BAE4: Entrepreneurial Management

Chapter 1
Introduction to Entrepreneurship

Learning Outcomes:
At the end of this lecture, you are expected to:

✓ Define the term entrepreneurship and entrepreneur

✓ Describe the importance of entrepreneurship
✓ Differentiate Entrepreneur and Businessman
✓ Identify types of entrepreneurs
✓ Recognize the role of entrepreneurship in the economy

Introduction
Entrepreneurial activities today have become very important and are keys to economic development.
Growth, industrial development, including employment generation, depend upon entrepreneurial
behavior of a country.

Entrepreneurs are the reason for a large quantity of highly developed industries which result to greater
employment opportunities for unemployed youth, increase in per capita income higher standard of living
and increased individual saving, revenue to the government in the form of income tax, value added tax,
export duties, import duties, and balanced regional development.

Entrepreneurs are individual who recognize opportunities where others see chaos, contradiction, and
confusion. They are aggressive catalysts for change within the marketplace. Whatever their passions,
entrepreneurs are the heroes of today’s marketplace. They start companies and create jobs at a
breathtaking pace. The global economy has been revitalized because of their efforts, and the world now
embraces free enterprise as the most significant force for economic development.

Entrepreneurship - the capacity and willingness to develop, organize and manage a business venture
along with any of its risk in order to make profit.

Entrepreneurship is the act of creating a business or businesses while building and scaling it to generate
a profit.

Entrepreneurship refers to the concept of developing and managing a business venture in order to gain
profit by taking several risks in the corporate world. Simply put, entrepreneurship is the willingness to
start a new business. Entrepreneurship has played a vital role in the economic development of the
expanding global marketplace.

What is an ‘Entrepreneur’?

Entrepreneur - is a person who starts a new business venture.

An Individual who, rather than working as an employee, founds and runs a small business, assuming all
the risks and rewards of the venture.
An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most
of the rewards. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods,
services, and business/or procedures.

Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate needs
and bring good new ideas to market. Entrepreneurs who prove to be successful in taking on the risks of a
startup are rewarded with profits, fame, and continued growth opportunities. Those who fail, suffer losses
and become less prevalent in the markets.

Entrepreneurs help Economies

Nurturing entrepreneurship can have a positive impact on an economy and a society in several ways. For
starters, entrepreneurs create new business. They invent goods and services, resulting in employment,
and often create a ripple effect, resulting in more and more development.

Entrepreneurs add to the gross national income. Existing businesses may remain confined to their markets
and eventually hit an income ceiling. But new products or technologies create new markets and new
wealth. And increased employment and higher earnings contribute to a nation’s tax base, enabling greater
government spending on public projects.

Entrepreneurs create social change. They break tradition with unique inventions that reduce dependence
on existing methods and systems, sometimes rendering them obsolete. Smartphones and their apps, for
example, have revolutionized work and play across the globe.

Entrepreneurs invest in community projects and help charities and other non-profit organizations,
supporting causes beyond their own. Henry Sy, for example, has used his considerable wealth SM
foundation.
10 Important Personal Characteristics of Entrepreneurs
Some say that entrepreneurs are born, not made. Whether you believe this or not, there are some
personality traits that many successful entrepreneurs share.

Being an entrepreneur requires much more than big ideas. A true entrepreneur possesses a unique set of
skills and characteristics that enable them to beat the odds and go after their dreams.

If you want to be an entrepreneur, you need to have the right personality and the right attitude. Here are
10 essential characteristics to be successful as an entrepreneur:

• Creative
Entrepreneurship starts with an idea. To
be successful, you need to always be
thinking of new ideas and better ways of
doing things.

Entrepreneurs are not satisfied with the

status quo. They think outside the box
and look for opportunities to come up
with new solutions.

• Passionate
Perhaps the most important characteristic for entrepreneurs, passion is essential to any business
owner or working professional's success. Without passion, there is no reason for your work and
no drive to do it.

How to be passionate and positive:

✓ Choose a product or service that you’re genuinely interested in.

✓ You must be convinced that your business solves a real need in a way that will improve
people’s lives.
✓ Once you are sure about that, it’s easy to be passionate and positive about what you do.
• Risk Taker

Successful entrepreneurs know that sometimes it’s important to take risks. Playing safe almost
never leads to success as a business owner. You’ll need to be willing to take a few risks to succeed.

Taking risk doesn’t mean that entrepreneurs are “reckless”, more so that they have an
appreciation for the balance between risk and reward. They recognize that a taking a degree of
risk can result in a much greater return in life if they manage to be successful.

Example of this can be seen in athletes and adventurers. While they don’t fit the typical definition
of an entrepreneur, they are essentially banking on their personal ability to succeed in their
chosen field and hope that an investment in that area of expertise pays off in some way.

• Optimistic
Do you see the glass half empty or half full? For
entrepreneurs, it's always half full. Entrepreneurs always
look on the bright side and are constant dreamers. They
look at how they can do things better and make the world
a better place. They never dwell on the past or the
negative. Instead, they focus on moving forward and
moving up.

Entrepreneurs are not easily defeated. In fact, they view failure as an opportunity for future
success. If they don’t succeed the first time, they’ll continue to try until they do. Most
entrepreneurs don’t take ‘no’ for an answer.

How to remain committed:

✓ Each time you run up against an obstacle, rather than thinking that your idea won’t work
or that you’ve failed, think about what you can learn from the experience.
✓ Figure out another way to reach your goal from where you are.
✓ Remember that many successful entrepreneurs fail several times before they succeed.
• Persuasive
To be successful in business, you have to know business. If you're a people person and know how
to get people to listen to you, you could be a successful entrepreneur. Especially when first
starting out, entrepreneurs need to gain buy-in from those around them on their big idea. If it's
an out-of-the-box idea, which it usually is, many people will be skeptical before giving their
support or investing any money.

• Flexible
"As an entrepreneur, you'll typically start out as a 'solopreneur,' meaning you will be on your own
for a while. You may not have the luxury of hiring a support staff initially. Therefore, you will end
up wearing several different hats, including secretary, bookkeeper and so on."

Entrepreneurs know how to adapt to unfamiliar situations. If their business requires that they
learn how to build a website they'll do it. Whatever it takes, entrepreneurs are ready and willing.

• Goal-oriented
Entrepreneurs are all about setting goals
and putting everything they have into
achieving them. They’re determined to
make their business succeed and will
remove any obstacles that stand in their
way. They also tend to be strategic in their
game plans and have a clear idea of what
they want to achieve and how they plan to
do it.

How to become goal-oriented:

✓ Create short- and long-term goals for your business. Short-term goals are those you can
complete in an hour, a day, or as long as a week. Long-term goals might take you a year
or longer.

✓ Whenever you have a choice to make about what to focus on, choose the thing that will
help you make the most progress toward one of your goals.

• Decisive
There is no room for procrastination or “what ifs” in business. Entrepreneurs know what needs to
be done and don't hesitate to make the decisions that will lead them to success. They don't let
opportunities pass them by; instead, they seize the day and get the job done
 • Hard Worker
This should seem an obvious characteristic of entrepreneurs but it is still work stating. No one is
successful in life without putting in the hard work. Yes, luck does play a part but you can’t overlook
the importance of hard work.

Entrepreneurs often work hard, not because they see the business as a job, but because they love
doing what they do. This is where hard work meets passion and becomes such a strong force to
willing an entrepreneur forward in their chosen field.

• Self-Belief
As a result, successful entrepreneurs have to have self-belief. They have to believe in their
ability to execute on the idea or business opportunity they see in front of them. That doesn’t
mean they have to believe they are always right, but they have to have a natural inclination
towards backing themselves and believing in their ability, even when others don’t.

Relevance of Entrepreneurship to an Organization

1. Development of managerial capabilities

The greatest significance of entrepreneurship lies in the fact that it helps in identifying and
developing managerial capabilities of entrepreneurs. An entrepreneur studies a problem,
identifies its alternatives, compares the alternatives in terms of cost and benefit implications, and
finally chooses the best alternative.
 Studying a problem, identifying its alternatives, comparing alternative in terms of cost and benefit
implication and choosing the best alternative help in sharpening the decision-making skills of an
entrepreneur. Besides, these managerial capabilities are used by entrepreneurs in creating new
technologies and products in place of older technologies and products resulting in higher
performance.

2. Creation of organizations

Entrepreneurship results in the creation of organizations when entrepreneurs assemble and

coordinate physical, human and financial resources and direct them towards achievement of
objectives through managerial skills.

3. Improving standard of living

By creating productive organizations, entrepreneurship helps in making a wide variety of goods

and services available to the society which results into higher standard of living for the people.

Possession of smartphones, computers, innovation of milk tea, rapid growth if shopping malls,
etc. point to the rising living standard of people. All these are due to the efforts of entrepreneurs.

4. Means economic development

Entrepreneurship involves creation and use of innovative ideas, maximization of output from
given resources, and development of managerial skills. All these factors are essential to the
economic development of a country.

Businessman and Entrepreneur

It is a common assumption that businessman and entrepreneur are the same, but both words refer to a
different individual possessing a distinct approach to business. to put is in other words, a businessman is
a person who runs the business, undertaking an unoriginal business idea. On the contrary, an
entrepreneur is someone who first initiates a product or business idea and thus the leader of that in the
market.

In the future, an entrepreneur can become a businessman. However, between businessman and
entrepreneur, there is a thin line difference businessman is a market player, whereas, the entrepreneur
is a market leader.
Differences between Businessman and Entrepreneur

The following are the differences between businessman and entrepreneur:

✓ A person who brings his unique idea to run a startup company is known as an entrepreneur. A
businessman is a person who starts a business on an old concept or idea.

✓ A businessman makes his place in the market with his efforts and dedication, whereas an
entrepreneur creates the market for his own business.

✓ The businessman is a market player while entrepreneur is a market leader because he is the first
to start such a kind of enterprise.

✓ As the businessman follows the footsteps of other businessmen, the possibility of failure is very
less which is just opposite in the case of the entrepreneur.

✓ A businessman uses traditional methods to run the business. Conversely, an entrepreneur applies
unconventional methods for the same.

✓ A businessman is oriented towards profit; however, an entrepreneur is a people focused in

essence, he gives more importance to its employees, customers, and the public.

✓ The businessman faces extreme competition because it is very difficult to gain a competitive
position in an already existing market, which is not in the case of an entrepreneur.

✓ Businessmen take calculated and managed risk. They cannot afford to lose money and suffer from
bankruptcy. Entrepreneurs are like sky divers. They take crazy risks. They don’t care of losing time
and money just to pursue their passion. But since they do it with love. Joy and passion, they often
gain extraordinary rewards.

✓ A business owner is an employer and a manager. He hires employees and workers to help his
business grow. An entrepreneur is a friend and a leader. He finds peers and PEOPLE, whom he
will never treat as machines. He invites them to grow.

✓ A businessman usually sees customers as his source of sales and revenues. For him, customers
are the lifeblood of his business. An entrepreneur sees customers as his source of duty and
fulfillment. For him, customers are his own blood.
 -End-

References:
https://www.investopedia.com/terms/e/entrepreneur.asp
https://www.inc.com/sujan-patel/10-essential-characteristics-of-highly-successful-.html
Entrepreneurship-Theory, Process and Practice 10th Edition by Donald F. Kuratko
Entrepreneurship in the Philippine Setting by Winefreda T. Asor, Ph.D.