A PERSPECTIVE

TO
ENTREPRENEUR
SHIP
CHAPTER 1 1

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP

A PERSPECTIVE ON
ENTREPRENEURSHIP
ENTREPRENEURSHIP IS A VERY IMPORTANT
COMPONENT IN THE PHILIPPINE ECONOMY
It thrives the economic system.
Supports innovation and hard work.
If entrepreneurs become successful, the nation is
immensely benefited.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 2

ENTREPRENEURSHIP AND
ECONOMIC DEVELOPMENT
 ECONOMIC DEVELOPMENT – Scheme aimed at improving the living standards of the
nation’s citizenry. It needs the following elements:
 1. Human Resource (labour supply, education, discipline, motivation)
 2. Natural Resources (Land, minerals, fuel, climate)
 3. Capital Formation (Machines, Factories, Roads)
 4. Technology (Science, Engineering, Management)
 The effective and efficient utilization of the various resource elements contribution to the
economic growth.
 There is a need for entrepreneurs to harness the potential of these elements at the right quantity
at the right time.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 3

 WHAT IS
4
ENTREPRENEURS
HIP?

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP

WHAT IS ENTREPRENEURSHIP
Entrepreneurship refers to the economic activity of a
person who starts, manages, and assumes the risk of
a business enterprise.
The person who undertakes entrepreneurial activities
is called an “Entrepreneur”.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 5

WHAT IS ENTREPRENEURSHIP
The entrepreneur identifies economic need.
Offers a Business Solution
Assemble resources required
Assumes the risk of either succeeding or failing.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 6

 Entrepreneurship Activity
1. Identify an Economic Implementation of K-12 in the Philippines. Few
Need schools in La Trinidad offers grade 11 and Grade 12
admission.

2. Business Solution for the Establish a Senior High School education with
need competitive standards that the current high schools are
providing.

3. Assembling resources Acquire funds, hire qualified teachers and staff,

required construct building, and the like.

4. Assuming risk Prepare project study, business plan, advertising,

maintain good relationship with stakeholders, etc.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 7

 THE
8
ENTREPRENEUR’S
TASK

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP

THE ENTREPRENEUR’S TASK
 The Entrepreneur has the following roles in the development of the
economy:
 1. Produce Products/Services for customers and producers
 2. Provide Employment
 3. Pay Taxes to Government
 4. Demand for suppliers’ products and services
 5. Training facilities for future entrepreneurs.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 9

1. PRODUCE PRODUCTS/SERVICES FOR
CUSTOMERS AND PRODUCERS

With hundreds of companies offer the exact same

product.
It is the task of the entrepreneur to offer a better
option which fulfil the specific requirements of the
customer in purchasing a product or service.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 10

2. PROVIDE EMPLOYMENT
A review of the statistical reports prepared by
the government shows that business organized
by entrepreneurs employs millions of people.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 11

3. PAY TAXES TO
GOVERNMENT
 The taxes paid to government in the form of license, fees,
and permits applicable to the enterprise, as well as income
taxes applicable to the employees and entrepreneurs, easily
amounts to billions of pesos.
 The taxes collected are, in turn, poured into development
projects of the government.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 12

4. DEMAND FOR SUPPLIERS’
PRODUCTS AND SERVICES
 Entrepreneurs has to make sure that the suppliers will have
ready market for their products and services.
 There is a eco-system between companies, every
organization needs each other in order to survive.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 13

5. TRAINING FACILITIES FOR
FUTURE ENTREPRENEURS.
Business enterprises provide a training ground
for future entrepreneurs.
A number of entrepreneurs were former
employees of enterprising persons.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 14

 Land Labour Capital
(Natural Resources) (Human Resources) (Financial Resources)

Entrepreneur

Production Process

Finished Goods and Services

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 15

THE ENTREPRENEUR’S TASK
 To make profits, the entrepreneur performs the following functions:
 1. To supply the necessary capital
 2. To organize production by buying and combining inputs like
materials and labor
 3. To decide on the rate of output, in the light of his expectations
about demand
 4. To bear the risk inherent of the venture

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 16

 ENTREPRENEURS
17
HIP AND
INNOVATION

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP

ENTREPRENEURSHIP &
INNOVATION
 INNOVATION – defined as the introduction of a new method,
procedure, custom, device, etc. It could be any of the following:
 A new product
 A new process of production
 Substitution of a cheaper material in an unaltered product.
 Reorganization of production, internal function, or distribution
arrangement leading to increased efficiency, better support or lower
cost

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 18

ENTREPRENEURSHIP &
INNOVATION
 Improvement in instruments or methods of doing innovation.
Innovation may also be viewed as the last stage in an important
process consisting of the following:
 Invention – which refers to he discovery or devising of new products and
processes
 Development – which refers to the process by which the ideas and principles
generated from the stage of invention are embodied in concrete products and
techniques
 Innovation – which refers to the actual introduction of a new product or
process.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 19

EXAMPLES OF INNOVATION

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 20

 NEW VENTURES
21
AND LONG TERM
ENTERPRISES

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP

NEW VENTURES AND LONG
TERM ENTERPRISES
 A new venture cannot remain as such forever.
 The entrepreneur must develop it into a small business or make it grow into a
mature and bigger company.
 The transition from a new venture to successful long term enterprise consists
of 4 major stages
1. Prestart-up stage
2. Start-up stage
3. Early growth stage
4. Late growth stage

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 22

PRESTART-UP STAGE
 Starts to question the feasibility of an idea, product or
service.
 Seeks answers to questions regarding potential markets,
production and financing.
 The planning stage

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 23

START-UP STAGE
 Formation of the business
 Generation of necessary capital
 Purchase of facilities and equipment
 Constructing prototype products
 Testing the market

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 24

EARLY GROWTH STAGE
 Small scale activities
 Ex.
 Selling to limited markets with limited resources
 It’s natural to incur losses.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 25

EARLY GROWTH STAGE
The new venture matures into a stable
enterprise.
The management is structured, long-term
financing is established, and facilities
planning are undertaken.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 26

 REWARDS FOR
27
SUCCESSFUL
ENTREPRENEURS
HIP
CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP
REWARDS FOR SUCCESSFUL
ENTREPRENEURSHIP
 The use of any of the factors of production deserves to receive
some form of compensation. The factors referred to as “things
required for making commodity” consists of the following:
 “Land”
 “Labor”
 “Capital”

 The fourth factor becomes necessary and this is the “entrepreneur”

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 28

 Factors of Production Economic Reward Limiting Factor for
Rewards Received

Land Rent Supply and Demand

Capital Interest Industry rates /

Government mandated
rates

Labor Wages / Salary Labor supply and

Demand / Labor
Legislation

Entrepreneur Profits Skill of the Entrepreneur

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 29

 THE
30
ENTREPRENEUR’S
PREDICAMENT

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP

THE ENTREPRENEUR’S
PREDICAMENT
 In the race for winning the all-important consumers’ pesos, the
business will have to offer products or services that have certain
advantages over the competition’s wares.
 The competitor may either imitate or offer better innovations. If the
competitor is successful, the profits of the entrepreneur will decline.
 To be ahead again, the entrepreneur will consider offering newer
and better innovations. The cycle continues until one or both find
reason stop.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 31

 Year Entrepreneur 1 Entrepreneur 2 Entrepreneur 3
Year 1 Introduce innovative Inactive Inactive
product

Year 2 Reap moderate profits Introduce innovative Inactive

product

Year 3 Maximize profits Reap moderate profits Introduce innovative

product

Year 4 Profits decline Maximize profits Reap moderate profits

Year 5 Introduce innovative Profits decline Maximize profits

product

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 32

ENTREPRENEURSHIP AND
BUSINESS SIZE
 Both small and large businesses are confronted by problems that are
entrepreneurial in nature.
 To effectively compete, business of whatever size must adapt
innovative approaches to its activities. Examples of innovation are
the following
 Offering business services during Sundays and Holidays
 Manufacture and sale of new products
 Selling on a differed payment scale

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 33

ENTREPRENEURSHIP AND
BUSINESS SIZE
Small businesses have the advantage of switching to
another business concept whenever necessary
Large businesses have the advantage of launching
new products while maintaining the organization
structure.

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP 34

FIN.
End of Chapter 1. 35

CHAPTER 1 - A PERSPECTIVE TO ENTREPRENEURSHIP