WHAT IS ENTREPRENEURSHIP
Entrepreneurship- refers to the economic activity of a person who starts,
manages, and assume the risk of a business enterprise. The person who
undertakes entrepreneurial activities is called an entrepreneur.
An Example of Entrepreneurship Activity
Entrepreneur's Concern Problem at Hand
1. High income families are not 1.
satisfied with the services
1. Identifying an economic need provided by high schools in their
area.
2. Resources must be made 2.
2. Assembling resources required available.
3. Assuming risk 3. Venture must be made. 3.
Entrepreneur's Action
Establish a high school education with
higher standards than the current high
schools are providing.
Acquire funds, hire people, construct
buildings, and the like.
Prepare project study, advertise,
maintain good relationship with
employee and customers, among
others.
 ENTREPRENEURS-performs the function of harnessing the
potentials of any or all of the various elements
ECONOMIC DEVELOPMENT-is a scheme aimed at improving the living standards of
the nations citizenry. To achieve the following goals, proper management of the
following elements is necessary
1. Human resources (labor supply, education, discipline and motivation)
2. Natural resources (land, mineral, fuel and climate)
3. Capital formation (machines, factories, roads)
4. Technology (science, engineering, management and entrepreneurship)
 THE ENTREPRENEURS TASK &
RESPONSIBILITIES
1. TO PROVIDE PRODUCTS AND SERVICES FOR CUSTOMERS
AND PRODUCERS
2. TO PROVIDE EMPLOYMENT
3. TO HELP IN GAINING TAXES REVENUE FOR THE GOVT.
4. TO PROVIDE DEMAND FOR SUPPLIERS, PRODUCTS AND
SERVICES
5. TO PROVIDE TRAINING FACILITIES FOR FUTURE
ENTREPRENEURS.
 Land Labor Capital
(Natural Resources) (Human Resources) (Financial Resources)

Entrepreneur

Production Process

Finished Goods and Services

THE ENTREPRENEUR PERFORMS THE FOLLOWING FUNCTION
TO MAKE PROFITS

1. TO SUPPLY THE NECESSARY CAPITAL

2. TO ORGANIZE PRODUCTION BY BUYING AND
COMBINING INPUTS LIKE MATERIALS AND LABOR
3. TO DECIDE ON THE RATE OF OUTPUT, IN THE LIGHT OF
HIS EXPECTATION ABOUT DEMAND
4. AND TO BEAR THE RISK INHERENT TO THE VENTURE
 INNOVATION-maybe defined as the introduction of a new method,
procedure, custom, device, among others could be any of the following
1. New Product
2. New Process of Production
3. SUBSTITUTION of a cheaper material in an unaltered product
4. REORGANIZATION OF PRODUCTION, internal function, or distribution arrangement leading to
increase efficiency, better support for a given product, or lower cost.
5. Improvement in Instrument or methods of doing innovation. Innovation may also be viewed as the
last stage in important process consisting of the following
Invention-refers to the discovery or devising of new products and processes
Development-refers to the process by which ideas techniques and principles are generated
Innovation-refers to the actual introduction of a new product or process
INNOVATION must reduce costs or improve the quality of products or services offered for sales
THE TRANSITION FROM A NEW VENTURE TO A SUCCESSFUL
LONG-TERM ENTERPRISES
1. PRESTART-UP STAGE- PLANNING, STUDYING, FROM QUESTIONING THE FEASIBILITY
OF AN IDEA, PRODUCT AND SERVICES.

2. START-UP STAGE-FORMATION OF BUSINESS, GENERATION OF NECESSARY CAPITAL,

PURCHASE OF EUIPMENT, CONSTRUCTING PROTOTYPE PRODUCTS AND TESTING THE MARKET

3. EARLY GROWTH STAGE-FOLLOWS AFTER THE ESTABLISHING FEASIBILITY.

WHAT PROFITS OR NOT

4. LATE GROWTH STAGE-FINAL STAGE BEFORE THE NEW VENTURES MATURE

THE FACTORS OF PRODUCTION AND THEIR REWARDS
Factors of Production Economic Reward Limiting Factor for
Rewards Received
Land Rent Supply and Demand

Capital Interest Industry rates/government

mandates rates
Labor Wages/Salary Supply and demand
Legislation
Entrepreneur Profits Skill of Entrepreneur
 As the landowners earns rent for allowing the use of his property,
Owner of the Capital earns interest for allowing use of his capital.
The laborer on duty earns wages for his effort
Entrepreneur earns profit for deciding how the business shall be run
Innovation and Its Possible Effects on Competing Firms
Entrepreneur Entrepreneur Entrepreneur
1 2 3
Year 1 introduce innovative product Inactive Inactive

Year 2 reap moderate profits Introduce innovative product Inactive

Year 3 maximize profits Reap moderate profits Introduce innovative product

Year 4 profits decline Maximize profits Reap moderate profits

Year 5 introduce innovative product Profits decline Maximizze profits

 EXAMPLE OF INNOVATIONS
1. OFFERING BUSINESS SERVICES DURING
SUNDAY AND HOLIDAYS
2. MANUFACTURE AND SALE OF NEW
PRODUCT
3. SELLING ON A DEFERRED PAYMENT
SCHEME