Understanding Entrepreneurship Core Concepts and Character Traits

Subject Context: These notes are based on the Unit 1: Core Concepts of Entrepreneurship at Tarlac National High School, prepared by Vivian D. Parazo, LPT, CB.
Learning Objectives:
- Define the terms entrepreneur and entrepreneurship.
- Describe the salient features of entrepreneurship.
- Distinguish between an entrepreneurial venture and an ordinary business activity.
- Describe the importance of entrepreneurship to individuals and the nation.
- Identify the various sources of entrepreneurial ideas.
- Identify character traits common among successful entrepreneurs.
- Determine skills and competencies relevant to the practice of entrepreneurship.

Entrepreneur:
- Origin: The term originates from the French word entreprendre, which translates to "to undertake."
- Business Paradigm: It signifies the start of a new business undertaking.
- Functional Definition: According to the American Heritage Desk Dictionary, an entrepreneur is a person who organizes, operates, and assumes the risk of a business venture.
- Professional Conduct: An entrepreneur is one who strongly advocates and correctly practices the concepts and principles of entrepreneurship in operating and managing a self-owned business venture.
Entrepreneurship:
- The Art of Management: It is defined as the art of observing correct practices in managing and operating a self-owned wealth-creating business enterprise.
- Value Provision: It involves providing goods and/or services that are valuable to the customers.
- Field of Practice: Entrepreneurship refers specifically to the particular field of practice, whereas the entrepreneur is the individual practitioner.

The practice of entrepreneurship is characterized by five distinct features:

An Art of Correct Practices: It is not merely a set of rules but an art form requiring the application of specific principles and correct management practices.
Wealth-Creating Venture: Unlike activities that merely generate income for subsistence, entrepreneurship aims to create wealth (excess value).
Providing Valuable Goods and/or Services: The core output must be valuable to the target customer base.
Risk-Taking Venture: Uncertainty is inherent; the entrepreneur assumes the risk of failure or loss in exchange for potential rewards.
Opening and Managing a Self-Owned Enterprise: It involves the direct ownership and active management of the business entity.

Creativity: This serves as the fundamental basis for the discovery of something new. It is the mental process that leads to new ideas.
Innovation: This enables entrepreneurs to differentiate their business from competitors. It is the application of creative ideas to create value.
Opportunity Recognition: These skills are essential for identifying and recognizing opportunities within a dynamic and ever-changing environment.

To distinguish between an entrepreneurial venture and a standard small business activity, several factors are considered:

Motive in Opening a Business: Why the venture was started (e.g., wealth creation vs. survival).
Perception of Risk: How the owner views and manages the potential for loss.
Reactions to Changes in Environment: How the business adapts to external market shifts.
View on Competition: Whether the business seeks to innovate or simply exist alongside others.
Vision for Development and Growth: Long-term goals for scaling vs. maintaining status quo.
Horizon of Business Operation: The timeline and scope of the business's future.
Sources of Business Funds: How the capital is raised and utilized.

Provides employment opportunities.
Creates new demand in the market.
Facilitates the smooth flow of money within the local market.
Makes a substantial contribution to the raising of taxes which funds local services.

Creates new business opportunities across the nation.
Encourages competitiveness, challenging entrepreneurs to continuously improve their products and services.
Helps the country find an entrepreneurial niche in the global/world market.
Assists the national government in achieving favorable economic ratings in the world market.

Entrepreneurs derive their business ideas from various external and internal stimuli:

Changes in the External Environment: Shifts in society, demographics, or the physical world.
Technological Discovery and Advancement: New inventions or improvements in existing tech.
Government’s Thrust, Programs, and Policies: New laws, incentives, or national priorities.
People’s Interests: Trends, hobbies, and changing consumer preferences.
Past Experiences: Lessons learned from previous jobs, businesses, or personal life.

Successful entrepreneurs typically exhibit traits categorized into three clusters:

Definition: The internal desire to be an achiever in the field of entrepreneurship and the aspiration for high quality.
Specific Traits:
- Opportunity seeker.
- Committed.
- Persistent.
- Risk-taker.
- Efficient and Quality oriented.

Definition: The tendency to begin the day with a specific plan and conclude it with a review of the progress made against that plan.
Specific Traits:
- Goal-setter.
- Information-seeker.
- Systematic in planning and monitoring.

Definition: The ability to maintain a high degree of interrelationship within the business community through influence and linkages.
Specific Traits:
- Persuasive and a positive networker.
- Self-confident.

General Skills: Considered as the personal abilities to do things well. They are acquired and developed through constant and correct practice.
Definition of a Skillful Person: It is the totality of the knowledge, experience, and aptitude of a person.
Entrepreneurial Skills: Refers to a specific set of cognitive, problem-solving, technical, and interpersonal skills required for entrepreneurial practice.

The Formula: Entrepreneurial Core Competency is the integration of three elements:
1. Entrepreneurial Skills
2. Entrepreneurial Concepts and Principles
3. Entrepreneurial Characteristics
Competitive Advantage: Core competency acts as the ultimate source of competitive advantage for a business, enabling it to outperform others.