Introduction to Entrepreneurship

Introduction to Entrepreneurship

• Entrepreneurship can be a difficult path with unexpected challenges and setbacks
• Previously, starting a business was hard with limited knowledge of product creation and raw material procurement
• Despite these difficulties, people continue to establish businesses to achieve personal goals and fulfill societal demands.
• Today there are numerous entrepreneurs globally because of the growth in opportunities.

The Role and Significance of Entrepreneurship in Society

• "Entrepreneur" originates from the French term "entreprendre," meaning "to undertake"
• In the Middle Ages, merchants and artisans traded goods and services for payment across kingdoms.
• These tradespeople were essential to the economy and specialized in crafts.
• Entrepreneurship has evolved to focus on creating, organizing, and operating new ventures for profit, involving financial risk.
• Entrepreneurs take risks to launch businesses, introducing new goods, services, or ideas for profit, often aiming to capture a specific market interest through innovation.
• Owning a business provides flexible hours, independent decision-making, and autonomy
• Curiosity and a desire to explore the unknown are vital for entrepreneurs
• Entrepreneurs must be ready for a journey involving risks, hard work, sacrifices, and possible setbacks.

Importance of Entrepreneurship in Society

• Entrepreneurship is essential for societal development by influencing the world with innovative ideas, goods, and jobs
• The five key roles of entrepreneurship are:
  • Employment Creation: Entrepreneurs create jobs, reducing unemployment and improving the economy
  • Economic Development: Entrepreneurial businesses contribute to economic growth through expansion, technology investment, and workforce enhancement.
  • Technological Advancement: Entrepreneurs introduce innovations that change lives, like the tech industry and the Internet have transformed communication and created jobs
  • Market Dynamics: New competition expands consumer choices, leading to better, cheaper products and services, motivating businesses to improve.
  • Socio-Cultural Changes: Entrepreneurship addresses social and cultural issues with innovative solutions, reducing the burden on governments and large corporations

Types of Entrepreneurship

• Agripreneurship
  • Involves producing and selling agricultural goods and inputs, including crop cultivation, aquaculture, and agro-bio products
  • Edita Aguinaldo Dacuycuy: A multi-awarded farmer from Ilocos Region, established an organic dragon fruit farm
  • Her business, Refmad-V Enterprise, received awards including Business Excellence and Best Business Company at the 2015 Golden Globe Annual Awards
• Buyer Entrepreneurship
  • Buyer Entrepreneurship involves using capital to acquire or merge established companies, which have a brand, customer base and revenue.
  • Tony Tan Caktiong: Known for acquiring brands like Greenwich, Chowking, Red Ribbon, and Mang Inasal and owning Jollibee
• Ecopreneurship
  • Ecopreneurship involves creating "green" businesses that aim to save the Earth while generating profit
  • Jamico Yco Jamlang: A chemical engineer and founder of The Bamboo Company, which addresses global issues through bamboo production.
• Imitator Entrepreneurship
  • Imitator Entrepreneurship involves copying or adapting existing successful business models
  • Bin Lin:. The co-founder and VP of Xiaomi, which copied Apple's iPhone design is an example of this
  • The company is now the third largest smartphone company in the world
• Intrapreneurship
  • Intrapreneurship involves acting like an entrepreneur inside a company, taking risks and innovating
  • Paul Buchheit: As Google's 23rd employee, he developed Gmail, which became a key part of Google
• Large Business Entrepreneurship
  • Large Business Entrepreneurship involves taking calculated risks to create new market offerings and remain competitive
  • Ernest Cua: The owner of Globe Telecom, leveraging its brand and partnerships to deliver financial services
• Scalable Startup Entrepreneurship
  • Scalable Startup Entrepreneurship involves launching a small company with intentions to quickly expand into a lucrative firm
  • Roland Navarro de Ros: The Founder and President of Kumu, a popular Filipino social app with millions of users and daily live streams
• Small Business Entrepreneurship
  • Small Business Entrepreneurship involves starting a small-scale business, often managed by one person
  • Nericel Bonus: A micropreneur who gained success selling thrift clothes online during the COVID-19 pandemic
  • Single-location restaurants and sari-sari stores are also examples of this
• Social Entrepreneurship
  • Social Entrepreneurship focuses on innovative solutions to social issues like poverty and education
  • Bryan Benitez McClelland:, who is an Environmental Consultant and President of Bambike is an example of this
  • Bambike manufactures bamboo bicycles and partners with GawadKalinga for social programs
• Technopreneurship
  • Technopreneurship: Solves business problems using technology
  • Diosdado Banatao: Developed key tech innovations and excelled in tech companies

Small, Medium, and Micro-sized Enterprises (SMME)

• SMMEs include businesses in industry, agribusiness, and services under single proprietorship, cooperative, partnership or corporation
• Their categorization depends on total assets inclusive of loans but exclusive of land:
  • Micro: Less than P50,000
  • Cottage: P50,001 to P500,000
  • Small: P500,001 to P5,000,000
  • Medium: P5,000,001 to P20,000,000

Forms of Business Ownership

• Determining business ownership is essential for entrepreneurs to understand rights and responsibilities
• Key considerations include:
  • Sole Proprietorship
    • Advantages: Easy to create/terminate, has ownership of rewards, flexibility, has reduced regulation and taxation
    • Disadvantages: Unlimited personal liability, limitations in capital, ends when the owner is deceased, limited skills and capabilities
  • Partnership
    • Advantages: Has pooled resources, ability to obtain capital, incentive for each partner, limited regulation and taxation
    • Disadvantages: Unlimited liability, business termination possible, difficult reconciling personal or business interests, has problems in share liquidation
  • Corporation
    • Advantages: Limited liability for stockholders, legal entity protected by law, ownership is transferrable, easy to obtain capital, provides employee benefits, voting rights
    • Disadvantages: Formal regulations, costly/time-consuming, separate taxation, loss of control
  • Cooperative
    • Advantages: Open/voluntary membership, democratic control, mandated education, cooperation among members, direct benefits, tax privileges
    • Disadvantages: Limited interest in shares, inequality of profit distribution, deviation from profit

Entrepreneurial Competencies and Motivation

• Entrepreneurship is now more accessible with confidence, dedication, and technological advancements.
• Successful entrepreneurs have specific skills, manage risks, and plan for contingencies
• Core competencies include:
  • Leadership: Demonstrates passion, vision, and mission to stakeholders
  • Articulate: Skilled in communication for sales, morale, conflict resolution, and negotiation
  • Sociable: Aligns organizational approach with employee characteristics
  • Adaptable: Decisive, passionate, and willing to change
  • Collaborative: Values contributions from all stakeholders
  • Multifaceted: Adaptable and skilled in sales, marketing, and management
  • Resilient: Learns from failure and seeks motivation
  • Proactive: Addresses problems before they arise
  • Innovative: Develops new market offerings
  • Risk-taker: Aware of risks and mitigates them
  • Creative: Explores new concepts
  • Passion: Is continuously motivated to achieve business goals

Motivation Theory

• Behavior has purpose and is driven to achieve specific objectives, entrepreneurial motivation drives engagement in entrepreneurial activities
• This includes taking risks, identifying opportunities, and pursuing innovation
• Two types of motivation:
  • Extrinsic: Uses rewards like money but fades when reward stops
  • Intrinsic:, driven by passion
    • Achievement motive - Strong desire to succeed
    • Power motive - Desire for control and influence
    • Affiliation motive - Focus on emotional connections