ENTREPRENEURSHIP

CHAPTER X: National Service Training Program

ENTREPRENEURSHIP
 In the simplest sense refers to the ability of the individual to
determine and come up with the proper combination of the
resources available in the environment and transform this into
an output of either goods or services, and obtain a fair profit
at the price the entrepreneur sets.
 An entrepreneur uses several factors to turn his idea into
profitable product.
 It would already be obvious that an entrepreneur’s first
investment in in his business enterprise is an idea.
IDEA

 Simply something an entrepreneur has already

conceptualized or imagined, painting a more or less clear
picture in his mind, giving him a clear plan of action.
 Is a clear blueprint in the entrepreneur’s mind.
RAW MATERIALS

 Are the basic inputs that the entrepreneur uses to come

up with his products.
 These inputs come from his environment, and are usually
found to be in there unprocessed or natural states - RAW
CAPITAL

 Refers to the buildings, machinery, equipment and tools

used in the course of production.
 More often than not, an entrepreneur hires laborers –
people directly responsible in the production process.
 The place where all of these physical factors are found is
generally called a (production plant).
 Having all these things allows the entrepreneur to have
what he calls a business enterprise.
 When these inputs are transformed into outputs
or what we call as finished products, the
entrepreneur now brings these finished products
to his market.
A market is simply the buyers and users of the
entrepreneur’s products. Technically, people who
buy the products are called customers, while the
people who use the products are called consumers
or end-users.
CONTRIBUTIONS OF
ENTREPRENEURSHIP TO THE ECONOMY
 FIRST, entrepreneurship employs the various resources present in
the economy. Many of these resources tend to be unutilized or
unmaximized. Entrepreneurs, therefore, make productive use of
otherwise non-productive resources.
 SECOND, entrepreneurs need manpower for their business
operations. They provide employment opportunities to various
individuals. Note that when these entrepreneurs hire people,
they also bear the burden of providing training for these
individuals. Professional growth and skills enhancement, are also
important contributions of entrepreneurs.
 CONTRIBUTIONS OF
ENTREPRENEURSHIP TO THE ECONOMY
 THIRD, it is said that entrepreneurship is the backbone of the economy.
Contrary to popular belief, it is the small and medium enterprises that make
up the great bulk of the Gross Domestic Product (GDP) of a country.
Economists estimate that 50-80% of the GDP of most countries actually comes
from SME’s. it has been found out through international research that
entrepreneurs tend to multiply during times of economic slumps and
recessions. This is particularly true in Southeast Asia. If people lose
employment opportunities due to economic shutdowns, business would be a
logical choice for livelihood.

 FOURTH contribution of entrepreneurs is in their ability to innovate goods and

services. The root of the words “entrepreneur” means to innovate, and this is
precisely what entrepreneurs bring to society. They make life more
comfortable and convenient for us. They make products more accessible and
easier to use.
CONTRIBUTIONS OF
ENTREPRENEURSHIP TO THE ECONOMY
 FIFTH contribution of entrepreneurs is their ability to gain
international popularity and prestige for their country. This is
true especially when these entrepreneurs are already able to
export their products or even brings their businesses abroad. The
entrepreneurs’ country of origin becomes known while allowing
the country to earn income via stronger currencies.

 SIXTH important contribution of entrepreneurs is their

willingness to take risks, risks that society will otherwise be
hesitant to take. These people accumulate great learning
experiences, which may be passed on to other businesspeople
through seminars, workshops, speaking engagements and others.
CONTRIBUTIONS OF
ENTREPRENEURSHIP TO THE ECONOMY
 Although a lot of people don’t recognize it, entrepreneurs also
profoundly inspire budding and potential entrepreneurs. It is said
that only a master can produce a master; likewise, only
businesspeople can teach others to venture into business.
Successful entrepreneurs become paragons for other
entrepreneurs, potential or actual.
SOCIO-ECONOMIC BENEFITS FROM
ENTREPRENEURSHIP
The following is a summary of the various socio-economic
benefits derived from the pursuit of entrepreneurship.

 Promotes
self-help and Enhances competitive
employment consciousness
 Mobilizes capital Improves quality of life
 Provides taxes to economy Enhances equitable
 Empowers distribution of income and
individual
wealth
 Enhances national identity
and pride
CATEGORIES OF SMALL AND MEDIUM
ENTERPRISES (SMEs)
 Any business activity or enterprise engaged in industry agribusiness and
services whether a single proprietorship, partnership or cooperative or
corporation – inclusive of those arising from loans but exclusive of the land
which the particular business entity’s office plant and equipment are
situated – must have value falling under the following categories:
1.) In terms of capitalization
a.) Micro P 150,000 and below
b.) Cottage above P150,000 to 1.5M
c.) Small above 1.5 M to 15M
d.) Medium above P15M to P60M
CATEGORIES OF SMALL AND MEDIUM
ENTERPRISES (SMEs)
2.) In terms of employment size
a.) Micro 5 or less workers
b.) Cottage 6-9 workers
c.) Small 10-99 workers
d.) Medium 100-199 workers
BARRIERS TO GROWTH OF PHILIPPINE
SME’s
Over the years, the following have been determined to be
the major reasons why entrepreneurship has not really
developed in the country:

 Poor access to finance  Poor linkage among small, medium

 Obsolete technology
 Low productivity
 Lack of skills upgrading
 Lack of information
 Inability to make
entrepreneurship transition
and large industries
 Inappropriate location
 Management incompetence
 Poor Market access
 Lack of infrastructure
 Bureaucratic/cumbersome
procedures
 Severe global/competition
THE IMPORTANCE AND BENEFITS OF
SMALL BUSINESSES TODAY
 The small business sector continues to create many of the new ideas
and innovations that future generations tend to take for granted. Small
businesses and school offering courses for small business development
and management become the seedbed of tomorrow’s products and
daily convenience. It is said that all big enterprises come from small
beginnings.

 Small businesses are vital to the success of the local economy not only
because they contribute to the GDP of a country, but also because they
meet local needs that many of the national products do not offer. Local
producers and suppliers of services form a great par in the day-to-day
activities of every community – be it a small town or a large
municipality.
 Furthermore, is it the vibrance of the local economy that
continues to draw investors into an area, and encourage
local people to stay and contribute to the community’s
productivity; when the local economy is not vibrant,
people tend to emigrate into cities and metropolitan areas
or, worse, to other countries. Having a strong local
economy, allows a more distributed growth and
development in a country.

 Needless to say, the presence of micro-enterprises and

small businesses contribute to the revenues of local
communities. The more enterprises there are, the more
transactions and government revenues are generated.
 With regard to the benefits of being small, small
businesses survive and prosper for many different reasons:

 Small businesses develop more personal relationships. Big

businesses and corporation tend to impersonal to their markets.
 Relatively low overhead costs. Due to their small scale of
operation, small businesses have lower overheads to cover.
 Catering to limited or niche markets. Big businesses, due to their
scale of operations, have to achieve economies of scale to recover
costs and investments.
 Quicker response to trends and situations. Large firms tend to
be slower in reacting to changes in their environment and changes
in the economy due to their sizeable investments.