ENTREPENEUSHIP: ENTREP 210

Module 1

Week 2: August 31-September 6, 2020 | 1st Semester, S.Y. 2020-2021

Introduction
This course introduces the basic concepts of Entrepreneurship in the Philippine
Setting. Topics covered include theories and concept of entrepreneurship, legal forms
of business organization, business opportunity identification and making of business
plan.
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Intended Learning Outcomes
 Determine the basic principles, concept and theories of entrepreneurship;
 Identify the different types of entrepreneurs; and
 Differentiate entrepreneur from Intrapreneur
Lesson 2: Different Types of Entrepreneurs

REVIEW:
Entrepr
Aeneur n entrepreneur is someone who organizes, manages, and assumes the risks of
a business or enterprise. An entrepreneur is an agent of change.
 Entrepreneurs are people who have a passion for creating change in the
world. They need a certain set of skills to be effective leaders and innovators.
 In economist-speak, an entrepreneur acts as a coordinating agent in
a capitalist economy. This coordination takes the form of resources being
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Becoming an Entrepreneur
company has more than 8,900 locations worldwide.

Following an ice cream making correspondence course, Jerry Greenfield

and Ben Cohen paired $8,000 in savings with a $4,000 loan, leased a
Burlington, Vt., gas station and purchased equipment to create uniquely
flavored ice cream for the local market. Twenty years later, Ben &
Jerry’s hauls in millions in annual revenue.

Unlike traditional professions, where there is often a defined path to follow, the road
 to entrepreneurship is mystifying to most. What works for one entrepreneur might
not work for the next and vice versa. That said, there are five general steps that most,
if not all, successful entrepreneurs have followed:

1. Ensure Financial Stability

This first step is not a strict requirement but is definitely recommended. While
entrepreneurs have built successful businesses while being less than financially flush
(think of Facebook founder Mark Zuckerberg as a college student), starting out with
an adequate cash supply and ensuring ongoing funding can only help an aspiring
entrepreneur, increasing his or her personal runway and give him more time to work
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on building a successful business, rather than worrying about making quick money.

2. Build a Diverse Skill Set

Once a person has strong finances, it is important to build a diverse set of skills and
then apply those skills in the real world. The beauty of step two is it can be done
concurrently with step one.

Building a skill set can be achieved through learning and trying new tasks in real-
world settings. For example, if an aspiring entrepreneur has a background in finance,
he can move into a sales role at his existing company to learn the soft skills
necessary to be successful. Once a diverse skill set is built, it gives an entrepreneur a
toolkit that he can rely on when he is faced with the inevitability of tough situations.

3. Consume Content Across Multiple Channels

As important as building a diverse skill set is, the need to consume a diverse array of
content is equally so. This content can be in the form of podcasts, books, articles or
lectures. The important thing is that the content, no matter the channel, should be
varied in what it covers. An aspiring entrepreneur should always familiarize himself
with the world around him so he can look at industries with a fresh perspective,
giving him the ability to build a business around a specific sector.

4. Identify a Problem to Solve

Through the consumption of content across multiple channels, an aspiring
entrepreneur is able to identify various problems to solve. One business adage
dictates that a company's product or service needs to solve a specific pain point—
either for another business or for a consumer group. Through the identification of a
problem, an aspiring entrepreneur is able to build a business around solving that
problem.

It is important to combine steps three and four so it is possible to identify a problem

to solve by looking at various industries as an outsider. This often provides an
aspiring entrepreneur with the ability to see a problem others might not.

5. Solve That Problem

Successful startups solve a specific pain point for other companies or for the public.
This is known as "adding value within the problem." Only through adding value to a
specific problem or pain point does an entrepreneur become successful.

Say, for example, you identify the process for making a dentist appointment is
complicated for patients, and dentists are losing customers as a result. The value
could be to build an online appointment system that makes it easier to book
appointments.
 Entrepreneurs are classified into different types based on different classifications as
mentioned below:

Based on the Type of Business:

1. Trading Entrepreneur:
As the name itself suggests, the trading entrepreneur undertake the trading activities.
They procure the finished products from the manufacturers and sell these to the
customers directly or through a retailer. These serve as the middlemen as
wholesalers, dealers, and retailers between the manufacturers and customers.
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2. Manufacturing Entrepreneur:
The manufacturing entrepreneurs manufacture products. They identify the needs of
the customers and, then, explore the resources and technology to be used to
manufacture the products to satisfy the customers’ needs. In other words, the
manufacturing entrepreneurs convert raw materials into finished products.

3. Agricultural Entrepreneur:
The entrepreneurs who undertake agricultural pursuits are called agricultural
entrepreneurs. They cover a wide spectrum of agricultural activities like cultivation,
marketing of agricultural produce, irrigation, mechanization, and technology.

Based on the Use of Technology:

1. Technical Entrepreneur:
The entrepreneurs who establish and run science and technology-based industries are
called ‘technical entrepreneurs.’ Speaking alternatively, these are the entrepreneurs
who make use of science and technology in their enterprises. Expectedly, they use
new and innovative methods of production in their enterprises.

2. Non-Technical Entrepreneur:
Based on the use of technology, the entrepreneurs who are not technical
entrepreneurs are non-technical entrepreneurs. The forte of their enterprises is not
science and technology. They are concerned with the use of alternative and
imitative methods of marketing and distribution strategies to make their business
survive and thrive in the competitive market.

Based on Ownership:
1. Private Entrepreneur:
A private entrepreneur is one who as an individual sets up a business enterprise. He /
she is the sole owner of the enterprise and bears the entire risk involved in it.

2. State Entrepreneur:
When the trading or industrial venture is undertaken by the State or the Government,
it is called ‘state entrepreneur.’
 3. Joint Entrepreneurs:
When a private entrepreneur and the Government jointly run a business enterprise, it
is called ‘joint entrepreneurs.’

Based on Gender:
1. Men Entrepreneurs:
When business enterprises are owned, managed, and controlled by men, these are
called ‘men entrepreneurs.’
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2. Women Entrepreneurs:
Women entrepreneurs are defined as the enterprises owned and controlled by a
woman or women having a minimum financial interest of 51 per cent of the capital
and giving at least 51 per cent of employment generated in the enterprises to women.

Based on the Size of Enterprise:

1. Small-Scale Entrepreneur:
An entrepreneur who has made investment in plant and machinery up to Rs 1.00
crore is called ‘small-scale entrepreneur.

2. Medium-Scale Entrepreneur:
The entrepreneur who has made investment in plant and machinery above Rs 1.00
crore but below Rs 5.00 crore is called ‘medium-scale entrepreneur.’
3. Large-Scale entrepreneur:
The entrepreneur who has made investment in plant and machinery more than Rs
5.00 crore is called ‘large-scale entrepreneur.’
Based on Clarence Danhof Classification:
Clarence Danhof (1949), on the basis of his study of the American Agriculture,
classified entrepreneurs in the manner that at the initial stage of economic
development, entrepreneurs have less initiative and drive and as economic
development proceeds, they become more innovating and enthusiastic.

Based on this, he classified entrepreneurs into four types:

These are discussed in seriatim:
1. Innovating Entrepreneurs:
Innovating entrepreneurs are one who introduce new goods, inaugurate new method
of production, discover new market and reorganize the enterprise. It is important to
note that such entrepreneurs can work only when a certain level of development is
already achieved, and people look forward to change and improvement.

2. Imitative Entrepreneurs:
These are characterized by readiness to adopt successful innovations inaugurated by
innovating entrepreneurs. Imitative entrepreneurs do not innovate the changes
themselves, they only imitate techniques and technology innovated by others. Such
types of entrepreneurs are particularly suitable for the underdeveloped regions for
bringing a mushroom drive of imitation of new combinations of factors of production
already available in developed regions.

3. Fabian Entrepreneurs:
Fabian entrepreneurs are characterized by very great caution and skepticism in
experimenting any change in their enterprises. They imitate only when it becomes
perfectly clear that failure to do so would result in a loss of the relative position in
 the enterprise.

4. Drone Entrepreneurs:
These are characterized by a refusal to adopt opportunities to make changes in
production formulae even at the cost of severely reduced returns relative to other
like producers. Such entrepreneurs may even suffer from losses but they are not
ready to make changes in their existing production methods.
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Following are some more types of entrepreneurs listed by some

other behavioural scientists:
1. Solo Operators:
These are the entrepreneurs who essentially work alone and, if needed at all, employ
a few employees. In the beginning, most of the entrepreneurs start their enterprises
like them.

2. Active Partners:
Active partners are those entrepreneurs who start/ carry on an enterprise as a joint
venture. It is important that all of them actively participate in the operations of the
business. Entrepreneurs who only contribute funds to the enterprise but do not
actively participate in business activity are called simply ‘partners’.

3. Inventors:
Such entrepreneurs with their competence and inventiveness invent new products.
Their basic interest lies in research and innovative activities.

4. Challengers:
These are the entrepreneurs who plunge into industry because of the challenges it
presents. When one challenge seems to be met, they begin to look for new
challenges.

5. Buyers:
These are those entrepreneurs who do not like to bear much risk. Hence, in order to
reduce risk involved in setting up a new enterprise, they like to buy the ongoing one.

6. Life-Timers:
These entrepreneurs take business as an integral part to their life. Usually, the family
enterprise and businesses which mainly depend on exercise of personal skill fall in
this type/category of entrepreneurs.
 Different Types of Entrepreneurship
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1. Small Business Entrepreneurship
 A majority of businesses are small businesses.
 People interested in small business entrepreneurship are most likely to make a
profit that supports their family and a modest lifestyle. They aren't seeking
large-scale profits or venture capital funding.
 Small business entrepreneurship is often when a person owns and runs their
own business. They typically hire local employees and family members.
 Local grocery stores, hairdressers, small boutiques, consultants and
plumbers are a part of this category of entrepreneurship.

2. Scalable Startup Entrepreneurship

 This kind of entrepreneurship is when entrepreneurs believe that their
company can change the world.
 They often receive funding from venture capitalists and hire specialized
employees.
 Scalable startups look for things that are missing in the market and create
solutions for them.
 Many of these types of businesses start in Silicon Valley and are technology-
focused. They seek rapid expansion and big profit returns. Examples of
scalable startups are Facebook, Instagram and Uber.

3. Large Company Entrepreneurship

 Large company entrepreneurship is when a company has a finite amount of
life cycles.
 This type of entrepreneurship is for an advanced professional who knows
how to sustain innovation.
 They are often a part of a large team of C-level executives.
 Large companies often create new services and products based on consumer
preferences to meet market demand.
 Small business entrepreneurship can turn into large company
entrepreneurship when the company rapidly grows.
 This can also happen when a large company acquires them. Companies such
as Microsoft, Google and Disney are examples of this kind of
entrepreneurship.
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4. Social Entrepreneurship
An entrepreneur who wants to solve social problems with their products and services
is in this category of entrepreneurship. Their main goal is to make the world a
better place. They don't work to make big profits or wealth. Instead, these kinds of
entrepreneurs tend to start nonprofits or companies that dedicate themselves to
working toward social good.

Difference between Entrepreneurship and Intrapreneurship

If you have great ideas for businesses or products and want to convert this ideas into
something tangible, you may find yourself wanting to know the difference between
entrepreneurs and intrapreneurs.

An entrepreneur is someone who designs and launches a new business, which

means that they will take on all of the rewards and risks that come with running a
business. On the other hand, an intrapreneur is an individual who uses their
entrepreneurial skills to create and develop a new project in the company that they
 already work at, which eliminates many of the risks that come with running a
business as an entrepreneur.

While there are many similarities between entrepreneurs and intrapreneurs,

understanding the differences between these two types of professionals should help
you determine which role you wish to pursue. There are distinct benefits for each
role that may be of interest to you when you’re mapping out what your next
business move is going to be. The following guide provides an in-depth look at the
differences between entrepreneurs and intrapreneurs as well as the shared traits
between these two roles.
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An entrepreneur is an individual who designs, launches, and manages a new

business, which almost always starts out as a small business. Individuals who

create and launch a business take on the majority of the risks associated with
developing a business. However, they will also reap most of the rewards.
Entrepreneurs who can successfully bring a business to the market are considered to
be innovators. These individuals will regularly develop new ideas, services, goods,
and businesses.

Entrepreneurs are a key component of the greater economy because their skills

are necessary for anticipating the needs of customers and bringing their new ideas
onto the market. While it can be very risky to be an entrepreneur when one of your
ideas fail, the rewards that entrepreneurs have access to include possible fame, high
profits, and numerous growth opportunities throughout their careers.
 What is an Intrapreneur?

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An intrapreneur is an individual who works on developing new ideas and

products within the confines of the business that they already work
at. Intrapreneurs include any person within the company that applies
entrepreneurial skills, vision, and forward thinking into the role that they have in the
company.

 One of the more appealing reasons to be an intrapreneur is that it allows you

to form new ideas, products, and business goals without taking on the risks
that come with starting a new business as an entrepreneur.
 An intrapreneur can be anyone from an intern to the vice president of the
company in question.
 Successful intrapreneurs will foster innovation in the company that they work
for.
 In most cases, an intrapreneur will be given full control over the project that
they are working on even though the project is usually designed to have a
significant impact on the company itself.
 Many individuals who begin as intrapreneurs will eventually develop into
entrepreneurs once they decide to leave the company that they work at and
form their own business.

Shared Traits Between Entrepreneur and Intrapreneur

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Both entrepreneurs and intrapreneurs have a drive to innovate whenever possible,

which is why there are many shared traits between them. These shared traits include:

 Leadership

When it comes to leadership, both entrepreneurs and intrapreneurs must have

strong and effective leadership skills if they want to turn their idea into a
successful product, business, or company change. In order to obtain any kind of
success as an entrepreneur or intrapreneur, both of these types of individuals should
be able to motivate other people to work towards the same goal. Whether you work
as an entrepreneur or intrapreneur, the unknown is a large component of developing
an idea or a business.

 Adaptability

As for adaptability, this is a critical element of being successful as an entrepreneur

or intrapreneur. No matter how great your idea is or how effective you are at
managing a team, the life of an entrepreneur or intrapreneur is filled with challenges
and roadblocks that can threaten to derail all of your business goals and objectives.
Even the best strategies encounter problems, which is why entrepreneurs and
intrapreneurs will need to know how to adapt.

 Intelligence

The other primary shared trait between entrepreneurs and intrapreneurs is

intelligence. In many cases, having intelligence means understanding which skills
and tools are needed to complete a project.
  Whether you are in the midst of starting a new business or changing the way
that the company you work with operates, you will almost certainly need to
be intelligent if you want to reach success with your main business goal.
 One aspect of intelligence is knowing what to expect from the wider market.
 In order for intelligence to be effective and to be properly applied, it should
be paired with vision, which refers to being able to recognize market trends
and capitalize on some of the emerging opportunities in the market.
 Ex: Bill Gates wouldn’t be where he is today if he didn’t understand that
personal computers and the internet would eventually become mainstay in
practically every home in the country.
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 While it’s not easy to anticipate the needs of any market, entrepreneurs and
intrapreneurs should be able to do so if they want to remain ahead of the
competition.

Difference Between Entrepreneur and Intrapreneur

Entrepreneur

Meaning: An entrepreneur develops their own business with a new concept or idea
that they’ve cultivated.
Objective: To bring something new to the market.
Primary Motives: Financial gain, independence, and innovation.
Risk: Every type of risk applies to the entrepreneur.
Capital and Resources: Any resources and capital are raised entirely by the
entrepreneur. Raising these funds usually involves seeking financing from angel
investors and venture capital firms.
Works For: Operates entirely separately from an organization in order to become a
leader in the market. Entrepreneurs primarily serve their customers.
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Intrapreneur
Meaning: An
intrapreneur is an employee of a company who uses their entrepreneurial skills
within the business to innovate in company processes, services, and products.
Objective: To directly enhance the sustainability and strength of the company that
they work for.
Primary Motives: To bolster the revenues and profits of the company they work for
by making substantial changes to the company and how they operate.
Risk: Most of the risk is taken on by the company. However, poor ideas and changes
for the business may cause intrapreneurs to be fired.
Capital and Resources: All capital and resources that are needed for the project at
hand are provided by the company.
Works For: An intrapreneur works for an organization. However, they will have
some of the freedoms that entrepreneurs have. For instance, intrapreneurs typically
have complete control over a specific project.
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 References
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entrepreneurship/31823#:~:text=These%20three%20aspects%20are
%20nature,discovery%20theory%20and%20creative%20theory.
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Entrepreneurship.html#:~:text=Entrepreneurship%20is%20the%20process
%20of,the%20entrepreneur%20makes%20a%20profit.
 W J Baumol
Entrepreneurship in economic theory
The American Economic Review, volume 58, issue 2, p. 64 - 71
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 Sevandal, Rosewin L., 2018,Lecture Manual Fundamentals of
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 Somoray, Ana Marie., 2000, Lecture Compilation, Entrepreneurship and
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