CHAPTER 1 – UNDERSTANDING

ENTREPRENEURSHIP
WEEK 1 - 2
CONTENT STANDARDS LEARNING
COMPETENCIES
The learner demonstrates
understanding of key
 Discuss the relevance of the course
concepts, underlying
principles, and core  Explore job opportunities for
competencies in Entrepreneurship as a career
Entrepreneurship.
WHAT COMES TO
YOUR MIND…
•When you hear the words
entrepreneur and
entrepreneurship?

•Do you imagine yourself

becoming an entrepreneur
and managing your own
business in the future?
10 SUCCESSFUL
ENTREPRENEURS WHO ARE
COLLEGE DROPOUT
o BILL GATES – Microsoft
o MICHAEL DELL – Dell Computers
o STEVE JOBS – Apple founder
o MARK ZUCKERBERG – Facebook
o DANIEL EK – Spotify
o TRAVIS KALANICK – UBER
o EVAN SPIEGAL – Snapchat
o RALPH LAUREN – Ralph Lauren Corp.
o HENRY FORD – Ford Motors
o WALT DISNEY – Walt Disney
  Henry Sy (Shoe Mart)
 Tony Tan Caktiong (Jollibee
The Top 5 Most Foods)
Successful  Socorro Ramos (National Book
Entrepreneurs in the Store)
Philippines  John Gokongwei Jr. (J.G.
Holdings)
 Mariano Que (Mercury Drug)
 Henry Sy (Shoe Mart)
Net Worth: US$19 billion

•Shortly after, World War II broke out and ruined

the family business. On the other hand, Sy
continued pursuing his entrepreneurial interests by
selling worn military combat boots and other items
to American soldiers. This is where the name “Shoe
Mart” originates: it was Manila’s first shoe store
that time. Despite being unable to find vendors
that could make the shoes he wanted, Sy persisted.

•Sy, who died in 2019 at the age of 94, was survived

by his family. Sy’s legacy lives on today in his many
SM malls and other acquired businesses. As a
result, he was one of the world’s wealthiest men.
 John Gokongwei Jr. (J.G.
Holdings)
Net Worth: USD$4.8
billion.

•When his father died, the family fortune

evaporated, and he had to support his family by
peddling goods from his bicycle in the streets of
Cebu. He then began to trade by boat and truck
until he began importing from the United States.

•Seeing that low trade margins would always limit

his income, he switched focus to manufacturing. He
borrowed PHP 500,000 from Chinabank to launch a
maize milling company that is now known as
Universal Corn Products.

•His family is now one of the most successful

Filipino business families and owns the Robina Land
Corporation, which owns Robinsons Supermarkets
and Department Stores, as well as the commercial
airline Cebu Pacific.
Socorro Ramos (National Book Store)
Net Worth: USD$3.1 billion

•Socorro Ramos began her career in

publishing and retail as a salesgirl in a
bookshop. With a capital of PHP200, she
and her husband launched the National
Book Store in Escolta at the age of 19,
selling books and school supplies to
children.

•The National Book Store now has

around 3,000 employees. At the age of
98, Socorro Ramos is worth an
estimated USD3.1 billion, making her
one of the country’s richest people.USD
3.1
Tony Tan Caktiong
(Jollibee Foods)
Net Worth: USD$1.2
billion
He bought an ice cream shop in 1975, but
owing to low sales, he decided to add other
items such as fried chicken, fries, and
burgers. Customers came to the store to
buy his products after word spread in his
area.
Caktiong was able to expand across the
country after embracing the fast-food
business model, growing his humble
restaurant into one of the Philippines’ most
successful businesses.
Furthermore, by establishing a franchise, he
has been able to break into the
international market. With over 2,500
outlets in the Philippines and locations in
the United States, China, Saudi Arabia,
Vietnam, Singapore, Brunei and the UK,
Jollibee is a fast-food giant.
Mariano Que (Mercury Drug)
Net Worth: USD$1.1 billion

•Following WWII, Mariano Que discovered

a commercial opportunity. Que, who had
worked at a local drugstore before the
war, opened his own drugstore when he
noticed the demand for sulfa, a type of
antibiotic used to treat bacterial illnesses.

•He began selling good-quality sulfa for a

low price. As a result, he was able to
expand his clientele. In 1945, he founded
the Mercury Drug chain of pharmacies.
ACTIVITY #1

• CHARACTERISTICS
• COMPETENCIES
• SKILLS

SUCCESSFUL
ENTREPRENEURS
 The outbreak of COVID-19 pandemic led
to closure of various business establishments that
resulted to job termination of many employees.
Plenty of workers became unemployed
I. Overview and waited for the assistance from the
government.
However, there were also plenty of people
including the terminated employees who were
able to look for their livelihood during the
pandemic.
Most of these people were able to sustain
their needs because of their entrepreneurial mind.
 Thus, to be able to survive and to keep pace with
this hard and challenging world while facing speed of
technological advancements, unexplored doors of various
new business opportunities must be opened – and that is
I. Overview the role of an entrepreneur.

Entrepreneurship, being known to humankind as one of

the most powerful economic force, empowers individuals
to seek opportunity where others find difficult problems.

Entrepreneurship is the symbol of achievement and

business tenacity. It is a fundamental source of change in
all facets of society and a key to economic development.
II. Objectives
• Understand the relevance of
entrepreneurship (TLE_ICTAN11/12PC-Ia-
1);
• Understand the concept of entrepreneur
and entrepreneurship
(TLE_ICTAN11/12PC-Ia-1);
• Identify the factors affecting
entrepreneurship (TLE_ICTAN11/12PC-Ia-
1); and
• Explain the core competencies in
entrepreneurship (TLE_ICTAN11/12PC-Ia-
1)
 III. Vocabulary List
• ENTREPRENEUR - Derived from the French word, entreprendre, which means “to
undertake” (Pahuja, 2015). This refers to an individual or groups of individuals that act
independently, or as part of a corporate system, that create new organizations or
initiate renewal or innovation within an existing one.
In other book, it refers to those innovators who “undertake” the risk of new
enterprises and generate new ideas to create unique and potentially profitable
solutions to modern-day problems.
• ENTREPRENEURSHIP - An economic activity of an entrepreneur who is always in
search of something new to exploit new ideas into gainful opportunities by accepting
the risk and uncertainty of the enterprise.
It covers the occurrence of organizational innovation or creation of new products that
occurs inside or outside the existing organization (Cuervo, et al., n.d.).
• ENTERPRISE - A business or an establishment created by an entrepreneur.
• INTRAPRENEUR - these are usually employees within a company who are assigned
a special idea or project and are instructed to develop the project like an entrepreneur
would.
• INTRAPRENEURSHIP - Activities that occurs within a firm or large organization which
includes corporate venturing, when large entities spin off organizations.
 Direction: Carefully read the statement

IV. Pre-Test below. Place a T on the line if you think the

statement is TRUE and place an F on the line
if the statement is FALSE.
___ 1. Entrepreneurship is a complex
phenomenon which is influenced by the
interplay of a wide variety of factors that
include personality, internal and
environmental factors.
___ 2. Entrepreneurship involves creation
and use of innovative ideas, maximization of
output from given resources, and
development of managerial skills.
___ 3. An entrepreneur is a high risk-taker.
___ 4. To be an entrepreneur, one needs
money only.
___ 5. Entrepreneurship, like leaders, are
born, not made.
 Direction: Carefully read the statement

IV. Pre-Test below. Place a T on the line if you think the

statement is TRUE and place an F on the line
if the statement is FALSE.
T
___ 1. Entrepreneurship is a complex
phenomenon which is influenced by the
interplay of a wide variety of factors that
include personality, internal and
environmental
T factors.
___ 2. Entrepreneurship involves creation
and use of innovative ideas, maximization of
output from given resources, and
development
F of managerial skills.
___
F 3. An entrepreneur is a high risk-taker.
___ 4. To be an entrepreneur, one needs
F
money only.
___ 5. Entrepreneurship, like leaders, are
born, not made.
NATURE AND
CONCEPTS
• ENTREPRENEURS
Derived from the French words entre – to
enter – and prendre – to take.
Someone who recognizes opportunities
starts a new business venture,, organizes
resources to take advantage of the
opportunity, creates something new that
will provide VALUE to customers, and
willingly accepts the financial risks
associated with the business venture.(UP
ISSI, 2012)
Entrepreneurs are innovators, willing to
take risks and generate new ideas to
create unique and potentially profitable
solutions to modern-day problems.
• ENTREPRENEURSHIP
 Entrepreneurship is the process of creating
incremental wealth through the efforts of individuals
who find new and useful ways to employ resources
that lead to the creation of new products, services, or
technologies (IP ISSI, 2012)

 It also refers to economic activity of a person or an

organization who starts, manages and assumes the
risk of business enterprise.

 Entrepreneurship ranges in scale from solo projects

(even involving the part-time entrepreneur) to major
undertakings that create many job opportunities (De
Guzman, 2018).

 Entrepreneurship employs what Joseph Schumpeter

called the “gale of creative destruction” to replace
wholly or partly inferior innovation across markets
and industries. This destruction simultaneously
creates new products and new business models (De
Guzman, 2018).
 The three primary reasons that people become
entrepreneurs and start their own firms are:

1. Desire to be their own boss

Why Become an
Entrepreneur? 2. Desire to pursue their own ideas/ Gain Self-
satisfaction

3. Financial rewards
REWARDS OF ENTREPRENEURSHIP

FINANCIAL REWARD (MAKE MONEY)

BE YOUR OWN BOSS GAIN SELF-SATISFACTION
You give yourself the chance to
be financially independent. You
make the amount of money you Who wouldn’t want to be the Entrepreneurship can be very
boss? It is easy to be rewarding, both financially (make
work for. In entrepreneurship, money) and personally (own boss).
most of the time, the money overwhelmed with all the
Self-satisfaction may come in a lot of
even works for you. benefits of being your own boss. forms, be it through the profits
You just have to be mindful that gained, through helping employees
with the privileges also come the earn money, through serving the
responsibilities. community, or through simply seeing
an opportunity turn into reality via
entrepreneurial actions.
 1. It is an art of correct
practices.
2. It is a wealth-creating
venture.
SALIENT FEATURES OF
ENTREPRENEURSHIP
3. It provides valuable goods
and services.
4. It entails opening and
managing the self-owned
enterprises.
5. It is a risk-taking venture.
 Entrepreneurship is an art and not a science. It is not
governed by fixed and absolute rules, whereas science is.

As an art, entrepreneurship is dynamic, when economic

activity changes, the political, social and entrepreneurial
activities will eventually change.
1.
ENTREPRENEURS As an art, it is closely related to creativity. There is a
HIP IS AN ART OF constant change or evolution that contributes towards the
enhancement of the enterprise.
CORRECT
PRACTICES This aspects differentiates an entrepreneur from an
ordinary small businessperson. An entrepreneur
transforms feasible new ideas into an entrepreneurial
venture, while an ordinary small businessperson only
builds upon existing ideas to gain immediate earnings from
his/her business.
 In most instances, ordinary small businessperson equate
wealth with the term profit. In accounting, profit
represents the excess income or revenue from the cost
and expenses.

Entrepreneurship, however, is operating within the

2. concept of wealth creation rather than profit generation.
ENTREPRENEURS
HIP IS A WEALTH- Wealth is defined as the abundance of money, property
or possession. The concept of abundance and not
CREATING accounting profit, is the very essence of wealth in
VENTURE entrepreneurial endeavor.

Wealth is created when the value of the business has

increased abundantly, and the life of its owner has
improved considerably. If not, then the business is being
managed and operated not within the framework of
entrepreneurship.
 The owner of the business, in most instances, is engaged in
the sale of goods and services. However, the mere act of
selling goods or providing services does not make a person
perform within the concept of entrepreneurship.

3. Entrepreneurship creates economic wealth by providing

goods and services to the consumers. These goods and
ENTREPRENEURS services must have a value in order to create wealth.
Otherwise they become wasted.
HIP PROVIDES
VALUABLE One essential principle in entrepreneurship then is “not to
GOODS AND sell waste to consumers but only valuable goods and
services”.
SERVICES
Valuable goods and services should highly satisfy the
target buyers in terms of quality and price. The
entrepreneur convinces the consumers that they gain
more benefits that what they pay for the goods and
services.
 This feature highlights two important elements:
(1) the concept of opening a self-owned
enterprise and (2) the concept of managing it.
4.
ENTREPRENEURS To be within the concept of entrepreneurship,
HIP ENTAILS the business must be opened and managed by
the owner.
OPENING AND
MANAGING SELF-
A business is considered a self-owned when the
OWNED person managing its daily activities is also its
ENTERPRISE owner.

Intrapreneurship – business is managed by

others for the benefits of the owners.
 Risk is inherent in an entrepreneurial venture.

The approach in handling business risks

differentiates an entrepreneur from an ordinary
5. businessperson.
ENTREPRENEURS
HIP IS A RISK- The risk in entrepreneurship is called business
risk.
TAKING VENTURE
An entrepreneur should face business risks
intelligently. He/she cannot eliminate something
ingrained in entrepreneurship instead he/she
must find ways to minimize the effects of risks.
Entrepreneurship and
ordinary small business
activity
 • Entrepreneurship is different from the
activities of small businesses.
NATURE • Entrepreneurship and the activities of
AND ordinary small businesses differ in the
following areas:
CONCEPT… • Motive in opening a business
• Perception of risk in the business
• Reactions to changes in the
environment
• View on competition
• Vision for development and
growth
• Horizon of business operation
• Sources of business funds
 • An entrepreneur starts a business
venture based on entrepreneurial
concepts and principles and the
aspirations to become successful.
He/she is constantly on the lookout
1. MOTIVE for new and fresh ideas which can
be found in the business
IN environment.

OPENING A • An owner of an ordinary small

BUSINESS business opens a business within
the primary goal of making it
his/her source of livelihood. The
business becomes the major
provider of the family for their
financial requirements.
 • The entrepreneur takes and
faces the business risk squarely.
He/she considers it inherent in
2. the business venture, prepare
the business for it, and finds
PERCEPTIO ways to minimize its effects.
N OF RISK
IN THE • The owner of an ordinary small
business, on the other hand,
BUSINESS believes that the business risk is
a limiting to the operation of the
business and must be avoided.
 • The entrepreneur reacts positively
to the changes in the environment
as it brings new ideas for
entrepreneurial opportunities.
3. REACTIONS
TO CHANGES • The owner of ordinary business,
on the other hand, remains
IN THE passive and static to changes in
ENVIRONMEN the environment where his
business operates. He usually
T believes that change in the
environment is not a plus factor to
the daily operations but rather a
source of negative consequences.
 • For the entrepreneur the presence of
competition is a sign of a healthy
economic environment. Competition
will undoubtedly force entrepreneurs
to continuously improve their present
products or services and be creative in
their endeavor.
4. VIEW ON
COMPETITIO • The owner of ordinary small business,
however, views competition as an
N unhealthy element in the business
environment and tries to avoid it. He is
uncomfortable working in a
competitive environment and strongly
discourages competition in the
business community.
 • The entrepreneur usually outlines
the course of his entrepreneurial
venture in terms of short-term,
medium-term, and long-term plans
of actions. He makes sure that the
mission and vision of his business is
5. VISION FOR clear.
DEVELOPMEN
T AND • The owner of ordinary small
business on the other hand, relies
GROWTH upon chance or luck to maintain the
status quo of his business. He is not
much concerned about its
development and growth as long as
he is satisfied with its earnings.
 • An entrepreneur thinks globally but acts
locally. He is primarily concerned with the
major economic events not only in the

6. local environment but also in the global

business market. The entrepreneur has a
strong notion that the business venture
HORIZON will be going out of the local market and
will soon face healthy competition in the
OF international market. The entrepreneur
has both local and global perspective.

BUSINESS • The owner of ordinary small business,

OPERATIO meanwhile, is centered only on the local
environment. He does not intend to

N participate in the global environment. In

other words, expansion has never been an
idea worth entertaining for the owner of
ordinary small business.
 7. SOURCES OF
BUSINESS FUNDS
• When the entrepreneur finds that the
proposed business endeavor is a wealth-
creating venture, he explores ways to
generate the much-needed funds both
internal and external sources.

• On the contrary, the owner of an

ordinary small business tends to limit
the funding of his business enterprise to
personal sources. Loans from external
sources can be a risky undertaking for
him.
 In Summary…

… knowing the differences between an

entrepreneur and an owner of ordinary small
business will help you assess yourself, if you
are an entrepreneur or a mere owner of
ordinary small business.
MISCONCEPTIONS ON
ENTREPRENEURSHIP
Entrepreneurship is romanticized in our culture, and it's easy to see
why: We live in a capitalistic society that values the creation of ideas,
the unlimited potential of business, and the prestige of attaining
wealth and power.

On top of that, we have entrepreneurial celebrities like Elon Musk and

Mark Zuckerberg inspiring countless waves of new entrepreneurs
striving to achieve the same level of success they did.

That is a good thing -- mostly: STARTUPS drive economic growth,

and the entrepreneurial journey is valuable in any future application.

However, too many young people (and people new to business

ownership) end up being in over their heads because they believe in
these common entrepreneurial misconceptions:
1. ENTREPRENEURS
ARE BORN TO LEAD
■ It may seem that some people were born natural
leaders, or were born with better traits to become
entrepreneurs, but in reality, entrepreneurs come in all
shapes and sizes, and it's possible to acquire the
necessary traits to become a successful entrepreneur no
matter how you started out.
■ Introverts, extroverts, "idea people" and grunt workers
have all equal stakes in business ownership and
development; anyone can be an entrepreneur, given the
right mindset and dedication.
2. ALL YOU NEED IS A
GREAT IDEA TO BE
SUCCESSFUL

■ Yes, a great idea is usually the

foundation of a profitable and
sustainable business but even the
best ideas can end up failing if
they aren’t properly supported.
■ Great ideas are fantastic, but
execution is by far more
important, even mediocre ideas
are profitable if executed properly.
■ Note that there are no million
ideas, just million executions.
3. ENTREPRENEURSHIP
APPLIES ONLY TO
SMALL BUSINESSES

Entrepreneurial concepts and principles do not

make any distinction as to the size of the business
venture.

The amount of the capital does not serve as a

reckoning ground for classifying whether the
venture is operating within the concept of
entrepreneurship or ordinary small business.

The concepts and principles of entrepreneurship

are applicable to all types of business regardless
of their size.
 4. ENTREPRENEURSHIP APPLIES MOSTLY
TO PERSONS WITH GOOD EDUCATIONAL
BACKGROUND IN BUSINESS COURSES

■ No body is born an entrepreneur. To become a successful entrepreneur,

you must know the basic concepts and principles of entrepreneurship
and apply them properly to your chosen business.

■ Although business courses may help you in the field of

entrepreneurship, it does not however, provide an assurance that you
will become a dynamic entrepreneur.

■ In reality, successful entrepreneurs come from all walks of life and

have different educational backgrounds. Studying in prominent
colleges or universities does not even guarantee you of becoming a
successful entrepreneur. It is your inner driving force that carries
you towards becoming a dynamic entrepreneur.
4. ENTREPRENEURSHIP APPLIES
ONLY TO A GOOD ECONOMY

■ An entrepreneur finds business opportunities in both

flourishing and distressed economies.
■ During a financial crackdown, big businesses usually adopt
to conservative approach in utilizing their resources. They
reduce their production output and hold on to their cash.
This will eventually reduce employment and congest the
flow of money in the economy.
■ While big businesses are contracting their production output
during such an event, small businesses, on the other hand,
increase their output. Even during a financial crackdown,
new ideas can be created, and new business opportunities
can be identified.
5. YOU'LL HAVE Many people are drawn to the idea of
entrepreneurship because of the potential
UNLIMITED freedom it brings. It's true that you'll be the
one setting most of the rules. You can
FREEDOM. abolish the 9-5 workday if you want, enable
remote work options, dress casually, and
declare your own vacations

Just don't forget that you're also responsible

for making this business profitable.
Oftentimes, that means making tremendous
personal sacrifices, working long hours,
and getting stuck at the office far longer
than you'd like.
 6. ENTREPRENEURSHIP IS
SIMPLY OPENING A SMALL
BUSINESS

■ Entrepreneurship does not merely

mean opening a small business. This
is simply the first step in actualizing
the entrepreneurial venture.

■ Entrepreneurship does not start and

end with opening a small business. It
is a long, continuing process.
 FOUR PRIMARY
CHARACTERISTIC
S OF SUCCESSFUL
ENTREPRENEURS

1-46
• PASSION FOR THE BUSINESS
• The number one characteristic shared by
successful entrepreneurs is a passion for the
business.
• This passion typically stems from the
entrepreneur’s belief that the business will
positively influence people’s lives.
• PRODUCT/CUSTOMER FOCUS
• A second defining characteristic of successful
entrepreneurs is product/customer focus.
• An entrepreneur’s keen focus on products and
customers typically stems from the fact that
most entrepreneurs are, at heart, craftspeople.

1-47
• TENACITY DESPITE FAILURE
• Because entrepreneurs are
typically trying something new,
the failure rate is naturally high.
• A defining characteristic for
successful entrepreneurs’ is their
ability to persevere through
setbacks and failures.
• EXECUTION INTELLIGENCE
• The ability to fashion a solid
business idea into a viable
business is a key characteristic of
successful entrepreneurs.

1-48