Entrepeneur
The term "entrepreneur" originates from A small business is different from an ordinary
the French word entreprendre which means "to
undertake." It connotes a business paradigm which
signifies the start of a new business undertaking.
On the other hand, the term "entrepreneurship"
comes from the word entrepreneur. It refers to a
particular field of practice or process, as compared
to an entrepreneur which is a person practicing
entrepreneurship. Comparatively, the relationship
is like that of a manager and the management in
which a manager is a person who practices
correctly the concept of management.
The American Heritage Desk Dictionary
defines an entrepreneur as a person who
organizes, operates, and assumes the risk of
business ventures. In this book, however, an
entrepreneur is defined as a person who strongly
advocates and correctly practices the concepts and
principles of entrepreneurship in operating and
managing the self-owned business venture. This
venture is also called enterprise.
This operational definition puts emphasis
on the concepts of advocacy and correct practices.
These two concepts outline the primary difference
between the owner of an ordinary small business
and the entrepreneur. Furthermore, another key
feature of this definition is that an entrepreneur
owns and manages the small entrepreneurial
endeavor or small business.
Entrepreneurship
This book operationally defines entrepreneurship
as the art of observing correct practices in
managing and operating a self-owned wealth-
creating business enterprise by providing goods
and services that are valuable to the customers. All
discussions in this book are made within the
peripheral concept of this operational definition.
Understanding the correct meaning of the term
dispels the doubts and misconceptions with the
definition; promotes and enhances better
comprehension of the entrepreneurial field; and
helps build a strong foundation about
entrepreneurship.
Small Business and Ordinary
Small Business
small business. Small business refers to a business
or enterprise that correctly adopts and practices
the principles of entrepreneurship.
It is owned by one person with a limited
workforce of not more than 20 persons. This term
also includes the small and medium enterprises
(SMEs) that have been strongly promoted by
government and non-governmental organizations
(NGOs) in their desire to improve the lives of the
Filipino people through entrepreneurship.
On the other hand, ordinary small business
pertains to a business enterprise managed and
principles of entrepreneurship. In the Philippines,
small businesses, whether ordinary or not, are
flourishing and sprouting like mushrooms.
They can be found almost anywhere and
everywhere-along city streets, municipal roads
and national roads, and in public markets,
hospitals, schools, and amusement places.
Why does this happen in the Philippines?
The reason could be that many Filipino families
resort to opening ordinary small businesses since
it is the easiest and most practical sari-sari store
business, or a small stall or pushcart in which food
and other staff can be sold in way to augment their
income. A small amount of money can be used to
start up a simple the person owning and running
its day-to-day operations is not an entrepreneur
but rather a quantity. However, the mere opening
of a business enterprise is not entrepreneurship
and a businessperson.
Most of the owners of ordinary small
businesses in the Philippines may not be
considering entrepreneurship as an advocacy.
Some of them may not have even heard of the
term and merely intend their businesses to serve as
the source of their livelihood or as a means to
lessen their financial problems. In reality, many
ordinary small businesses in the Philippines have
not really progressed ever since they started some
years ago. What is worse is that others have gone
bankrupt and collapsed after some time.
Entrepreneur refers to a person who strongly
advocates and correctly practices the concepts and
1
principles of entrepreneurship in operating and
managing the self-owned entrepreneurial venture.
Entrepreneurship is the art of observing correct
practices in managing and operating a self-owned,
wealth-creating business enterprise by providing
goods and services that are valuable to the
customers.
Salient features of
Entrepreneurship
From its operational definition, entrepreneurship
consists of five salient features.
1. It is an art of correct practices.
2. It is a wealth-creating venture.
3. It provides valuable goods and services.
4. It entails opening and managing the self-owned
enterprise.
5. It is a risk-taking venture.
The salient features of entrepreneurship provide
better understanding of the whole concept. They
also act as the point of reference in determining
whether a particular business endeavor is
operating within the realm of entrepreneurship.
Entrepreneurship is an art and not a
science. It is not governed by fixed and absolute
rules, whereas science is. Thus, there is constant
change which denotes movement and innovation.
Entrepreneurship, therefore, is not static or
stagnant. It continuously grows, develops,
improves, and expands; the change does not stop.
The development of entrepreneurship through the
years is a proof that it is an art that continuously
evolves and responds to the changing needs of the
people.
As an art, entrepreneurship is dynamic. By
the moment the economic activity changes, the
political, social, and entrepreneurial activities will
eventually change.
As an art, entrepreneurship is closely
related to creativity. By creativity, there is a
constant change or evolution that contributes
towards the enhancement of the enterprise.
Creativity results in new ideas which are the
backbone of entrepreneurship. Entrepreneurs keep
on searching for something new. They find ways
to transform new ideas into entrepreneurial
opportunities.
This aspect differentiates an entrepreneur
from an ordinary small businessperson.
entrepreneur transforms feasible new ideas into an
entrepreneurial venture, while an ordinary small
businessperson only builds upon existing ideas to
gain immediate earnings from his/-her business.
As a future entrepreneur, one should
always remember that nothing is permanent in the
field of entrepreneurship. What is applicable to
one entrepreneur may not be applicable to another.
Certain things may happen to one entrepreneur but
may not happen to another. Entrepreneurship
should be practiced not as a science but as an art.
Creativity should always be applied to
entrepreneurial undertakings by regularly
evaluating the market and the environment and
responding to the changes in them.
Art in entrepreneurship is also related to
the correct practices or ways of carrying out
entrepreneurial activities. The owner of an
ordinary small business has the freedom to
manage and operate his/her business according to
what pleases him/her. Ideally, he/she prefers
business activities which are done easily. The
entrepreneur, however, has to perform
entrepreneurial activities correctly regardless of
whether they are undertaken easily or not. What is
important in entrepreneurship is that the business
activities are performed correctly.
2
Entrepreneurship Is a Wealth-
Creating Venture.
This feature sounds simple, but this has
been most misconstrued because of the word
wealth. We often hear the old maxims "Health is
wealth" or "Knowledge is wealth." However, this
is not the concept of wealth in entrepreneurship.
In most instances, ordinary small
businesspeople equate wealth with the term profit.
In the parlance of accounting, profit represents the
excess income or revenue from the cost and
expenses.
Although profit may be a good indicator of
wealth, it can be measured in different The
economist, for example, has a different
perspective of wealth from that of an accountant.
Profit, therefore, in its strict sense, does not equate
to wealth. To put it differently, assume that the
cost of your product is P60. You sell this product
to a customer for P80. As a result of the sale,
definitely you have a mark-up or a profit of 20 is
gained.
However, the question is, "Is one enriched
by twenty pesos?" In case the sale is not in cash
(i.e., the sale is on account or on credit), and the
customer does not pay, you lose 80 in the
transaction.
Entrepreneurship, however, is operating
within the concept of wealth creation rather than
profit generation. The concept of profit is more
applicable in the area of accounting as a way of
measuring the operating performance of a
business. According to Random House Webster's
Dictionary, wealth is defined as the abundance of
money, property, or possession.
The concept of abundance and not of accounting
profit, is the very essence of wealth in This book
strongly underscores the word "abundance" in the
conceptual definition of wealth. This conceptual
definition of wealth, in its strict sense, does not
even refer to business profit is the very essence of
wealth in entrepreneurial endeavor.
As the field of entrepreneurship continues
to develop, it has already included other contexts.
However, the concept of entrepreneurship in this
book is limited only to the business paradigm. As
an entrepreneur, therefore, you should open your
own business as a wealth-creating venture and not
solely as an income-generating venture.
Opening a business with the working
philosophy that it will provide an income is
common among ordinary businesspeople. It
should not be the approach and way of an
entrepreneur. An entrepreneur has a different
perception and outlook from an ordinary
businessperson. An ordinary entrepreneur looks at
his/her own business as a wealth-creating venture,
while an businessperson regards his/her small
business basically as a source of income.
Some literature, however, define
entrepreneurship as a process of starting a
business. This definition obscures the real
meaning of entrepreneurship. As explained earlier,
the mere opening of a business is definitely not
entrepreneurship, and neither does it mean wealth
creation. A business has to generate wealth for the
owner in a creative way. Otherwise, it is not an
entrepreneurial endeavor but is merely an ordinary
small business.
Wealth is created when the benefits
derived by the owner in providing goods and
services to the customers are abundant enough to
cover the costs incurred by the business. At the
same time, it provides personal benefits to the
owner, which in turn improve his/her life.
Otherwise, the small business is not a wealth-
creating venture. The wealth created by the small
business must improve the life of the owner and
cascade to the development of the local economy
and eventually of the whole country.
The creation of wealth must gradually
accelerate and benefit both the owner and the
community. Unless this happens, the business is
not a wealth-creating venture and may remain
where it started. That is why an entrepreneur
regularly evaluates the level of wealth created by
the business.
The adoption of the wrong concept of wealth
creation is the primary reason why most of the
small business ventures in the Philippines do not
prosper. In a worst-case scenario, the owner takes
the venture only as a means to support the basic
needs of the whole family on a daily basis. This
seems to be the real scenario of small businesses
3
in the local communities in the Philippines. The
owner of the business makes routine exchange of
goods and services for a certain price. He/She
accepts any income generated by the business.
This is not, however, the real essence of
entrepreneurship.
Wealth creation is not merely the selling of
the products of services for a price. Nevertheless,
selling products or services for a price does not
necessarily mean creating wealth. This is usually
the misconception of the ordinary businesspeople.
Wealth is created when the value of the business
has increased abundantly, and the life of its owner
has improved considerably. If not, then the
business is being managed and operated Wealth is
created when the value of the business has
increased abundantly and the life of not within the
framework of entrepreneurship.
Entrepreneurship Provides
Valuable Goods and Services.
The owner of a business, in most
instances, is engaged in the sale of goods and
services. However, the mere act of selling goods
or providing services does not make a person
perform or act within the concept of
entrepreneurship. Anybody can sell goods or
services for a price. A peddler in the bus station,
for example, sells goods to the travelers. However,
he/she cannot be considered as an entrepreneur. It
would be safe to address him/her as an ordinary
businessperson.
Entrepreneurship creates economic wealth
by providing goods and services to the consumers.
These goods and services must have a value in
order to create wealth. Otherwise, they become
wasted. One essential principle in
entrepreneurship then is, "not to sell waste to
consumers but only valuable goods and services."
Anything of no value to anybody is definitely a
waste.
Valuable goods and services highly satisfy the
target buyers in terms of quality and price. The
entrepreneur convinces the consumers that they
gain more benefits than what they pay for the
goods and services.
The entrepreneur defines value from the
perspective of the buyers and not only from his/
her own because what is valuable to the
entrepreneur may not be of any value to the
consumers. Value, therefore, is subjective. Not
every person considers the same things as
valuable.
Businesses that offer goods and services
that are valuable from the buyer's perspective are
operating within the concept of entrepreneurship.
The business will definitely be a wealth- creating
venture. When consumers are satisfied with the
products and services offered by an entrepreneur,
they tend to patronize the business and even
endorse it to others. Thus, in simple analysis,
wealth is created. The reverse happens when an
entrepreneur sells the products and services which
are not valuable to the consumers. The latter may
buy them the first time but may not patronize
them for a second time and may look for the same
products and services from other sellers. In this
case, wealth is lost.
For example, will adding two side pockets
to the ladies bag that one intends to produce from
local raw materials be valuable to the target users?
If the answer is yes, then the product can start.
However if the answer is no, it is not advisable to
add the two side pockets.
Assume that you are adding two side pockets
without knowing whether this will make your
product more valuable or not. By adding two side
pockets to your product, additional materials and
labor expenses will be incurred. The cost of
producing the product, therefore, will increase.
When the production cost increases, the
selling price also increases. This will put you in a
very unfavorable position since competitors may
be selling a similar product at a lower price. If the
consumers do not find the additional side pockets
valuable, then these are wasted and cause a loss
for your business.
Hence, as a future entrepreneur, it is a
must to ascertain first whether or not the
additional value that will be placed on your
product is valuable to the target consumers. It
should be always remembered that adding another
value to a product or service will surely increase
the cost of the product or service.
It is important that you analyze your target
consumers in the field of entrepreneurship. They
4
should be studied since everyone can become your scale businesses only, leaving out big businesses
potential customer. in the process.
Entrepreneurship Entails Another factor that contributes highly to
this misconception is that most programs of non-
Opening and Managing the Self- governmental organizations (NGOs) promoting
Owned Enterprise entrepreneurship have been directed toward and
are participated in by ordinary small businesses.
This feature highlights two important
While there is nothing wrong with the support of
elements: the concept of opening a self-owned
NGOs to small businesses, the same has made the
enterprise and the concept of managing it.gb
impression that entrepreneurship is purely about
The entrepreneur opens his/her own
small businesses when in fact the concept of
business under the principle of entrepreneurship.
entrepreneurship also covers big businesses whose
It must be self-owned in order to qualify as an
owners and managers are one and the same
entrepreneurial endeavor. A business is considered
person.
self-owned when the person managing its daily
The significant contributors to the
activities is also its owner. This is a
promotion of entrepreneurial activities in the
straightforward requirement of entrepreneurship.
Philippines, as spearheaded by the
Businesses that are being managed by others for
Entrepreneurship Development for College
the benefit of the owners do not fall within the
Education Level, the Small Enterprise Research
sphere of entrepreneurship. Such businesses are
and Development Foundation, and the University
operating under the concept of intrapreneurship.
of the Philippines Institute for Small-Scale
The concept of intrepreneurship may
Industries, to mention a few, have primarily
include the business practices of franchising and
focused on small-and-medium scale enterprises.
buyout. However, this topic is outside the
Entrepreneurship is not about the size of
coverage of this book. Franchising and buyout are
the business but rather about its sole ownership. In
usually taken up in higher marketing subjects.
other words, entrepreneurship includes small,
The issue in a self-owned business is very
medium, and multimillion businesses that are
clear and simple; it is plainly about ownership. It
managed by their respective owners.
is neither about the amount of invested capital nor
Then why do NGOs and even national
about the nature of the business enterprise.
government offices focus on small businesses in
Therefore, businesses falling under the concept of
their entrepreneurial programs? It may be because
entrepreneurial endeavor may range from a small
the owners of small businesses lack the necessary
bakery or restaurant in the neighborhood to a
knowledge, training, and budget for their
multimillion construction company operating
entrepreneurial activities, so that both the
throughout the Philippines, provided that the
government and NGOs desire to assist them. On
business is managed by the owner himself/herself.
the other hand, big businesses operating under the
Entrepreneurship has generally been
concept of entrepreneurship have the much-
equated with ordinary small businesses. This is a
needed financial requirements to support their
misconception that must be properly corrected.
operation.
One factor that contributes mainly to this
Another misconception of
misconception is that in the Philippines, it has
entrepreneurship relative to self-owned businesses
been a common knowledge that small businesses
is that it is more inclined toward production or
are managed by their owners. The small
manufacturing and is not applicable to buying and
convenience stores in the neighborhood, the small
selling of goods or rendering of services. This
school supplies stores in front of schools, the
misconception has been highly influenced by the
small refreshment parlors along the streets, and
fact that most of the entrepreneurial programs of
the small stalls in the public markets are usually
both the government and NGOs have been
managed by their owners. Entrepreneurship then
directed toward agriculture, aquaculture,
has come to refer to ordinary small-and-medium

5
craftsmanship, toy making, furniture making, and
food processing, to name a few. Generally,
entrepreneurship includes all types of business
operations, namely production or manufacturing,
merchandising, and services.
In entrepreneurship, the owner of a
business must also be the manager of the daily
operations of the entrepreneurial venture. A
business, whether big or small, that is managed by
a person other than its owner is not within the
concept of entrepreneurship. In such a case, the
owner cannot be considered as an entrepreneur but
as an ordinary businessperson. Similarly, the
person handling the activities of the venture is not
an entrepreneur but a
manager.
Planning is an important principle in management.
It refers to the process setting goals of the
business. The entrepreneur, being the owner and
manager, must clearly set the Planning is an
important principle in management. It refers to the
process of setting the goals of his/her business. In
other words, he/she should establish a clear
direction of his/her entrepreneurial venture.
He/She must have a definite answer to the
question, "Where my entrepreneurial venture be in
five or ten years after?"
1. Entrepreneurship affects the lives of the
Filipinos, the local community, and the Philippine
economy.
2. Entrepreneurship makes the following
contributions to the lives of the Filipinos:
a. It provides guidelines in their wealth-creating
ventures.
b. It helps improve their financial and social life.
c. It helps broaden their creativity.
d. It helps make their lives happy, fruitful, and
successful.
3. Entrepreneurship, in one way or another, makes
the following contributions to the local
community:
a. It provides employment in the community.
b. It creates new demand in the market.
c. It makes substantial contribution to the raising
and collection of taxes.
d. It facilitates the movement of the factors of
production.
e. It creates new business opportunities.
f. It promotes a peaceful and loving community.
g. It increases constructive competition.
4. Entrepreneurship makes the following
contributions to the Philippine economy:
a. It encourages competitiveness and thereby
challenges entrepreneurs to keep improving their
products and services.
b. It helps find an entrepreneurial niche in the
world market.
c. It helps hasten the economic recovery process
of the Philippines during financial turmoil or
crackdown.
d. It facilitates the smooth flow of money in the
local market.
e. It assists the national government in its desire to
have favorable economic ratings in the world
market.
In contrast, the owner of an ordinary small
business usually opens a business even if there are
no business opportunities existing in the
community. As a result, the business can hardly
move from where it started even after several
years of operation. Thus, it all boils down to the
basic need to identify the sources of
entrepreneurial ideas, some of which are as
follows:
1. Changes in the environment
6
2. Technological discovery and advancement
c. suppliers,
3. Government's thrust, programs, and policies
d. customers,
4. People's interests
e. creditors, and
5. Past experiences
f. employees.
CHANGES IN THE
ENVIRONMENT TECHNOLOGICAL DISCOVERY
Entrepreneurial ideas arise from the AND ADVANCEMENT
changes that happen in the external environment Discovery and advancement in the use of
with entrepreneurial implications. Not everyone technology are another good source of
welcomes changes in the external environment. entrepreneurial ideas and opportunities. Most
However, a person with an entrepreneurial drive people welcome technological discoveries and
views these changes positively. He/She determines advancements but cannot identify or determine
what business opportunities they may provide. entrepreneurial opportunities stemming from
them. On the other hand, a person with
The term external environment in this lesson entrepreneurial interest looks at the possibility of
refers to the physical environment, societal business opportunities in any new discovery or
environment, and industry environment where the advancement in technology.
business operates. For example, a person with sufficient
knowledge in the repair and installation of a
1. The physical environment includes mechanical engine discovers that the additional
engine parts he installed during the repair has
a. climate, considerably reduced fuel consumption. That
person could simply rest on his laurel for having
b. natural resources, and contributed to fuel conservation. Nevertheless, if
he had any entrepreneurial drive, he would see his
c. wildlife. discovery as a business opportunity to
manufacture the new engine parts that could
2. The societal environment includes the various reduce fuel consumption.
forces like
GOVERNMENT'S THRUST,
a. economic forces, PROGRAMS, AND POLICIES
The priorities, projects, programs, and
b. sociocultural forces, policies of the government are also good sources
of entrepreneurial ideas. The term government in
c. political forces, and this lesson refers to the local government
(municipal, city, or provincial) or the national
d. technological environment. government and its branches.
The programs and agenda of the Philippine
3. The industry environment of the business government intuitively address the needs of the
includes Filipino people. There are also instances when the
national government responds to the call of
a. government, international agencies or the world market.
Whenever there are changes in the policies and
b. competitors,
7
programs of the government, new entrepreneurial opening his/her own auditing office. In a similar
ideas are likely born. manner, a good engine mechanic who has worked
For example, the use of firecrackers to in a leading car manufacturer may find it
celebrate New Year's Eve is strictly prohibited. appropriate to open his/her vehicle repair shop.
People without entrepreneurial drive will view the Thus his/her relevant job experiences in the past
ordinance as a plain restriction. An entrepreneur, can lead to that entrepreneurial venture.
however, will take it as a business opportunity to
come up with a new product that will serve as a
substitute for firecrackers. The entrepreneur and the owner of an ordinary
PEOPLE'S INTERESTS small business are different in the following areas:
The interests, hobbies, and preferences of
a. Motive in opening a business
people are a rich source of entrepreneurial ideas.
For example, the increasing number of Internet
b. Perception of risk in the business
cafés at present could be attributed to the strong
attachment of young people to computers. The rise
c. Reactions to changes in the environment
of amusement parks, nightspots, and nature farms
could be a response to the need of people for fun
d. View on competition
and relaxation.
However, an entrepreneur must be keen in
e. Vision for development and growth
identifying the cycle of interests and trends of
his/her target market since these tend to
f. Horizon of business operation
continuously change. He/She must be ready to
address the change properly and immediately to
g. Sources of business funds
avoid possible negative effects on the operations
of the business venture.
Knowing the differences between an entrepreneur
For instance, for almost three decades
and an owner of an ordinary small business will
from the early 1970s, a lot of people were going to
help you assess yourself, if you are an
bowling centers. The interest in this particular
entrepreneur or a mere owner of an ordinary small
game, however, consistently declined. At present,
business. Such knowledge will enable you to
only very few people are still playing bowling.
avoid completely the perceptions or behavior
This change led to the closure of some bowling
similar to the latter and focus more on the
centers nationwide.
perceptions or behavior of the former.
As a future entrepreneur, your business
venture should be adaptive to the interests and
hobbies of the people to protect and sustain your MOTIVE IN OPENING A
business. Keep evaluating the interests of your BUSINESS
target customers.
An entrepreneur starts a business venture
PAST EXPERIENCES based on entrepreneurial concepts and principles
Past experiences and exposures are also a and the aspiration to become successful. He/She is
good source of entrepreneurial ideas. The constantly on the lookout for new and fresh ideas,
expertise and skills developed by a person who which can be found in the business environment.
has worked in a particular field may lead to the The business environment is marked by creativity
opening of a related business enterprise. and innovation. It continuously changes and
For example, an auditor who has learned evolves. New and fresh ideas for the entrepreneur
the appropriate auditing and management advisory lead to business opportunities. Likewise, the
skills and techniques in a prominent auditing firm entrepreneur makes use of entrepreneurship as a
can start his/her entrepreneurial venture by means to a happy and fruitful life.

8
Entrepreneurship is perceived as a wealth-creating
venture that will ultimately improve the life of the
entrepreneur.
On the other hand, the owner of an
ordinary small business opens a business with the
primary goal of making it his/her source of
livelihood. The business becomes a major
provider of the family for their financial
requirements. The owner of an ordinary small
business operates with a basic motive of earning
profit. However, the level of profitability is
sometimes neglected. The profitability aspect and
the level of profitability are two distinct important
issues.
PERCEPTION OF RISK IN THE
BUSINESS
The entrepreneur takes and faces the
business risk squarely. He/She considers it
inherent in the business venture, prepares the
business for it, and finds ways to minimize its
effects. The owner of an ordinary small business,
on the other hand, believes that the business risk is
a deterrent to the operation of the business and
must be avoided.
REACTIONS TO CHANGES IN
THE ENVIRONMENT
The entrepreneur reacts positively to the
changes in the environment. Changes in the
business environment bring new ideas for
entrepreneurial opportunities. The entrepreneur
considers changes in the environment a creative
mechanism for development and growth in the
entrepreneurial activities. They become a new
source of possible entrepreneurial venture.
Entrepreneurs do not simply wait for the
changes to happen in the entrepreneurial
environment. They outline alternative courses of
action in anticipation of the changes to happen.
On the other hand, the owner of an ordinary small
business remains passive and static to changes in
the environment where his/her business operates.
He/She usually believes that change in the
environment is not a plus factor to the daily
operations but rather a source of negative
consequences.
VIEW ON COMPETITION
For the entrepreneur the presence of
competition is a sign of a healthy economic
environment. The environment where the venture
operates can be considered neutral or free- trade
because of healthy competition. Competition will
undoubtedly force entrepreneurs to continuously
improve their present products or services. It will
be one of the factors that will make them creative
in their endeavor.
The owner of an ordinary small business,
however, views competition as an unhealthy
element in the business environment and tries to
avoid it. He/She is very uncomfortable working in
a competitive environment and strongly
discourages competition in the business
community.
VISION FOR DEVELOPMENT
AND GROWTH
The entrepreneur usually outlines the
course of his/her entrepreneurial venture in terms
of short-term, medium-term, and long-term plans
of action. He/She makes sure that the The
entrepreneur usually outlines the course of his/her
entrepreneurial venture in terms vision and
mission of his/her business is clear.
The entrepreneur aligns the daily business
activities toward the attainment of the plans.
He/She properly manages the venture in such a
way that the operations will provide development
and growth to the venture.
The owner of an ordinary small business,
on the other hand, relies upon chance or luck in
maintaining the status quo of his/her business.
He/She is not so much concerned about its
development and growth as long as he/she is
satisfied with its earnings.
HORIZON OF BUSINESS
OPERATION
An entrepreneur thinks globally but acts
locally. His/Her sight is always focused on the
9
stars above, while his/her feet are firmly anchored and differentiate it from the activities of ordinary
on the ground. He/She is primarily concerned with small businesses.
the major economic events not only in the local
environment but also in the global business
1. Entrepreneurship applies only to manufacturing
market. The entrepreneur has a strong notion that
businesses.
the business venture will be going out of the local
market and will soon face healthy competition in
2. Entrepreneurship applies only to small
the international market. The entrepreneur has
businesses.
both local and global perspectives.
The owner of an ordinary small business,
3. Entrepreneurship applies mostly to persons with
meanwhile, is centered only on the local
good educational background in business courses.
environment. He/She does not intend to
participate in the global environment. The concept
4. Entrepreneurship applies only to a good
or view of operating outside the local market is
economy.
inconceivable. In other words expansion has never
been an idea worth entertaining for the owner of
5. Entrepreneurship is simply opening a small
an ordinary small business.
business.

SOURCES OF BUSINESS
FUNDS
When the entrepreneur finds that the
proposed business endeavor is a wealth-creating
venture, he/she explores ways to generate the
much-needed funds from both internal and
external resources. He/She strongly believes that
the wealth that the venture may create is more
than enough to compensate for the sourced funds.
On the contrary, the owner of an ordinary
small business tends to limit the funding of his/her
business enterprise to personal resources. Loans
from external resources can be a risky undertaking
for him/her. He/She fears that financial institutions
will not be willing to extend financial assistance to
the business. In other words, he/she is already
fully convinced that he/she is pursuing the
unprogressive type of business endeavor.

MISCONCEPTIONS ON
ENTREPENEURSHIP
Entrepreneurship has its fair share of
misconceptions, the basic of which is equating it
with the activities of ordinary small businesses.
Listed below are some common misconceptions
on entrepreneurship. Knowing them will enable
you to understand the concept of entrepreneurship

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