Chapter 1

Overview of Entrepreneurship

Entrepreneurship 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 operations. Creating
a sound business plan, along with efficient and effective operation of the business, will not only
benefit the entrepreneur but also the entire society and the economy.

Societal and Economic Benefits of Entrepreneurship

1. Entrepreneurship produces more jobs that equate to an increase in national income.

2. Entrepreneurship amplifies economic activities of different sectors of society.

3. Entrepreneurship introduces new and innovative products and services.

4. Entrepreneurship improves people’s living standards.

5. Entrepreneurship disperses the economic power and creates equality.

6. Entrepreneurship controls the local wealth and balances regional development.

7. Entrepreneurship reduces social conflicts and political unrest.

8. Entrepreneurship elicits economic independence and capital formation.

Who is an Entrepreneur?

The word “entrepreneur” has a French origin and was coined from the words “entre”, which
means “between”, and “prendre”, which means “to take.”

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. Like other
vocations, being an entrepreneur is also a calling. It is not a career that one can just jump into when
he or she decides so. It entails a holistic business talent to be considered one, ranging from products
to marketing expertise to operations agility, and to financial proficiency.

The definition of an entrepreneur only provides you with a general description or shows you
what is expected from an entrepreneur. However, entrepreneurship is composed of varying degrees
or levels of intensity. According to Action Coach, there are five levels of Entrepreneurial Development:

1. The self-employed. Self-employed persons are, simply but, not comfortable with the routines
of a desk job. They do not want to conform to a fixed working schedule. They want to do things in
their own way and start to feel agitated when controlled by the powers-that-be.
 2. The manager. In this level, entrepreneurs feel the need to step up and ask some help from the
people around them. They delegate and hire potential employees to do the work. Entrepreneurs will
start knowing their employees better, assessing their strengths and their areas from improvement.
They will begin to create positions that match the requirements of the business and the employees’
expertise. Entrepreneurs can now move to the nest level.

3. The leader. Entrepreneurs in this level already enjoy seeing their people flourish, stepping up
and producing great results with minimal supervision. They already recognize key leaders in their
organization. In effect, these key leaders also enjoy the entrepreneur’s trust and are satisfied with the
outcome of their careers. At this point, entrepreneurs can now move on the next level.

4. The investor. Investors look for more opportunities for their business to grow. They may
either purchase one or two businesses that can potentially add value to the company, or sell their
established business (as a franchise) to potential entrepreneurs. When this becomes successful, they
will now become true entrepreneurs.

5. The true entrepreneur. True entrepreneurs, based on their experience, now aim for quality an
excellence in their work. They have full learned, and continue to practice a four-step process of
thinking.

i. Idealization - entrepreneurs dream enormously and desire to build an ideal

environment.

ii. Visualization - entrepreneurs start to create plans to make the dream a reality.

iii. Verbalization - involves sharing their ideas with other people, knowing that their
vision is already occurring.

iv. Materialization - happens when the vision becomes a reality. In this stage, true
entrepreneurs now have an income that keeps on multiplying even if they do not put
much effort.

The world of entrepreneurship these days has already evolved, and new terms are coined to suit
an entrepreneur’s field or expertise. Here are some of them:

1. A technopreneur is an entrepreneur who puts technology at the core of his or her business
model.

2. A social entrepreneur is one who takes advantage of the country’s social problems and turn
them to profitable institutions with the intention of helping the disadvantaged community rather
than making a profit.

3. An intrapreneur is an entrepreneur in a large company or corporation who is tasked to think,

establish, and run a new big idea or project. Intrapreneurs are usually the product managers or the
business development managers of a company.

4. An extrapreneur is an entrepreneur who hops from one company to another to act as the
innovation champion, providing creative and efficient solutions.
Common and Core Competencies in Entrepreneurship

Entrepreneurship is a career that requires an excess of common and core competencies.

Therefore, to be considered a successful entrepreneur, he or she must possess common
entrepreneurial competencies that are needed all throughout the entrepreneurship career. At the
same time, he or she should also possess core entrepreneurial competencies that are needed for
business sustainability and management.

Here are the common traits that entrepreneurs should always have:

1. Proactive. They address issues, problems, and challenges before they come rather than when
they already happened. They ensure that proper research is done, the risk factors assessed, and plans
are executed on a timely and most efficient way.

2. Agent of change. Entrepreneurs are innovation champions. They see opportunities in

hopeless and complex situations. They are always enthused to improve and develop new products
and services and introduce them to the market.

3. Risk takers. Entrepreneurs will not be successful if they do not take risks. By taking risks,
entrepreneurs do not just grab opportunities left and right; they have to take consideration the
potential various threats they may encounter.

4. Have a sharp eye for opportunities. Entrepreneurs have a talent for recognizing an
opportunity even by using the macro level data only. They know how to assess the net cause and
effect of an opportunity and decide intelligently if a venture should be considered or not.

5. Sociable. Soft skills are one of the most important competencies of entrepreneurs as these
establish the relationship with the most important assets of the company - its people and its
customers.

6. Networkers. A networker knows the key people to connect with. Networking can be a very
intimidating task, for it takes a lot of guts to pull it off. Successful entrepreneurs gain trust of their
valuable network and maintain a long-lasting relationship with them.

7. Decisive. Entrepreneurs always have a decision about their business. They do not settle for
gray areas or unclear solutions. They do not leave an issue unsolved without a disposition. They make
sure that all aspects of their business have clear objectives and strategies.

8. Balanced. The minds of entrepreneurs should always have a balance between the analytical
and the creative side. Their brains are always playing with “unique ideas” that no one has ever
thought of yet.

9. Innovative. The minds of entrepreneurs are rich with big ideas that can add value to their
existing business or could become a game changer in the industry or business where they belong.
They do not stop improving and thinking of new and worthwhile ideas for their business.

Here are some core traits that entrepreneurs should develop in managing and running the
business.
 1. Leaders - Successful entrepreneurs always have the heart of a leader. To be successful leaders,
they must be a source of inspiration for their employees. They must be humble, approachable,
friendly, and also know how to listen to people’s concern.

2. Communicators - Entrepreneurs know how to use all forms of communication to effectively

shares ideas and address certain concerns with their customers or employees. Effective
communication not only provides people with a clear view of what the business offers, they also help
prevent mishaps or accidents in an organizations.

3. Specialists - Entrepreneurs are experts in their chosen business. They are tactical and are very
keen with details. When asked about the specifics of their product or service, they can easily answer
without heavily relying on their people. As a result, they can easily think of innovating and improving
the product or service offerings because they know their complexity.

4. Problem solvers - Entrepreneurs possess critical thinking skills and look at problems as
challenges or puzzles that they need to solve. They know how to handle issues in any area of the
business, be it finance, operations, or marketing. Entrepreneurs have faith that every problem has a
solution no matter how hard it is. They must also be courageous and know how to face the
consequences of their decisions.

Entrepreneurship or Employment

Entrepreneurs and employment are two different career paths that a person can choose
depending on his or her personal aspirations and work characteristics. It is really up to the person at
the end of the day on what career trail he or she will follow, considering all compelling career factors
that are important to him or her. This table shows a comprehensive list of the perks and the
downsides of being an entrepreneur as compared to being employed.

Important Career Entrepreneur Employee

Factors

1. Income  Income generated passively  Income generated actively

even when the entrepreneur is
resting.
 Opportunity income unlimited,
depending on the success of
the business.
 Income only earned when the
business is successful.
during working hours.
 Income usually fixed per
month and increases every
year depending on the
employer and the employee’s
performance.
 Income earned whether the
business is successful or
unsuccessful.

2. Hiring and Firing,  Provides jobs; is the owner of  Seeks for a job; is the one
Organizational Setup, the business and conducts the
and Major Key Result talent selection.
Areas
 Fully responsible for serving
customers, making the business
profitable and sustainable, and
providing employee
satisfaction.
 Has the power to disengage
nonperforming employees
applying the due process policy
of disengaging personnel.
 Can venture into expansion of
business such as franchising
and buying other similar
businesses.
3. Daily Tasks  Performs all necessary variable
tasks to establish and manage a
start up business, which usually
takes most of the
entrepreneur’s time; spend
more hours on work than a
regular employee and
sometimes gets no sleep.
 Prepares policies, procedures,
and memoranda for the
business.
4. Leisure Time and  Has a flexible schedule and can
Vacations take unlimited number of
vacation days (applicable only if
the business has stabilized
already).
5. Taxation  Taxed on the net income; can
claim taxable income
deductions for allowable
expenses incurred by the
business.
6. Comfort Level at  
Work
applying for a job and is
interviewed by the company’s
hiring officers.
 Has a goal of satisfying only
the employer or direct
supervisor.
 Fully dependent on the
employer’s performance; is at
risk of losing his or her job if
the company does not
perform well; may find it
difficult to just leave their
below par employer if this is
their only source of income.
 Can only work for the current
employer exclusively.
 Has a routine tasks and works
on regular or normal hours.
 Follow policies, procedures,
and memoranda from the
employer.
 Has a limited number of
vacation days imposed by the
employer.
 Taxed on the gross income;
cannot use expenses incurred
related to the job such as
food and transportation
expenses to claim for
deductions from taxable
income.
Careers in Entrepreneurship

Entrepreneurship consists of vast career options depending on the passion and field of interest
of the entrepreneur. The saying “When you love what to do, it’s as if you are not working” is very
much applicable to entrepreneurs who consider managing their business as enjoyment rather than
working exhaustively.

Here is a list of most common small businesses in the Philippines:

1. Sari-sari Store - There are approximately more than one million sari-sari stores in the
Philippines. Situated in almost all neighbourhoods, these stores provide affordable basic retail
products to nearby communities.

2. Rice retailing - Because rice is the staple food of Filipinos and other Asian countries, rice
retailing business is very common in the country.

3. Food cart business - This business is also popular in the Philippines. The number of food cart
business is not as big as the number of sari-sari stores, but food carts are present in almost every
populous location usually located inside or outside the malls, schools, parks, train stations, and
offices.

4. Printing business - This business is also lucrative in the Philippines because the demand is very
high. Usually situated near schools and offices, printing businesses cater to the needs of students for
their respective projects and also to offices for their advertising and business requirements like flyers,
billboards, magazines, newspapers, journals, and calendars. Also for the demand occasions such as
wedding, anniversaries, birthdays, funerals, and graduations.

5. Buy-and-sell business - This is one of the emerging businesses in the Philippines, and it is not
just done traditionally in brick-and-mortar stores but also over the Internet. The influx of buy-and-sell
Web sites has changed the behaviour of how Filipinos exchange goods on the most and practical way.

6. Street food business - Just like the food cart business, this kind of business is widespread in
the Philippines. Street food businesses are literally located in streets, selling almost the same food
products being sold by the food cart business. Examples are selling barbecue, pork/chicken intestines
(isaw), chicken blood (betamax), chicken feet (adidas), and the famous balut (developing duck
embryo).

7. Flea market business or tiangge - In this type of business, entrepreneurs set up a small space
and sell any type of goods in a wet market setup that is normally in an open space. Customers are
more interested to buy from these flea markets because they can bargain for the price.

8. Online selling business - This business deals with adding the Internet as a marketing and
transaction channel for selling. This is very similar with the buy-and-sell business, except that the
focus is on selling existing and established products online.

9. Cellphone loading business - More than 95% of Filipinos are prepaid mobile phone users,
that’s why there are so many cellphone loading business to their existing businesses such as the
sari-sari store, food cart, or online business.

10. Laundry and dry cleaning business - This type of business is often located at central business
districts and areas with several condominiums and townhouses. Furthermore, these business
establishments also have a significant presence near schools, dormitories, and apartments.
 11. Hair styling and makeup business - One of the successful business in the Philippines is the
hair styling business, which includes parlors and barber shops. These businesses also offers auxiliary
services such as hair treatment, massage, and nail styling because most Filipinos are generally
conscious about proper grooming and hygiene that’s makes the business profitable.

12. Spa, gym, and nail care business - This kind of business is related to hair styling and makeup
business. One of the ways Filipinos cope with stress is by going to spa. Also, Filipinos now go to gym
because of becoming more health conscious. Nail care is very much enjoyed by Filipino women who
avail of manicure, pedicure, or both.

13. Video and photography business - This business requires talent in capturing precious
moments of celebrators in wedding, birthdays, anniversaries, graduations, and very important event.
This business gaining popularity because of the presence of social media, where videos and
photographs are supposed to be shared to other people.

14. Tutorial business - This business caters to students who are not able to catch up with their
lessons, or those who just want to be ahead in class. A tutorial business is composed of experts in a
particular field who transfer their knowledge to another for a fee.

15. Baking business - A lot of bakeries is present in almost all neighbourhoods in the Philippines
because bread is the second staple food of Filipinos. Pan de sal is the most common bread being
offered by this business.

16. Web site development and design/blogging. The popularity of the Internet brought so many
opportunities to Internet-savvy building entrepreneurs. In this business, the Web site developer
conceptualizes and implements a Web site for another business whose objectives is to inform,
persuade, and remind its customers.

17. Direct selling business - This business is also very common in the Philippines. It is a
face-to-face selling of products by a sales agent. The products include fashion accessories, health and
wellness items, clothing, food supplements, and home care items.

18. Car wash and car care business - You often see this business in large cities because of the
proliferation of cars. In fact, the demand for car care increases every year.

19. Bar, cafe, and restaurant - The number of foodies (food enthusiasts) has increased because
the Filipino palate became globalized. Filipino consumers’ demand for variety and quality taste has
evolved as well; thus businesses are continuously thriving.

20. Water station and LPG (liquified petroleum gas) - These businesses can never go wrong as
they continuously serve households, supplying them with their purified water and gas needs. The
products that they sell are used for daily consumption, which why a lot of these are found in almost
every corner in the Philippines, especially in the urban areas.