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A Perspective on
Entrepreneurship
Chapter 1
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ENTREPRENEURSHIP

 an important component of a capitalist economy

 thrives
in economic systems that support
innovation and hard work

 Entrepreneurs = success = nation

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Entrepreneurship and Economic
Development

Human Resources Natural Resources

Economic
Development

Capital Formation Technology

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Entrepreneurship

 Itrefers to the economic activity of a person who

starts, manages, and assumes the risk of a business
enterprise

 Entrepreneur– is the person who undertakes

entrepreneurial activities
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Entrepreneur

Economic Business Takes the

Resources
Needs Solution Risk
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Entrepreneur’s Problem at Hand Entrepreneur’s
Concern Action
1. Identifying an High income families Establish a high
economic need are not satisfied with standard school for
the services provided high school students
by high schools in the
area

2. Assembling Resources must be Acquire funds, hire

resources made available people, construct
buildings and the
like.

3. Assuming risk Venture must be Prepare project study,

made advertise, maintain
good relationship
with employees and
customers, among
others.
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Entrepreneur’s Task

 Products
and services for customer’s and
producers;

 Employment;

 Taxes

 Demand and supplies’ products and services; and

 Training facilities for future entrepreneurs

+ Entrepreneur

LAND LABOR CAPITAL

Entrepreneur

Production
Process

Finished
Goods and
Services
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Entrepreneurship and Innovation

 Innovation
– introduction of a new method,
procedure, custom, device, among others.

 Innovation
 INVENTION – discovery or devising of new products and
processes;
 DEVELOPMENT – which refers to the process by which the
ideas and principles generated from the stage of invention
, modified into a new product;
 INNOVATION – an introduction of new product
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ACTIVITY: INNOVATION

 PRODUCT
 NAME
 DESCRIPTION OF THE PRODUCT
 TAGLINE
 SHORT COMMERCIAL
 LOGO
+ Common Pitfalls for New
Enterprises
 Improper pricing
 Lack of knowledge about product costing
 Inability or unwillingness to plan
 Poor communication among the management team
 Domestic pressures distracting the owner/
manager
 Poor retail location
 Lack of discipline
 Dishonesty
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New Ventures and Long – Term
Enterprises
 Four Stages
A. Venture Idea (prestart-up stage)
 happens when the entrepreneur starts to
question the feasibility of an idea, product, or
service.
 “What will the business make or sell?”
 May be derived from a recognition of
opportunities
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1. An old type of business can be
given a new twist or
professionalized.
 Example: Inthe food business,
entrepreneurs have reinforced the practice
of having chef cook in front of customers to
attract people who like to smell and see
what is cooking
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Product with a twist
2. A standard product or
service can be customized.

Computer technology has

been used to create products
ranging from bathing suits
tailored to fit the individual to
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birthday records containing
the recipient's name.
 3. New technology
can be adapted to
manufacture an old
product

Entrepreneurs have
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created a number of
businesses that use
desktop publishing and
laser printers to turn out
printed materials much
cheaper.
 4. Imported products can
be replaced by domestic
production

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 5. Business operations can
be internationalized

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SEATWORK (1/4) : Think of a
product or services that can spring
up from the following:
1 Scientific Invention: ________________________

2 New Government Program:

____________________

3 Hobbies and personal interests: ______________

4 A love for food: _____________________________

5 Running a household: ________________________

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Venture ideas through the
following:
 Market Research
 Itis an organized way of finding objective
answers to the questions every business must
answer to improve its chances of success.

 Information

 Demographics
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New Ventures and Long – Term
Enterprises (continuation – FOUR STAGES)
B. Start – Up Stage –
 Formation of the business;
 Generation of necessary capital;
 Purchase of facilities and equipment;
 Constructing prototypes
 Testing the market
 Consider our first customer, first sales, build for
survival
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1. Marketing Strategy – overall
plan what product to offer and to
sell
 Product

 Customer

 Pricing

 Advertising and Promotion

 Distribution and sales management
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2. People Skills
3. Location Strategy
4. Financing Strategy
5. Internal Management Essentials
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New Ventures and Long – Term
Enterprises
C. Early growth stage – establishing
feasibility; selling to limited markets
with limited resources
 Development
 Buildingof human resources
 Gradual build- up of valuable assets
 Management control system
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New Ventures and Long – Term
Enterprises
D. Late Growth Stage – management is
structured; long term financing is
established, and facilities planning
are undertaken
 Expansion
 Exporting
 Franchising
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Rewards for Successful
Entrepreneurship
Factors of Economic Reward Limiting Factor for
Production Rewards Received
Land Rent Supply and demand

Capital Interest Industry rates/

government
mandated rates

Labor Wages/ salary Supply and demand

legislation

Entrepreneur profits Skill of entrepreneur

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The Entrepreneur’s Predicament
(embarrassing situation)
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Entrepreneurship and Business
Size