PRELIM WEEK

Prelim Week Exam

Unit 1

Concept of Entrepreneurship

Learning Objectives

These units on the Concepts of Entrepreneurship shall help the students to:

1. Define entrepreneurship in the context of small and medium-

scale industries
2. identify the entrepreneurial competencies

Who is Entrepreneur?

define ENTREPRENEURSHIP as a process of creating something new with value by

devoting the necessary time and effort, assuming the accompanying
FINANCIAL, PSYCHIC and SOCIAL RISK and receiving the resulting reward of
money and personal satisfaction and independence.

"actually this is an old concept with a new flavor. Countries have developed
through time one term for producer, seller and service provider, MERCHANT"

FOUR BASIC ASPECT OF BEING ENTREPRENEUR :

1. Creation of something of value. – This means entrepreneurs create products or

services that can be offered for price.

2. Devotion of necessary time and effort.- Entrepreneurs devote their time and
effort towards the attainment of their personal goals. In business, some of these
goals are to earn profits, to make products/services available in the community,
to provide employment and income for their family and other reason.

3. Assumption of necessary risk- In the pursuit of their goals, entrepreneurs

assumes risk on the possibility of losing whatever they put in. In business there is
the possibility to fail and lose everything. But the possibility of earning big is even
greater.

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4.Getting rewards.- Many entrepreneurs reap the reward s of their efforts through
the generation of profits and business expansion. But the possibility of earning
big is even greater.

The Philippine government recognizing the importance of entrepreneurship to

the economy, had initiated through the DepEd and HEIs. The inclusion of
subjects on Entrepreneurship in the intermediate grades and high school. Even
before this is compulsory inclusion, entrepreneurship has been among subject
offerings and course major in the college level and also in the post -graduate
schools.

The government does not only prescribe academic requirement for

entrepreneurship, it also provides government incentives for more people to go
into business.

In addition it also provides government projects like trade fairs, trade missions,
etc. are being pushed to help entrepreneurs. Established businesses also serve
as big brother to would-be-entrepreneurs. Civic organizations or non-
government organizations called NGO’s help promote entrepreneurship.

WHO IS ENTREPRENEUR?

An ENTREPRENEUR is a person who starts and or operates a business.

An entrepreneur is creative and innovative.
He/She is a person who starts something new.
Entrepreneur maybe male, female or third sex,.
young, old, professional, college graduate or school drop out.
comes from ABCD economic group.
He is an owner-manager and willing to take risk usually he is someone not willing
to works with others, instead he wants he wants others to work for him.
usually his kind of business single or sole proprietorship because he does not
everything from production to selling.

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Role of Entrepreneurship in the Economy

Entrepreneurship are vital in the economic development of the country. They

provide employment and income that moves the economy.

Employment and Income

Entrepreneurship Investment
Savings & Taxes

Figure 1- Vicious Cycle of Development

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Entrepreneurs Investment
Employment Income
Savings and Taxes
then back Entrepreneur

Thus the cycle results to economic development as more people are employed
to enjoy an income through investment of an entrepreneur. The government
likewise benefits in the process because entrepreneurs PAY TAXES, hence the
government has the funds to provide services to the people.

It should be remembered that the activity of one entrepreneur provides

multiplier effect.

For Example:

Jose decides to manufacture T-shirt and buys his materials from Mr. Santos.
Hence, Mr. Santos hires workers to meet the requirements of Jose.

Jose also hires workers to produce the T-shirt . If Jose will close his business,
eventually, Mr. Santos will also close his shop unless he has a lot of customers.
This cycle is the opposite of the cycle above its is cycle of regression.

It should be remembered that the activity of one entrepreneur provides a

multiplier effect.

The Entrepreneur

1.Mobilizer of Capital – Entrepreneur sometimes use their own savings as capital

for their business ventures. However, if they do not have the capital , money cab
be borrowed from banks to finance their intended business.

2.Service Provider – Business ventures of entrepreneurs could be along the line of

service like parlors, spas, or coffee shops, laundry shops.

3.Employers – Usually, entrepreneurs hire people to help them on their business .

Example: A restaurant owner will hire cooks and kitchen helpers while he,
the owner, does the purchasing and attending to the customers.

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4.Tax Payers – Business establishment pay taxes to the government. Thus, more
business would mean more taxes an better government services.

Example: governments project for transportation public highways,

infrastructure, bridges, pier, airports and farm to market roads.

5.Suppliers of the product- Products and services are available through the
efforts of the entrepreneurs. Without them, a scarcity of certain products and
services will be felt.

ROLE OF ENTREPRENEURSHIP IN ECONOMIC GROWTH

Micro, small and Medium enterprises (MSMEs) are vital component in out
economy.

Microbusinesses, small and Medium enterprise provide employment for 70% of

the Philippine Labor force (NSO)
It is important for the economy to increase the output of MSMEs to help the
economy move and grow.

To attain this, the TECHNOLOGY and 4 more marketing information .

The government has three strategies to help MSMEs. They are:

1. Provide credit, technology, and marketing support to the new enterprise

2.Tap Overseas Filipino Workers to invest their earnings in MSMEs.
3.Promote greater involvement of local government units (LGU) in promoting
small business activities by providing them information on business opportunities,
available resource of funds and the latest product design.

In November 2002, RA 9178 was signed into law, The Barangay Micro Business
Enterprise (BMBEs) Act of 2002 provides five incentives and benefits are:

1. Exempt BMBEs from income tax and encourage LGUs to except or reduce
local taxes imposed by BMBEs
2. Exempt BMBEs from coverage of the minimum wage law.
3. Improve credit delivery to BMBEs
4.Provide for technology transfer, production and management training and
marketing assistance to BMBEs

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5.Provide trade and investment promotion to BMBEs

ENTREPRENEURS IN SMALL AND MEDIUM INDUSTRIES

Entrepreneurs are engaged in either small or medium business. This because

basically the establishment of business is dependent upon the amount of capital
that you can put in a number of employees that you hire. Many businesses
started small and then move to big business.

Small and Medium scale businesses are important in the country because of the
following reasons:

1. They help provide to supply of products to customer.

Example: a family needs only a can of milk per week and this is met by the
nearby store in the community.

2. They provide personal service

Example: you need a haircut. This service is provided by the neighborhood

barber shop.

3.Small and Medium scale business serves as a means of earnings to

unemployed individual.

Example: the service of Juan dela Cruz a factory a factory worker, was
terminated. From separation pay he received, Mr, Juan dela Cruz started a
repair shop and earned in the process.

4. The small and medium scale business also provide employment to other
people.

Example: IN OUR NEXAPLE UNDER #3 MR. Juan dela Cruz also hired workers to
help him in the process of providing repair services to his customers. Thus
unemployment in the country is reduced.

5.Small and Medium scale entrepreneurs also pay taxes to the government and
such payment allows the government to provide services to the people.

Some of these services are education, sanitation, peace and order, electricity,
health and others.

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The small and medium entrepreneurs cannot be underestimated. Financially

they provide purchasing power to their workers; psychologically, they enjoy
prestige and satisfaction because they own their businesses; and economically,
they add to the supply and demand of goods and services.

Entrepreneurs are found practically in every community.

For Example: the producer of rags sold along the busy city streets, the scissor
makers in the provinces, the candle makers, vegetable growers, and many
others. These people boost the economy and make their country proud of their
industriousness.

STUDY GUIDE

1. What is entrepreneurs and who is an entrepreneur?

2.What kind business are entrepreneurs involved in?
3. how you define small and medium scale industries to the economy of the
country.
4. how do you define a small and medium scale industry.
5. How does an entrepreneur influence the economic growth of the country.
6.if a big mall will decide to close because of internal management problems,
what do you think will happen to the suppliers of products to the mall?

Activity #1

Activity

1. Report to class what assistance is given by the local

government to small and medium scale industries

2. List down at least ten entrepreneurs in your community

and present in class the kinds of business they are engaged
in. Find also their reason for engaging in business.

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Unit 2

Entrepreneurial Competencies

Entrepreneurial Competencies

Entrepreneurs are ambitious.

They have strong desire to succeed.
They are motivated by their personal mission and vision.
They are willing to do what whatever it takes to succeed.
They are take risks and sometimes at the higher level than most other people.
They are ready to take the road less traveled.
They are confident they will succeed, if not now maybe in the future time, but
they keep on pursuing their desire to succeed.

They have no one to answer to;

They ate their own bosses.

The risk -taking quality of an entrepreneur is not the same as that of the gambler.

The entrepreneur has a way of controlling the outcome.

The outcome is not left to chance.

The Characteristics of entrepreneur are the following.

1.they have a strong desire to succeed
2.they are risk takers
3.they are creative
4.they take responsibility of their activities
5.they have a high level of confidence

"For wanting to be in business you should test himself against the above
competencies. The benefits of entrepreneurship in the succeeding sections will
help in making decision on which course of action to take

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The rewards of entrepreneurship are:

1.money material return or profit

2.freedom
3.psychological rewards

PROFIT-generally comes in the form of money or cash.

This material income or rewards running a business.

Profit is left after deducting the cost and expenses from the selling price of
products and services. Thus

Selling Price - Cost and Expenses = Profit

The entrepreneurs freedom to do what he feels is fit in his business. The products
may be those he bought for sale, those he bought and converted to other
product to sell, where to sell and when to sell. This is referred to as being one’s
own boss.

The third benefit of entrepreneurship is the good feeling of being service to

others. The entrepreneur is able to satisfy customer’s needs, to give them work
of employment others, to pay taxes to government and to support the
community. Observe how cellfone has made communicating easy with your
families and friends.

Your parents, brothers and sisters may be working for an entrepreneur. The food
for family may have been produced by someone in the food business. Generally
the entrepreneur enjoys what he is doing. To most entrepreneurs, running their
business is fun. They feel like they are always socializing with their customers, their
employees and their business associates.

Prestige is also a good feeling. There is a sense of power that of not being
dependent on someone else for income. Such feeling gives rise to improved
self-esteem and self confidence.

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Problems of Entrepreneurship?

Just as there are benefits in entrepreneurship, there are also some

problems. The problems of entrepreneurship are:

1. Entrepreneurship demand hard work.

2. Entrepreneurship demands long working hours
3. Entrepreneurship may cause emotional stress.

The desire succeed in terms of profit, satisfying customers needs, and

sustaining the company make entrepreneur work harder than others who are
employees. The entrepreneur may lose his capital, may lose his credit, or may
lose face if he not able to make profit or when he is not able to produce the
needed cash. If capital and cash is not enough, he may keep on looking for
sources of cash to fill in need for money. He may lose face ad may even be
charged in court for bouncing checks. This is after experiencing both being an
employee and being an entrepreneur. Generally, employees again stop thinking
of their work-related problems when they leave their work places. Entrepreneurs
think of their business wherever they go.

STRENGTHS AND WEAKNESSES

What are your strengths? What are your weaknesses? These are two
questions will guide you in your self-evaluation with regard to entrepreneurship.
Skills, knowledge, health, interest, and the desire to grow are strengths that will
push a person to be an entrepreneur.

Weaknesses, like lack of confidence or inability to speak well and convince

people are temporary and can be reversed.

Physical appearance can be improved by going to beauty salon, or visiting the

dentist or the dermatologist. A change in wardrobe, diet and exercise can do
wonders to improve self- confidence.

The ability to speak well can be learned, There are special schools or tutorial
services that can help solve these problems.

How you fit into the identified characteristics of entrepreneurs? How do the
benefits of entrepreneurship appeal to you? Do you fear the problems of
entrepreneurship? At this point, you may not yet be sure about your self-
evaluation. In this year level, you will do hands on work om retailing,
manufacturing, and service businesses. At the end of this school year, you will be

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in a better position to do a repeat identification of your strengths and weaknesses

as regards doing business.

REAL LFE SITUATIONS WHERE ENTREPRENEURIAL COMPETENCIES ARE APPLIED

Here are seven entrepreneurs who, in their own ways, have demonstrated the
applications of entrepreneurial competencies.

1. The Entrepreneurial machinist

He started as an apprentice in a machine shop at age sixteen. By age twenty, he

was producing tools and dies for large manufacturing companies. Then he
concentrated in the production of umbrella parts and moved on the produce fly
and mosquito nets when the demand for umbrella parts has gone down because
of cheap imports.

2. The Entrepreneurial CPAs

A group of certified public accountants has been operating a CPA review school
for the last 25 years. It includes book authors, practitioners, college professors CPA
reviewers.

3. The Entrepreneurial Doctors

A group doctors, most of them with their own specialization, invested money in a
medical diagnostic laboratory catering to corporate and walk-in patients.

4. The Entrepreneurial Lady

She started her business printing materials and examination booklets for the next
door university. In time, her mimeographing or Photocopy business grew to a
bookstore with a student canteen. After a fer more years, she became a book
publisher . She was able to set up big business schools in four campuses in Davao
City , all run by her children. Meanwhile, she continues manning the original
bookstore/ student canteen and, today still writes her cash vouchers and bank
checks longhand.

5. Entrepreneurial Dermatologist

She has several cosmetic products patented in her name. To date, her company.
She has several cosmetics products that are best suited for the Filipino skin. Her
practice as dermatologist has been her priority even as she was attends to her
cosmetic business where she heads to research and development department.

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6. The Entrepreneurial MBA (Master in Business Administration)

He was a young college professor in an exclusive girls’ school. That was soon
after he graduated from one of the best MBA schools in Metro Manila.
He put up a specialty restaurant which was an instant success. His classmates,
Convinced of his track record of making things happen, were encouraged to
Make cash investments in his ventures.

7. The Entrepreneurial Framemaker.

He started a small shop laminating diplomas and certificates. Eventually,

Customers realized the disadvantages of lamination – that the document
becomes yellowish after a while and laminated documents are blurred when
photocopied. The customers opted to framing certificates. Moreover, framed
cross stitch work became a fad, thus, our entrepreneur shifted business from wood
lamination to the making of frames. His wife helps in doing cross stitch designs that
they frame and sell. He Also made arrangements with some schools to frame
certificates of recognition/appreciation given to students or guests in seminars,
hence his business is doing good.

Reminders to the new Entrepreneur

As a starting business entrepreneur, bear in mind that you would start business by
yourself or with a small group of people. It is important to stick to the basics if
running a business, such as:

1. Make sure you get things done.

2. Be close the customers.
3. Innovate. Be open to new ideas.
4. Produce through people. Trust them.
5. be hands-on in running your business.
6. Be clear with your values.
7. Know. Your expertise. Continue doing it. Stick to what you know best.
8. Keep things simple.
9.Keep a lean staff.
10. Keep firm on directions but at the same time give your people autonomy. Be
good at balancing the two.

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Reminders to the Entrepreneur

TOUGH TREES

The tree that never had to fight

For sun and sky and air and light,
But stood out in the open plain
And always got its share of rain,
Never became a forest king,
But lived and died a scrubby thing.

The man who never had to fight

To win his share of sun and sky and

Air and light
Never became a manly man,
But lived and died as he began.

Good timber does not grown in ease –

The Stronger the wind, the tougher the trees.

STUDY GUIDE

1. What is entrepreneurship and who is an entrepreneur?

2. What kind of businesses are entrepreneurship involved in?
3. What is the contribution of small and medium scale industries to the economy
of the country.
4. How do you define a small and medium scale industry?
5. How does an entrepreneur influence the economic growth of the country?
6. If a big mall will decide to close because of internal management problems,
what do you think will happen to the supplier of products to the mall?

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Unit 3

Entrepreneurial Qualities and Self Assessment

Personal Entrepreneurial Characteristics (PECs)

In the Philippines extensive research by the Small Enterprise Research

Development Foundation at the Department of Trade and Industry reveals 10
Personal Entrepreneurial Characteristic (PEC) that lead to success. These are
grouped into what are called the Achievement Cluster, the Planning Cluster
and the Power Cluster.

Achievement Cluster

This pertains to the desire of the individual to fulfill or to realize something. This
desire is strong to an entrepreneur who will not stop at any obstacle but take
such obstacles as challenges. Hence, the following characteristics are dominant
in him.

1. Opportunity -Seeker
a. Perceives and acts on new business opportunities
b. Seizes unusual opportunities to obtain financing, equipment, land, work,
space or assistance

2. Persistent
a. takes repeated or different actions to overcome obstacles
b. Makes sacrifices or expends extraordinary effort to complete task
c. Sticks to own judgement in the face of opposition or disappointments

3. Committed
a. Accepts full responsibility for problems encountered
b. Helps own employees to get the job. Done
c. Seeks to satisfy the customers

4. Risk -Taker
a. Takes moderate risks
b. Prefers situations involving moderate risk

5. Values Efficiency and Quality – Oriented

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a. always strives to raise standards and aims for excellence

b. Strives to do things better faster and at a lower cost.

Planning Cluster

An entrepreneur is clear on what he wants to achieve. He plans his every move

because he knows that eliminate resources will be used. To make sure that the
resources (money, materials, machinery, etc.) are efficiency used, he makes his
move tentatively on paper, hence, the plan. A plan is a blue print of the project
that he wants to establish.
Such quality of an entrepreneur demands that he be a:

6. Goal -Seeker
a. Sets clear and specific short -term objectives
b. Sets clear and long-term goals

7. Information-Seeker
a. personally seeks information on clients, suppliers, and competitors
b. Seeks experts to render business or technical advise
c. Uses contacts or information networks to obtain information

8. Systematic in Planning and Monitoring

a. Develops logical, step-by-step plans to reach goal
b. Looks into alternatives
c. Monitors progress and switches to alternative strategies when necessary to
achieve goals

Power Cluster

Power does not mean bossing around. This means the power lead, to
convince people of your ideas, to make people believe in you, to persuade
others especially those with negative perceptions. Therefore, an entrepreneur
must:

9. Be Persuasive and Goal in Networking

a. Uses deliberate strategies to influence or persuade others
b. Uses business and personal contacts to accomplish objectives

10. Process Strong Self- Confidence

a. Believes in self
b. Expresses confidence in own ability to complete a difficult task or to meet a
challenge

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OTHER FACTORS TO CONSIDER

After studying the personal entrepreneurial characteristics (PECs) the

entrepreneur determines those characteristic he already possesses, those where
improvements are necessary and environment factors. These are:

1. Personal Interest . The personal interest of the individual us a deciding factor in

getting into business. His personal interest will drive him to engage into something
that will give him satisfaction. If you look around, usually restaurant owners love to
cook

2. Knowledge/ Talents. The skills or talents or knowledge of an individual serve as

his best asset in venturing into something that will earn him a income, People who
are good in computer technology eventually establish internet stations or internet
cafes.

3. Training/Work Experience. The kind of training or experience of an individual

influences his desire to go into business. Children of entrepreneurs eventually
become entrepreneurs themselves. Those whose family were engaged in the
manufacturing of shoes ultimately become shoe manufacturers themselves. In
the same manner, those who have worked in a beauty salon for quite some
time, sooner or late, put up their own salons.

4. Government Support/ Assistant Programs. The goal od any a government is

economic development, This is done through investment, business and
employment. Thus support is available in terms of technology, marketing or
training. So check this out in your community.

5. Rate of Growth of Business. There is no profit in venturing into business where

the rate of growth is negative. Check government and industry reports to have
a glimpse of the future of the business you have in mind.

6. Other Consideration. Consider the rate if return of the capital you will put into
the business. Would you earn higher returns by putting your money in the money
market compared to the potential profits if you put up a business? Would you
earn more in terms of salary as employee compared to operating a business.

The Entrepreneurial Personality

Give the characteristic and other considerations in entrepreneurship, the list of

entrepreneurial personality therefore can be lumped into three (3) namely:

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1. High need for achievement. Here lies the strong desire of an individual to pursue
his dream, a dream that could be long – range or immediate. His dream keeps
on flashing in his mind until he makes a move for it to be realized.

2. Strong belief that they can control their destiny. William Jennings Bryan said,
“Destiny is a not a matter of change, it is a matter of choice; it is not a thing to be
waited for, it is a thing to be achieved.” Indeed, it is!

3. Risk-taker. Risk is present in every activity, but it can be lessened. Business risk
can be learned or avoided by careful planning, insurance, and being alert if
what is happening around. Poultry farm pest, for example, can be avoided by
vaccination or selling the entire herd in case of epidemic in a nearby farm.

In spite of the risk involved in business, entrepreneurs establish their business

because they prefer to be independent and to be personally responsible for
solving problems, setting goals, and reaching goals through their own efforts. They
prefer to take calculated risks. They usually are not likely to be contented in a
corporate or government employment.

Activity #2

Choose your answer YES, Maybe and NO with corresponding point, 3,2,1
Add all points from 1-25
Please check your Total score interpretation below

Entrepreneurship Self-Test

1. I am persistent. Yes Maybe No

2. When I am interested in project. I need less sleep
Yes Maybe No
3. When there is something I want, I keep my goal clearly in mind.
Yes Maybe No

4. I examine mistakes and I learn from them.

Yes Maybe No

5. I keep New Year's resolutions. Yes Maybe No

6. I have a strong personal need to succeed Yes Maybe No

7. I have new and different ideas. Yes Maybe No

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8. I am adaptable. Yes Maybe No

9. I am curious. Yes Maybe No

10. I am intuitive Yes Maybe No

11. If something cannot be done, I find a way. Yes Maybe No

12. I see problems as challenges. Yes Maybe No

13. I take chances. Yes Maybe No

14. I will gamble on a good ideas even if it is not Yes Maybe No

a sure thing. Yes Maybe No

15. To learn something new, I explore unfamiliar subjects. Yes Maybe No

16. I can recover from emotional setbacks. Yes Maybe No

17. I feel sure of myself. Yes Maybe No

18. Im a positive person. Yes Maybe No

19 . I experiment with new ways to do things.

Yes Maybe No
20. I am willing to undergo sacrifices to gain possible Yes Maybe No

21. I usually do things my own way. Yes Maybe No

22. I tend to rebel against authority. Yes Maybe No

23. I often enjoy being alone. Yes Maybe No

24. I like to be in control. Yes Maybe No

25. I have a reputation for being stubborn. Yes Maybe No

I. Concept of Entrepreneurship

My Name is _______________________________________________________

My Score is _________________________________________________________

My Score interpretation is __________________________________________________________

My Decision _____________________________________________________________________________

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Score per answer

Yes - 3 points
Maybe - 2 points
No - 1 point

Scores interpretation

60 - 75 You have qualities of an entrepreneur

48 - 59 You have potential but need to push yourself
37 - 47 You may not want to start a business alone
Below 37 Self-employment may not be for you

STUDY GUIDE

1. Make a self evaluation . Do you possess the characteristics of an

Entrepreneur?

2. In which of the characteristics did you score high ? or Low?

END FOR PRELIM LESSON

Words to Ponder

Great Men all started from the first step

References :

BanastaoCristina & Frias, Solita A. 2019, Entrepreneurship

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