ENTREPRENEURSHIP

start up buying an existing business franchising.

An entrepreneur has several ways to start a new venture. The most frequently used forms of entrepreneurs are ? ? ?

Start up enterprise

is a company which is recently formed, where the founder establishes a completely new business from scratch.

buying an existing business

is acquiring either the shares of an existing company or all of the assets of an existing enterprise

franchising

is when the “owner of the company that already has a successful product or service, licenses its trademark, trade name, and methods of doing a business to others in exchange for an initial franchise free and royalty payments.”

Focus and attention

It means that there should be a clear and documented vision-mission and strategies to begin with. Start right by “beginning with the end in mind.”

Focus and attention
Sources of Capital
Good network
Legal Requirements
Degree of risk
Research and Development
Personal Competencies
Availability of Resources

important factors to consider before an entrepreneur can actually begin the enterprise.

Creativity opportunity seeking self confidence persistence commitment risk taking

Personal Competencies

Resources

pertain to raw materials, human resources, and machineries/equipment

basic feasibility of the venture

can the product or service work?
is it needed?
is it legal?
is it ethical to offer this product or service?

Competitive advantages of the venture

What specific competitive advantage (price,quality) will the product or service offer?
how are the competitors likely to respond?
what product or service differentiatied will you offer?

buyer decision in the venture

who are the customers likely to be?
where are these customers located?
how much will each customers buy, and how many customers are there?

marketing of the goods and services

how much will be spent on advertising?
what share of the market will the company capture?
who will perform the selling function?
how will you establish the brand in the market?

production of the goods and services

will the company make or buy what it sells?
are sources of supplies available at reasonable prices?
Will the reaw materials be imported or locally available?
are there reliable sources of equipment/machinery for the goods/services to be produced?
what appropriate technology will you utilize to produce your product or service?

staffing decision in the venture

how will competencies in each area of the business be ensured?
who does the recruitment and selection of personnel?
do you have enough needed talents to start the business?

control of the venture

what record will be needed? when?
will any special controls be required?
who will monitor and assess performance?

financing the venture

how much working capital will be needed?
who will be providing the financing?
what will be the costs for getting outside financing?
how long will it take to secure financing?

size ownership activities industry classification

types of businesses available to entrepreneurs

assets employees

The size of the enterprise is based on its total ? or number of ? who work for it.

bureau of small and medium enterprise development

BSMED

Department of trade and industry

DTI

micro enteprise

50,000 asset

micro enteprise

a home-based enterprise, operating in makeshift or temporary quarters

2

how many people heads the micro enteprise?

1 to 10

micro enteprise number of employees

micro enteprise

Self-employed vending food like taho, puto, or fishballs; those selling in public market; and those having sari-sari or rolling stores

Cottage enterprise

asset 250,000-500,000

Cottage enterprise

a home based business which is often managed and operated by the members of the family

Cottage enterprise

Subcontractors of footwear like shoes and slippers; and food manufacturers of peanut butter/coco jam or pastillas, as well as decorative products like vases candles and lanterns.

small enterprise

asset 500,000-2.5 million

small enterprise

it is owned by an individual or group and has enough resources to continue operating

small enterprise

it employs from 10 to 20 people

small enterprise

groceries bakeshops beauty salons medical/dental clinics toy makers jeepney manufacturers and travel/tour agencies

10 to 20

small enterprise number of employees

20to 100

medium enterprise number of employees

medium enterprise

asset 5m-20m and emplyos 1000 or more workers

medium enterprise

it is owned by a single individual, business partners, or a corporation.

medium enterprise

these workers are more skilled and possess technical expertise to run the business with machines/equipment and utilize various quality controls to make the products

medium enterprise

Fine dining restaurants with branches, computer importer-dealers, garment manufacturers, human resource providers, and private educational institution.

Large enterprise

asset 20m-more

large enterprise

it is often owned and managed by a corporation.

large enterprise

it is large in scope of operation and number of products or services that it offers to the market.

large enterprise

it employs 100 or more workers who are h ired on the basis of their expertise

board of directors

is responsible for its governance of large enterprise

chief operating officer

they oversee the implementation of the directives of the board

large enterprise

Big fast food chains, large department stores, big bookstores, family-owned commercial banks and insurance companies.

single proprietorship partnership corporation cooperative

4 types of business according to ownership

single proprietorship

is owned as usually managed by one person

single proprietorship

advantage is easy to setup

single proprietorship

advantage is decision making left entirely to owner

single proprietorship

advantage is easy to dissolve

single proprietorship

advantage is retention of all profits

single proprietorship

advantage is more flexibility

single proprietorship

advantage is tax incentives and less government regulation

single proprietorship

disadvantage is demanding on owners personal time

single proprietorship

disadvantage is growth limited by owners financial means

single proprietorship

disadvantage is unlimited liability

single proprietorship

disadvantage is lack of stability

single proprietorship

disadvantage is limited access to credit

single proprietorship

disadvantage is limited business skills and knowledge

partnership

is an association of two or more persons who act as co owners of a business

partnership

advantage is relatively easy to set up

partnership

advantage is check and balanced maintained with two or more owners

partnership

advantage is availability of more capital and credit

partnership

advantage is retention of profits to fewer owners

partnership

disadvantage is may endangered by conflicts betwwen partners

partnership

disadvantage is generally liability for debts incurred is unlimited

corporation

is an artificial being created by operation of law having the right of succession and the powers attributes and properties expressly authorized by or incident to its existence

corporation

advantage is risk and losses are shared with the other shareholders

corporation

advantage is maximum flexibility for growth

corporation

advantage is limited liability of individual shareholders

corporation

advantage is greater room for professionalism in management

corporation

advantage is easy to raise capital

corporation

advantage is assured tof atleast 50 years of existence by law

corporation

disadvantage is complicated setting up process

corporation

disadvantage is individual stockholders may have limited influence or management

corporation

disadvantage is tendency to institutionalie a bureaucracy

corporation

disadvantage is strictyl regulated and supervised by the government

Cooperative

is a duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve a lawful common social or economic end, making equitable contribution to the capital required, and accepting a fair share of the risks and benefits of the undertaking in accordance with the universally accepted principles of the cooperatives

Cooperative

advantage is Least likely to be dissolved

cooperative

advantage is More people benefit from the business

cooperative

advantage is Professional managers may be employed by the members

cooperative

disadvantage is shared control of the business

cooperative

disadvantage is consensual decision making

service merchandising manufacturing business

3 forms of business based on activites

service business

type of businesses focus on providing intangible products such as offering professional skills, proposals, and expertise.

Service business

Examples are accounting firms, law firms, schools, medical clinic, banks, hair salons and spas and repair shops

merchandising business

This type of business is commonly known as the “buy and sell” business

merchandising business

Products are bought from manufacturers or other merchandisers and are sold as is at an amount higher than the purchase price

merchandising business

Examples are grocery stores, hardware, department stores and drug stores

manufacturing business

This is a type of business wherein materials are bought to create a new product

manufacturing business

Examples are food factories, garment factories, and car manufacturing

philippine standard industrial classification

PSIC

Goods

are products that are processed from raw materials that are consumable.

Goods

They are things that people use such as clothes, shoes, tables, books, cosmetics, toys, jewelry, and many more

Services

are activities which help are demanded by consumers based on their needs and wants.

architecture forestry and fishing

exploitation of vegetal and animal natural resources harvesting breeding animals and etc

mining and quarrying

extraction of minerals occuring naturally as solids (coals and ores) liquids (petroleum) or gases (natural gas)

manufacturing

physical or chemical transformation of materials substances or components into new products

electricity gas steam and air conditioning supply

activites of providing electric power natural gas steam hot water and permanent infrastructure of lines mains and pipes

water supply

activities related to the management of various forms of waste, such as solid or non-solid industrial or household waste