INSTRUCTIONAL MODULE IN SHS ENTREP

ENTREPRENEURSHIP
WEEK 2

TOPIC/S: CHAPTER 1: A Perspective on Entrepreneurship

1. Entrepreneurship and Economic Development
2. What is Entrepreneurship
3. The is Entrepreneur’s Task
4. Entrepreneurship and Innovation
5. New Ventures and Long-Term Enterprises
6. Rewards for Successful Entrepreneurship
7. The Entrepreneur’s Predicament
8. Entrepreneurship and Business Size

OBJECTIVES/ LEARNING OUTCOMES:

At the end of this module, the students shall be able to:
1. describe the real concept of Entrepreneurship;
2. explain the role of entrepreneurs in the economic development; and
3. provide students an in-depth idea about the entrepreneurs and
entrepreneur’s responsibilities;

DISCUSSION:
A PERSPECTIVE ON ENTREPRENEURSHIP

ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT

Economic development - is a scheme aim at improving the living standards of
the nation’s citizenry. To achieve economic development goals, proper
management of the following elements is necessary.
1. Human resources
2. Natural resources
3. Capital formation
4. Technology

WHAT IS ENTREPRENEURSHIP?
Entrepreneurship refers to the economic activity of a person who starts,
manages, and assumes the risk of a business enterprise.
Entrepreneur – the person who undertakes entrepreneurial activities.

Entrepreneur’s Problem at hand Entrepreneur’s action

concern
1. Identifying an 1. High income 2. Establish a high
economic need families are not standard school
satisfied with for high school
the services students.
provided by
high schools in
the area.
3. Assembling 4. Resources must 2. Acquire funds,
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 resources be made hire people
required available construct
buildings, and
the like

5. Assuming risk 3. Venture must 4. Prepare project

be made. study,
advertise,
maintain good
relationship with
employees and
customers, and
among others.

THE ENTREPRENEUR’S TASK

If all the requirements in a capitalist economy are in place, the entrepreneur can
assume his assigned role in the development of the economy or the business
itself. This is made possible because the surviving enterprises are responsible for
providing the following.
1. Products and services for customers and producers.
2. Employment
3. Taxes
4. Demand for suppliers’ products and services
5. Training facilities for future entrepreneurs.

The Entrepreneur’s Task

In the attempt to make profits, the entrepreneur performs the following specific
functions:
1. To supply the necessary capital
2. To organize production by buying and combining inputs like
materials and labour.
3. To decide on the rate of output, in the light of his expectation about
demand;
4. To bear the risk inherent to the venture.

ENTREPRENEURSHIP AND INNOVATION

The freedom of competition afforded by the capitalist economy serves to drive the
entrepreneur to innovate and get ahead of his competitors lest he is driven out
of the market. Buyers of commodities have a tendency to patronize innovative
offerings of any kind and if one wants patronage, he, must remember this
innovation.

Innovation - may be defined as the introduction of a new method, procedure,

custom, device, and among others. Innovation could be any of the following.

1. A new product;
2. A new process of production;
3. The substitution of a cheaper material in an unaltered product;

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4. The reorganization of production, internal function, or distribution
arrangement leading to increased efficiency, better support for a
given product, or lower cost; or
5. An 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;
1. Invention – which refers to the discovery or devising of new
products and processes;
2. Development – which refers to the process by which the ideas and
principle generated from the stage of invention are embodied in
concrete; and
3. Innovation – which refers to the actual introduction of anew
products or process.

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 if he is to
recoup the cost of opening a new venture and take advantage of the
opportunities presented by a mature business.
The transition from a new venture to a successful long-term enterprise consists of
at least four major stages. The stages are as follows:

1. The prestart – up stage happens when the entrepreneur starts to question

the feasibility of an idea, product, or service. He seeks answers to question
regarding potential markets, production, and financing. This is a very
important stage that the entrepreneur must consider.
2. In the start –up stage, the following activities are undertaken:
a. Formation of the business
b. Generation of necessary capital;
c. Purchase of facilities and equipment;
d. Constructing prototype products; and
e. Testing the market
3. The early growth stage follows after establishing feasibility. Activities will
be on a small scale, i.e., selling to limited markets with limited resources. If
losses occur, it will naturally be limited also. If the enterprise is successful at
this stage, the option to move to the next stage can be exercised.
4. The latte growth stage is the final stage before the new venture matures
into a stable enterprise. This is when management is structured, long term
financing is established, and facilities planning are undertaken. This is also
the stage where the skills of the entrepreneur are less needed. Instead, the
skilled manager begins to take over.

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 a
commodity” consist of land, labour, and capital. To make them work, however,
a fourth factor becomes necessary and this is the entrepreneur.

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 1. When the land is used in production activities, the owners of land are paid
compensation called ´rent. The term rent refers specifically to the price
paid per unit volume of time for the services of durable goods, which, most
often, refers to land or buildings.
2. For the efforts of the laborer, they are paid wages or salaries. Wages
may be determined on a piece –rate basis, while salary is based on time
rate.
3. Interest is the compensation paid to owners of invested capital.
4. When all the factors of production are properly compensated, whatever is
left as profits are regarded as income and they accrue to the account of the
entrepreneur.

ORIGINS OF ENTREPRENEURSHIP

In the Middle Ages, entrepreneurs were described either as actor or the managers
of large production project using resources. Those people were called CLERICS.
In the 17th century RICHARD CANTILLON, introduced the term entrepreneurship.
He also considered as the father of ENTREPRENEURSHIP.

JEAN BAPTISTE SAY – added to CANTILLON’S definition by including idea that

entrepreneurs had to be leaders.

ADAM SMITH, DAVID RICARDO AND JOHN STUART MILL – british economist briefly
touched on the concept of entrepreneurship, broadly referring to the English term
as business management - activities associated within a company.

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. In the creation of a new venture, the entrepreneur may be successful in
offering innovative products or services.

ENTREPRENEURSHIP AND SMALL BUSINESS SIZE

To many people, entrepreneurship means running a small business. New business

ventures, however, can also be undertaken on a large scale. Both small and large
businesses are confronted by problems that are entrepreneurial in nature.
To effectively compete, business of whatever size must adopt innovative
approaches to its activities. Examples of innovations are the following:

1. Offering business services during Sundays and holidays

2. Manufacture and sale of new products; and
3. Selling on a deferred payment scheme

SEVERAL FACTORS OF ENTREPRENEURSHIP

1. IDEA – is simply something an entrepreneur has already conceptualized or

imagine.

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 2. RAW MATERIALS – the basic inputs.
3. CAPITAL – refers to the buildings, machinery, equipment, and tools.
4. LABORER’S – are people directly responsible in the production needed.
5. PLANT – refers to the production
6. FINISHED PRODUCT - these are inputs that transformed into outputs
7. MARKET – is simply the buyers and users interact
8. CUSTOMER’S - people who buy product.
9. CONSUMERS OR END-USERS – people who use the product

CHARACTERISTICS OF ENTREPRENEUR

1. Drive – self –motivated. If he fails in his first attempt, he makes another

attempt.
2. THINKING ABILITY – entrepreneur job involves solving problems and making
decisions. Then if he finds the correct solutions to problems and makes
decisions that are implemented, he comes to realizing his goals.
3. ABILITY TO COMMUNICATE – communication is a very important
characteristics of an entrepreneur.
4. TECHNICAL KNOWLEDGE - when an entrepreneur performs certain job.
5. SELF-CONFIDENT – a person’s belief in his ability leads to actual
performance and eventual success.
6. Entrepreneurs are known to fall in love with all of the above.
7. NEED FOR LUCK
8. STRONG RELATIONSHIP

IMPORTANT ENTREPRENEUR TRAITS

1. SELF-AWARENESS 6. EXPERIENCE
2. SELF-MOTIVATION 7. DRIVE
3. COURAGE 8. INNOVATION
4. CONFIDENCE 9. VISION
5. PATIENCE 10. HARD WORK

References:
1. Fajardo, Feliciano., Entrepreneurship, Manila: National Bookstore, 1994
2. Lao, Felix., Marketing Management, Manila, Rex Publishing Co., 1998
3. Robert G. Medina., Entrepreneurship and Small Business Management,
Manila:Rex Book Store2010
4. [Link]

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