week 1. core concepts of entrepreneurship pdf

entrep

1. CORE CONCEPTS ON
ENTREPRENEURSHIP

2. ENTRPRENEUR
A person who organizes, operates, and assumes the risk of business venture.
ENTREPRENEURSHIP
Is an art of observing correct practices in managing and operating self-
owned wealth-creating business enterprise by providing goods and
services that are valuable to the customers.

3. SALIENT FEATURES OF
ENTREPRENEURSHIP
1. Entrepreneurship is an art of correct practices
Entrepreneurship is an art not a science . It is nor static or stagnant. It continuously grows,
develops, improves, and expands; the change does not stop. The development of
entrepreneurship through the years is a proof that it is an art that continuously evolves and
responds to the changing needs of the people.
As an art entrepreneurship is dynamic. By the moment the economic activity changes, the
political, social, and entrepreneurial activities will eventually change.
As an art, entrepreneurship is closely related to creativity. By creativity, there is a constant
change or evolution that contributes towards the enhancement of the enterprise. Creativity
results in new ideas which are the backbone of entrepreneurship . Entrepreneurs keep on
searching for something new . They find ways to transform new ideas into entrepreneurial
opportunities.

4. 2. Entrepreneurship Is a Wealth-Creating Venture
This feature sounds simple, but this has been most misconstrued because of the word
wealth. We often hear the old maxims "Health is wealth" or "Knowledge is wealth." However,
this is not the concept of wealth in entrepreneurship. In most instances, ordinary small
businesspeople equate wealth with the term profit
Although profit may be a good indicator of wealth, it can be measured in different ways.
The economist, for example, has a different perspective of wealth from that of an accountant.
Profit, therefore, in its strict sense, does not equate to wealth. To put it differently, assume that
the cost of your product is P60. You sell this product to a customer for P80. As a result of the
sale, definitely you have a mark-up or a profit of ~ 20 is gained.
However, the question is, "ls one enriched by twenty pesos? '' ln case the sale is not in cash
(i.e., the sale is on account or on credit), and the customer does not pay, you lose P80 in the
transaction.

5. Wealthiscreatedwhenthebenefitsderivedbytheownerinprovidinggoodsand
servicestothecustomersareabundantenoughtocoverthecostsincurredbythe
business.Atthesametime,itprovidespersonalbenefitstotheowner,whichintum
improvehis/herlife.Otherwise,thesmallbusinessisnotawealth-creatingventure.
Thewealthcreatedbythesmallbusinessmustimprovethelifeoftheownerand
cascadetothedevelopmentofthelocaleconomyandeventuallyofthewhole
country.Wealthiscreatedwhenthevalueofthebusinesshasincreasedabundantly
andthelifeofitsownerhasimprovedconsiderably.Ifnot,thenthebusinessis
beingmanagedandoperatednotwithintheframeworkofentrepreneurship.

6. 3. Entrepreneurship Provides Valuable Goods and Services
The owner of a business, in most instances, is engaged in the sale of goods and services.
However, the mere act of selling goods or providing services does not make a person perform or act
within the concept of entrepreneurship. Anybody can sell goods or services for a price. A peddler in
the bus station, for example, sells goods to the travelers. However he/ she cannot be considered as
an entrepreneur. It would be safe to address him/her as an ordinary businessperson.
Entrepreneurship creates economic wealth by providing goods and services to the consumers. These
goods and services must have a value in order to create wealth. Otherwise, they become wasted. One
essential principle in entrepreneurship then is, "not to sell waste to consumers but only valuable
goods and services." Anything of no value to anybody is definitely a waste.
Valuable goods and services highly satisfy the target buyers in terms of quality and price.
The entrepreneur convinces the consumers that they gain more benefits than what they pay for the
goods and services.
The entrepreneur defines value from the perspective of the buyers and not only from his/ her own
because what is valuable to the entrepreneur may not be of any value to the consumers.
Value, therefore, is subjective. Not every person considers the same things as valuable.

7. 4.EntrepreneurshipEntailsOpeningandManagingtheSelf-Owned
Enterprise
Abusinessisconsideredself-ownedwhenthepersonmanagingits
dailyactivity'sisalsoitsowner.Thisisastraightforwardrequirementof
entrepreneurship.Businessesthatarebeingmanagedbyothersforthe
benefitoftheownersdonotfallwithinthesphereofentrepreneurship.
Suchbusinessesareoperatingundertheconceptofintrapreneurship.
Entrepreneurshipisnotaboutthesizeofthebusinessbutratherabout
itssoleownership.Inotherwords,entrepreneurshipincludessmall,
medium,andmultimillionbusinessesthat
aremanagedbytheirrespectiveowners.

8. 5. Entrepreneurship Is a Risk-Taking Venture
The basic concept of risk in entrepreneurship can be expressed in this statement,
"Risk is inherent in an entrepreneurial venture."
In other words, once an entrepreneurial venture is born because of new ideas or
opportunities, risk comes simultaneously with the venture. Risk cannot be
detached from any entrepreneurial venture and the only way to remove it is to
close the venture. However, closing the business means giving up becoming a
successful entrepreneur. Hence, closing the business is not the
ultimate answer in handling its inherent risk.

9. THE END