ACCOUNTANCY, BUSINESS AND MANAGEMENT ENTREPRENEURSHIP HAND-OUTS

ENTREPRENEURSHIP- according to professor NATHANIEL LEFT – is the capacity for innovation,

investment and expansion in new markets, products and techniques. It implies that an enterprise is at work
whenever an individual takes the risks and invest resources to make something new, designs a new way of
making something that already exists, or create new markets.
Entrepreneurship is not only applicable to business enterprise, it can also be done in schools, hospitals, and
other social services institutions.
Entrepreneurship also is the ability to be able to know what products and services are needed by people and to
be able to provide these things at the right time, at the right place and to the right people, and at the right price.
 It involves having a great idea or concept and gathering resources such as people, money, raw materials,
knowledge and know-how in order to produce the products and services that people are willing to buy.

ENTREPRENEUR – the owner of a business who attempts to make money by risk and initiative.
-Person who undertakes a commercial venture.

ENTREPRENEURSHIP ALWAYS INVOLVE AN OPPORTUNITY

Entrepreneurship happens when a person or the entrepreneur identifies an opportunity where he can
make a profit. It may as simple as buying a product at a lower price in one location, and selling it at a higher
price in another location or it can be more complicated as when an entrepreneur buys new materials combine
them in a new manufacturing process, produces a new product, and then sells it at a price greater than the cost
of producing it.

ENTREPRENEURSHIP ALWAYS INVOLVE SOMETHING NEW

Entrepreneurship involves introducing something new or novel, but this novelty can be found in many forms –
some may involve very dramatic changes, while others can be in small or subtle modifications. This concept of
introducing something new is called innovation which is defined as a new method, idea or product.
To innovate is to be able to translate an idea or invention into a good or service that has commercial
value.
i.e. it is something that people will pay for.

ENTREPRENEURIAL ENTERPRISE CAN INVOLVE:

 New concepts and/ or a new business
 Existing concept and / or a new business
 Existing concept / existing business

THE TYPES OF ENTERPRISES ACCORDING TO SIZE:

Enterprises in the Philippines are often categorized:

1. MICRO-ENTERPRISE – are businesses with total assets of less than Php3 million and employ less
than ten people.

Example of Micro-enterprise
 Sari-sari store
 Food stall
 Watch repair stall
 Meat stand in the public market

2. SMALL ENTERPRISE – are those businesses that have total assets between Php3 million and Php15
million, and employ between 10 and 99 people.

Example of Small enterprise

 A small printing press
 A chain of laundry shops
 A travel agency
 A restaurant
 A small beauty salon
 A consulting company
 3. MEDIUM ENTERPRISE – are those businesses that have total assets worth more than Php15 million
and employ 100 people and more.

Example of Medium enterprise

 A food manufacturing corporation
 A large supermarket

These businesses are often classified according to the assets they possess and the number of employees they
have.
Assets – are properties owned by a person or company, which are regarded as having economic value.

SOME EXAMPLE OF ASSETS

 Cash
 Real estate
 Office equipment
 Manufacturing equipment
 Vehicles
 Securities
 Inventory

INDUSTRIES WHERE MSMEs CAN BE FOUND

The table below identifies the industry sectors where most MSMEs can be found:
SECTORAL DISTRIBUTION OF MSMEs
INDUSTRY NUMBER OF MSMEs PERCENTAGE
Wholesale and Retail Trade 476 105 61.2%
Manufacturing 111 987 14.4%
Hotels and Restaurants 97 298 12.5%
Real Estate, Renting, Business Activities 47 654 6.2%
Other Community, Social, and Personal Services 44 313 5.7%
Total 777 357 100%

MSMEs Contribute to Employment

The MSMEs generated a total of 3 595 641 jobs in 2009, as compared to the 2 094 928 for large enterprises.
This means that MSMEs contributed almost 63.2% of the total jobs generated by all types of business
establishments that year. It can be seen why entrepreneurship is considered a great contributor to providing jobs
and reducing unemployment in the country. A great bulk of the jobs available in the market is created by the
MSMEs. Majority of the jobs are generated by MSMEs in the National Capital Region (NCR), followed by
MSMEs in Region 4-A (Calabarzon), then Region 3 (Central Luzon), Region 7 (Central Visayas), and Region 6
(Western Visayas).

REGIONS WITH THE GREATEST NUMBER OF JOBS CREATED BY MSMEs IN THE PHILIPPINES
(2009)
Rank Region Jobs Created by MSMEs
1 National Capital Region (NCR) 1 360 440
2 Region 4 – A (Calabarzon) 466 648
3 Region 3 (Central Luzon) 319 340
4 Region 7 (Central Visayas) 235 091
5 Region 6 (Western Visayas) 193 543

TYPES OF ENTERPRISE ACCORDING TO GOALS

Enterprise can be categorized into two groups:

1. BUSINESS ENTERPRISES – are entities that engage in commercial activities for the purpose of
livelihood or profit.
 Example of Commercial activities: Manufacturing, Trading, Selling, and distributing.

Entrepreneurs start and develop businesses to earn a living for themselves and their families. But some
create companies, which is a form of business enterprise, for the purpose of creating profit, and of providing
investors with a fair return of the money they invested in the corporation.

2. SOCIAL ENTERPRISES – are organizations that use commercial activities to improve human and
environmental well-being.

Social Enterprise three goals

 Profit
 Well-being of people
 Planet

Example of famous social enterprise

 Gawad kalinga – which has successfully built homes and communities
 Multiventures, Inc – launched Hapinoy – which aims to turn the sari-sari store into community branded
stores
 Cordillera Coffee – which helps poor coffee farmers get a better price for their produce.