Importance of Entrepreneurship
Compounded Benefits of Entrepreneurship
Basically, the benefits derived from entrepreneurship are compounded from one level to the next. It produces a chain of progressive results from the individual entrepreneur to the local community and finally to the whole Philippine economy.
Once the life of the entrepreneur or any individual Filipino is benefited, the local economy where entrepreneurship is practiced benefits as well.
When the Philippine economy grows on account of entrepreneurship, the related effects of development and growth are returned by the government to the community and finally to every Filipino.
Basically, the benefits derived from entrepreneurship are compounded from one level to the next. It produces a chain of progressive results from the individual entrepreneur to the local community and finally to the whole Philippine economy.
Once the life of the entrepreneur or any individual Filipino is benefited, the local economy where entrepreneurship is practiced benefits as well.
When the Philippine economy grows on account of entrepreneurship, the related effects of development and growth are returned by the government to the community and finally to every Filipino.
The Flow of Entrepreneurial Benefits
The first party to receive the benefits of entrepreneurship is the Filipino people which includes the entrepreneur himself/herself and other people who have direct dealings with the entrepreneur in the community.
The benefits received by the Filipino people are transferred to or shared with the local community where the concept of entrepreneurship is practiced. Then these are either transferred to the Philippine economy or flowed back to the Filipino people. The contributions or benefits of entrepreneurship that went to the Philippine economy are then flowed back to the local community and to the Filipino people.
Example of the domino effect of entrepreneurship:
Jenny's Hair Saloon
Jenny, upon seeing a promising and brilliant business opportunity in the community, opened a beauty shop.
She went to the Department of Trade and Industry, the City Government of Ormoc City, and the Bureau of Internal Revenue to process, pay, and comply with all the documentary requirements and fees in opening a business. The total taxes and licenses paid by Jenny in opening the business amounted to 5,000.
Upon receipt of the business permit, Jenny immediately bought all the needed equipment and materials for her beauty shop. For all these equipment and fixtures, she paid 60,000. She then rented a business space at 10,000 per month.
She hired and employed five beauticians and provided them salary above the minimum salary and all statutory benefits. The total annual compensation and benefits paid by Jenny to her employees for the year amounted to 540,000.
Jenny at the end of the year is enriched by 590,000 after paying the annual income tax of 110,000 to the BIR.
Based on the flow of benefits and contributions of entrepreneurship, the effects will appear as follows:
1. Jenny as the entrepreneur is enriched by 590,000 during the year.
2. The five employees or beauticians are enriched financially at a total amount of 540,000.
3. The owner of the rented building is enriched by 10,000 per month or 120,000 for the whole year, while the supplier of equipment and fixtures was enriched by 60,000
4. The local government collected local taxes amounting to 5,000
5. The national government, through its collection agency, BIR collected the annual income tax of 110,000.
6. The taxes collected by the local and national government will be returned to the general public in the form of services like roads, street lights, police security, and other public services.
The benefits received by the Filipino people are transferred to or shared with the local community where the concept of entrepreneurship is practiced. Then these are either transferred to the Philippine economy or flowed back to the Filipino people. The contributions or benefits of entrepreneurship that went to the Philippine economy are then flowed back to the local community and to the Filipino people.
Example of the domino effect of entrepreneurship:
Jenny's Hair Saloon
Jenny, upon seeing a promising and brilliant business opportunity in the community, opened a beauty shop.
She went to the Department of Trade and Industry, the City Government of Ormoc City, and the Bureau of Internal Revenue to process, pay, and comply with all the documentary requirements and fees in opening a business. The total taxes and licenses paid by Jenny in opening the business amounted to 5,000.
Upon receipt of the business permit, Jenny immediately bought all the needed equipment and materials for her beauty shop. For all these equipment and fixtures, she paid 60,000. She then rented a business space at 10,000 per month.
She hired and employed five beauticians and provided them salary above the minimum salary and all statutory benefits. The total annual compensation and benefits paid by Jenny to her employees for the year amounted to 540,000.
Jenny at the end of the year is enriched by 590,000 after paying the annual income tax of 110,000 to the BIR.
Based on the flow of benefits and contributions of entrepreneurship, the effects will appear as follows:
1. Jenny as the entrepreneur is enriched by 590,000 during the year.
2. The five employees or beauticians are enriched financially at a total amount of 540,000.
3. The owner of the rented building is enriched by 10,000 per month or 120,000 for the whole year, while the supplier of equipment and fixtures was enriched by 60,000
4. The local government collected local taxes amounting to 5,000
5. The national government, through its collection agency, BIR collected the annual income tax of 110,000.
6. The taxes collected by the local and national government will be returned to the general public in the form of services like roads, street lights, police security, and other public services.
Contributions of Entrepreneurship
- constant innovation of products & services.
- constant improvement of business activities (marketing, sales, customer service).
- business transactions are conducted with integrity.
- wealth is created & accumulated.
- only valuable products & services are offered to customers.
- business operations are managed & monitored well.
- expansions will occur and more small, medium & big businesses will be established.
Filipino People
- Entrepreneurs
- Suppliers
- Employees
- Construction workers
- Landlord
- Consumers
Local Government
- Department of Trade and Industry (DTI)
National Government
- Bureau of Internal Revenue (BIR)
Philippine Economy
Through the contributions of entrepreneurship, consumers are satisfied and the entrepreneurs accumulates wealth which improves his/her lifestyle and enables him to cover the costs incurred by the business (salary, rent, equipment, furniture & fixtures, renovation, innovation). This wealth also enables him/her to pay taxes to the government which contributes to the improvement of the Philippine economy. And the wealth accumulated by the government will be used for making roads & bridges, street lights, police security and public services which improves the living and working conditions of the Filipino people.