpeter famously listed the five (5) main types of innovations:

1. "a new good,"

2. "a new method of production,"
3. "a new market,"
4. "a new source of supply of raw materials, "and
5. "the carrying out of a new organization of any industry."
 QUALITIES NEEDED TO SUCCEED IN AN
ENTREPRENEURIAL ENVIRONMENT

Can Roll with the Punches – means being comfortable wearing many hats, requiring more flexibility and creativity,
and enjoying being dynamic.

Endless Motivation – be more persistent to have a greater chance of success.

Has the Hunger to learn – use everything that happens to you as a learning experience; use failure that occurs on
your path to success as a case study to improve your business further; continue to sharpen your skill sets and
broaden your knowledge base. Never stop learning and never let someone tell you that something cannot be done.
You can do it; make things happen.

Tolerance of Ambiguity – what you are doing one day could be completely different the next; expect to do things
outside of your job description and move quickly.

Love of the Circus – being equally willing to manage, code, consult or empty the trash cans in order to be “golden.”
 QUALITIES NEEDED TO SUCCEED IN AN
ENTREPRENEURIAL ENVIRONMENT
Knows where to Drive – one needs to be driven, self-motivated, and enthusiastic.

Ability to get things Done – push forward, make decisions independently, learn quickly from your mistakes, and
adapt to continually changing circumstances and information are qualities that every CEO seeks out.

Incredible Patience – to push as hard as you can is essential. However, if you cannot deal with waiting,
entrepreneurship will be a frustrating experience.

Unmatched Perseverance – means a commitment to your company, hard work, patience, and having endurance.

Dedication is Key – with the right mixture of perseverance, initiative, resiliency, and vision.
True Grit – the need to have passion.
Teamwork is a Must – every successful entrepreneur requires the ability to be a team player. You cannot do
everything on your own, so make sure you are willing to share tasks or take on someone else’s project.
 ENTREPRENEURSHIP AND COMMUNITY
DEVELOPMENT

Entrepreneurship as a Community Service

•According to the Youth employment Network, entrepreneurship is a veritable tool for
tackling poverty and unemployment's twin challenges. For this reason, the national
government has to intensify its community development activities to transform unemployed
youth from job seekers into employers of the workforce.
•Each community needs to create a new breed of entrepreneurs who are not contributors to
the local and national economy. Indeed, people in the community must also develop their
skills to successfully start, manage, expand, and/or diversify the business enterprise.
 ENTREPRENEURSHIP AND
COMMUNITY DEVELOPMENT
The framework illustrates how livelihood programs should be implemented in our partner
communities.
Role of Entrepreneurship for Community Development

The entrepreneur who is a business leader looks for ideas and puts them into effect in
fostering economic growth and development. Entrepreneurship is one of the most important
inputs in the economic development of a country. The entrepreneur acts as a trigger head to
give spark to economic activities by his entrepreneurial decisions (
http://www.preservearticles.com/2011011). He plays a pivotal role not only in the
development of industrial sector of a country but also in the farm and service sector for
community development.
 Role of Entrepreneurship for Community
Development
1. Promotes Capital Formation by mobilizing the idle savings of public.
 
They employ their own as well as borrowed resources for setting up their enterprises. Such type of entrepreneurial
activities leads to value addition and creation of wealth, which is very essential for the industrial and economic
development of the country.

2. Creates Large-Scale Employment Opportunities

Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic problem of
underdeveloped nations. With the setting up of more and more units by entrepreneurs, both on small and large-scale
numerous job opportunities are created for others.as time passes, these enterprises grow, providing direct and
indirect employment opportunities to many more. In this way, entrepreneurs play an effective role in reducing the
problem of unemployment in the country which in turn clears the path towards economic development of the nation.
 Role of Entrepreneurship for Community
Development
3. Promotes Balanced Regional Development

Entrepreneurs help to remove regional disparities through setting up of industries in less developed and
backward areas. The growth of industries and business in these areas lead to a large number of public
benefits like road transport, health, education, entertainment, etc. Setting up of more industries leads to
more development of backward regions and thereby promotes balanced regional development.
 
4. Reduce Concentration of Economic Power 

Economic power is the natural outcome of industrial and business activity. Industrial development
normally leads to concentration of economic power in the hands of a few individuals which results in the
growth of monopolies. In order to redress this problem a large number of entrepreneurs need to be
developed, which will help reduce the concentration of economic power amongst the population.
 Role of Entrepreneurship for Community
Development
5. Wealth Creation and Distribution
It stimulates equitable redistribution of wealth and income in the interest of the country to more
people and geographic areas, thus giving benefit to larger sections of the society, Entrepreneurial
activities also generate more activities and give a multiplier effect in the economy.
6. Increasing Gross National Product and Per Capital Income
Entrepreneurs are always on the look-out for opportunities. They explore and exploit opportunities,
encourage effective resource mobilization of capital and skill, bring in new products and services
and develops markets for growth of the economy. In this way, they help increasing gross national
product as well as per capital income of the people in the country. Increase in gross national
product and per capita income of the people in a country, is a sign of economic growth.
 Role of Entrepreneurship for Community
Development
7. Improvement in the standard of Living
Increase in the standard of living of the people is a characteristic feature of economic development of the
country. Entrepreneurs play a key role in increasing the standard of living of the people by adopting latest
innovations in the production of wide variety of goods and services in large scale that too at a lower cost.
This enables the people to avail better quality goods at lower prices which results in the improvement of
their standard of living.
 
8. Promotes Country’s Export Trade
Entrepreneurs help in promoting a country’s export-trade, which is an important ingredient of economic
development. They produce goods and services in large scale for the purpose earning huge amount of
foreign exchange from export in order to combat the import. Dues requirement. Hence import
substitution and export promotion ensure economic independence and development.
 Role of Entrepreneurship for Community
Development
9. Induces Backward and Forward Linkages
Entrepreneurs like to work in an environment of change and try to maximize profits by innovation. When
an enterprise is established in accordance with the changing technology, it induces backward and
forward linkages which stimulate the process of economic development in the country.

10. Facilities Overall Development

Entrepreneurs act as catalytic agent for change which results in chain reaction. Once an enterprise is
established, the process of industrialization is set in motion. This unit will generate demand for various
types of units required by it and there will be so many other units which require the output of this unit.
This leads to overall development of an area due to increase in demand and setting up of more and
more units. It this way, the entrepreneurs multiply their entrepreneurial activities, thus creating an
environment of enthusiasm and conveying an impetus for overall development in the community.
 GOVERNMENT’S ROLE AND UNDERTAKING IN
ENTREPRENEURSHIP DEVELOPMENT

Roles of the Government in Entrepreneurship Development

1. Peace and Order
2. Political Stability
3. Price Stability
4. Revenue Collection
5. Infrastructure and Training
6. . Education And Training
7. Public Administration
8. Production Technology
9. Marketing Assistance
10.Financial Assistance
 Government Undertaking for Entrepreneurship
Development
The government has instituted various undertakings to promote and develop entrepreneurial initiatives. The following are
some of the noted undertakings:
1. The One Town One Product (OTOP) – a priority program to promote entrepreneurship that creates jobs. Through
OTOP, local chief executives of each city and municipality take the lead in identifying, developing and promoting a
specific products or services that are seen with potential competitive advantage (www.dti.gov.ph).

• OTOP-Philippines supports micro, small, and medium enterprises (MSMEs) to manufacture, offer, and market
distinctive products or services through the use of indigenous raw materials and local skills and talents. It offers a
comprehensive assistance package through a convergence of services from local government units. (LGUs),
national government agencies (NGAs), and the private sector. This includes:
• Business counselling
• Appropriate technologies
• Skills and entrepreneurial training
• Marketing
• Product designs and development
 Some of Pangasinan’s OTOP products are as follows:

 Lingayen’s Capital Town’s OTOP product is “Bagoong” as per Ordinance No.6, s-2012 of
the Sangguniang Panlalalwigan of Pangasinan;
 Dagupan City’s milkfish, the popularly known “Banugs”;
 Sual and San Fabian are known for their dried salted fish:
 Dasol and Infanta towns are where hundreds of hectares of salt farm are located;
 Calasiao is famous for its white gold, sweet, and bite-sized “puto.”
 Bayambang is fastly known by food enthusiasts because of its “buro,” the fermented rice
–and fish mix.
 Binalonan and Bugallon for their jugs of vinegar that are found on stalls along the
highways;
 Some of Pangasinan’s OTOP products are as follows:

 San Carlos City is acknowledged for its bamboo craft and its luscious mangoes;
 Mangalan is recognized as the place to go to when one craves tasty “tapa”.
 Mapandan is known for its molasses sugar;
 Sto. Tomas residents make bags and another décor from cornhusks after adopting corn
as its OTOP;
 Bugallon chose to develop ”duhat” (native blackberry) wine instead of improving on its
nipa vinegar;
 Urdaneta City recently adopted squash as its favored product after its training center
developed different recipes from the vegetables.
 Alaminos City takes pride in its tourism prospects because of the Hundred Islands
National Park; and
 Balungao is cashing in on its goat trade.
 Government Undertaking for Entrepreneurship Development

2. The National Youth Commission offers the Youth Entrepreneurship Financing Facility
Program (YEFFP) that aims to:
a. Enhance the entrepreneurial skills of the Filipino Youth;
b. Support the business ventures of young people with technical and entrepreneurial skills,
who otherwise are ineligible under regular credit facilities, by providing them more
accessible access to credit;
c. Encourage the self-employment of the Filipino youth; and
d. Establish a credit program for entrepreneurs.
 Government Undertaking for Entrepreneurship Development

3. The Medium-Term Philippine Development Plan or MTPDP is the Philippines’ blueprint of

growth. This program envisions a nation where only a small proportion of the population is
considered poor. The MTPDP calls for developing an entrepreneurial culture by improving access
to information on business opportunities, available raw materials, skills and entrepreneurship
training, prospective fund sources, and access to the latest technologies. It also envisions a
school curriculum that incorporates entrepreneurship education. Similarly, it stresses the need to
enhance poor Filipinos' employment and livelihood opportunities through entrepreneurship and
microfinance.
However, the global crisis has made the fight against poverty much more difficult. For these
reasons, the government has to accelerate and intensify the implementation of critical provisions
in the MTPDP to maximize growth and protect the most vulnerable and make growth equitable
and sustainable.
 ENTREPRENEURSHIP AND FRANCHISING

Entrepreneurship and franchising are two concepts that are closely intertwined or
connected. Many entrepreneurs enter long-term relationships such as franchising, an
important area of entrepreneurship research (Mark Pruett & Greg Winter, 2011). Franchising is
a powerful economic engine because it is a sophisticated, entrepreneurial alliance through
which thousands of individuals create vast wealth.

Opportunity is the core of entrepreneurship. Bill Gates once said, "Vision is the easy part."
However, when you think you have the vision, the right idea, your very next question must be,
"Is it an opportunity." Therefore, an entrepreneur must understand what separates an
opportunity from an exciting idea. They have to think about the three subsets of opportunity
recognition: market demand, market size and structure, and margin analysis.
 ENTREPRENEURSHIP AND FRANCHISING

Franchising happens when someone develops a business model and sells the rights to operate it
to another entrepreneur, a franchise. The company selling the right is the franchisor. The franchisee
usually gets the business model's rights for a specific period and a specific geographic area. The
franchisor's key feature is that the franchisor retains the brand's ownership, and the modus operandi
for delivering the product and execution is franchise responsibility. McDonald's, Pizza Hut, Inc.
Jollibee, 7-Eleven, Inc., Aquabest, Bibingkinitan, and The Generics Pharmacy are just some of the top
Franchises for 2013.
Although it is argued that there is no entrepreneurial component in applying for and running a
franchise, it is indeed, beyond question that entrepreneurship and franchisingg are connected.
Suppose we agree that innovation is an integral part of entrepreneurship. A franchisee must comply
with the business model set forth by the franchisor-a standard requirement in a franchise-stamps-out
entrepreneurial discretion in the business. Indeed, what is gained in a franchise entrepreneurial
alliance is competitively exploiting a business opportunity.
 ENTREPRENEURSHIP AND SOCIAL
ENTREPRENEURSHIP

A common misconception is that any businessman, or anyone who starts business, is an

entrepreneur. According to economists say and Schumpeter, starting a business is not the
main component of entrepreneurship. Rather, entrepreneurship is concerned with stimulating
economic progress through innovation and action.

Social Entrepreneurship
• According to J. Gregory Dees, social entrepreneurship combines the passion of a
socialmission with an image of business –like discipline, innovation, and determination.
 Social Entrepreneur

•The social entrepreneur harnesses entrepreneurship skills to do social good. The social
entrepreneur’s philanthropic energies are channeled into business ventures, creating value in
business so that consumers are willing to pay for the goods and services, and by doing so, the
social entrepreneur earns a profit which is invested in the social ventures.

•According to Martin & Osberg, social entrepreneurs aim for value in the form of large-scale,
transformational benefit that accrues either to a significant segment of society or to society at
large. Moreover, the social entrepreneur targets its programs t the “underserved, neglected, or
highly disadvantaged population that lacks the financial means or political clout to achieve the
transformative benefit on its own. For them, social entrepreneurs are builders of a better world.
 Social Entrepreneur

Just as entrepreneurs change the face of business, social entrepreneurs act as the
change agents for society, seizing opportunities others miss and improving systems,
inventing new approaches, and creating solutions to change society for the better. While a
business entrepreneur might create entirely new industries, a social entrepreneur comes up
with new solutions to social problems and then implements them on a large scale and they
are individuals with innovative solutions to society’s most pressing social problems. They are
ambitious and persistent, tackling major social issues and offering new ideas for wide-scale
change.
 Difference between Entrepreneurship and Social
Entrepreneurship

The entrepreneur’s final objective is wealth creation. However, for the social
entrepreneur, wealth creation is simply a means to an end. The social entrepreneur
participates in profit-seeking business ventures if only to use the profits generated to create
valuable social program for the whole community.
 The Growing Need for Social Entrepreneurs

In the current economic crisis, financial pressures are exacerbating existing social problems
such as poverty and unemployment. According to J. Gregory Dees, social entrepreneurship is
necessary to mitigate the financial repercussions and consequences on the most vulnerable in
society.
If formal education that should be placed by parents is being impede due to their sufferings
from financial burden, fewer children will attend school and fewer people will receive adequate
health care. This could create tensions and violence that may increase as the poor compete for
jobs and income opportunities. Progress will be lost, as families that have been successful in
moving out of poverty fall back into it. As government, business, and household budgets tighten,
costly environmental protection and clean-up efforts are in jeopardy. Because many social and
environmental issues are time sensitive, failure to recognize the importance of social
entrepreneurship and provide adequate support for such efforts during this downturn would be a
serious mistake, as stated by Dees.
  
Qualities of a Good entrepreneur

It is clear that anyone can become an entrepreneur, but only the good entrepreneurs are successful and
manage to get the fruits of their investment. There are some distinctive qualities that are required to be a
successful entrepreneur. Here is a list of some of these qualities.

1. Perseverance
• Whatever business you might be setting up, there are times where you will face
problems. It is moment like this that you will need to hold on and persevere. You will
have to believe in yourself and your products and services in order to succeed.
  
Qualities of a Good entrepreneur

2. Interpersonal Skills
Business is all about dealing with people and you will need to be good at communicating
if you want to succeed. Whether it is with your customers, suppliers or employees it is
important that you learn how to communicate in an effective way to make sure that your
business is run as smoothly as possible.
3. Willingness to take Calculated Risks
A good entrepreneur should be ready to take calculated risk if he or she wants to
succeed. Sometimes in business you will need to trust your gut feelings and walk on water.
However, you will need to distinguish between foolishness and calculated risk. Make sure that
you do your homework and ensure that your business plan is feasible before getting started
  
Qualities of a Good entrepreneur

4. Motivation
It is important that an entrepreneur remain motivated at all time. This is indeed more
important when you are pioneering a business or activity as you will have no one else with
you. You should not let yourself down and make sure that you keep going forward.

5. Time Management
This is another important quality that you will need to have as a good entrepreneur.
Time management will allow you to organize yourself and make sure that you get all your
work done effectively.
  
Qualities of a Good entrepreneur

6. Passion
It almost goes without saying that to become a successful entrepreneur, you must be
passionate about your business. This does not necessarily mean you have to build a business
around something you love. You can (and should) identify a profitable market and grow your
business from there.
7. Leadership
Although the definition of a leader is not easy, we recognize one when we see him in action.
Basically, it’s the ability to be in charge of people and guide them to achieve their objectives. A
leader must be able to plan, motivate, coach and evaluate his staff. A leader must also have both
managerial and interpersonal skills.
  
Qualities of a Good entrepreneur

8. Competitiveness
Composition is everywhere. Business is strictly based on out compete your
competition. If you can establish your presence in the market, differentiate yourself from
your competitors and surpass them by providing a product with better quality and
affordable price, your chances of being a successful entrepreneur will be much larger.

9. Confidence
Confidence is a key competence for entrepreneurial success.
 Summary
Even a farmer is an entrepreneur; he promises to pay the landowner for his farm or land, a
fixed sum of money without assurance for the profit he will derive from his enterprise.
Entrepreneurship is the capacity for innovation, investment and expansion in new markets,
products and techniques, It is more than a word; it is a mission. We must perceive opportunities
inherent in changes; we must stimulate the desire for pursuing the opportunities; and we must
create an environment in which success is possible and the consequence of failure is tolerable.
An entrepreneur is one who organizes, manages, and assumes the risks of a business or
enterprise. He must find, evaluate, and develop an opportunity by overcoming the forces that
resist the creation of something new. Therefore, an entrepreneur is an innovator who is willing to
bear the risk as he sells.
 Summary
Entrepreneurship and franchising are two concepts that are closely intertwined or connected.
Many entrepreneurs enter long-term relationships such as franchising because it is an important
area of entrepreneurship research. Franchising is a powerful economic engine because of it is a
sophisticated, entrepreneurial alliance through which thousands of individuals create vast wealth.
To be brief, social enterprises are vital and should be seen as a positive force, as change
agents providing leading-edge innovation to social needs which are usually unsatisfied. Social
entrepreneurship has to start at the grassroots level because it is at that where it is often
overlooked. This is a societal need that deserves to be attended with much more attention from
academic theorists as well as policy makers. It is not a panacea because it has to be worked out
within the overall social and economic framework. This is especially important in developing
countries and welfare states facing increasing financial stress
 Summary
Thus, creation of new business opportunities through entrepreneurship, be it in the
course of franchising or social entrepreneurship, coupled with productivity and innovation,
will be contributory to economic growth. This therefore means that when there is more
entrepreneurship in an economy more growth is expected. Finally, whether an individual is
into entrepreneurship for purely profit margins or to promote social value, entrepreneurship is
highly beneficial to the economy and the society.
 The End
Have a wonderful day ! 
 References
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