UNIT 1: INTRODUCTION TO
ENTREPRENEURSHIP
“Entrepreneurship is living a few years of
your life like most people won’t, so that
you can spend the rest of your life like
most people can’t.”
WHAT IS ENTREPRENEURSHIP?
- Is the process by which individuals
pursue opportunities without
regard to resources they
currently control (Stevenson and
Jarillo)
- Is the art of turning an idea into
a business (Fred Wilson)
ENTREPRENEURSHIP IS A MINDSET
THAT IS:
● Opportunity-focused
● Innovative
● Growth-oriented
WHO IS AN ENTREPRENEUR?
- An entrepreneur is someone who
creates a new business.
ANATOMY OF AN ENTREPRENEUR
WHAT DO ENTREPRENEURS DO?
- Entrepreneurs assemble and then
integrate all the resources
needed– the money, the people,
the business model, the strategy–
to transform an invention or an
idea into a viable business.
WHY BECOME AN ENTREPRENEUR?
- The three primary reasons that
people become entrepreneurs and
start their own firms are the ff:
● The desire to be their own
boss
● Desire to pursue their own
ideas
● Financial rewards
CHARACTERISTICS OF SUCCESSFUL
ENTREPRENEURS
- Passion for the business
- Product/consumer focused
- Tenacity despite failure
- Execution intelligence
COMMON MYTHS ABOUT
ENTREPRENEURS
MYTH 1: Entrepreneurs are born, not
made
- This myth is based on the
mistaken belief that some people
are genetically predisposed to be
entrepreneurs.
- The consensus of many studies is
that no one is “born” to be an
entrepreneur; everyone has the
potential to become one.
COMMON TRAITS AND
CHARACTERISTICS OF SUCCESSFUL
ENTREPRENEURS
- A moderate risk taker
- A networker
 - Achievement motivated
- Alert to opportunities
- Creative
- Decisive
- Energetic
- Has a strong work ethic
- Lengthy attention span
- Optimistic disposition
- Persuasive
- Promoter
- Resource assembler/leverager
- Self-confident
- Self-starter
- Tenacious
- Tolerant of ambiguity
- Visionary
MYTH 2: Entrepreneurs are gamblers
- Most entrepreneurs are moderate
risk takers.
- The idea that entrepreneurs are
gamblers originates from two
sources:
● Entrepreneurs typically
have jobs that are less
structured, and so they
face a more uncertain set
of possibilities than people
in traditional jobs.
● Many entrepreneurs have a
strong need to achieve and
set challenging goals, a
behavior that is often
equated with risk taking.
MYTH 3: Entrepreneurs are motivated
primarily by money
- While it is naive to think that
entrepreneurs don’t seek financial
rewards, money is rarely the
reason entrepreneurs start new
firms.
- In fact, some entrepreneurs warn
that the pursuit of money can be
distracting.
MYTH 4: Entrepreneurial activity is fairly
easily spread out over age ranges.
- While it is important to be
energetic, investors often cite the
strength of the entrepreneur as
their most important criteria in
making investment decisions
- What makes an entrepreneur
“strong” in the eyes of an investor
is experience, maturity, a solid
reputation, and a track record of
success.
- These criteria favor older rather
than younger entrepreneurs.
THE ENTREPRENEURIAL PROCESS
1. Deciding to become an
entrepreneur
2. Developing successful business
ideas
3. Moving from an idea to an
entrepreneurial firm
4. Managing and growing the
entrepreneurial firm.
“The first step is to establish that
something is possible; then probability
will occur” - Elon Musk
ENTREPRENEURSHIP IN THE
TOURISM AND HOSPITALITY
INDUSTRY: AN OVERVIEW
I. ENTREPRENEURSHIP AND
SELF-EMPLOYMENT
FACTORS TO CONSIDER BEFORE
GOING INTO SELF-EMPLOYMENT:
● Business Idea;
 ● Skills (technical/managerial);
● Market;
● Capital (opening, working or
long-term);
● Machinery (technology);
● Raw Materials;
● Location (strategic);
● Legal issues; and
● Competition
REASONS FOR SELF-EMPLOYMENT:
● Need to improve personal income;
● Inability to secure a desirable job;
● Influence of others;
● To fulfill a lifelong ambition;
● To seek more independence;
● Love for adventure;
A. DISSATISFACTION WITH WAGE
EMPLOYMENT:
- Poor prospects of career
advancement;
- Delayed promotions;
- Lack of recognition or
appreciation of special
accomplishments;
- Poor terms of service;
- Unsatisfactory working
conditions; and
- Pending redundancy
B. FAVORABLE ENVIRONMENT:
- Appropriate incentives (e.g:
access to credit facilities);
- Laws governing small
enterprise creation;
- Access to raw materials
and machinery;
- Good infrastructure (e.g.:
roads, telephone networks,
electricity); and
- Inexpensive cost of labor
II. ISSUES AND CONSTRAINTS IN
ENTREPRENEURSHIP
SOME KEY HURDLES THAT ALL
ENTREPRENEURS AND BUSINESS
OWNERS FACE WHENS STARTING A
BUSINESS INCLUDE: (Beegom, 2013)
1. Developing the idea and business
concept;
2. Raising principal for startup business;
3.Gathering a business team;
4. Identifying the right business site, noble
employees and loyal customers;
5. Competing with competitors;
6. Unanticipated business trials and
expenditures;
7. Keeping up with industrial changes and
developments;
8. Withdrawing the business;
9. Down in the stagnation; and
10. Overrating, concentration and passion
and resolution
III. ENTREPRENEURSHIP IN THE
TOURISM AND HOSPITALITY
INDUSTRY
● Tourism acts as a business for the
creation of employment
opportunities and service focused
industry generates colossal profits
to the individuals, society and the
nation as a whole.
● Tourism reduces poverty, but
improves earnings (Ramukumba,
2014).
● Travel and Tourism subsidized
USD 7.2 trillion to the World Gross
Domestic Product (GDP),
signifying 9.8% of the Global GDP
(WTTC, 2016)
● The Travel and Tourism business
sector generated 284 million jobs
 or 1 in 11 employment in the
world.
● Travel and Tourism business rose
by 3.1% in 2015 revealing the 6th
successive year of positive
progression for the segment.
● Travel and Tourism will overtake
the global economy through the
following decade, growing by an
estimated 4% on average per
annum over the next ten years.
● In 2026, the Travel and Tourism
business is anticipated to generate
370 million employment
opportunities in total globally,
which will be equivalent to 1 in 9 of
all employment in the world
(WTTC, 2016).
● In 2026, South Asia will be the
fastest growing sub-region with
7.1% GDP growth, India 7.5% and
China 7.0% (WTTC, 2016).
● In comparison, agriculture
generates 44.6% employment and
manufacturing industry generates
mere 12.6% jobs.
● The Tourism industry is the 3rd
major foreign exchange payee
next to gems and jewelry and
read-made clothes industry
(Mukherjee, 2012).
IV. MICRO, SMALL, MEDIUM
ENTERPRISE (MSME)
● In the Philippine Setting (Senate of
the Philippines, 2012), MSME is
defined as any business activity or
enterprise engaged in industry,
agri-business and/or service that
has:
1. An asset size (less land) of up to
Php 100 million; and
2. An employment size with less than
200 employees.
● The constraints that MSMEs often
face can generally be categorized
as:
1. Non-financial barrier (cost of getting
electricity, heavy regulation, high tax rates
and corruption); and
2. Financial barrier (access to finance)
• Most MSMEs still have difficulty
accessing funds because of:
1. insufficient collateral, limited credit
histories and banking relationship;
2. inadequate financial records and
business plans; and
3. high interest rates
• Republic Act No. 9501: Magna Carta
for Micro, Small, Medium Enterprises
(MSMEs)
- It is hereby declared the policy of
the State to promote, support,
strengthen and encourage the
growth and development of
MSMEs in all productive sectors of
the economy particularly
rural/agri-based enterprises.
- The State shall recognize the
specific needs of the MSMEs and
shall undertake to promote
entrepreneurship, support
entrepreneurs, encourage the
establishment of MSMEs and
ensure their continuing viability
and growth.
VI. ASEAN MENTORSHIP FOR
ENTREPRENEURS NETWORK (AMEN)
- ASEAN Mentorship for
Entrepreneurs Network (AMEN)
serves as a learning cross border
mentorship hub to aid the region’s
 MSMEs in scaling up and
preparing for the transition into an
integrated market.
- It is planned to be integrated in
various sectoral alliance with
specific issues that need to be
addressed specifically the ASEAN
Young Entrepreneurs Network
(AYEN) and ASEAN Women
Entrepreneurs Network (AWEN)
ENTREPRENEURSHIP IN THE
TOURISM AND HOSPITALITY
INDUSTRY: AN OVERVIEW
I. OVERVIEW
ENTREPRENEURSHIP is the motion of
venturing into a new business or
businesses, captivating on the risks in
the optimism of making a maximum
turnover.
II. PERSPECTIVES
ENTREPRENEURS
ENTREPRENEUR is a person who shifts
economic resources out of an area of
lower productivity into an area of
higher productivity and greater yield.
• An entrepreneur in a developing
economy is one who starts an industry
(old or new), undertakes risks, bears
uncertainties and also performs the
managerial functions
decision-making and coordinating.
• Entrepreneurs imitate any techniques of
production from a developed economy.
• Entrepreneurism has now been
attributed to all small industrialists, traders
and agriculturalists.
III. QUALITY OF AN EFFECTIVE
ENTREPRENEUR
1. An Eye for Opportunity: Many
entrepreneurs start by finding a need and
quickly satisfying it.
2. Independence: Even though most
entrepreneurs know how to work within
the framework for the sake of profits, they
enjoy being their own boss.
3. An Appetite for Hardwork:
Entrepreneurs are always at work even
when other people have stopped.
4. Self-confidence: Most successful
entrepreneurs are confident of achieving
realistic and challenging goals.
5. Discipline: Successful entrepreneurs
resist the temptation to do what is
unimportant or the easiest but have the
ability to think what is the most essential.
6. Judgement: Successful entrepreneurs
have the ability to think quickly and make
a wise decision.
7. Ability to Accept Change: An
entrepreneur may need to change his/her
plans in order to help the business grow.
ON 8. Make Stress Work for Them:
Entrepreneurs are capable of working for
long hours and solving different
complexities at the same time.
9. Need to Achieve: Entrepreneurs have
a strong desire to achieve higher goals.
10. Focus on Profits: Successful
entrepreneurs always have the profit
margin in sight and know that their
business success is measured by profits.
of 11. Risk-bearing: Entrepreneurs are the
persons who take decisions under
uncertainty and thus they are willing to
take risk, but they never gamble with the
results.
12. Locus of Control: Entrepreneurs
believe in their own ability to control the
consequences of their endeavor by
influencing their socio-economic
environment rather than leave everything
to luck.
13. Creative and Innovators: They
constantly put their efforts in introducing
new products, new methods of
production, opening new markets and
reorganizing the enterprise.
14. Leadership: Entrepreneurs as leaders
should provide the necessary spark of
motivation by guiding, inspiring, assisting
and directing the members of the group
for achievement of unity of action, efforts
and purpose.
15. Ability to Mobilize Resources: They
have to mobilize the 6Ms of a Business –
Man, Money, Material, Machinery,
Market and the Method effectively to
realize the final product as
entrepreneurship is a function of gap
filling and input completing.
IV. ENTREPRENEURIAL
CONTRIBUTION TO ECONOMIC
DEVELOPMENT
● Utilization of Local Resources:
Local resources, some of which
would be otherwise declared
useless, are put to more gainful
use.
● Promotion of Technology:
Entrepreneurs are very creative
hence they contribute to the
utilization and development of
technology.
● Capital Formulation: As the
entrepreneurs pay tax and save
their earnings, they too directly
contribute to capital formulation
● Creation of Employment
Opportunities: Entrepreneurs help
in the creation of wealth for the
country through job creation.
• Promotion of an Entrepreneurial
Culture: A country which embraces
entrepreneurial culture is bound to be
economically stable.
• Export Promotion: Entrepreneurs are
able to earn the country foreign exchange
• Favorable Balance of Payment: There
is now a balance between the import and
export business.
• Improved Marketing of Locally
Produced Products: Every business is
compelled to produce quality
products/services and aggressively
market the same.
• Improve Infrastructure: Creation of
business leads to improvement of cities
and towns which in turn result in
improvement of roads, banking services,
telephone network, electricity, etc..
• Promotion of Talent and Hobbies:
Entrepreneurship encourages young
people to exploit their talents.
• Improved Growth in Gross Domestic
Product (GDP): There is now favorable
trade internally and this has seen an
increase in economic growth.
- Gross Domestic Product (GDP) –
is the final value of the goods
and services produced within
the geographical boundaries of
a country during a specified
period of time, normally a year.
• Self-reliance: Entrepreneurs enable
citizens to survive comfortably without too
much borrowing.