Lesson 1ENTREPRENEURSHIP AND ITS 1.

Passion – those making it in business do what

they like to do because as an entrepreneur if
RELEVANCE IN THE ECONOMY
you are not interested in what you’re doing, you
Entrepreneurship cannot make your business standout and make
It involves bringing about change to achieve some it better.
benefit. This benefit may be financial but it also involves
2. Willing to learn and experiment –
the satisfaction of knowing you have changed something
entrepreneurs talk to someone who can help, be
for the better. “(Creating a Venture by Lily Kretchman et
experts, competitors, suppliers or prospective
al. Toronto: Wiley, 1991.) customers. They are not shy about their
ignorance.
Entrepreneurship and Entrepreneur
Entrepreneurship 3. Willing to work hard – there’s no substitute for
hard work. Nobody but you, who conceived of
- The act of creating a business or businesses
the business, can give your one hundred
while building and scaling it to generate a profit. percent to it.
- An important driver of economic growth and
innovation. 4. Persistent and patient – many successful
- What people do to take their career and dreams entrepreneurs have tried and failed before. They
into their hands and lead it in the direction of learn from their mistakes and adopt a new
their own choice. business but apply a different strategy. An
- About building a life on your own terms. No entrepreneur always tries his best to see his
bosses. No restricting schedules. And no one plan and never learn to give up on something
holds you back. that he believes in.
Entrepreneur
5. Vision – a mark of a successful man is his
- A person who sets up a business with the aim to ability to set a clear and realistic goal for himself
make a profit and creates a new business, this goal is what guides his actions and
bearing most of the risks and enjoying most of thoughts.
the rewards.
- The Term “entrepreneur” comes from the French 6. Creative and innovative – learn to be flexible
word entreprendre which means “to undertake.” and to adapt by watching the market closely.
- An innovator, a source of new ideas, goods, 7. Seek opportunities – they grab opportunities
services, and business/or procedures. that come their way, and knows that it might not
- Playing a key role in any economy, using the come again, or if it did, not for a long time.
skills and initiative necessary to anticipate needs
and bring good new ideas to market. 8. Persuasive and know the value of
networking – this trait is as being connected to
leadership. The entrepreneur has the power to
What is the Role of Entrepreneur? influence people because he has good practical
intelligence and can think clearly under stress.
Entrepreneur is the one who bears uncertainty, buys
labor and materials, and sell products at uncertain 9. True to their words – word of honor is very
prices. He is one who takes risks and makes innovation important to the entrepreneur. They need to be
on the factors of production. They are people who are committed every time so that they will be trusted
by the people around them.
leaders in their community of employees, customers,
creditors, and suppliers. They are able to influence 10. Take calculated risks – entrepreneurs take
people on their own way of thinking. more risk than the average person and makes
decisions using experiences, knowledge and
intuition. They take a chance and place his
TYPES OF ENTREPRENEUR  money and time into his chosen activity.
1. Mega-entrepreneurs
11. Demand quality and efficiency – aspires to
– Individuals who are willing to absorb huge
give their customers products and services of
risks of using enormous amounts of capital in
high quality. They believe that the efficient way
their business ventures. of doing things saves on cost, time and effort but
2. Micro-entrepreneurs produces high quality goods at a low price.
– Individuals who are engaged in micro or small
12. Systematic – they always have a plan and
businesses as alternative formal employment.
monitor the activities that will ensure the
attainment of the goals.
Characteristics of an Entrepreneur
 13. Confident – He/she is a self-confident person. It is the mixture of controllable marketing variable that
He believes in her/himself. The challenges the firm uses to pursue the sought level of sales in the
motivate him or her and is not insecure about market.
having experts around.
Marketing mix is divided into two parts;
Importance of Entrepreneurship  Strategic Marketing Mix - It cannot be changed
 Generates employment overnight because it takes time to get
implemented.
 Helps in the economic growth of the country E.g.: product, people and place
 Eradicates poverty and social unrest  Tactical Marketing Mix - It can be changed
 Improves social and image abroad very easily.
E.g.: promotion, process, price and physical evidence
Contributions of Entrepreneurs to
Economic Development Evolution of the Field of Entrepreneurship
 Develop new markets 1. Earliest Period
 Discover new things “An entrepreneur is a person who sells
 Mobilize capital resources for productivity goods on behavior of the goods owner’’,
 Introduce new technologies exhibited by MARCO POLO (1254-1324).
 Create Employment Marco Polo travelled to many places in Asia to
 Improve the quality of life trade. He would enter into a formal agreement
with a capitalist to sell his goods. He bore all
 Contribute to more equitable income
the risks of possible damage of loss of the
distribution and eases social unrest goods. After everything was sold, profits were
 Generates new sources of materials divided between the capitalist and the trader
 Stimulates investment interest in the new as agreed.
business ventures being created
 Serves as role model 2. Middle Ages
 Brings social benefits to the people Entrepreneur used to describe both as
 Utilizes and mobilizes indigenous resources an actor and a person who managed large
 Provides more alternative for consumers production projects. Individuals did not take
any risks because all the resources used
were provided by the government of the
Requirements of Entrepreneurship country. A typical entrepreneur in the middle
ages was the priest. The person in charge of
 Availability of resources great architectural works used to build castles
 Resources can be classified as human and and fortifications, public buildings, abbeys,
non-human resources and cathedrals.
 Market demands
3. 17th Century
 The extent to which people may patronize the The connection of the risk with
product entrepreneurship developed. An entrepreneur
 Good location was a person who entered into a contract with
 The site of the business enterprise government to perform a service or to supply
 Capital or funds stipulated products.
 Sufficiency of the funds or capital John Law, a Frenchman was one of the
entrepreneurs in that period. The founder of
Entrepreneurship is always associated the royal bank of finance and the Mississippi
with innovation. In fact, it is the capacity for Company which had an exclusive franchise to
innovation, investment, and expansion according trade between France and the new world.
to Nathaniel Left. Therefore, an entrepreneur is Unfortunately, monopoly on French trade
someone who is innovative and mostly engages eventually led to collapse the company.
in investment whether it is small, medium or large 4. 18th Century
enterprise. An entrepreneur who can offer
In this era, the person with capital was
something new or can improve something that
differentiated from the one who needed
already exists has already a competitive
capital. The entrepreneur was distinguished
advantage from the rest.
from the capital provider. One reason for this
Marketing Mix differentiation was industrialization occurring
throughout the world.
Bi Whitney was an American inventor
 best known for inventing the cotton gin. This
was one of the key inventions of the industrial
6. 21st Century
revolution.
During the present century two
Thomas Edison, was the inventor of characteristics are associated with the
many inventions. He was developing new entrepreneur these are innovation and
technologies and was unable to finance his creativity. Creativity is the ability to bring
inventions himself; he was a capital user but something new into existence while innovators
not a provider. are practical people and create from the
5. 19th and 20th Century opportunities available in reality. Following
principles of innovation have emerged leading
Entrepreneurs were frequently not
to the success of entrepreneurs:
distinguished from managers and were viewed
mostly from an economic perspective. a. Action oriented and searching for
Andrew Carnegie is one of the best new ideas
examples of this definition. Carnegie was an b. Making the product service simple
innovator and invented nothing, but rather and understandable
adapted and developed new technology in the c. Trying, testing, and revising
creation of products to achieve economic d. Learning from failures
vitality. e. Hard work is the key to success

The 7 P’s of Marketing

Product
It is the item offered for sale it can be a service or an item and its purpose is to satisfy the needs and wants of
the target buyer. Decisions relating to product, includes:
 Design  Value  Accessories
 Technology  Quality  Warranties
 Usefulness  Packaging
 Convenience  Branding
Price
It is a value that will purchase a finite quantity, weight, or other measure of a good or service and to make the
product affordable to the target market and reflect the value of benefits provided.

Promotion
It is the way a company communicates what it does and what it can offer to customers. It includes activities
such as;
 Newspapers,  Product  E-mail
radio, and other Sampling  Website
forms of media  Quantity  Social Network
 Windows display discounts  Sales Events
 Fashion show  House-to-house  Posters
 Exhibits selling
 Lecture and  Telephone
demonstration
Place
It is the place where customers buy a product, and the means of distributing your product to that place, must
be convenient for the customer. The following are the channels of distribution;
 Retails  Mail order  Direct sales
 Wholesale  Internet  Peer to peer
 Multi-Channel

People
They are the most important element of any services or experiences and are all the persons involved in the
activities of producing products and providing services and products to consumers. Services tend to be produced
 and consumed at the same moment, and aspects of the customer experience are altered to meet the individual
needs of the person consuming it. It includes the following;
 Customer  Management  Customer service
 Employees  Culture

Process
It determines the capability of the product to supply the demand of the consumer it is about knowing what to
do and how to do it, especially in services marketing.

Physical Evidence
It pertains how a business and its products are perceived in the marketplace It is also the first distinction of a product so
that the product could easily be recognized by its appearance. Physical evidence includes the following;

 Packaging  Brochures  Uniforms and

 Internet/web pages  Furnishings employee dress
 Paperwork (such as  Signage (such as  Business cards
invoices, tickets and those on aircraft and  Mailboxes
dispatch notes) vehicles)

Types of Businesses Available to Entrepreneurs

TYPE OF EXAMPLE
DESCRIPTION
BUSINESS

It has an asset size not exceeding P50,000. It is usually a home- Self-employed vending food like taho, puto,
based enterprise, operating in makeshift or temporary quarters. The or fishballs; those selling in the public
Micro Enterprise
owner heads the enterprise and employs from one to not more than market; and those having sari-sari or rolling
10 people to help him/her. stores.

Subcontractors of footwear like shoes and

It has an asset of P250,000 but not exceeding P500,000. It is a slippers; and food manufacturers of peanut
Cottage Enterprise home-based business which is often managed and operated by the butter/ coco jam or pastillas, as well as
members of the family. decorative products like vases, candles, and
lanterns.

It has an asset of P500,000 but not exceeding P2.5 million. It is Groceries, bakeshops. Beauty salons,
Small Enterprise owned by an individual or group and has enough resources to medical/ dental clinics, toy makers, jeepney
continue operating. It employs from 10 to 20 people. manufacturers, and travel/ tour agencies.

It has an asset of P5 million to less than P20 million. It is owned by Fine dining restaurants with branches,
a single individual, business partners, or a corporation. It employs computer importer-dealers, garment
Medium Enterprise more than 20 to 100 people. These workers are more skilled and
manufacturers, human resource providers,
possess technical expertise to run the business with machines/
and private educational institutions.
equipment and utilize various quality controls to make the products.

It has an asset of P20 million or more. It is often owned and

managed by a corporation. It is large in scope of operation and
number of products or services that it offers to the market. It Big fast-food chains, large department
employs 100 or more workers who are hired on the basis of their stores, big bookstores, family-owned
Large Enterprise
expertise. Its Board of Directors is responsible for its governance commercial banks and insurance
and it has a Chief Operating Officer to oversee the implementation companies.
of the directives of the Board. It operates in highly formalized but
complex systems of management.