LESSON 1 Entrepr

ENTREPRENEURSHIP
LESSON 2

SALIENT FEATURES OF ENTREPRENEURSHIP

❖ from the word entrepreneur 1) It is an art of correct practices.

❖ the art of observing correct practices in 2) It is a wealth-creating venture.

managing and operating a self-owned 3) It provides valuable goods and services.
wealth-creating business enterprise by
providing goods and services that are 4) It entails opening and managing the self-
valuable to the customers. owned enterprise.

❖ refers to a particular field of practice or 5) It is a risk-taking venture.

process; entrepreneur- person practicing it

❖ Entrepreneurship and entrepreneur = IT IS AN ART OF CORRECT PRACTICES.

manager (a person who correctly practices
the concept of management) and ❖ an ART and NOT a SCIENCE
management
❖ constant change= movement and
SMALL BUSINESS VS ORDINARY SMALL innovation; therefore it isn’t STAGNANT or
BUSINESS STATIC
SMALL BUSINESS ❖ an art: dynamic and closely related to
creativity
❖ refers to a business or enterprise that
adopts and practices correctly the principles -CREATIVITY = new ideas
of entrepreneurship. backbone of entrepreneurship

❖ is owned by one person with a workforce of Static- stable

not more than 20 persons.
Stagnant- motionless, lifeless, dead
❖ e.g. SMEs (small medium enterprise) that
⮚ Entrepreneurship is an art and not a science
have been promoted by both govt and
because it is not governed by fixed and
NGOs in their desire to improve the lives of
absolute rules, while science is. As such it
the people
will continue to change.
ORDINARY SMALL BUSINESS
⮚ Change denotes movement and
❖ pertains to a business enterprise managed innovation. Entrepreneurship therefore is
and operated by an owner who is not and not static or stagnant. It continuously
advocate of and does not practice the grows, develops, improves and expands.
concepts and principles of entrepreneurship
⮚ Dynamic- by the moment the economic
❖ e.g. sari2 stores activity changes, the political, social, and
entrepreneurial activities will eventually
ENTREPRENEUR VS ORDINARY SMALL
change
BUSINESSPERSON
⮚ Entrepreneurship is closely related to
ENTREPRENEUR
creativity. Creativity results in the creation
❖ starts a business venture based on of new ideas, which is the backbone of
entrepreneurial concepts and principles and entrepreneurship.
the aspiration to become successful
ENTREPRENEUR
ORDINARY SMALL BUSINESSPERSON
❖ transforms feasible new ideas into an
❖ opens a business with the primary goal of entrepreneurial venture
making it his source of livelihood
ORDINARY SMALL BUSINESSPERSON
❖ has the freedom to manage and operate
his/her business according to what pleases
him/her; prefers business activities which
are done easily
IT IS A WEALTH-CREATING VENTURE.
❖ Ordinary small businesspeople: wealth =
profit
❖ Entrepreneurship: wealth creation rather
than profit generation
▪ Wealth- abundance of money, property, or
possession ( Random house Webster's
dictionary)
ENTREPRENEUR
❖ looks at his/her business as a wealth-
creating venture
ORDINARY SMALL BUSINESSPERSON
❖ regards his/her small business basically as a
source of INCOME
When can we say that wealth is created in
the business?
❖ The value of the business has increased
abundantly.
❖ The life of its owner has improved
considerably.
❖ There is development of the local economy
and eventually of the whole country.
IT PROVIDES VALUABLE GOODS AND SERVICES.
❖ Creates economic wealth by providing
goods and services to the consumers
❖ Essential principle: “Not to sell waste to the
consumers but only valuable goods and
services.”
❖ Entrepreneur defines value from the
perspective of the consumers.
❖ One essential principle in entrepreneurship
then is: Do not sell wastes to consumers
but valuable goods and services only.
Anything of no value to anybody is
definitely a waste.
Value is subjective.
IT ENTAILS OPENING AND MANAGING THE
SELF-OWNED ENTERPRISE.
❖ Two important elements: the concept of
opening a SELF-OWNED enterprise and the
concept of MANAGING it
- the OWNER must also be the
MANAGER of the daily operations of the
venture
❖ Intrapreneurship- businesses that are being
managed by others for the benefit of the
owners (e.g. franchising)
❖ Planning- process of setting goals of the
business
❖ This feature highlights two important
elements, the concept of opening a self-
owned enterprise and the concept of
managing it.
❖ A business is considered self-owned when
the person managing its daily activities is
also its owner. This is a straightforward
requirement of entrepreneurship.
❖ Self-owned- when the person managing its
daily activities is also its owner;
entrepreneurship is not about the size of
the business but rather about its sole
ownership; if the owner isn’t managing, he
is just an ORDINARY BUSINESSPERSON and
the person handling the activities is not an
entrepreneur but a MANAGER
IT IS A RISK-TAKING VENTURE.
❖ basic concept of risk: “Risk is inherent in an
entrepreneurial venture.”
❖ risk in entrepreneurship - business risk
❖ The basic concept of risk in
entrepreneurship can be expressed in this
statement: Risk is inherent in
entrepreneurial venture.
❖ The risk in entrepreneurship is called
business risk.