ENTREPRENEURSHIP

Governor Pack Road, Baguio City, Philippines 2600

Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

Introduction to Entrepreneurship

Learning Objectives:
At the end of this module, the learners are expected to:
a. Discuss the relevance of entrepreneurship in general, including its economic importance;
b. Define who is an entrepreneur;
c. Explain the key concepts of common and core competencies in entrepreneurship;
d. Explain opportunities for entrepreneurship as a career; and
e. Differentiate the different legal forms of businesses.

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 (Batisan, 2016).

Societal and economic benefits of entrepreneurship

An entrepreneur is successful if the business that he or she envisioned has materialized into a
thriving industry with regular customers and financial gain. This eventually reflects on the society and
the economy as a whole. Here are the societal and economic benefits of entrepreneurship:

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

Millions of unemployed people will have the opportunities to have a decent occupation. Small
businesses produce jobs that create wealth.

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

A simple eatery in a rural area and a coffee shop in an urban area both ignite economic
activity regardless of their business scale.

3. Entrepreneurship introduces new and innovative products and services

New products and services are always available in the market because of the ingenuity of the
entrepreneurs to seek opportunities and improve on them.

4. Entrepreneurship improves people’s living standards

5. Entrepreneurship disperses the economic power and creates equality

It balances the economy b distributing national income to more businesses rather than to only
few monopolies.

6. Entrepreneurship controls the local wealth and balances regional development

It makes sure local resources are used properly and that every area has an appropriate
allocation of resources

7. Entrepreneurship reduces solid conflicts and political unrest

Imagine if there are no or only few sari-sari or supermarket stores in our area. All of you will then
fight for food supplies because the store cannot supply all your needs. (Supply and Demand
concept)

8. Entrepreneurship elicits economic independence and capital formation

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

A country with more entrepreneurs is highly likely to become financially independent and will
less likely need the help of other countries. Entrepreneurs create wealth instead of borrowing wealth.

Who is an Entrepreneur?
Entrepreneur is a coined term from French 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.

It entails a holistic business talent to be considered one, ranging from product and marketing
expertise to operations agility, and to financial proficiency.

The world of entrepreneurship these days has already evolved, and terms are coined to suit an
entrepreneur’s field or expertise:
1. Technopreneur- An Entrepreneur who puts technology at the core of his or her business model.
2. 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.
3. Intrapreneur- An entrepreneur in a large company or corporation who is tasked to think,
establishes, and run a new big idea or project. Intrapreneurs are usually the product managers or the
business development managers of a company.
4. Extrapreneur- An entrepreneur who hops from one company to another to act as an innovation
champion, providing creative and efficient solutions.

Entrepreneurial Competencies
To be considered a successful entrepreneur, one must possess common entrepreneurial
competencies that are needed all throughout the entrepreneurship career
1. Proactive
Entrepreneurs are reactive rather than passive. They address issues, problems, and challenges
before that come rather than when they already happened. They ensure that proper research is
done, the risk factors are assessed, and plans are executed on a timely and most efficient way.
2. Agents of change
Entrepreneurs see opportunities in hopeless and complex situations. They do not settle for
mediocrity and the status quo.
3. Risk Takers
Entrepreneurs do not just grab opportunities, they have to take into consideration the potential
various threats they may encounter. Entrepreneurs calculate risks; if they think that there is a big
chance of succeeding, they push through with the venture and do not let the opportunity pass.
4. Have a sharp eye for opportunities
They know how to assess the net cause and effect of an opportunity and decide intelligently
if the venture should be continued or not.
5. Sociable
Relationship management is the key for employee and customers’ retention, which can be
achieved by a social entrepreneur.
6. Networkers
Successful entrepreneurs gain trust of their valuable network and maintain a log-lasting
relationship with them
7. Decisive

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

The base their decisions on scientific calculations backed up by their experience and
technical knowledge.
8. Balanced
The minds of entrepreneurs should have a balance between the analytical and the creative
side.
9. Innovative
The minds of the 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.

Core traits of an entrepreneur

The following are the core traits that entrepreneurs should develop in managing and running
the business:
1. Leaders
They know how to unite the team and bring out the best in every employee
2. Communicators
Communication channels between entrepreneurs and their employees or customers should
always be open to ensure the smooth flow of operations in their business.
3. Specialists
Entrepreneurs are very keen with details. They can easily answers questions on the specifics of
their products or services without heavily relying on their people. As a result, the can easily think of
innovating and improving the product or service offerings because they know their intricacies.
4. Problem Solvers
Entrepreneurs possess critical thinking skills and look at the problems as challenges or puzzles
that they need to solve. They listen to the plight of their employees on certain problems involving their
units, and come up with strategic solutions.

Required Skills from an Entrepreneur

Skills are considered as the personal abilities to do things well. They come from the totality of
the knowledge, practice or experience, and aptitude of a person. The following are the skills required
from an entrepreneur:

CONCEPTUAL SKILLS- Enable managers to think of possible solutions to complex problems. It is the
mental ability of the entrepreneur to learn new things, generate new ideas, and express knowledge
in both oral and written forms.

The scientific approach in solving business problems involves:

a. Defining the real problem;
b. gathering information about the problem;
c. formulating alternative solutions;
d. evaluating alternative solutions;
e. selecting and implementing the optimal solution; and
f. evaluating the decision.

HUMAN SKILLS/ Interpersonal Skills- Enable managers to relate well with people across all levels of the
organization. This skill is about the relationship and interaction of the entrepreneur with the workers,
suppliers, creditors, prospective customers, and other members of the business community.

The interpersonal skills of an entrepreneur ma include, among others, the following:

a. Skills in verbal communication
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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

b. Skill in non-verbal communication

c. Skills in listening
d. Skills in leading
e. Skills in negotiating

TECHNICAL SKILLS- Enable managers to perform specific tasks with high levels of proficiency with the
use of their expertise. In the absence of the technical skills, the output of the cognitive skolls may not
carry any significant value. Without the technical skills, an idea will remain to be an idea and a
business opportunity will remain to be a business opportunity.

The technical skills of an entrepreneur include roficiency and ability, among others, in the
following areas:
a. Information technology
b. Feasibility study and business plan preparation
c. Technical writing skills
d. Marketing
e. Management and Finance

Career Opportunities in Entrepreneurship

Entrepreneurship consists of vast career options depending on the passion and the field of
interest of the entrepreneur. The saying “When you love what you 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. Aside from putting up your own business, having mastery in
entrepreneurship may land you on the following:

1. Business Consultant- Identifying and recommending solutions to company problems

2. Sales Manager- Representing the company and its products and services. This also includes
mingling with customers to know their preferences.
3. Research and Development- Understands the business concepts , systems, procedures and
practices.
4. Fundraiser- raises money for a specific purpose and meant not to make profit but instead for
maintaining an organization for a specific purpose.
5. Teacher- Inspiring young people to have a vision for the society

Legal Forms of Businesses

In putting up a business, an entrepreneur may choose on the following legal forms of business
as to ownership:

I. Sole Proprietorship:
– A business owned by single person, assumes all the risk derives all profits. The entrepreneur makes
the financial decision.

Advantages Disadvantages
Low start-up costs Unlimited liability
Greatest freedom from government regulation Lack of continuity in business organization in the
absence of the owner
Owner is in direct control of decisions in the Highest mortality rate
enterprise making
Minimal working capital is required Difficulty raising capital
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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

Tax advantages to owner Relative difficulty to compete with bigger

businesses
All profits go to the owner All losses borne by the owner

II. Partnership (Art. 1767-1867)

 A voluntary association of two or more persons to carry on a business.
 A contract between two or more persons binding themselves to contribute money, property or
industry to a common fund with the intentions of dividing the profits among themselves
Basic features of partnership:
a) Voluntary agreement e) Mutual agency of the partners
b) Association of profit f) Non-secrecy of the articles
c) Contribution to common fund g) Separate juridical personality
d) Lawful purpose

Classification of partnership as to:

A. Liability
1. General partnership – One wherein all the partners are general partners who are liable for
partnership debts.
2. Limited partnership – Having one member or more general partners and one or more limited
partners who as such not be bound by the obligations of the partnership.

B. Period of Existence
1. Partnership at a fixed term – Formed for a certain period of time.
2. Partnership at will – Formed without a definite period of existence and which can anytime be
terminated by any of the partners.

C. Objects
1. Universal partnership of present property – one in which partners contribute to a common fund all
the property actually belonging to them at the time the partnership is constituted, with the
intentions of dividing the same among themselves.
2. Universal partnership of profits – One which comprises all that the partners may acquire by their
work or industry during the existence of the partnership.
3. Particular partnership – One in which has for its objects determinate things, their use or fruits or a
specific undertaking or the exercise of a profession.

Classification of partners as to:

A. Liability
1. General partners – One who is liable for partnership debt the extent of his separate property
after the partnership assets are exhausted.
2. Limited partners – One whose liability for partnership debt is limited to his capital contribution.
3. General-limited partners – One who has all the rights, powers and subject to all the restrictions
of a general partner but whose liability is among themselves, limited to his capital contribution.

B. Contribution
1. Capitalist partner – One who contributes money for property to the capital.
2. Industrial partner – One who contributes his work, labor or industry to a common fund.

C. Role played in management

1. Managing partner – Manages the affairs of the partnership
2. Liquidating partner – Partner who liquidates the affairs of the partnership after it is dissolved.

D. Public knowledge
1. Ostensible partner – One whose connection in the partnership is one and public.
2. Secret partner – One whose connection in the partnership is not made known to the public
3. Dormant partner – One who does not participate in the management of the affairs of the
partnership.
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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

4. Silent partner – One who has no voice or say in the management of the affairs of the
partnership
5. Nominal partner – One who though not actually a partner is made liable for the debts of the
partnership to third reason by reason of his acts or omissions.

Reasons to dissolve the partnership:

1. Death of a partner 4. Insolvency
2. Bankruptcy 5. Admission of a new partner
3. Insanity of a partner 6. Partner’s decision

Advantages Disadvantages
Ease of formation compared to corporations Unlimited liability
Relatively low start-up costs Lack of continuity in case a partner withdraws or
dies
Additional sources of investment capital Divided authority among partners
Possible tax advantages Difficulty raising additional capital due to needed
consent of all partners
Limited regulation Hard-to-find suitable partners
Broader management base Possible development of conflict between partners
Usually better managed than sole Action of one partner is understood to be the
proprietorships action of all partners

III. Corporation (B.P. 68 as revised by R.A. 11232)

• An artificial being created by operations of law having the rights of succession and the powers,
attributes and properties expressly authorized by law or incident to its existence.
A. Nature of Capital
a) Stock Corporation
– One whose capital is divided into shares for purposes of voting and distribution of
dividends.
b) Non-stock Corporation
– No part of the income is distributed as dividends to its members.
B. Purpose
a. Public Corporation
– Organized for the purpose of carrying out the purpose of the state
b. Private Corporation
– Established for business/ profit, charitable, and professional purposes
C. State/Country
a. Domestic
– Organized under Philippine Laws.
b. Foreign
– Organized under laws of another country other than the Philippine Laws.
D. Types of Stocks
a. Close corporation
– Limited to selected persons or members of the family.
b. Open corporation
– Open to any person who wish to invest or become stockholders.

Components of the corporation:

1. Corporators – All persons composing the corporations whether they are stockholders or members.
2. Incorporators – Corporators mentioned in the articles of incorporations.
3. Stockholders – Natural or juridical persons owning at least one share of stock of a corporation
4. Members – Corporators in a non-stock corporation.

Similarities between a corporation and partnership:

1. Each has a juridical personality
2. They can be organized only where there is a law authorizing their organization
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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

3. They can act only through agents

4. They are composed of an aggregate of individuals
5. They distribute their profits to those who contribute capital
6. Both are subject to income tax

Advantages Disadvantages
Limited liability Closely regulated and monitored by the SEC
Specialized management due to presence of Most expensive form of business organization to
corporate officers organize
Ownership is transferable Corporate charter restrictions
Continuous existence of the business even after Extensive record keeping necessary
withdrawal or death of an owner
Separate legal entity from owners Double taxation of dividends
Possible tax advantages and other incentives Possible conflict between shareholders and
executives
Easier to raise capital Limited range of business, dependent on
corporate charter

Salient Provisions of the Revised Corporation Code of the Philippines (R.A. 11232)
 To be discussed in Business Finance

IV. Cooperative
• A voluntary organization composed of small producers and consumers join together to form
business enterprise.
Principles of Cooperative:
1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and Independence
5. Concern for the community

Advantages Disadvantages
Owned and controlled by members Possible development of conflict between
members
Democratic control Numerous members tend to diminish ones share
in the total dividends
Limited liability Longer decision making process than
corporations due to more votes to count
Profit distribution Requires members to participate for success
Dividends are in proportion to a members use of Extensive record keeping necessary
cooperative services
Highly encouraged by the government Less incentives for members to invest additional
capital

V. Mutual Funds
• Financial intermediary that accumulates money by selling shares of stock or bonds of publicly-
listed corporations to individual or corporate investors.
The funds accumulated from investors (individual and corporate) are used to buy stocks, bonds or
other market instruments and is manage by a professional fund manager. The fund manager’s
earning is called spread while the investors earn in a form of dividends or stock price
appreciation.

VI. Other legal forms:

a. Joint venture
– regarded as a particular partnership established for a specific undertaking

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 ENTREPRENEURSHIP
Governor Pack Road, Baguio City, Philippines 2600
Tel. Nos.: (+6374) 442-3316, 442-8220; 444-2786;
442-2564; 442-8219; 442-8256; Fax No.: 442-6268 Grade Level/Section: ABM 12
Email: email@uc-bcf.edu.ph; Website: www.uc-bcf.edu.ph

MODULE 1 – ENTREP Subject Teacher:

– Bringing together several partners to engage in a business activity which is normally very
specialized
b. Joint stock
– The capital is divided into small units permitting a number of investors to contribute varying
amounts, profits are divided between stockholders in proportion to the number of shares they
own. It is similar to corporation.

References:

BAL 338.04 Kuratko, D. (2012). Entrepreneurship: An Introduction. Pasig City: Cengage Learning Asia
K9654 Pte. Ltd.
2012
BAL Batisan, R. (2016). Entrepreneurship. Makati City: Diwa Learning Systems Inc
658.421
B3208
2016
BAL Aduana, N. (2016). Entrepreneurship in Philippine Setting. Quezon City: C&E Publishing,
658.421 Inc.
B3208
2016 https://www.slideshare.net/mobile/rarepacer/entrepreneurship-introduction-part-4-
career-opportunities

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