Entrepreneurship

Learning Outcomes:
At the end of this module the learners can:
• Discuss the relevance of entrepreneurship in general,
including its economic importance.
• Define who is an entrepreneur.
• Explain the key concepts of common and core
competencies in entrepreneurship.
• Delineate clearly between entrepreneurship and
employment.
• Explore opportunities for entrepreneurship as a career.
What is Entrepreneurship?
What is an Entrepreneur?
Entrepreneurship
• It is a proactive process of developing a business venture
to make a profit.

• It involves seeking opportunities for market, establishing

and operating a business out of the opportunity, and
assessing its risks and rewards through close monitoring of
the operations.
Here are the societal and economic
benefits of entrepreneurship.
• Entrepreneurship produces more jobs that equate to an
increase in national income.
• Entrepreneurship introduces new and innovative products
and services.
• Entrepreneurship amplifies economic activities of different
sectors of society.
• Entrepreneurship improves people’s living standards.
• Entrepreneurship disperses the economic power and
creates equality.
• Entrepreneurship controls the local wealth and balances
regional development
• Entrepreneurship reduces social conflicts and political
unrest.
• 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”.
Entrepreneur
• 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.

• It entails a holistic business talent to be considered one,

ranging from product and marketing expertise to
operations agility, and to financial proficiency.
Five levels of entrepreneurial
development – Action Coach
• The self-employed
• The manager
• The leader
• The investor
• The true entrepreneur
The world of entrepreneurship these days
has already evolved, and new terms are
coined to suit an entrepreneurs’ field of
expertise. Here are some:
Technopreneur
An entrepreneur who puts technology
at the core of his or her business model.
Social Entrepreneur
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.
Extrapreneur
An entrepreneur who hops from one
company to another to act as the
innovation champion, providing creative
and efficient solutions.
The Role of Entrepreneurs in the
Society

• They innovate
• They nurture healthy competition
• They allow money to circulate
FACTORS AFFECTING
ENTREPRENEURSHIP
1. Personality Factors
An entrepreneur core competencies which include:

• Initiative
• Proactive
• Perseverance
• Problem solver
• Persuasion
1. Personality Factors
An entrepreneur core competencies which include:

• Self-confidence
• Self-critical
• A Planner
• Risk Taker
 2. Environmental Factors
These factors relate to the conditions in
which an entrepreneur has to work.

Environmental factors such as political

climate, legal system, economic and social
conditions and market situations, contribute
significantly towards the growth of
entrepreneurship.
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 scarce
resources.
2. Innovation
Entrepreneurship involves a continuous search
for new ideas
3. Profit potential
It is the level of return or compensation to the
entrepreneur for taking on the risk of developing an
idea into an actual business venture.
4. Risk bearing
The essence of entrepreneur is the willingness to
assume risk arising from the creation and
implementation of new ideas.
Functions of an Entrepreneur
1. Innovation
An Entrepreneur is basically an innovator who
tries to develop new technology, products and
markets. Innovation may involve doing new things
or doing existing things differently.
Ernest L. Cu

Transformed a simple data

entry service company into
becoming one of the country’s
largest outsourcing service
providers
 2. Assumption of Risk
An Entrepreneur is a risk taker and not a risk shirker.
He is always prepared for assuming losses that may arise
on account of new ideas and projects undertaken by
him. This willingness to take risks allows an entrepreneur
to take initiatives in doing new things and marching
ahead in his efforts.
Corazon D. Ong
a dietician by profession who
used her knowledge to create
affordable processed meat
products that could compete with
the already well known and
established processed meat
brand.
3. Research
An Entrepreneur is a practical dreamer and
does a lot of ground-work before taking a leap in his
ventures.
Gregorio G. Sanchez, Jr.
a civil engineer by profession
formerly engaged in civil
construction works. He went into
research and performed
experiments using only pots and
pans and a small tank as his
equipment.
4. Development of Management Skills
The work of an entrepreneur involves the use of
managerial skills which he develops while planning,
organizing, staffing, directing, controlling and
coordinating the activities of business.
Socorro Ramos

She became acquainted

with writers, book lovers and
other personalities who could
provide her information about
the changing times.
5. Overcoming Resistance to Change
New innovations are generally opposed by
people because they make them change their
existing behaviour patterns. An entrepreneur always
first tries new ideas at his level.
Diosdado Banatao

He saw the opportunity of

setting-up his own company
by designing chip sets.
6. Catalyst of economic development
An entrepreneur plays an important role in
accelerating the pace of economic development
of a country by discovering new uses of available
resources and maximizing their utilization.
Mariano Que

His goal is to make safe

medication available and
accessible to every Filipino
community.
Types of Entrepreneurs
1. Innovative Entrepreneurs
These entrepreneur have the ability to think
newer, better and more economical ideas of
business organization and management. They are
the business leaders and contributors to the
economic development of a country.
2. Imitating entrepreneurs
These entrepreneur are people who follow the
path shown by innovative entrepreneurs.
3. Fabian Entrepreneurs
These entrepreneur are sceptical about the
changes to be made in the organization. they do
not initiate any inventions but follow only after they
are satisfied with its success rates.
4. Social Entrepreneurs
Social Entrepreneurs drive social innovation and
transformation in various fields including education,
health, human rights, workers’ rights, environment
and enterprise development.
Cecilio K. Pedro

He developed multi-
flavoured toothpastes for children
that came brightly packaged in
tubes and boxes adorned with
“Sesame Street” characters.
 Career Opportunities for
Entrepreneurship Graduates
 1. Mid-level management
At big companies, the C-level folks develop
ideas, the ground force does the work, and mid-level
management converts the idea into execution.
 2. Business consultant
Business today need consultants who can go to
a client site, identify problems and fix them. That is
what an entrepreneur does, and that is why this job is
a perfect opportunity.
 3. Sales
Entrepreneurship graduates can work in sales or
run the department of any business. It is a
requirement for Entrepreneurship graduates to have
know-how to represent a company, manage
accounts, and follow up on leads.
 4. Research and Development
A good qualification to work in R&D is a training
and education on understanding of business
concepts, procedures, and practices and
entrepreneurship.
 5. Not-for-profit fundraiser
Being able to raise funds requires understanding
the importance of business and networking
relationships. This is a great place for someone with
degree on entrepreneurship because his experiences
in studying advanced concepts can be used to his
advantages on the job.
 6. Teacher
Those with entrepreneurship degree are
qualified to teach the core subjects in Senior High
School and teach students the entrepreneurial skills.
 7. Recruiter
College graduates who had courses that cover
operations management, leadership and a variety of
others, and those with entrepreneurship degree, most
likely have a keen sense of what type of person is
needed to fill us a position.
 8. Business reporter
Entrepreneurship graduates can write articles, or
pick up a quick class to learn how to write article.
They can take a prime position to take the lead in
covering a local business beat. Understanding the
field and concepts of business can be used to make
the business section much more interesting and
appealing.
Some Myths about Entrepreneurship
1. Entrepreneurs, like leaders are born,
not made
2. Entrepreneurs are academic and social
misfits.
3. To be an entrepreneur, one needs
money only.
Alfredo Yao

He started concocting fruit

juices in his own kitchen and
launched the orange drinks which
became an instant hit.
4. To be an entrepreneur, a great idea is
the only ingredient.
Tony Tan Caktiong

He ventured into the food

business by buying an ice cream
parlor franchise from the famous
Magnolia Ice Cream House.
5. One wants to be an entrepreneur as
having no boss is great fun.
Henry Sy, Sr.

The founder of the Philippine’s

largest retailing company known as
SM. The acronym stands for “Shoe
Mart”
Entrepreneurship or Employment
Pros and cons of entrepreneurship vs. employment
 Important Career Factors
1. Income

Entrepreneur Employee

Income generated Income generated

passively even when the actively
entrepreneur is resting (i.e., on working hours
only);
no work = no pay
 Important Career Factors
1. Income

Entrepreneur Employee

Opportunity income Income usually fixed per

unlimited, depending on month and increases
the success of the every year depending
business on the employee
performance
Important Career Factors
1. Income

Entrepreneur Employee

Income only earned Income earned whether

when the business is the business is successful
successful or unsuccessful
 Important Career Factors
2. Hiring and Firing, Organizational Setup, and Major Key Result Areas

Entrepreneur Employee

Provides jobs; is the Seeks for a job; is the

owner of the business one applying for and is
and conducts the talent interviewed by the
selection company’s hiring
officers
 Important Career Factors
2. Hiring and Firing, Organizational Setup, and Major Key Result Areas

Entrepreneur Employee

Fully responsible for serving Has the goal of satisfying

customers, making the only the employer or the
business direct supervisor
profitable/sustainable, and
providing employee
satisfaction
 Important Career Factors
2. Hiring and Firing, Organizational Setup, and Major Key Result Areas

Entrepreneur Employee

Can venture into expansion Can only work for the

of business such as current employer
franchising and buying exclusively
other similar businesses
 Important Career Factors
3. Daily Tasks

Entrepreneur Employee

Performs all necessary variable Has routine tasks and works

tasks to establish and manage a
startup business, which usually takes
on regular or normal hours
most of the entrepreneur’s time;
spend more hours on work than a
regular employee and sometimes
gets no sleep
 Important Career Factors
4. Leisure Time and Vacations

Entrepreneur Employee

Has a flexible schedule and Has limited number of

can take unlimited number vacation days imposed by
of vacation days the employer
(applicable only if the
business has stabilized
already)
 Important Career Factors
5. Taxation

Entrepreneur Employee

Taxed on the net income; Taxed on the gross income;

can claim taxable income cannot use expenses
deductions for allowable incurred related to the job
expenses incurred by the such as food and
business transportation expenses to
claim for deductions from
taxable income
 Important Career Factors
5. Careers in Entrepreneurship

Entrepreneur Employee

Is comfortable in doing multiple May be comfortable with

and challenging tasks and takes
accountability with the risks and
routines and minimal risks;
profits of the business; does not may also be comfortable in
want to be confined in a box; thinks working for the company
outside the box or sometimes thinks itself
there is no box
Careers in Entrepreneurship
List of most common small businesses in the Philippines:
• Sari – sari store
• Rice retailing
• Food cart business
• Printing business
• Buy-and-sell business
• Street food business
Careers in Entrepreneurship
List of most common small businesses in the Philippines:
• Flea market business or tiangge
• Online selling business
• Cellphone loading business
• Laundry and dry cleaning business
• Hair styling and makeup business
• Spa, gym, and nail care business
• Video and photography business
• Tutorial busines
Careers in Entrepreneurship
List of most common small businesses in the Philippines:
• Baking business
• Web site development and design/blogging
• Direct selling business
• Car wash and car care business
• Bar, café, and restaurant
• Water station and LPG (liquefied petroleum gas)
station
Careers in Entrepreneurship
List of most common small businesses in the Philippines:
• Baking business
• Web site development and design/blogging
• Direct selling business
• Car wash and car care business
• Bar, café, and restaurant
• Water station and LPG (liquefied petroleum gas)
station
Franchising
A business arrangement wherein the franchisor,
who is the owner of the business, acquires
distribution centers through the franchisees or the
affiliated dealers.
Entrepreneur Philippines’ franchise
business options in the Philippines:
Franchise or Startup Businesses
• Fast food establishments and restaurants
• Food and snacks
• Gas stations/petroleum products
• General merchandise and retail
• Health and wellness (salon, massage, spa, and
gym)
• Schools
• Services (personal and business)
• Waters station
• Franchise Fee: N/A
• Initial Capital Investment:
P25 to 35 million (Phillippines outlet)
US$450,000 to 800,000 (International outlet)
• Franchise Fee: P1,000,000 + 12%VAT
• Initial Capital Investment: P7 million to P8.5 million
• Franchise Fee: N/A
• Initial Capital Investment: P200,000 – 1,200,000
• Franchise Fee: P815,000
• Initial Capital Investment: P20-25m
• Franchise Fee: P815,000
• Initial Capital Investment: P20-25m
• Franchise Fee: P50,000
• Initial Capital Investment: P250,000
• Franchise Fee: P380,000 – 480,000
• Initial Capital Investment: P380,000 – 500,000
• Franchise Fee: P1.5 – 2.2m
• Initial Capital Investment: P18 – 25m
• Franchise Fee: P1.2m
• Initial Capital Investment: P8-10m
• Franchise Fee: P290,000
• Initial Capital Investment: P750,000
• Explain the relevance of Entrepreneurship in our country and to
an organization.
• What are the functions of entrepreneur.
• Give examples of career opportunities for entrepreneurship.
• Differentiate the types of entrepreneur.
• Shed light on 5 myths about entrepreneurship.
• Imagine you were hired to teach the subject on
entrepreneurship to Senior High School Students. Convince your
students of the relevance of the course/subject.
• Explain the concept of the core competencies in
entrepreneurship.
• What are the job and career opportunities for an entrepreneur?.
Explain each.
• Research on the life of one of the successful entrepreneurs
cited in this chapter.
(Ernest L. Cu, Corazon D. Ong, Gregorio G. Sanchez, Jr., Soccoro Ramos, Diosdado
Banatao, Mariano Que, Cecilio Pedro, Alfredo Yao, Tony Tan Caktiong, Henry Sy, Sr.)
• Find out what made them succeed.
• Cite lesson learned from their stories of success.
• Find out how the entrepreneur performed the 6 Functions of
an entrepreneur
(Innovation, Assumption of Risk, Research, Development of management skills,
Overcoming resistance to change, and Catalyst of economic development)
• Based on the types of entrepreneur, under what type of
entrepreneur does he/she belong
(Innovative Entrepreneur, Imitating Entrepreneurs, Fabian Entrepreneurs, Drone
Entrepreneurs, and Social Entrepreneurs)
 Criteria 5 points 4 points 3 points 2 points
The content of The content of The content of The content of
Content of the given topic is the given topic is the topic lacks the topic is not
Research well emphasized somewhat clarity emphasized
emphasized

Artistry and Artistry and The presentation Artistry and

creativity is clearly creativity is lacks artistry and creativity have
Creativity observe somewhat creativity not been observe
observed

Excellent Good outcome Satisfactory Poor outcome of

outcome of of production outcome of less production with
Teamwork & production with with showmanship of no showmanship
Performance showmanship of showmanship of group solidarity of group solidarity
group solidarity group solidarity

Excellent Good discussion Satisfactory Poor discussion on

Discussion discourse on the on the topic discussion on the the topic
topic topic
DEVELOPING A BUSINESS PLAN
 Preparing a Business Plan (Lesson 1)
Learning Outcomes

• Explain what is business plan, its focus, types and content

• Distinguish between a business plan and a feasibility plan
• Determine possible product/service that will meet peoples’
need by accomplishing the new product / new service
template
Business Plan
A business plan is a formal statement of a set of
business goals, the reasons why they are believed
attainable, and the plan for reaching those goals.
Focus of Business Plan
• Externally focused plans target goals that are important to
external stakeholders, particularly financial stakeholders.

• Internally focused plans target intermediate goals

required to reach the external goals.
Categories of a Business Plan
1. Business Plan for Profit
2. Marketing Plan
3. Project Plan
4. Business Plan
5. Operation Plan
Content of Business Plan
1. Executive Summary
It guides proponents or investors on the overall
feasibility of the proposed project at a glance.
2. Project Background and History
It narrates the project conceptualization, and
details the events that led to the study. It also presents
the project proponents, the proposed name of the
project, the type of business proposal/project, and the
project location.
3. Management and Personnel
Feasibility
It pinpoints the project’s general to specific market
feasibility topics. It presents the market and an analysis
of past, present and future demand and supply
situations for the particular products.
4. Production Feasibility
This refers to the manufacturing aspects of the
product. It includes the details of what the product is
and how they will be produced/raised using proposed
location, production size (capacity) and lay-out.
4. Financial Feasibility
It enables the entrepreneur to know how much
capitalization will be needed to finance the project
and who will be the project’s financiers. It determines
the most adaptable financing scheme in terms of the
financiers’ terms and conditions or repayment.
5. Financial Feasibility
It enables the entrepreneur to know how much
capitalization will be needed to finance the project
and who will be the project’s financiers. It determines
the most adaptable financing scheme in terms of the
financiers’ terms and conditions or repayment.
6. Socio Economic Feasibility
This is viewing the project’s feasibility only from the
point of view or from the standpoint of the project’s
proponents/investors. This part presents the project’s
feasibility as to how it will be beneficial to other people
and entities.
7. Project Implementation and Timetable
These include the details of all activities to be
considered during the projects pre-investment and pre-
operating phase and also the timetable of each of
these activities.
7. Project Implementation and Timetable
These include the details of all activities to be
considered during the projects pre-investment and pre-
operating phase and also the timetable of each of
these activities.
Feasibility Study
The preparation of a Business Plan complements
the project feasibility study. The feasibility study is a
major information source in making a critical decision
whether to go or not to go into the business.
The Advantages of writing down the results of
the feasibility study are as follows:
The findings can be set out in a clear and logical way,
so that potential lenders can understand the business
and its likely risks and advantages.

It is a reference material that can be used to plan

long term development of the business.

The plan can be regularly consulted and updated as

a guide to the business.
The Advantages of writing down the results of
the feasibility study are as follows:
Mistakes can be made on paper rather than in the
operation of the business.

When the plan shows that a successful business is

possible, it makes the entrepreneur feel more
confident to succeed.

It helps the entrepreneur to decide on how much

money is needed and if properly prepared, it gives the
loan agency confidence that their money will be
repaid.
Conducting a Feasibility Study
Feasibility Checklist
• Is there a demand for a product?
• Who else is producing similar products?
• What is needed to make the product?
• What is the likely profit?
Comparison between a Feasibility
Study and Business Plan
• A feasibility study is conducted before a decision to
proceed.
• A business plan is prepared after a decision to
proceed
• A feasibility study provides an investigative function
• A business plan provides a planning function
Feasibility Plan Business Plan
1. Is conducted 1. Prepared after
before a decision a decision
to proceed PLAN to proceed
2. Provides an 2. Provides a
Investigative planning
function function