Module 1 – Entrepreneurship and Development

ABM 213 - ENTREPRENEURIAL MANAGEMENT

2nd Semester, School Year 2024- 2025

Course Description

This course discusses the concept of entrepreneurship, and the characteristics

of entrepreneurs, and identifies challenges and opportunities faced by entrepreneurs in
the operation of Micro, Small, and Medium Enterprises (MSMEs ). Students are also
taught about planning a business, preparing business plans, and how to start a new
enterprise.

Course Outcome

At the end of the course, the students should be able to:

1. Explain the basic concepts and theories of entrepreneurship;

2. Explain the relevance and role of entrepreneurship in socioeconomic development;
3. Generate, identify, and analyze business ideas based on discovered and enhanced
personal entrepreneurial competencies;
4. Prepare any of the following: business proposal, business plan, or business model
canvas; and,
5. Apply the basic entrepreneurship concepts and theories through the conduct of micro
projects.

Module 1 – ENTREPRENEURSHIP AND DEVELOPMENT

I. Introduction

For the economy to speed the development process, there is a need to increase
opportunities (such as the availability of capital, technology, and labor), and make
potential entrepreneurial people aware of them.

The trouble with this, however, is that it has been repeatedly observed that even
when opportunities are present (e.g. available technology, land, labor, capital, market
and profit potentials, etc.), man does not necessarily engage in vigorous economic
activities. Often time, the reason behind such is the incapacity of the individual to tap
these opportunities due to a lack of entrepreneurial drive, capability, and risk-bearing
capacity.

Because of the above mentioned, it is therefore. the purpose of this lesson is to

inculcate among the students, participants, or would–be-entrepreneurs the benefits,
relevance, importance, and role of entrepreneurship in economic development. It is
expected (through people’s enlightenment) that the more individuals who are
knowledgeable and predisposed to entrepreneurship, the more the society is responsive
to environmental opportunities, hence the faster the rate of economic development
(SERDEF, 1991).

II. Learning Outcomes

• To explain concepts and theories of entrepreneurship

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To appreciate the social and economic impact of entrepreneurship

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To identify stakeholders/organizations behind the development of entrepreneurship

ABM 213 – ENTREPRENEURIAL MANAGEMENT GERRY Z. LAGGUI, PhD

 Module 1 – Entrepreneurship and Development

III. Learning Content

Who is an Entrepreneur?

Entrepreneurship

“The ability of individuals to perceive the kind of products or services that others
need and to deliver these at the right time, to the right place, to the right people, and at
the right price, is what is generally referred to as ENTREPRENEURSHIP”
“Entrepreneurial” people are those (a) who are able to perceive and take
advantage of economic opportunities; (b) who innovate and develop new products and
services; and (c) who invest their time, money, and efforts to run a business.
As the process of creating something new with value by devoting the necessary
time and effort, assuming the accompanying financial, psychic, and social risks, and
receiving the resulting rewards of monetary and personal satisfaction and independence.

Moreover, as a producer, seller, service provider, and MERCHANT.

In Agriculture, there are two major business activities an entrepreneur can

engage in: on-farm agribusiness (e.g. crop, poultry, and livestock, fishery, and forestry),
and off-farm agribusiness (e.g. agro-industries and agri-services).

Agribusiness in essence is agricultural entrepreneurship where an entrepreneur

normally engaged himself in either on-farm or off-farm activities.

Structurally, agribusiness can be defined as the sum total of all operations

involved in the manufacture and distribution of farm inputs, production operation in the
farm; processing, storage, and marketing of agricultural commodities and other items
made for them. Likewise, Agribusiness is a vertically structured system that composes
the major players in the system and the coordinators of the system.

Sectorally, agribusiness encompasses the whole of the economy’s agricultural

sector and that portion of the industrial sector and commercial sector supporting sector
e.g. agro-service and agro-industries.

Economists recognized that for production to take place, someone has to

mobilize resources (land, labor, and capital) of the Agribusiness enterprise. They called
the individual AGRIBUSINESS ENTREPRENEUR and this activity AGRIBUSINESS
ENTREPRENEURSHIP.

The man who actively responds to opportunities in the Agribusiness sector and
the marketing environment because he sees all the advantages that he will personally
gain in doing so is referred to as an AGRIBUSINESS ENTREPRENEUR.

Four Basic Aspects of an Entrepreneur

1. Creation of something valuable. This means entrepreneurs create products or
services that can be offered for a price.
2. Devotion of necessary time and effort. Entrepreneurs devote their time and effort
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toward the attainment of their personal goals.

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ABM 213 – ENTREPRENEURIAL MANAGEMENT GERRY Z. LAGGUI, PhD

 Module 1 – Entrepreneurship and Development

3. Assumption of necessary risks. In the pursuit of their goals, entrepreneurs assume

risks on the possibility of losing whatever they put in.
4. Getting rewards. The prestige of being a business owner provides intrinsic
satisfaction.

An ENTREPRENEURS are:

1. Mobilizers of capitals
2. Service providers
3. Employers
4. Taxpayers
5. Suppliers of products

Role of Entrepreneurs in the Economy

Entrepreneurs are vital in the economic development of the country. They
provide employment and income that moves the economy forward, as shown in the
vicious cycle of development.

Vicious Cycle of Development

Employment and income

Entrepreneur’s investment

Savings & taxes

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

Role of Entrepreneurship in Economic Growth

Micro, small, and medium enterprises (MSMEs) are vital components of the
economy. MSMEs provide employment for 70 percent of the Philippine labor force (PSA
2016). It is important for the economy to increase the output of the MSMEs to help the
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economy move and grow.

ABM 213 – ENTREPRENEURIAL MANAGEMENT GERRY Z. LAGGUI, PhD

 Module 1 – Entrepreneurship and Development

To attain this, MSMEs should have more access to:

a. Credit
b. better sources of raw materials
c. modern technology
d. more marketing information

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

1. Provide credit, technology, and marketing support to new enterprises

2. Tap overseas Filipino workers to invest their earnings in MSMEs.
3. Promote greater involvement of local government units (LGU’s in promoting
small business activities by providing them with information on business
opportunities, available sources of funds, and the latest product design.

Entrepreneurs in Micro, Small, and Medium Industries

Entrepreneurs are engaged in micro, small, or medium businesses. This is
because basically, the establishment of a business is dependent upon the amount of
capital that you can put in and the number of employees that you hire.

Reasons why micro, small & medium-scale businesses are important in the
country

1. They help provide the supply of products to customers

2. They help provide personal services
3. Micro, small, and medium-scale business serves as a means of earning for
unemployed individuals
4. The micro, small, and medium-scale businesses also provide employment to
other people
5. Micro, Small, and medium-scale entrepreneurs also pay taxes to the
government, and such payment allows the government to provide services to
the people

Characteristics of Entrepreneurs

1. they have a strong desire to succeed

2. they are risk takers
3. they are creative
4. they take responsibility for their activities creative
5. they have a high level of confidence

Risk
Strong desire to succeed taker

High level of
Responsibility for their confidence
activities
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ABM 213 – ENTREPRENEURIAL MANAGEMENT GERRY Z. LAGGUI, PhD

 Module 1 – Entrepreneurship and Development

The rewards of entrepreneurship are:

a. Money or material return or profit
Profit generally comes in the form of money or cash. This is the material income or
rewards from running a business. Profit is what is left after deducting the cost and
expenses from the selling price of products and services.

Selling price – cost and expenses = PROFIT

b. Freedom

The entrepreneur has the freedom to do what he feels is fit for his business. The
products may be those he brought for sale, those he bought and converted to other
products, or those services he renders to others.

c. Psychological rewards

The entrepreneur is able to satisfy customers’ needs, give work or employment to

others, pay taxes to the government, and support the community.

Problems of Entrepreneurship

Just as there are benefits to entrepreneurship, there are also problems. The
problems of entrepreneurship are:

1. entrepreneurship demands hard work

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

Reminder to the New Entrepreneur

1. Make sure you get things done

2. Be close to 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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ABM 213 – ENTREPRENEURIAL MANAGEMENT GERRY Z. LAGGUI, PhD