INTRODUCTION TO ENTREPRENEURSHIP

MODULE

Bacolod City, Negros Occidental

 SALIENT FEATURES, IMPORTANCE OF
ENTREPRENEURSHIP, TYPES OF
ENTREPRENEURSHIP & ENTREPRENEURIAL
COMPETENCIES
MODULE 2

Bacolod City, Negros Occidental

 Entrepreneurship Q1-Module 2

SALIENT FEATURES OF ENTREPRENEURSHIP

Entrepreneurship is the process of running and managing a business venture. While there
are many entrepreneurs, only a few of them succeed. So, it is essential to understand the
salient features of entrepreneurship before starting your venture.

The salient features provide the aspiring entrepreneur with a better understanding of the
whole concept. They also act as the point of reference in determining whether a particular
business endeavor is operating within the realm of entrepreneurship.

In entrepreneurship, there are 5 primary salient features:

• Art of correct practices
• A wealth-creating venture
• Provides valuable products and services
• Managing self-owned enterprise
• A risk-taking venture

1. Art of Correct Practices

Entrepreneurship is an art and not a science thus, there is a constant change; it

continuously grows, develops, improves, and expands. As an art, it is closely
related to creativity that contributes to the enhancement of the enterprise.
Entrepreneurship education teaches how failure makes people more creative and
innovative. The current situation we are in gave birth to many opportunities. Food
businesses that used to be for dine-in purposes only evolved into food service
deliveries and DIY (Do IT Yourself) food kits
to name a few
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2. Wealth-creating venture

Entrepreneurship is operating within the concept of wealth creation, rather than

profit generation. Wealth is created when the benefits derived by the owner in
providing goods and services to the customers are abundant enough to cover the
costs incurred by the business.

Wealth is created when the value of the business has increased abundantly and
the life of the entrepreneur and community has improved considerably.

3. Provides Valuable Goods and Services

Entrepreneurship creates economic wealth by creating and providing valuable

products and services. These products and services must be of great value to
create wealth. Entrepreneurs must know how to convince their target customers
that the product or service they offer will give them more benefits than what they
pay for.

Products or services that are highly satisfactory from the customer’s perspective
will be a wealth-creating venture and operates within the concept of
entrepreneurship.

4. Self-managed Enterprise

Entrepreneurs should themselves manage the day-to-day tasks to be qualified as

a self-owned enterprise and to be considered as entrepreneurs operating within
the concept of entrepreneurship. Businesses that are being managed by other
people on behalf of the owner do not fall under the sphere of entrepreneurship.
Such business is considered “intrapreneurship”.
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5. Risk-taking venture

Once the entrepreneurial venture is born because of new and innovative ideas,
risks come simultaneously with the venture. The risk in entrepreneurship is called
“business risk”.

The approach to handling business risks differentiates an entrepreneur from an

ordinary business person. Usually, the ordinary business person does not
understand the nature of entrepreneurship and business risks which may lead to
the failure of his/her business enterprise.

Other salient features that entrepreneurs need to understand before taking

their entrepreneurial journey:

• Vision. Aspiring entrepreneurs must set a vision first. The vision must be shared
with the co-founders, staff, and other members of the organization. A vision should
be clearly defined and must give direction and serves as a motivation for the entire
organization.

• Innovation. Innovation is crucial to entrepreneurial success. It is important to

come up with new and innovative ideas. Aspiring entrepreneurs must know how to
answer why would a customer will switch to your product or service when he/she
is already using the same from an existing brand. It is essential that the idea may
be added with a new feature or benefit, and make it more interesting, making the
customer feel the need to purchase the product.

• Human Resource. Another essential feature of entrepreneurship is building a

formidable and credible management team. Aspiring entrepreneurs must know
how to handpick the right people for their organization.
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IMPORTANCE OF ENTREPRENEURSHIP

Aspiring entrepreneurs must have a clear understanding of the impact of

entrepreneurship on the lives of the people, community, and economy.

The contributions of entrepreneurship cannot be specifically delineated from one party to

the other. Once the life of the entrepreneur and people is benefitted, the community and
the local economy where entrepreneurship is practiced benefit as well.

Contributions of
Entrepreneurship

People Community Economy

In the given diagram, the first party to receive the benefits of entrepreneurship is the
people. The benefits received by the people are transferred to the community where the
entrepreneurial venture is located. Then these are transferred to the economy and flowed
back to the people and the community.
When the economy grows on account of entrepreneurship, the concomitant effects of
development and growth are returned by the government to the people and community.
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TYPES OF ENTREPRENEURSHIP

All forms of entrepreneurship are essential and complementary forces of economic

development.

1. Small Business

The Small Business Administration (SBA) says that more than 99% of all U.S. businesses
are considered small businesses, and a majority of them are entrepreneurial ventures.
These could be anything from a restaurant to a retail store to a local service provider.
They typically don’t have any intention of becoming a chain or franchise. These are the
pizza places, dry cleaners, daycares, and self-employed individuals. Most small business
entrepreneurs use their own money to get things started and only make money if they are
successful in their venture.

2. Scalable Startups

A scalable startup attempts to grow quickly and become a profitable company. While less
common than small businesses, these startups tend to gain a lot of attention when they
become successful. They typically start in an attic, a garage, a dorm room, or a study
room on campus, as an idea that’s being tossed around. These small-scale concepts end
up gaining investors which allows them to grow and scale up. This is what most folks think
of when they hear “startup” or “entrepreneur” and get visions of Silicon Valley tech
companies.

3. Intrapreneurship

Think of a company like Alphabet (Google) which owns several other companies, but has
also started a few of their own. There are times when entrepreneurs work within a larger
company as an employee, but see potential to spin off new products or services that take
on a life of their own. These intrapreneurs utilize an entrepreneurial mindset to employ
the resources their current employer has available to them. Thinking outside the box, they
continue to solve potential problems for current and future
 Entrepreneurship Q1-Module 2

customers. This model allows entrepreneurs the opportunity to hit the ground running
thanks to support from a larger backer.

4. Social Entrepreneurship

Human-created issues sometimes call for innovative community-based solutions. Social

entrepreneurs seek to create positive change with their actions. By launching an initiative
or non-profit organization, whose primary purpose is to help people and not make money,
these individuals strive to be the change they want to see in the world. Some topics these
organizations focus on include racial justice, environmental conservation, or serving
underserved communities in one way or another.

5. Large Company Entrepreneurship

When an existing larger company wants to offer more services, it comes under large
company entrepreneurship. This is for professionals who know how to manage a large
company and get maximum growth. They play with the innovation and test how they
perform. You will need a big team to manage a large company. Want some examples of
a large company? See Amazon, Apple, Microsoft, etc.

6. Innovative Entrepreneurship

While there is no doubt that every entrepreneur is an innovator,

innovative entrepreneurs are those who always come up with new ideas. They always
seek ideas and build them in reality. They know how to stand in the crowd with innovation.
Steve Jobs is an example of an innovative entrepreneur.
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ENTREPRENEURIAL SKILLS AND COMPETENCIES

COMMON COMPETENCIES
In starting a business, the following are considered entrepreneurial competencies:
1. Specific Goal Setting. Entrepreneurs should be motivated to set goals, particularly
business growth objectives, which have been found to increase firm growth resulting in firm
performance and innovation.
2. Self-Efficacy. Entrepreneurs must believe in their ability or self-confidence. If
entrepreneurs have high self-efficacy, there is a strong relationship between this motivation
and the firm high increase in growth.
3. Layers of Competency. Entrepreneurs should know the group of attributes, some of which
apply to all entrepreneurs, while others are occupation and industry-specific.
4. Need for Achievement. Entrepreneurs must have a high need for achievement and take
responsibility for outcomes. Engage in activities that have a moderate degree of
consequences and require skills and effort.
5. Ambition. Entrepreneurs must be persistent, motivated, and persevere in the face of
situational challenges.
6. Willingness to Learn. Entrepreneurs should have a strong willingness to learn and often
pursue opportunities to acquire new skills and competencies.
7. Strong Initiative. Entrepreneurs must have high initiative and are often driven to work
hard.
8. Adaptability and Flexibility. Entrepreneurs must learn how to be highly flexible and
adaptable, often dealing very well with a unique ability to choose actions even without all the
necessary information.
9. Willingness to Take Risks. Entrepreneurs are willing to take the consequences and
identify and calculate risks.
10. Interpersonal Skills. Entrepreneurs with strong interpersonal skills, work well with
people from different backgrounds.
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INDUSTRY-WIDE AND WORK COMPETENCIES

1. Networking/Collaboration. The ability to establish professional relationships. This skill

will help entrepreneurs negotiate with competitors, suppliers, and potential partners.
2. Creative and Critical Thinking. These skills will help entrepreneurs generate innovative
solutions and use relevant information to understand the “greater picture”.
3. Organizing. Entrepreneurs plan and prioritize work to ensure time is managed effectively.
4. Planning. Entrepreneurs must be specific about the direction of their business venture and
the set of strategies they will use to achieve both short-term and long-term goals and
objectives.
5. Business Principles. Entrepreneurs must understand the basic principles of business.
Market knowledge, economic principles, and ethical practices.
6. Computer Competency. Entrepreneurs must be proficient in the use of basic computer
programs so that he/she know how to communicate and prepare documents electronically.
7. Workplace Competencies. The application of knowledge, skills, attitude, values, and
behaviors in the workplace.
8. Innovation and Creation. Entrepreneurs must apply their creativity to the formulation of
inventive systems and products.
9. Marketing. Entrepreneurs are competent in executing strategies for promoting their
products and establishing customer relationships. They conduct market analysis, set pricing
objectives, and customer objections into sales acceptance.
10. Business Operations. Entrepreneurs perform business operations that can carry out
daily operations, such as personnel management, inventory, and control.
11. Risk Assessment and Management. Entrepreneurs can handle risk management and
can take legal action. They must keep themselves abreast of the new business laws and
regulations to protect their businesses.
12. Financial Management. Entrepreneurs are knowledgeable in evaluating financial needs,
determining risks, and identifying sources of funds.
 Entrepreneurship Q1-Module 2

SKILLS
Skills are considered personal abilities to do something well. They are acquired and
developed by a person through constant and correct practices. They are clear manifestations
of the abilities of a person to carry out complex tasks.
Kind of skills that an aspiring entrepreneur must possess:
1. Cognitive Skill
- Refers to the mental ability of the entrepreneur to learn new things, as well as to
generate new ideas.
The cognitive skills of an entrepreneur include the following:
o Ability to understand written materials
o Ability to learn new and apply new information
o Ability to solve problems systematically
o Ability to create new ideas
o Ability to innovate new products, procedures, and methods

2. Problem-Solving Skill
- Problems are common in the life of an entrepreneur and whatever the type
or size of the problem, the entrepreneur must know how to face it, solve it,
and make a sound decision.
To resolve the (business) problem, the scientific are as follows:
o Define the real problem
o Gather information about the problem
o Formulate alternative solutions
o Evaluate alternative solutions
o Implement the optimal solution
o Evaluate the decision

3. Technical Skills
- Now, that we are in the age of advanced information technology, entrepreneurs
must have equipped themselves with technical skills. The technical skills of
entrepreneurs should relate to their knowledge and proficiency in a specialized
field.
The technical skills of an (aspiring) entrepreneur include proficiency and ability in
the following areas:
1. Information technology
2. Feasibility study and business plan preparation
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4. Technical skills in writing

5. Marketing
6. Management and Finance

4. Interpersonal Skills
- It is about the relationship and interaction of the entrepreneur with the workers,
suppliers, suppliers, creditors, and (prospective) customers.
The interpersonal skills of an entrepreneur may include the following:
o Verbal communication skill
o Non-verbal communication skill
o Listening skill
o Leading skill
o Negotiation skill

5. Core Competencies
- An aspiring entrepreneur should fully understand and apply the concepts and
principles of entrepreneurship.
The entrepreneurial core competency is a combination of entrepreneurial
concepts and principles as well as traits and skills that provide and become the
ultimate source of competitive advantage for the entrepreneur.
Competitive advantage pertains to the strategic position and conditions of the
entrepreneurial venture that:
o Provide the necessary attributes to outperform competitors
o Distinguishes the venture from competitors
o Achieves superior performance in the industry
o Produces a product or develops production methods that can hardly be copied by
competitors

CHARACTERISTICS

Entrepreneurial Character Traits

The term character refers to the mark or attribute that distinguishes an entrepreneur from the
owner of an ordinary business.
Based on research conducted by the Small Enterprise Research and Development
Foundation (SERDF) of the Department of Trade and Industry (DTI), there are ten
entrepreneurial characters grouped into three major clusters as follows:
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1. Achievement Cluster

- Consists of entrepreneurial character traits that are directly related to the

entrepreneur’s desire to be an achiever in the field of entrepreneurship.
The entrepreneur ordinarily does not settle for mediocrity but aspires for quality.
Entrepreneurs are by nature achievers and they strive to achieve.
In this cluster the traits are;
a. Opportunity Seeker
b. Committed
c. Persistent
d. Risk-taker
e. Efficient and Quality Oriented

Opportunity Seeker

- A person who sees and acts on new business opportunities and, seizes unusual
opportunities to obtain financing, equipment, land, work, space, and assistance.
Committed
- Displays full commitment to the work or endeavor that S/he is undertaking. He/she
does not entertain negativism and skepticism.
Also, accepts full responsibility for what has been promised to the customers,
seeks customer satisfaction, and knows how to establish proper coordination with
and among workers, so that goods and services and delivered as promised.
Persistent
- Take repeated actions to overcome obstacles and make personal sacrifices to
complete the required task.
Risk-taker
- Successful entrepreneurs are risk-takers. No one can predict exactly what will
happen tomorrow. There are three types of risk-takers:

1. Aggressive risk taker. Not scared to take any risks in business

2. Moderate risk-taker. Calculative risk-taking. Analyzes the situation
before making any decision.
3. Conservative risk-taker. Not eager to take any kind of risk. Contented
with what he/she has in his/her business.
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Efficient and Quality-Oriented

- highly values the importance of efficiency and the concept of quality in all business
undertakings.
Also, performs the required tasks by the existing standards of excellence while striving
to do things better and faster with minimal cost.

2. Planning Cluster
- Set of characters common among successful entrepreneurs that supports the set
of characters in the achievement cluster.

The planning cluster includes the following traits:

1. Goal setter
2. Information seeker
3. Systematic in planning and monitoring
Goal-Setter
- The basic concept of planning is the setting of goals and objectives. Goal-
setter sets clear, specific, and well-defined short-term and long-term goals
and objectives.

Goals and objectives must be specific, measurable, achievable, realistic,

and time-bound.
Information seeker
- Constantly make decisions that will affect the operations of their business
ventures. Successful entrepreneurs have a sound basis when they make
decisions.
Systematic in Planning and Monitoring
- A successful and dynamic entrepreneur does not simply set goals and
objectives as well as monitor entrepreneurial activities in any way he/she
wants. He/she is following a systematic pattern and processes.
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3. Power Cluster
- A set of character traits that reflect the degree of interpersonal relations maintained
by successful entrepreneurs.
It defines how entrepreneurs project themselves to the business community. The
term power, in this case, pertains to the ability of the entrepreneur to maintain the
highest degree of interrelationship in the business community.
Power cluster has two-character traits:
1. Persuasive and positive networker
2. Self-confident
Persuasive and Positive Networker
- Adopts specific strategies that will influence and convince others while maintaining
the highest degree of respect and making use of positive contacts in the business
community to attain the goals and objectives set by the entrepreneur.

Self-Confidence
- Building strong self-confidence does not happen overnight. It is not also
spontaneous activity relative to a particular business endeavor.
• Do you have a strong belief in yourself?
• Do you have the skills and abilities to help you build strong self-confidence?
• Do you have the confidence to complete a difficult task on time?
• Do you have the necessary ability to meet the challenges of an
entrepreneurial venture?
• Are you confident in every decision you make?
• Do you trust yourself?