ENTREPRENEURSHIP

Contributions to the Economy

Entrepreneurship employs the
various resources present in the
economy
Entrepreneurs need manpower for
their business operations
It is said that entrepreneurship is
the backbone of the economy
The ability of entrepreneurs to
innovate goods and services
The ability of entrepreneurs to gain
international popularity and
prestige for their country
The willingness of entrepreneurs
to take risks, risks that society will
otherwise be hesitant to take
Entrepreneurs also profoundly
inspire budding and potential
entrepreneurs
SOCIO-ECONOMIC BENEFITS
FROM ENTREPRENEURSHIP
• Promotes self-help and employment
• Mobilizes capital
• Provides taxes to economy
• Empowers individual
• Enhances national identity and pride
• Enhances competitive consciousness
• Improves quality of life
• Enhances equitable distribution of
income and wealth
 CATEGORIES OF SMEs
(Small and Medium Enterprises)
AMOUNT OF AMOUNT OF
SMALL AND MEDIUM CAPITALIZATION CAPITALIZATION
ENTERPRISE CATEGORY (CAPITALIZATION) (EMPLOYMENT SIZE)

MICRO ENTERPRISE less than Php 3 Million less than 10 employees

from Php 3 Million from 10 employees

SMALL ENTERPRISE
to Php 15 Million to 100 employees

from Php 15 Million from 100 employees

MEDIUM ENTERPRISE
to Php 100 Million to 500 employees

from Php 100 Million 500 employees

LARGE ENTERPRISE
and above and above
BARRIERS TO GROWTH
OF PHILIPPINE SMEs
• Poor access to finance
• Obsolete technology
• Low productivity
• Lack of skills upgrading
• Lack of information
• Inability to make entrepreneaurial
transition
• Poor linkage among small, medium and
large industries
• Inappropriate location
• Management incompetence
• Poor market access
• Lack of infrastructure
• Bureaucratic/ cumbersome procedures
• Severe global competition
IMPORTANCE AND BENIFITS
OF SMALL BUSINESSES
TODAY
IMPORTANCE
• The small business sector continues to
create many of the new ideas and
innovations that future generations tend
to take for granted.
• Small businesses contribute to the GNP
of a country and meet local needs that
many of the national producers do not
offer.
IMPORTANCE
• It is 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.
• The presence of micro-enterprise and
small businesses contribute to the
revenues of local communities.
BENIFITS
• Small businesses develop more personal
relationships.
• Relatively low overhead costs.
• Catering to limited or niche markets.
• Quicker response to trends and
situations.
CHALLENGES FOR SMALL
BUSINESSES
• Running an enterprise on your own
involves hard work and having to make
most decisions on your own.
• It is rather difficult to achieve economics
of scale and be cost-efficient when
capitalization and other resources are
not abundant.
• Discounts in terms of buying raw
materials are also limited for a small
business that tends to buy in smaller
quantities.
• Another key limitation of small businesses
is their inability to employ specialists or
highly skilled laborers in their enterprises.
• Better technology and better information
(or production processes) may not
necessarily be readily available for small
enterprises.
• Access to greater financing presents yet
another formidable challenge to
entrepreneurs.