Entrepreneurship
Entrepreneurship is finding a business opportunity, starting a new venture, and taking on the risks
to make a profit or create value. It means coming up with new ideas, creating products or services,
and working to bring those ideas to the market.
1) Economic Benefits of Entrepreneurship in society:
Creates More Jobs and Increases Income
Entrepreneurship generates jobs, helping more people find work and increasing the country's
overall income. Small businesses play a big role in creating jobs and building wealth.
Boosts Economic Activity
A small eatery in a rural area and a coffee shop in the city both boost economic activity, no matter
their size.
Brings New Products and Services
Entrepreneurs introduce fresh and innovative products and services to the market, continuously
offering new options to consumers.
Improves Living Standards
Businesses like salons, barbershops, and local stores make life easier by providing essential goods
and services nearby.
Spreads Economic Power and Promotes Fairness
Entrepreneurship distributes income across many businesses, reducing the dominance of large
companies and promoting economic balance.
Supports Local Wealth and Regional Growth
Entrepreneurs use local resources wisely, ensuring that all areas receive proper resource allocation
and development.
Reduces Social Conflicts
By making basic goods widely available, entrepreneurship helps prevent shortages and reduces
competition over limited supplies.
Encourages Economic Independence
A nation with many entrepreneurs becomes financially stable, needing less assistance from other
countries, and generates its own wealth.
Entrepreneur
An entrepreneur is a person who starts a new business, taking on the risks involved to make a profit
or solve a problem. They come up with ideas for products or services, work to make them a reality,
and bring them to the market.
5 Levels of Entrepreneurial Development
The Self-Employed
They prefer working independently and feel uncomfortable being controlled by others.
The Manager
At this level, entrepreneurs start hiring employees and assigning tasks to help manage the
workload.
The Leader
They enjoy seeing their team grow and succeed with less supervision. Their focus shifts to the big
picture and strategy rather than daily tasks.
The Investor
They seek more growth opportunities and often appoint managers to run operations. They become
directors, focusing on expansion. Example: Tony Caktiong, founder of Jollibee.
The True Entrepreneur
Aim for quality and excellence of their work
follow a thought process that includes:
Idealization (dreaming big)
Visualization (planning the future)
Verbalization (sharing ideas)
Materialization (turning ideas into reality)
Four-Step Process Thinking of an Entrepreneur
1. Idealization
Entrepreneurs dream big and imagine an ideal world or business.
2. Visualization
They start planning how to make that dream come true.
3. Verbalization
They share their ideas with others, believing their vision is starting to happen.
4. Materialization
The dream becomes real. A true entrepreneur earns ongoing income, even with little effort.
Common Traits Entrepreneurs Should Have
Proactive
They do thorough research, assess risks, and follow through on plans efficiently and on time.
Agents of Change
They’re always excited to improve or create new products and introduce them to the market.
Risk Takers
They consider risks but move forward if the chances of success are good, not letting opportunities
slip by.
Sharp Eye for Opportunity
They carefully evaluate opportunities and decide wisely whether to pursue them.
Sociable
They build good relationships with employees and customers to keep them connected.
Networkers
They know the key people to connect with for business growth.
Decisive
They resolve issues promptly, set clear goals, and make decisions based on calculations,
experience, and knowledge.
Balanced
They combine logical thinking with creativity, often coming up with unique ideas and enjoying
“aha!” moments.
Innovative
They constantly think of new and valuable ideas to improve their business.
Core Traits Entrepreneurs Should Develop for Managing Their Business
1. Leaders
o They inspire their employees and take responsibility for their roles.
o They use their strengths and recognize their weaknesses to make the best of situations.
o They make decisions confidently and unite the team to bring out the best in everyone.
2. Communicators
o They effectively share ideas and address concerns with customers and employees using
all forms of communication.
3. Specialists
o They pay attention to details and are knowledgeable about their products.
o They can answer questions without relying on others and constantly work to improve
their offerings.
o They are proactive and involved rather than just staying behind the scenes.
4. Problem Solvers
o They think critically and view problems as challenges to solve.
o They handle issues in all areas of the business with confidence.
o They believe every problem has a solution, no matter how difficult.
o They are courageous and face the consequences of their decisions.
Pros and Cons of Entrepreneurship vs. Employment
Franchising
A franchise is a way for someone who owns a brand name or logo to allow others to sell their
products or services using that name. The person who buys the franchise (franchisee) operates
independently, but they rely on the business system set up by the brand owner (franchisor) for
support and guidance.
Advantages
• Training and guidance
• Brand-name appeal
• A proven track record
• Financial assistance
Disadvantages
• Franchise fees
• Franchisor control
• Unfulfilled promises
The Costs of Franchising
• The Basic Franchise Fee
• Insurance
• Opening Product Inventory
• Remodeling and Leasehold Improvements
• Utility Charges
• Payroll
• Debt Service
• Bookkeeping and Accounting Fees
• Legal and Professional Fees
• State and Local Licenses, Permits, and Certificates
Sole Proprietorships
A sole proprietorship is a business that is owned and operated by one person. The enterprise has
no existence apart from its owner.
Advantages
• Ease of formation
• Sole ownership of profits
• Decision making and control vested in one owner
• Flexibility
• Relative freedom from governmental control
• Freedom from corporate business taxes
DisAdvantages
• Unlimited liability
• Lack of continuity
• Less available capital
• Relative difficulty obtaining long-term financing
• Relatively limited viewpoint and experience
Partnership
• A partnership is an association of two or more persons acting as co-owners of a business
for profit.
• The Uniform Partnership Act is generally followed by most states as the guide for legal
requirements in forming partnerships.
• The articles of partnership clearly outline the financial and managerial contributions of
the partners and carefully delineate the roles in the partnership relationship.
Advantages
• Ease of formation
• Direct rewards
• Growth and performance facilitated
• Flexibility
• Relative freedom from governmental control and regulation
• Possible tax advantage
Disadvantages
• Unlimited liability of at least one partner
• Lack of continuity
• Relative difficulty obtaining large sums of capital
• Bound by the acts of just one partner
• Difficulty of disposing of partnership interest
