TLE 10

PERSONAL ENTREPENEURIAL COMPETENCIES

Creative – think outside the box

People who think outside the box, who strategize effective means to attract customers, and people who are risk takers
are called entrepreneurs. They turn ideas into profitable business. It is not only about creating a living but also making a
difference in the world we live in today.

Entrepreneurs are often characterized as innovators. They play a big role in the economy. They foresee what people
need at present or in the future.

Entrepreneurs came from the French word “entreprende, which means ”to undertake”.

1. Entrepreneurship is the drive for innovation and improvement. According to Joseph Schumpeter, it is considered
as a force of creative destruction through innovation. This leads to creating new and better ways in termas of
service and products, and the whole business as a whole.

2. In Entrepreneurship, money is not the main motivation in conducting the activity. Instead, success is the major
motivation, and money is just considered as a reward.

3. Entrepreneurship searches for change, responds to it and then exploits the change as an opportunity.

4. Entrepreneurship is the transformation of an innovation that will pave way to more sustainable enterprise that
generates value.

5. Entrepreneurship is the act of someone who has perceived what others did not see and would act upon his or
her own perception to address problems.

Entrepreneurs VS Businessperson

They are inventors in the process and pioneers in creating They start with unoriginal business concept, since they
a particular product. normally venture in franchising or retailing business that
has already been established
Their goal is to change the world through their invented Their main objective is to gain profit. This is the main
products or services. reason why they work with existing ideas.
They are more intuitive, they take higher risks in the They take calculated and manageable risks because they
realization that it would eventually make grand rewards cannot afford to suffer from bankruptcy.
in the future.
They play an active part in the process even with the For them, since everything is systematic, they always
littlest part of any business activity. have a flow or a hierarchy to follow.
They consider themselves as their major competitor. They are always after winning and beating their
They always have to outgrow themselves. competitors.
They see the world as a duty. It helps them from They see the world as an opportunity to make a living.
conceptualizing products or services.
They are like scientists who work in their own laboratory. They allot lesser time solving concerns because they
They need to conceptualize a product or service from work with existing ideas, which makes their actions more
scratch calculated and systematized.
Success for them is measured through the realization of For them, success is measured through profit gains or
their goal by finding solutions to processing concerns by through monetary purposes.
means of creating a products and services.
Entrepreneurship Creates Job Opportunities
- “Policies to foster entrepreneurship are essential job creation and economic growth.”
Since entrepreneurs would eventually hire more people for their business, it would give rise for more
opportunities for employment.

Entrepreneurship Provides New Products and Ideas

- If there would be no entrepreneurs, our world today would still be in stagnation. Entrepreneurs provide new
products, market ideas, and technology.

Entrepreneurship Gives Rise to Smaller Enterprise

- Through entrepreneurship, even the unexperienced person is provided with an opportunity to start a small
enterprise.

Entrepreneurship Improves the Standard of Living

- Entrepreneurs help people sustain their lifestyle by providing adequate goods and services for their consumption

Entrepreneurship Encourages Development through Research.

- There is always a need to conduct constant research for the success and realization of their goal for future
reference

Entrepreneurs play an important role in the economic development of a nation. They are considered as national assets
that have to be cultivated since their contribution towards employment generation is vital. They ensure brighter future
for the people. Moreover, they serve as an instrument to further improve the society’s standard of living.

FACTORS TO CONSIDER IN CHOOSING THE TYPE OF OWNERSHIP

1. Monetary Resources
 Cover the financial position of the person. If the investment funds of the person is low or limited, he or
she must choose a simple business structure like sole proprietorship or partnership. If the owner has
sufficient monetary resources, he or she can invest in a corporation type of business.

2. Business Management Preferences

 Include the person’s strengths and capabilities to manage the business. The extent to which he/she
wishes to have personal control and willingness for establishing a business with otherpeople shpuld be
considered.

3. Primary purpose of business venture

 This is to embrace the reason of establishing the business. Different purposes in business venture affects
the overall decision in selecting appropriate type of business.

Different types of business ownership:

a. Sole Proprietorship – considered as the simplest, easiest, and least expensive type of business to start with. It is
owned, run, and managed by a single person with the highest level of authority, which is called the sole
proprietor.

Advantages Disadvantages
It is easy to start and inexpensive. The capital is limited while the obligation is unlimited.
The income is managed solely. The managerial expertise is not ensured
The business secrets will remain confidential The expansion of the business is not guaranteed because
of the volume of the work
There is flexible business operation.
Transactions carry a little sophistication and formalities
 b. Partnership – involves two or more people who own and manage a single business. They usually agreed to
contain terms like specifying their roles in the business, dividing the profits earned, and resolving conflicts in the
business together.

Advantages Disadvantages
It is easy to establish Liability is unlimited
It entails a higher capital source Lack of harmony may lead to the closure of the business
Better managerial decisions are derived from each Transferability of shares is difficult without the approval
contribution. of the other partners.
The risk is shared between and among partners The life of the business is uncertain.

c. Corporation – The owners of the company are called shareholders. Individually, they enjoy most of the rights
and responsibilities that they are entitled with and can be legally liable for their actions.

Advantages Disadvantages
The personal assets of each owner are protected from It is more expensive to form compared to other types of
business debts and liabilities. ownership.
It has unlimited life that extends beyond the illness or It requires legal formality
death of the owners.
Transferring of ownership is facilitated through sale of The business is operated by the management team of a
stock corporation without any real oversight from the owners.
The management will not be affected when change of Double taxation means the corporation pays taxes from
ownership occurs its income and shareholders pay their taxes upon
received of dividends
The capital is easy to raise enough through the sale of
stocks and bonds.

d. Cooperative – form of business organization. It is not formed for the goal of making profit but to primarily
provide its members good and services at reasonable rates.

Advantages Disadvantages
It is owned and controlled by its members It demands longer decision-making process
It has a democratic control by sticking to the rule: one It needs members to participate for success.
member, one vote
It has a limited liability Proper and intensive record keeping is necessary
It is an open membership There is a possibility of conflict between members.
It is supported by the government. It focuses on serving
the society

e. Franchising – form of business that allows an individual or franchise to practice the existing business concept.

Advantages Disadvantages
The business concept is proven to be profitable The cost is higher
It does not require the franchise to be a marketing expert The franchising agreement restricts owners on how to run
the business.
Marketing and brand promotions are centralized The business is difficult to sell one’s franchised because it
needs approval from the franchisor.
The relationship from the supplier had already been The business is dependent on existing operation system.
established Innovativeness of franchise is sacrificed.
Training of the staff is part of the complete package for
the successful operation of the business.