Entrepreneurship: Definition and Characteristics

• Entrepreneurship is converting processed ideas into remarkable business ventures.
• It involves innovation, investment, and expansion in markets, products, and techniques.

What is an Entrepreneur?

• Entrepreneurs start their own businesses and work for themselves, unlike employees.
• They are alert to profitable opportunities for exchanging goods or services.
• They organize, manage, direct, and assume the risks of a business or enterprise.

The Entrepreneur as a Missionary

• Entrepreneurs see opportunities and have a great desire for profit.
• They create environments where success is possible and failure is controllable.
• They take risks and invest resources to create new or improved products.

Goal-Driven Entrepreneurs

• Entrepreneurs are goal-driven and self-confident, exercising control.
• They set high goals, avoid risks, and ensure compliance with work programs.
• They accept challenges and responsibility for results.

The Entrepreneur as a Marketing Man

• Entrepreneurs identify the marketing environment and marshal resources to exploit opportunities.
• They properly identify customer needs and wants.

Starting Small for Growth

• Many entrepreneurs start small and grow through managerial talents and persistence.
• They differentiate themselves from other managers through expansion.

Factors That Develop Entrepreneurial Activities

• Taking Initiative: Entrepreneurs capitalize on opportunities with knowledge and minimal risk.
• Organization of Capital Resources: Financial and human resources are crucial; entrepreneurs start small with savings and trusted individuals.
• Development of Administrative Machinery: Management is developed with an organizational structure based on operational needs, assigning duties based on skills.
• Development of Entrepreneurial Autonomy: Entrepreneurs lead activities, aware of risks, and maintain cost control, especially early on.
• Development of SWOT Analysis: Entrepreneurs analyze Strengths, Weaknesses, Opportunities, and Threats to foresee and avoid risks.

Why Become an Entrepreneur?

• Control over time, fulfillment, creation/ownership, compensation, and working conditions are benefits.
• Financial gain alone is not sufficient motivation.

Benefits and Costs of Entrepreneurship

• Benefits: Independence, satisfaction, financial reward, self-esteem, contribution to society.
• Costs: Business failure, obstacles, loneliness, financial insecurity, long hours, strain on relationships.

Entrepreneurs vs. Managers

• Entrepreneurs have ideas, skills, and courage to take risks.
• Managers manage operations and functions within an organization.
• Entrepreneurs are initiators and leaders.
• Managers are responsible for managing employees and ensuring smooth operations.

Peculiar Characteristics of Managers

• Managers develop systems based on current industry practices.
• They solve organizational problems and refine policies.
• They provide solutions for routine activities.
• They focus on details and group cohesion to achieve group accomplishments.

Characteristics of Innovator Entrepreneurs

• They look at problems from different angles and develop solutions.
• They develop hypotheses based on current practices and make innovations using SWOT analysis.
• They prioritize results over means, have little tolerance for routine work.
• They capitalize on talented individuals opinions.

The Making of a Filipino Entrepreneur

• Colonization has slowed entrepreneurial development.
• Entrepreneurship is more than self-employment; it involves growth and management.

Challenges for Entrepreneurship

• New entrepreneurs should emulate successful entrepreneurs' values and character.
• Hard work, personal attention, integrity, emotional stability, and executive ability are essential.

Starting Points for Entrepreneurial Success:

• Start independently, explore the business environment, maintain control, have financial advisors, and seek professional advice.

Entrepreneurial Management Demands:

• Alertness to opportunities, endurance, flexibility, self-assurance, and research.

Profile of a Successful Entrepreneur

• Successful entrepreneurs are creators with ambition and an eye for opportunities.
• They desire independence, drive to succeed, determination, feedback mechanisms, and results-driven focus.

Philippine Economic Landscape

• Economic growth requires investment in physical and human capital.
• The government needs to clarify the private sector's role in investment.
• Poverty and population explosion hinder growth.

Factors Determining Economic Growth

• Filipino Values and Culture:
  • Love for imported products: Preference for foreign goods.
  • "Bahala Na" attitude: Leaving destiny to chance instead of acting decisively.
  • Crab mentality: Undermining others' success.
  • "Manana Habit": Procrastination.
  • Lack of value for time
  • "Hiya" (shame): Can drive better service but also lead to fraud.
  • Fiestas and social occasions: Spending savings on celebrations.
• Job Opportunities/Employment:
  • Insufficient opportunities and low wages.
  • Employment is vital for economic development.
  • Rural income is mainly for subsistence.
• Availability of Needed Capital:
  • Republic Act 6977 (Magna Carta for Small Enterprises) provides funds.
  • Republic Act 6810 (Magna Carta for Countryside and Barangay Business Enterprises) grants exemptions and incentives.

Entrepreneur and Socio-Economic Development

• Small and medium enterprises contribute to the economy.
• Entrepreneurs provide employment, pay taxes, offer new lifestyles, improve the capital base, empower people, and foster competition.

Entrepreneurial Skills and Competencies

• Entrepreneurial skills are abilities to establish and operate enterprises successfully.
• Entrepreneurial competencies are quality characteristics representing an entrepreneur's capability.
• Skills involve learning and adopting essential characteristics.

Managerial Skills for Entrepreneurs

• Planning and Conceptualization: Forecasting and controlling risks.
• Organizing Resources: Efficient allocation of people and materials.
• Directing and Motivating: Compensating and communicating with subordinates.
• Controlling: Implementing safeguards and monitoring progress.
• Managing Time: Scheduling activities efficiently.
• Adapting to the Environment: Keeping up with changes in technology and business.

Characteristics of an Entrepreneur

• Leadership and Management Abilities: Planning, organizing, directing, and controlling.
• Positive Risk-Takers: Enjoying challenges and making calculated decisions.
• Self-Confidence and Positive Outlook: Believing in their abilities and faith.
• Innovativeness and Forward-Looking: Creating new and better products.
• Natural Intelligence and Decision-Making Skills: Making effective decisions.

The Decision-Making Process

• Identify the problem: Analyze risks and organize relevant data.
• Gather data: Collect information related to the problem.
• Analyze data: Focus on timely, relevant information.
• Formulate solutions: Develop various alternatives.
• Select best alternative: Choose the option with minimal risks.
• Implement the alternative: Utilize group efforts and consult stakeholders.

Organizing the Business Enterprise

• Analyzing personal and social attitudes.
• Developing entrepreneurial studies for project feasibility.

Entrepreneurial Studies

• Evaluating management control and profitability.
• Analyzing the business environment to minimize failures.

Factors for New Entrepreneurs

• Know your product/service, analyze market potential, determine marketing strategy, know competitors, and continue.

Environmental Scanning

• Making profit while delivering customer satisfaction.

Factors for Business Location

• For small entrepreneurs:
  • Business Location: Convenient site with parking and transportation.
• Factors to consider:
  • Rent and space, lease terms, type of goods, income level of customers, sales volume, city ordinances, location.
• For small industrial plants:
  • Environmental Factors: Compliance with zoning and environmental laws.
• Factors to consider:
  • Land Area: Suitable size and shape, free from hazards.
  • Facilities for Expansion: Space for plant and parking.
  • Power and Utilities: Reliable and cost-effective power and water supply.
  • Building and Utilities: Compliance with codes and labor laws.
  • Plant Site Accessibility: Accessible to transportation.

SWOT Analysis

• Evaluate:
  • Product strength: technology, raw materials, skilled workers, capital, expertise.
  • Product weaknesses: quality, price, design, cost, supply/demand, management.
  • Market opportunities: product demand, poor market quality, government support, credit terms.
  • Treats to product profitability: competition, limited supply, labor unions, taxation, peace and order, power costs.
• Areas:
  • Management Team, Production Process, Marketing Program, Financial Management.

Identifying Business Opportunity

• Conceiving the business idea and technical feasibility.

Tips for Choosing a Business Name

• Easy to recall, pleasant, easy to pronounce/spell, related to product.

Organizing the Business Enterprise

• Develop entrepreneurial studies to determine project feasibility.

The Event Formation Process

• Change in life path, evaluate the desirability of the business concept, feasibility of implementation.

Basic Phases of a Business Plan:

• Management Structure, Marketing, Financial Management.

Why Create a Business Plan?

• Saves time and money, raises capital, operations guide, organizes thoughts.

Business Plan Components:

• Cover page, contents, executive summary, mission/vision/culture, company description, opportunity analysis, marketing plan, management/operations, financial analysis, funding request, exit strategy, appendices.

Business Plan Suggestions:

• Write for audience, show involvement, be clear, use data, consistent style, format, number items, present professionally.