Entrepreneurship

Businesses are the backbone of the economy. Entrepreneurs plays

an important role in developing the economy through providing the
needed products and services including the solution to the problem of
unemployment.

Entrepreneurs areencouraged by the economy because they can

provide a lot of opportunities for the unemployed young people. It will
increase in per capital, income, higher standard of living and increased
individual saving, revenue to the government in the form of income
tax, value added tax, export duties, import duties, and balanced
regional development

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Activity 401 Let Me Know

• Give at least five (5) names of entrepreneurs that you know. May it be from
your locality or within Philippines. Identify what are their common traits as
entrepreneur.

Competencies of Entrepreneurs

1. What characteristics that you can observe or see that is common to them?
2. Who among the entrepreneurs you mentioned that you admire most and why?
3. In your own opinion, what do you need to possess to become a successful
entrepreneur?

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Relevance of Entrepreneurship to an organization

1.Development of Managerial capabilities- this means that one of the benefits an

entrepreneur gets is to develop his managerial skills.

2.Creation of Organizations- which means that because of entrepreneurships many

organizations will exist.

3. Improving standard of living- this means that entrepreneurship can lift up the
economic status of an individual.

4.Means of economic development- this means that not only the life of the
entrepreneur is improved but also the society where the business is located.

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Concept of Entrepreneurship

The word “entrepreneur” was derived from the French verb

enterprendre, which means “ to undertake” This is pinpointing to
those who ”undertake” the risk of enterprise. The enterprise is
created by an entrepreneur and the process is called
“Entrepreneurship”

Entrepreneurs are innovators, willing to take risks and generate new

ideas to make it unique and profitable solutions to the present-day
problems.
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 Factors Affecting Entrepreneurship

Personality Factors which includes:

a. Initiative- which means doing things even before being told

b. Proactive- which means he can classify opportunities and seize it.
c. Problem Solver- which means he can retain good relations with other people
d. Perseverance- meaning he will pursue things to get done regardless of challenges
e. Persuasion- means that he can entice people to buy even if they don’t.
f. A Planner- meaning he makes plan before doing things and do not fail to monitor it.
g. Risk-taker which means that he is willing to gamble but he will calculate it first.

2.Environmental Factors which include political, climate, legal system, economic and social
conditions and market situations.

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 Common Competencies in Entrepreneurship

1. Decisive- an entrepreneur must be firm in making decisions.

2. Communicator- an entrepreneur must have a convincing power.
3. Leader-an entrepreneur an entrepreneur must have the charisma to be
obeyed by his employees
4. Opportunity seeker- an entrepreneur must have the ability to be the first to see
business chances.
5. Proactive- controlling a situation by making things to happen or by preparing
for possible future problems.
6. Risk Taker- they have the courage to pursue what is their business ideas.
7. Innovative- the entrepreneurs have big business ideas and they do not stop
improving and thinking of new worthwhile ideas for their business.

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Core Competencies in Entrepreneurship

1. Economic and dynamic activity- Entrepreneurship is an economic activity because

it involves the creation and operation of an enterprise with a view to creating value
or wealth by ensuring optimum utilization of limited resources.

2.Innovative- Entrepreneurs constantly look for new ideas, thus he needs to be

creative.

3. Profit Potential- meaning the entrepreneur can be compensated by his profit

coming from the operation.

4.Risk bearing –meaning the entrepreneur needs to gamble but wise enough to
offset the risk.

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 TYPES OF ENTREPRENEURS
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1.Innovative entrepreneur- they are those who always make new things by thinking of
new ideas.

2. Imitating entrepreneurs- they are those who don’t create new things but only
follow the ideas of other entrepreneurs.

3. Fabian entrepreneurs- they are those skeptical. They don’t initiate but follow only
after they are satisfied.

4. Drone entrepreneur- they are those who lives on the labor of others. They are die-
hard conservatives even ready to suffer the loss of business.

5. Social entrepreneurs-they are those who initiate changes in the various fields such
as education, health, human rights, environment and enterprise development.
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Large image
Career Opportunities of Entrepreneurship

1.Business Consultant- with the expertise of the entrepreneur he can be a very

good source of advices to other entrepreneurs and would be business man.

2.Teacher- a graduate of an entrepreneurship can be use his knowledge in

teaching
3. Researcher- the entrepreneur can be employed as researcher by an
enterprise.

4. Sales - the entrepreneurship graduate can apply as salesman

5. Business Reporter - the entrepreneur being expert in the field, he can be

employed as business reporter.

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Large image Based-Task 402 Interview the Known
Performance

Choose one successful entrepreneurs in your community or nearby places and

conduct an interview using the guide questions below. Discuss the result of your
interview to your classmates.

1. What motivated you to become an entrepreneur?

2. What do you think are your characteristics and competencies that made you a
successful entrepreneur

3. What do you think of being employed? Why didn’t you choose that path?

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Large image
Activity 402 Self- Assessment
Direction: Find out if you have the qualities of an entrepreneur. Put a check mark on
the box.
Qualities YES NO
Risk Taker
Communicator
Leader
Opportunity Seeker
Proactive
Innovator
Decisive

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Large image
Entrepreneurial Ideas
The creation of an entrepreneurial ideas leads to the identification of entrepreneurial
opportunities, which in turn results in the opening of an entrepreneurial venture.
The entrepreneurial process of creating a new venture is presented in the diagram below.
(Aduana, 2017)

Figure 1. The Entrepreneurial Process of Creating

New Venture
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 Essentials in Entrepreneur’s Opportunity Seeking
These are the basic foundation that the entrepreneur must have in seeking opportunities:
Entrepreneurial mind frame. This allows the entrepreneur to see things in a very positive and
optimistic way in the midst of difficult situation. Being a risk - taker, an entrepreneur can find solution
when problems arise.
Entrepreneurial heart flame. Entrepreneur's driven passion, they are attracted to discover
satisfaction in the act and process of discovery. Passion is the great desire of an entrepreneur to achieve
his/her goals.
Entrepreneurial gut game. This refers to the ability of the entrepreneur of being intuitive. This
also known as intuition. The gut game also means confidence in one’s self and the firm believes that
everything you aspire can be reached.

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Sources of Opportunities
There are many ways to discover opportunities. Looking at the big picture
some have noticed the emerging trends and patterns for business opportunities.
While others are trying to find out their target market. Some are the following
sources of opportunities:
1. Changes in the environment
Entrepreneurial ideas arise when changes happen in the external environment. A
person with an entrepreneurial drive views these changes positively. External
environment refers to the physical environment, societal environment, and
industry environment where the business operates.
1.1 The physical environment includes
a. Climate- the weather conditions.
b. Natural resources- such as minerals, forests, water, and fertile land that
occur in nature and can be used for economic gain.
c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in the wild.

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1.2 The Societal environment includes the various forces like
a. Political forces- includes all the laws, rules, and regulations that govern business
practices as well as the permits, approvals, and licenses necessary to operate the
business.
b. Economic forces- such as income level and employment rate.
c. Sociocultural forces- customs, lifestyles and values that characterize a society.
d. Technological environment- New inventions and technology innovations.
1.3 The industry environment of the business includes:
a. Competitors
b. Customers For example, one factor in the physical environment that
c. Creditors can easily change is the climate. The temperature is very
d. Employees high during summer but very low during the rainy season.
e. Government An individual with entrepreneurial drive can be extremely
f. Suppliers imaginative and inventive in identifying opportunities.
He/she can venture a business that responds to the needs
of the people during summer and rainy season.

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2. Technological discovery and advancement
A person with entrepreneurial interest sees possibility of business opportunities in
any new discovery or because of the use of latest technology.
For example, an individual with knowledge in repair and installation of a machine
engine discovers that additional engine parts that considerably reduce fuel
consumption.

3. Government’s thrust, programs, and policies, the priorities, projects, programs,

and policies of the government are also good sources of ideas.
For example, the use of firecrackers to celebrate New Year’s Eve is strictly
prohibited. People without entrepreneurial interest will view the ordinance as a
plain restriction. However, for an entrepreneur, it is a business opportunity to come
up with a new product that will serve as a substitute for firecrackers.

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4. People’s interest
The interest, hobbies, and preferences of people are rich source of
entrepreneurial ideas. Like the increasing number of Internet Café at present
could be lead to the strong attachment of young people to computers.

5. Past experiences

The expertise and skills developed by a person who has worked in a particular
field may lead to the opening of related business enterprise.
For example an accountant who has learned the appropriate accounting and
management skills and techniques in a prominent accounting firm can start
his/her business venture by opening his/her own accounting firm.

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Forces of Competition Model

It is also known as the “five forces of competition,” An

industry environment is a competitive environment.
Regardless of what product or services you have,
competition is always present.

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Competition – it is the act or process of trying to get or win
something.
For example, the prices are lower when there is a competition
among the
stores.

These are the five forces competing within the industry:

• Buyers
• Potential new entrants
• Rivalry among existing firms
• Substitute products
• Supplier
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1. Buyers
The buyers are the one that pays cash in exchange to your goods
and services. For example, the influenced of the price or in the
bargaining strategy. The buyer has a strong and magnified
bargaining power. The threat of its bargaining power will be less if
the following factors notice:
a. There are several suppliers available in the market.
b. The buyer has the potential for backward integration.
c. The cost of switching the supplier cost is minimal.
d. The product represents a high percentage of the buyer’s cost.
e. The buyer purchases large portions of the seller’s product or
services.

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2. Potential New Entrants
A new entrant is defined as the one who enters something. For
example, the level of capital requirements, if the business requires huge
capital, new entrants should decline to join the business. This gives a
threat to the business. This can be notice if there is the presence of the
following factors:
a. Substantial capital requirement.
b. Strict government policy.
c. Difficulty in accessing distribution channels.
d. Economies of scale.
e. High cost of product differentiation.
f. High switching cost

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3. Rivalry among Existing Firms
Rivalry is a state or situation in which people or groups are competing
with each other. For example it depends on the Marketing strategy of
your competitor, like giving freebies and special offers. The intensity of
rivalry among existing firms is characterized to the following factors:
a. Diversity of rivals.
b. Number of competing firms.
c. Characteristics of the products or services.
d. Increased capacity.
e. Amount of fixed costs.
f. Rate of industry growth.

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4. Substitute Products
Substitute means anything that takes the place or function of another. For
example the consumers decide to use margarine as a substitute for butter.
In case the price of butter increases, preferably the consumer will gradually
switch to margarine.

A substitute product can give a big threat in the industry environment if the
following factors are notice:

a. Switching cost is low.

b. Preferences and tastes of the customers easily change.
c. Product differentiation is highly noticeable
d. The quality of substitute products dramatically improves.
e. The price of substitute product is substantially lower.

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5. Suppliers
The Suppliers are the one that provide something that is needed or
wanted. For example if the supply and services being offered is
unstable or keep. The intensity of the threat is strong in this kind of
the competitive force in the industry. This can be notice if there is
the presence of the following factors:
a. The supplier has the ability for forward integration.
b. Suppliers in the industry are few, but the sales volume is high.
c. Substitute products are not readily available in the market
d. The switching cost is very high.
e. The product or service is unique.

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