Entrepreneurship Thru Theories and Practice

A Synthesis Term Paper

Respectfully Submitted to
The Faculty of
The Graduate School
University of Cebu

Respectfully Submitted by:

John Paul G. Preston

Candidate for the degree
Master of Business Administration

In Partial Fulfillment of the

Requirements in the Course
Entrepreneurship (BM 203B)

September 2019
Chapter 12: The Challenges of Filipino Entrepreneurs

The Philippines has been known to have a high unemployment rate. Through entrepreneurship,

opportunities for jobs are created. There are also needs and wants not yet filled by industries or

other entrepreneurs that can still be filled. Entrepreneurs also can have their business in less

industrial areas. This creates economic activity that helps the entrepreneur and the community.

There are also resources that an entrepreneur can use to create new products. The

experiences of entrepreneurs can also contribute to more theories and best-case practices.

Through these entrepreneurial activities, there is a ripple effect – an entrepreneur creates

another entrepreneur. This helps people achieve more and become better versions of

themselves. Their contribution can make up for what the government has failed to do or give.

They have the power that can open and broaden the opportunities for the country and people to

grow and develop. However, they also need to work hand in hand with the government. The

government as well has to help in the creation and sustainability of small enterprises. I do agree

that entrepreneurs have the responsibility of not only satisfying the demands of the consumers

but also having to create jobs. The jobs that an entrepreneur can offer can help lessen the

unemployment rate, which ultimately helps the economy. As an entrepreneur, I feel it is my

responsibility to do so. I need to know the demands of the market. I continuously innovate and

ensure that my products are of the best quality. As in our restaurant, we always look into quality

of our food. At the same time, I also look at the other side which is being able to employ people.

My brother and I also make sure that we pay pour employees rightfully as well as provided other

perks. Being an entrepreneur, I always consider the best practices. I also read material from the

internet and books, and I try to relate the theories I have read. What I can say would be the best

contribution that the government has towards entrepreneurs is the BMBE Law which provides

SMEs with benefits such as lower taxes and exemption from minimum wage. This has been a

good law by the government to support starting entrepreneurs. Filipino entrepreneurs face

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
challenges from the stakeholders such as their customers, employees, the government, and the

general public. However, an entrepreneur can find solutions to make these challenges become

an opportunity. As unemployment is high, entrepreneurs are able to create jobs. the government

also support small-time entrepreneurs to get their business going. Entrepreneurs also have to

consider fulfilling the needs of their customers. Entrepreneurs also contribute to a better

understanding of the best practices that practicing entrepreneurs can apply. I think the best

thing an entrepreneur can do is train others who want to become entrepreneurs. The main

problem of being an employee is that income is not enough for survival. Everyone needs to

have a sideline or business to really enjoy life. Schools should teach their students to look at the

possibility of being entrepreneurs. They should provide an avenue for students to become

creative and innovative. They should hone the ideology that products can have added value or

totally making new ideas. They should also push for students to become more business-minded

instead of just becoming employees. as there are more people that need jobs, entrepreneurship

should be viewed as a way to help these people find jobs. there are also some schools that do

push for entrepreneurship; however, their methodology is a bit far-fetched. Though

entrepreneurs need to be innovative, there still should be an integration of the SMART (specific,

measurable, attainable, realistic, and time-bounded) principle. The consideration for improving

the curriculum in school should be done together with modern entrepreneurs.

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
Chapter 13: The Role of Entrepreneurship in Economic Development

Entrepreneurs have been believed to be innovative in both products and process. They

efficiently use the inputs of production, which are man, materials, machines, and manpower to

create products, services, jobs, and income. These all ultimately contribute to economic

development. When entrepreneurs use innovative methods or materials, development takes

places. The outcome or output is growth. Developments and growth theories have been utilized

implicitly or explicitly by entrepreneurs to improve the direction of their endeavour. This module

presents seven theories that an entrepreneur can use. The Laissez-faire Theory focuses on the

unlimited opportunity for market competition and innovation for entrepreneurs when the

government does not interfere. The Keynesian Theory focuses on the government’s actions

during a recession to create more jobs through more public projects. The Ricardian Theory

focuses more on land as it is the source of natural resources. The Harrod-Domar Theory

emphasizes on machines to efficiently deliver to improve development and growth. The Kaldor

Theory has an emphasis on technology. The Innovation Theory focuses on the entrepreneurs

to innovate and disrupt the equilibrium.

The contribution of practicing entrepreneurs has been positive and endless. Yet, there is still a

lack of openness to become one. The culture of the Philippines has been grounded on going to

school to be able to work. Parents do not encourage their children to venture into business.

They merely follow the culture of having someone direct one’s life instead of one directing his

life. Evidence can be seen in our parents who believe in the womb to tomb employment. Some

of the older generations have stayed in the same company until their retirement. However,

generation y has started to reconsider this practice. Through the internet, more risk-friendly

opportunities have been created. Online selling has boomed as well. These opportunities have

helped in development through the creation of new methods. Online sellers, though might not

be legitimate in the eyes of the government, proves that the Laissez-faire theory works as it has

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
shown that they are more motivated to engage in business without the interference of the

government. But then again, the downside is deviant practices of scamming by either the seller

or the buyer as the are no legal basis for scamming. the government still would have a hard

time mediating such scams. But then again, those who have built a good reputation for online

selling have earned their fair share. Non-economic theories of trust and integrity of both parties

should be highly considered. Most of them are also not employed by any company. they have

more free time for themselves or their family. They also do not face the daily struggle of having

to commute in the age of traffic and having to time in. The Harrod-Domar Theory and Kaldor

Theory also are applicable in the online selling scenarios as there is a usage of smartphones,

tablets or computers to engage in commerce. There have also been more software applications

and websites that do not necessarily need programming knowledge for users to use. Sellers do

not necessarily need to program anything, but just upload their products or services. The

internet has opened a wide opportunity for entrepreneurs as cost-efficient ways of doing things

help small-time entrepreneurs. Though online selling might not benefit the government directly

as taxes are not being remitted, it still helps generate income for the seller which in turn can be

used for buying commodities that contribute to the income of the industry and taxes for the

government.

The addition of entrepreneurship in schools, colleges, and universities should be supported by

everyone. As this practice continuously grows through new techniques, but still has the

foundation of systems. The thought of entrepreneurship which most people have is that it is

basically selling things. Parents who have not finished school sell products in the public market.

This gives an impression to their children that selling as a last resort for people who did not go

to school. However, this mindset should be stopped. It should be developed into a choice that

anyone from any social classes can take. People who can take over their parent’s million-dollar

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
business can continue. Those that have parents who are employees can take the opportunity to

create their own business.

Chapter 14: The Government and Entrepreneurship

The ideas of freedom, rights, laws, orders, and any other matter that concerns the function of

the government are aimed to create its main goal which is to protect and promote the well-being

of society. With that said, the well-being of society is also seen from a positive economic

development. The government plays a role in economic development. The duty of the

government is to ensure that employment and infrastructure are present. They need to find

ways that money is able to circulate. However, the government is far from perfect. It has its

limitations which create gaps. The role of entrepreneurs is that they fill the gap that the

government fails to fill. Because of this relationship, the government is obliged to support

entrepreneurs in their endeavors. However, the endeavors of the entrepreneurs must also be

aligned to help and promote the well-being of society. This view should also be viewed based

on what is best for all as the government should consider all sectors such as the producers,

consumers, and employees.

As an entrepreneur, I would say that one of the best supports the government can give to

starting entrepreneurs is the ease of starting a business. When I started my business, there was

just too many procedures to go through. It was also a problem as different governing agencies

are located far from each other. there is also a lack of ample parking space and commuting is

also a problem as not all jeepneys would pass by. What they can have is a simplified way of

getting a business permit. They should also open an option to have it done online so that people

need not have to wait in long lines as well as they need not be hassled because of the ‘system

slowdown’ which most government agencies reason for the slow service.

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
The government should also promote businesses that provide help to potential entrepreneurs

through financing. An example of this is the Ramon Aboitiz Foundaiton, Inc. (RAFI). They want

to help indigent mothers start a business through financing. Their efforts as well do not generate

income for their organization as their other business group does it for them. This kind of social

responsibility has helped tons of people to improve their lives. It also helps generate more ideas

that create business which has an effect of creating more businesses and employment.

The Barangay Micro Business Enterprise (BMBE) Act of 2002 is also something that starting

entrepreneurs do not know of. This act focuses on small scall businesses that are engaged in

the production, processing, or manufacturing of products or services. It also applies to business

with assets, land not included, lower than or equal to three million pesos. Most entrepreneurs

and businessmen do not know about this law that gives benefits such as exemption from taxes

and fees as well as the exemption of minimum wage law. This is extremely helpful for those that

want to start small so that they can slowly build their brand and gain capital. In my case, I find

this extremely helpful because I am able to enjoy benefits which helps me save on some

expenses. With the savings I can invest it in improving my existing business or branch out. I

always see the best option of starting a business through one’s personal savings. It has also

been unclear as to where one can apply for a BMBE. When I first applied for it, I was advised to

get the forms from the City Treasurer’s Office. There was extremely a lot of paperwork to be

done. However, I read online that you can get it from the Department of Trade and Industry. I

went there, and it was an extremely simple procedure. There were some questions being asked,

and after three days, I was able to get my BMBE certificate.

Schools also fail to teach this aspect of entrepreneurship. This is essential as it helps motivate

people to become entrepreneurs. The government should also be more supportive of

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
entrepreneurship programs. They should also be more visible on social media as it is an

inexpensive platform to disseminate information. Schools as well need to teach the more

practical aspect of being an entrepreneur instead of focusing on things that would just come and

go.

Chapter 15: Characteristics of Entrepreneurs

Through time, entrepreneurs have been associated with innovation and risk-taking endeavors to

create and distribute their products and services. However, this objective associations for the

entrepreneurs also need more clearly defined characteristics. Through risk-taking has been

synonymous to an entrepreneur, risk should be carefully considered. They do not merely jump

into risk without thinking about the possibilities of return. They make sure that the benefits of

return exceed the cost of investment. This calls for careful analysis through application of

experience and theories. The decision should also be based on what they believe in. The

confidence of knowing that their skills and products are good enough contribute to better output.

Decision-making calls for the confidence that one has on himself as well as the risk that has

been considered. Entrepreneurs also must work hard as they work for themselves; their driving

force should come internally. Motivation must come from the mindset of self-growth and

improvement. They must also not blindly copy the competition, but they must innovate what the

competitors offer. Innovativeness may be added to the products and services sold or through

the processes done to achieve the outputs. Innovativeness is what sets the difference of what

the competitor offers, and the entrepreneur has. As a leader, the entrepreneur guides his

suppliers, employees, and customers to have harmony with each other. An entrepreneur is an

optimist. He must keep looking forward and not stop in case of failure. He must see everything

that happens as an opportunity to learn and grow.

In practice, I can attest to the perception of an entrepreneur. Entrepreneurs are, indeed, risk-

takers. When I decided to start my own business, I decided to take the risk of quitting my job. I

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
did so because I did not feel the growth and motivation in my job as a business development

officer. It was risky because if my business fails or does not grow, I would have no income and

time would be wasted. However, before I did take the opportunity, I did an analysis of weight in

the cost and benefits. because I saw that the benefit was more than the cost, I became

confident in submitting my resignation letter. However, I also had to work hard to make sure that

the benefits would happen. My brother, who is a talented cook, experimented on chicken wings.

Because the taste was good for our test group, we decided to open a chicken wing restaurant in

our house. It started a bit rocky because we did not have a brand, nor did we have flavors that

made us competitive. After a few weeks of thinking, I came up with the idea of a new flavor. I

told my brother what the flavor would taste like. He immediately experimented in the kitchen.

We had to upsell the product to our customers as it was a flavor not known to all. After a while,

customers kept coming back and slowly multiplied. The idea of the flavor I had become a hit and

our restaurant has become known because of the flavor. We worked hard for our restaurant to

become what it is today. We also continue to innovate on new flavors so that our customers will

always have something to look forward to. We also continuously look for suppliers who can

deliver the same quality wings as we have experience different comments on local and imported

wings. We make sure that suppliers have a competitive price so that we can profit and still make

it affordable to our customers. We also take good care of our employees by offering the right

compensation and benefits. through this, they will be committed and engaged in their work. And

our customers get the value of what they pay for. We also faced failures such as customer

complaints because of the slow service we had before, but we learned from it, and we

continuously improve the service that we provide. Though we had no proper training in

entrepreneurship, we used the confidence we had to pursue what we wanted, and we learned

from the experiences granted.

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
Chapter 16: The Search for Business Opportunities

Business opportunities come from the effort of the entrepreneur in creating harmony amongst

the employees, customers, suppliers, and other stakeholders. Though the business is directed

to offer goods and services for the customers, the creation of these goods and services are

dependent on the other stakeholders. Though the opportunity might come from the demands

and wants of the people, production would be impossible without the inputs. These inputs come

from the suppliers. though demand and inputs are present, it still needs the support of the

employees for the business to continue. It as well needs the acceptance of the public. Once an

entrepreneur can harmonize the factors of the business opportunities, he must then analyze it

through the SWOT Analysis. Strengths and weaknesses are based internally, while the

opportunities and threats are focused on the external aspects. In addition to the mentioned

analysis, consideration for the product life cycle is also very important. The demand for the

product does not stay static. Some entrepreneurs fail because they forget to consider the

product life cycle. A product goes through the introduction, growth, maturity and decline stages.

Each stage has a unique way of handling. The introduction calls for more marketing activities so

that it builds noise. The growth calls for continuous promotion. Maturity has the product in

demand, but the increase in its demand slowly falls off. Price competition also occurs wherein

inefficient competitors slowly decrease. Decline happens when there is a decline in the product.

Before this happens, an entrepreneur has to do activities that will help the product survive. Part

of the business of an entrepreneur also lies in location. Aside from location being a big chunk of

the expenses, a good one helps the business growth through customer convenience and

loyalty. All of these factors for an opportunity lies in market research. Every detail on any

business comes from market research, and its importance is the guidance it gives to the

entrepreneur.

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
Business opportunities do come when a person analyzes his environment and pursues his

passion. Based on my experience, a starting entrepreneur must integrate what his passion is

and what is the market trend. Passion comes from reflecting on what one really desires and

what makes him happy. For the market trend, it comes from market research. For a small

business like mine, extensive market research is not necessary. From my end, simple research

was done, which was visiting restaurants that serve chicken wings to know the products as well

as asking people their thoughts of the restaurants and the products it offers. Once data has

been collected, it needs to be transformed into information that one can use to create a

business concept. As an entrepreneur, it is important to take risks, but these risks must be

studied first to know the possible costs and effects that might occur. Since my brother and I

wanted to start a business, we started it in our own home. From there, we studied new market

trends such as the use of social media to promote a business. through hard work and luck, we

were able to slowly grow our business. in the future, when we grow our business, we would

have to consider a more comprehensive approach to market research.

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
Chapter 17: Developing a Business Plan

Planning is extremely important in any endeavor one would take. It gives an idea of what to do,

how to do it, when to do it, and what to expect from it. Integrating it with business, it gives the

entrepreneur the idea of what his vision, mission, and goals are. Plans have to realistic, self-

need centric, and flexible. They also must be started with simple projects as these are more

manageable, and one can gain experience from it. The stages of business planning focus on

the unplanned stage, budget-system stage, annual planning stage, and the strategic planning

stage. When I started my business with my brother, we did not have a formal plan. What we

thought would work, we simply implemented. The risk was small and too many finances were

not involved. However, as our business grew, we started thinking of the budget for inventory

and equipment. The accumulated net sales were used to improve our business. this helped us

not be bound with creditors. As we entered our first year of business, we then realized that we

needed to plan. What we did first was we planned among ourselves, but then, I realized that it

would be best to also gather the inputs from our employees. we did so to be able to know what

to do next. We have yet to strategize a plan for the next three to five years due to our hectic

schedule. However, when I start to have more free time, I would love to draft a strategic plan.

Business planning does not necessarily need to be a comprehensive and formal approach, but

you can also have a simple business plan when your business is small. When my brother and I

started our business, we did not really have a formal business plan, neither did we have

something very comprehensive as what school would teach us to make such as a feasibility

study. However, this feasibility study is useful when you are planning to start a bigger business

that needs investor or creditor confidence and trust. But for us, we know that we had the

financial capacity to start the business and we also invest using the profit that we generated

from the net sales and we slowly marketed through word-of-mouth through our friends and

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP
social media. Since we had enough space in our house to make a dining area, we had the

location at ease. We also did not have problems with the rent.

When we started the idea of the business, we considered a SWOT analysis. Was important for

us to know the strengths and weaknesses that we had such out her talent and what we could

offer. My brother is good in the kitchen, while I have a better understanding of management and

marketing with a little skill on accounting and financing. We also had to consider what we could

offer different from the competition. It was important for us to target specific and realistic

objectives because this is where we are able to see the financial aspect of whether we would be

losing or profit. Initially, we started with people we knew, and from there we asked them to

review our restaurant. This way we were able to know how and what we can improve on. We

started our business actually in a span of a night. The next day we just started marketing it

through social media, and then from there our business slowly grew. However, when we plan to

expand to another location we would have to consider a deeper understanding and application

of business planning so that we will know what we are going to in the future.  It is important for

us now since we have a brand to consider the market, and what we can add to have more value

in our brand. We aim to be more competitive than other restaurants.

JOHN PAUL G. PRESTON

MBA - GENERIC
BM203B – ENTREPRENUERSHIP