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Chapter 1
Perspective of Entrepreneurship
Positive Characteristics of an Entrepreneur
1. Leadership 3. Hardworking .
2. Optimism 4. creative
Core Characteristics of Entrepreneurs
Here are the most important or distinguishing traits or qualities that
entrepreneurs should possess.

1. Courage
2. Honesty
3. Integrity
4. Reasonable risk takers - (Entrepreneurs enjoy challenges, but they are
careful and calculating.)
5. Hardworking - (Successful people always attribute their success to hard
work.)
6. Creative - (Entrepreneurs are creative, innovative. They do things in new
and different ways.)
7. Leadership - (Entrepreneurs are leaders by the very nature of their
functions. Here are the essential leadership qualities: selfless dedication,
purpose and vision, courage, conviction, enthusiasm, integrity, tact, and
hard work.
8. Positive Thinking - (Entrepreneurs are positive thinkers. They think of
success and bright sides)
9. Decision maker - (Entrepreneurs make decision. The success of their
business depends on their ability to make the right decisions.)

Decision-making has six distinct phases:

a. Identifying the problem
b. Gathering the data about the problem
c. Analyzing the data
d. Formulating alternative solutions
e. Selecting the best solution; and
f. Implementing the solution/decision

10. Self-confidence - (Entrepreneurs have strong faith in their abilities)

In the attempt to make profits, the entrepreneur performs the following

specific function;
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 supply the necessary capital;

 the production by buying and combining inputs like materials and labor
 decide on the rate of output in the light of his expectation about demand
 bear the risk inherent to the venture

Innovation may be viewed of 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
principles generated from the stge of invention ar embodied in
concrete products and techniques.
3. Innovation which refers to the actual introduction of new products
or process.

New Ventures and Long Term Enterprise

The transition from a new venture to a successful long-term enterprise
consists of four major stages. They are as follows:

1. Pre-start stage
2. Start-up stage
3. Early growth stage
4. Late growth stage

In the start-up stage, the following activities are undertaken:

*formation of the business
*phase of facilities and equipment
*constructing prototype products
*testing the market

Examples of Innovation are the following:

*offering business services during Sundays and holidays
*manufacture and sales of new products
*selling on a deferred payment scheme

Role of Entrepreneurship in Socio-Economic Growth of a Country

Entrepreneurs play big role in driving a nation’s economic growth and

societal development. They inspire people to dream big and to push the
boundary of advancement. They initiate change in the way we work and live
for the better. And most importantly, they create jobs and fortune for a nation. 
They pull the process of economic development through efficient use of
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resources, manpower, and finance. Their role is significant in all types of

economies—undeveloped, developing, and developed. 
Let’s take a closer look at how entrepreneurship contributes to a nation’s
economic development:

Creation Employment
Entrepreneurs are by nature job creators as opposed to job seekers.
When a person becomes an entrepreneur, there is one less job seeker in the
economy. In addition to that, that person provides employment or multiple
other job seekers. The job creation by new and existing businesses is one of the
basic goals of economic development. 

Encourages Better Standard of Living

Entrepreneurship is a key in raising the standard of living. Entrepreneurs
not only provide means for living through employment but they also provide
people’s needs and wants. They develop as well as adopt innovations that lead
to improvements in the quality of lives. The boom in the high tech electronics,
personal shopping experiences, luxury cars and other products which have
made our life easier are all a result of this rise in our standard of living, thanks
to the innovators and entrepreneurs.

Initiate Chain of Support and Wealth Sharing

While establishing the business entity, entrepreneurs invest their own
resources and attract capital from investors, lenders and the public. This
mobilizes public wealth and allows people to profit from the success of
entrepreneurs and growing businesses. This kind of pooled capital results in
wealth creation and distribution.

Enable Balanced Regional Development

Entrepreneur generally looks for places that are cheap to set up business
which are usually the least develop region.  These new businesses and
industrial units help in the development of the regions. This eventually leads to
infrastructure improvements including better roads and rail links, airports,
stable electricity and water supply, schools, hospitals, shopping malls and
other public and private services that would not be available otherwise. 
Expanding Exports
As businesses grow, they eventually want to start exporting to expand
their businesses to foreign markets. It is considered an important key factor of
economic development since it provides access to bigger markets which
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ultimately leads to currency inflows and access to cutting-edge technologies

and processes being used in more developed foreign markets. 
Entrepreneurs not only invest their own capital but it also attracts capital from
the market. They make productive use of these savings and mobilize them by
turning it into a productive resource. The pooled financial resource or capital is
the basis of wealth creation in the economy, thus contributing majorly to the
socio-economic development of a country.
Conclusively, entrepreneurs play a very important role in a nation’s
development by starting new businesses, creating jobs, and contributing to
development in various key areas such as Gross Domestic Product (GDP),
exports, standard of living, skills development and community development. 

Advantages and Disadvantages of Entrepreneurship

To everything in life there are advantages and disadvantages;

entrepreneurship is no exception. As a matter of fact, entrepreneurship,
evolves a lot of risk taking. Yet, it can pay off very well, with rewards such as
profits. The opportunity to be your own boss and make your own decisions.

Advantages

1. Excitement
Due to its high capacity for risk, there is a lot of adventure. It develops
excitement in entrepreneurs. It also develops positive attitude to face
challenges.

2. Originality
Innovative entrepreneurs tries to bring maximum quality and natural
products. Only a creative entrepreneur can offer a new service or
product that no one else has offered before.

3. Independence
Some wish to be their own boss and makes all the important decisions
themselves. Entrepreneurship provides opportunity to think and to act
independently.

4. Rational Salary
They are not being paid on what they doing but they earn money for
their efforts through profit. If they work hard earnings will higher.

Disadvantages
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1. Meeting Variable Cost

Starting your own business means that you must be willing to give the
security of a regular payment of cash for necessity.

2. Benefits
There are fewer benefit especially when your business is just starting
off.

3. Work Schedule
The work schedule of an entrepreneur is never predictable—an
emergency may come up in a matter of seconds. The day to day
activities of an entrepreneur changes from time to time.

4. Administration
All the decisions of the business are made by the entrepreneur, himself.
In such a business, there is a chance for wrong decisions. Such wrong
decisions will lead to loss.

5. Incompetent Staff
Most of the time, the entrepreneurs find themselves working with
employees, due to shortage of experienced employees. It brings wastage
of raw materials and decrease in productivity.

Categories/Types of Entrepreneurs
The world of entrepreneurship these days has already evolved, and new
terms are coined to suit an entrepreneurs’ field of expertise. Here as some:
Technopreneur is an entrepreneur who puts technology core of his or
her business model.

Social Entrepreneur is one who takes advantage of the country’s social

problems and turn them to profitable institutions with the intention of helping
the disadvantaged community rather than making a profit.

Intrapreneur is an entrepreneur in large company or corporation who is

tasked to think, establish, and run a new big idea.

Intrapreneurs s are usually the product managers or the business

development managers of a company.
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Extrapreneur is an entrepreneur who hops from one company to

another to act as the innovation champion, providing creative and efficient
solutions.

Types of Entrepreneurs

1. Based on the type of Business

a. Trading Entrepreneur
*They procure the finished products from the manufacturers and
sell these to customers directly or through a retailer.
*They serve as the middlemen, the wholesalers, dealers, and
retailers between the manufacturers and the customers.
b. Manufacturing Entrepreneur
*They manufacture products.
*They identify the needs of the customers, and, then, explore the
resources and technology to be used to manufacture the products to
satisfy the customers’ needs.

c. Agricultural Entrepreneur
*The entrepreneur who undertakes agricultural pursuits are
called agricultural entrepreneurs.
*They cover the wide spectrum of agricultural activities like
cultivation, marketing of agricultural produce, irrigation,
mechanization, and technology.

2. Based on the use of Technology

a. Technical entrepreneur
*These the entrepreneurs who make use of science and technology in
their enterprise.

b. Non-technical Entrepreneur
*They are concerned with the use of alternative and imitative
methods of marketing distribution strategies to make their business
survive and thrive in the competitive market.

3. Based on Ownership

a. Sole proprietorship
*one who as an individual sets up a business enterprise.
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*sole owner of the enterprise and bears the entire risks involved in it,
gets all the profit—called unlimited liability.
*Easiest and least expensive to set up

Advantages
*owner makes all the decisions, hours of business, and whom to hire
*owner is the boss
*any profits belong to the owner
Disadvantages
*the owner may lack the ability to buy the right supplies, do
accounting, etc.
*if the business loses money, so does the owner
*creditors can claim the personal belongings of the owner
*long hours of work
*if the owner is ill, the business doesn’t open

b. Partnership
*Two or more individuals share cost and responsibilities
*terms of partnership is recorded in partnership agreement
*”silent partner” - partner that will front a lot of capital, but do
participate in business decisions—receive profits in return

Advantages
*Two or more people share decision-making process
*One person may be better at one task than the other partner
*Sometimes it’s easier to borrow money if two people are
involved

Disadvantages
*share profits
*partner’s could disagree
*friendship can be lost over time as a result

c. Corporation
*business with legal status
*owned by individuals, families or small groups
*ownership often broken into small unit, shares, which are sold
through stock exchange
*those who buy – shareholders
*since there are many owners, a board of directors runs the
corporation
*shareholders have limited liability, not responsible for debts
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*get profits as dividends.

d. Cooperatives
*business owned by workers who use it
*run by the board of directors
*each member gets only 1 vote
*profit shared based on use

4. Based on the Size of Enterprise

a. Micro entrepreneur
*One who an investment in plant and machinery of less than Php
3,000,001 and with less than 10 regular workers.

b. Small-scale
*One who an investment in plant and machinery of less than Php
3,000,001 up to 15,000,000 and with 10 to 99 regular workers.

c. Medium
*One who an investment in plant and machinery of less than Php
3,000,001 up to 15,000,000 and with 10 to 99 regular workers.

d. Large
*One who an investment in plant and machinery above Php 100M.

Distinctions between Entrepreneur and Manager

1. Motive
Entrepreneur Manager
The main motive of an But, the main motive of a manager
entrepreneur is to start a venture by is to render the services in an
setting up an enterprise. He enterprise already set up by
understands the venture for someone else i.e., the entrepreneur.
personal gratification.

2. Risk Bearing
Entrepreneur Manager
An entrepreneur being the owner of A manager as an employee does
the enterprise assumes all risks and not bar any risk involved in the
uncertainty involved in running the enterprise
enterprise
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3. Status
Entrepreneur Manager
An entrepreneur is the owner of A manager is an employee in the
the enterprise. enterprise owned y the
entrepreneur.
4. Rewards
Entrepreneur Manager
The reward an entrepreneur Manager gets salary as reward for
gets for bearing risks involved the services rendered by him in the
in the enterprise is profit which enterprise. Salary of a manager is
is highly uncertain. certain and fixed.

5. Qualification
Entrepreneur Manager
An entrepreneur needs qualities A manager needs to possess
and qualifications like high distinct qualifications in terms of
achievement motive, originality sound knowledge in management
in thinking, foresight, risk theory and practice.
bearing bility, and so on.

6. Innovation
Entrepreneur Manager
An entrepreneur himself thinks On the contrary, what the
over what and how to reduce manager does is simply to
goods to meet the changing execute the plans prepared by
demands of the customers. Hence, the entrepreneur. Thus, a
he acts as an innovator also called manager simply translates the
a “change agent”. entrepreneurs’ ideas into
practice.
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