reviewer in entrep(1st grading)
TRANSCRIPT
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123456789101112131456 Chapter 1 (The concept of
Entrepreneurship)
Lesson 1 (Understanding Entrepreneurship)
Barter - entrepreneurship takes its roots from
rading in prehistoric times
Arabs(first barters in the Philippines)
Chinese (2nd)
Entrepreneur each individual who change
omething for value
When the barter could no longer satisfy the
rading parties, that is, when the transaction
ailed to meet the needs and wants, a unit of
monetary exchange was employed.
Mock cowrie shells(1000 BC) in China
Pieces of silver(500 BC) in Turkey
Leather money(118 BC) in China
First actual paper currency(9th Century)
in China
Development of money- contributed to the
promotion of trade
Entrepreneurship
It s a creative initiative of setting up
business to meet the needs of consumers
in the hope of getting profit from it.
is a venture a lot of people have
capitalized on and not without a reason
is synonymous to self-employment,
being your own boss, and writing your own
paycheck
Advantages of Entrepreneurship
1. Independence- entrepreneurship offers
young entrepreneurs to assume a
managerial role in their own venture,
hence they become their own boss.
2. Flexibility entrepreneurship offers
young entrepreneurs the chance to work
on their own pace and space.
3. Challenge the opportunities to grow
diversify are endless.
4. Direct payoffs entrepreneurship ben
directly from whatever profit the busin
yields.
5. Unlimited earnings income is deri
in full and no one can expect even more
Disadvantages of Entrepreneurship
1. No regular monthly salary - absenc
a regular paycheck
2. Unpredictable schedule work ho
run at no fixed
3. Risky- one may hit it big, break evenlose. If a blunder is committed, the en
investment may be lost
Business Ideas
1. Capitalizing on ones skills - a ho
can actually translate into a profita
business enterprise
2. Filling a vacuum even if there
existing outlets of these sought-agoods and services, a little competi
wont hurt.
3. Thinking a franchise franchise
reproduction of an existing business do
to the last detail
4. Starting a something new it is ju
matter of putting ones innate creativit
motion.
Lesson 2 (Entrepreneurship and the Economy
*There is no one-size-fits-all approach whe
comes to putting up a business.
Small-scale and Medium-scale Enterprise
Size of an enterprise is defined by the as
base and number of workers of a business.
Microenterprise a subcategory of
small business enterprise
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o less than P3,000,000 as capital
o 1 to 9 workers
Small-scale industries P3,000,001 to
P15,000,000 as capital
o 10 to 99 employees
Medium-scale industries P15,000,001
to P60,000,000 as capital
o 100 to 199 employees.
Small- and medium-scale industries
Are considered the main driving force in
economic development.
The support new concepts and
technologies, cultivate business
leadership, and enhance access to export
markets.
Economic Boost
1. 1.Entrepreneurship increases the
countrys per capita income Two of
the components of gross national income
are consumption (demand) and
investment (supply). By the increase of
this two the income will get higher.
2. Entrepreneurship creates jobs -
Entrepreneurship creates employment
opportunities for the employed and
underemployed that is welcome
development on new graduates and
victims of company closures.
3. Entrepreneurship meets consumer
demands By producing products and
services in their required volume andquantity
4. Entrepreneurship provides social
service Entrepreneurship provides
revenues to the government by way of
taxes and fees entrepreneurs pay.
5. Entrepreneurship links industries
Where exchange knowledge and
technology to come up with more quality
goods and more efficient services.
6. Entrepreneurship creates new mar
The creativity one puts his busin
helps create new products in the proces
Economic Concepts
1.Laissez-faire economy
Laissez-faire which literary means
leave us alone, is an economic syst
in which the individual and firms do get any direction or regulation from
government in terms of a production.
It is the behavior of the market
institution through which buyers
sellers interact and engage in exchan
that helps us answer the econo
systems three basic questions(1.W
will be produced? 2. How will it
produced? 3. Who will get what
produced?)
2.Keynesian economics
British economistJohn Maynard Key
believed that governments could interv
the economy and affect the level of out
and employment.
3.Theory of comparative advantage
British economist David Ricardo said t
countries will benefit more with specializa
and trade even if one country has abso
advantage over another country in
production of several goods.
4.Consumption and production
Two basic decision-making units of economy
1.Households(consumers)- demand go
and services that firms produced
2.Firms(business enterprise) need l
labor and capital to produce those goods
services.
Nations level of production is a
determinant of its national income.
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Chapter II (Entrepreneurial Requirements)
Lesson 1(Applying Entrepreneurial
Requirements)
An aspiring entrepreneurs starts by listing the
points to consider in deciding the type of
business to run.
Workbook technique a workable agenda in
unning a business is what any start-upentrepreneur need
Business Checklist
1. Personal expertise- An assessment of
ones skills and strength is important
2. Research a person must know
everything about the particular business
he or she wants to pursue.
3. Business networking learn from the
survival strategies of entrepreneurs who
have been in various business situations
4. Customer satisfaction keep the
customers constantly in mind. Know the
economic level and geographical location
of the target consumers.
5. Capital or Financing a business would
only go as far as the entrepreneurs
money would go.
6. Location Choose a site where the
demographic and lifestyle profiles of
the people are suited to the product or
service to be offered.
7. Competition analyze the competition
and consider the obvious: Customers
would go for the better alternative,
particularly when it comes to product or
services rates and quality.
Managerial Concerns
1.Effective product or service delivery
To boost product sales, an entrepreneur
has to develop a successful
entrepreneurial atmosphere of having an
effective product as well as effic
service.
The effectivity of a product depends
source, while he efficiency of ser
depends on employee motivation a
training.
2.Risk management
Remember that great efficiency managing a business would depend
how well an entrepreneur deals with ri
or failure.
Risks are there to help one persevere
reach his or her goals. There
marketing risks, financial ris
expansion risks, and other danger zo
to conquer.
Lesson 2(Business Layout and Location)
Layout- refers to the design o plan for the sh
its structural arrangement.
Location refers to the site or place where
shop is built.
The things to consider good store layout
Suitability to the type of merchandise
Volume of required furniture equipment
The number of employees
Business Layout
1. Closed layout(for controlled items
medicines are being sold)- the layou
the store should be done in such a w
that only service crew are allowed to
the merchandise from the shelves
2. Parallel shelves layout(for superma
layout) It is a different case altoget
when over the counter health product
supplements are sold. It requires f
service personnel since this is a
service store.
U-shaped layout (for specialty store such a
flower shop)- This will allow the customer to
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clearly sea the items they wish to buy. It does
not require many salespersons.
3. U-shaped and parallel shelves layout-
for a store that is a combination of self-
service and counter-service outlet like
convenience stores or drugstores
A suitable business location would take
nto:
Consideration accessibility of
transportation to consumers
Adequate parking space
Neighborhood safety
Customer base
Adequate store space
And suitability for expansion, cost,competition
Lesson 3(Creativity in Business)
Creative entrepreneur
To a creative entrepreneur, it is just too
impossible to resist opportunities to offer
people something new.
They can easily spot business
opportunities
They can actually work on every
opportunity that comes along without
following the well-trodden paths.
Creativity
is important in business.
It can expand a business idea making it
more vibrant and adaptable to change
TapSi TurBi- tapa, sinangag, turon and
bibinka
Maruya Carey- a fast-food joint that sells
turon and maruya
Your business name - could be the
single biggest factor that could make or
break your business.
Creative visual merchandising
You must have heard that first impress
are lasting
The logo and merchandise display
the business should communicate on
message and get the word out.
*A creative name and creative vis
merchandising could prove to be a cro
drawer.
*Entrepreneurs can either introduce someth
new or improve(make an innovat
something that already exists.
Chapter III(Entrepreneurial Competencie
*Venturing into business is like joining
competition. The main goal is to win.
Lesson 1 (The effective entrepreneur)
Traits of an Effective Entrepreneur
1. Risk-taking (thrill seeking)
-When there is uncertainty, there is ri
Paranoia stops entrepreneurs f
doing something, but there may also
instances when they cannot stop but cr
dark alleys.
Dark alleys consist of uncertain
brought about by the changing busin
environment(competition, econo
situation, political stability, etc.)
2. Leadership (headship)
- involves influencing others toward
achievement of goals.
3. Hard work (difficult task)
- entrepreneurs do not count the minu
or dread the hours they spend runn
their enterprise
4. Persistence (determination)
entrepreneurs do not just give up or g
in even under the most try
circumstances.
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5. Commitment (dedication and
devotion)
entrepreneurs make a strong resolve to
follow through with whatever it is they
have started.
6. Confidence (self reliance)
It is the can do attitude that
transcends boundaries in whatever centrepreneurs do.
7. Adaptability (flexibility and
compliance)
The business environment keeps on
changing.
8. Organization (company
establishment)
This refers not only to organizing things
but to organizing people.
9. Creativity (originality)
the creative and intuitive thinking
processes of entrepreneurs say a lot in the
way they run the affairs of their business.
Lesson 2 (Problem Solving)
An entrepreneur needs to have foresight if heor she wants to stay in the field, that is, before
matters come to a head , it is best to know what
o expect.
Common Problems of Entrepreneurs
1. Financial problems- costs sometimes
exceed revenues
Collateral- use to avail loans on banks
2. Organizational problems If personnel
would rather squabble than agree with
each other, then tension is likely to set in.
Grievances or dispute- rivalry of
employees
3. Production problems when the needed
materials become scarce and the workers
lack the necessary skills or there is
inefficiency in production, difficulties in
business begin to surface.
Brain drain or skill drain the wa
are insufficient
4. Marketing problems If an entrepren
does not bother as much with
marketplace as with the wares he or s
peddling, then he or she has a problem
5. Competition Rivals will always
around
6. Customer satisfaction- entreprene
will not have much luck with custome
they are clueless about their tas
preferences and buying habits.
Creative Solutions
By maintaining a network of contato give them sound of advice
Thinking of an incentive program t
would make their staff their partners in
growth of their business
Employing alternative come-ons
customers , among other thing.
Entrepreneurs scientific method to so
problems
1. Identifying a problem- be
attempting to find temporary or las
solutions to a problem, entreprene
must clearly identify the problem a
its nature
2. Formulating an educated guess
hypothesis entrepreneurs sho
hypothesize on the root cause of
problem and the possible solutions
3. Testing the hypothesis entreprene
should conduct a experiment to be a
to obtain data that validate the guess
4. Checking and interpreting the resu
of the study entrepreneurs sho
consider the nature of the problem
Drawing a conclusion the conclusion shou
include concrete steps to be taken to solv
proble
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Chapter IV (Core management Concepts)
Lesson 1 (Management in an Entrepreneurial
Activity)
Management
In all business and organizational activities
is the act of getting the people together to
accomplish desired goals and objectives
using available resources efficiently andeffectively.
Acc to our book it is ensuring that all tasks
are accomplished efficiently (doing
things right) and effectively (doing the
right things) to attain the goals of the
organization.
The verb manage comes from the Italian
maneggiare ( to handle- especially tools),
which in turn derives from the Latinmanus (hand). The French word
mesnagement (later menagement)
influenced the development in the
meaning of the English word
management in the 17th and 18th
centuries.
Basic Functions of management
1. Planning deciding what needs to
happen in the future and generating plansfor action.
2. Organizing (implementation) making
optimum use of resources requires to
enable successful carrying out of plants
3. Staffing job analyzing, recruitment, and
hiring individuals for appropriate jobs.
4. Leading/Directing Determining what
needs to be done in a situation and gettingpeople to do it.
5. Controlling/Monitoring checking
progress against plans
6. Motivation without this, employees
cannot work effectively.
Basic roles of management
1. Interpersonal roles that inv
coordination and interaction w
employees.
2. Informational roles that involv
handling, sharing, and analyz
information.
3. Decisional roles that require decis
making.
Management Skills
1. Technical used for special
knowledge required in work
Political used to build a power base and
established connections
2. Conceptual used to analyze comp
situations
3. Interpersonal used to communic
motivate, mentor and delegate.
4. Diagnostic ability to visualize m
appropriate response to a situation
Formation of the business policy
1. Mission of the business is the m
obvious purpose, which may be, exam
to make soap.
2. Vision of business reflects
aspiration and specifies its inten
direction or future destination.
3. Objectives of the business refer
the ends or activity at which a certain t
is aimed
4. Businesss policy is a guide t
stipulates rules, regulations
objectives, and may be used in managers decision-making. It must
flexible and easily interpreted by
employees.
5. Business strategy refers to
coordinated plan of action that is going
take, as well as the resources that it
use, to realize its vision and long t
objectives.
Levels of management
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1. Top-level managers- consist of Board of
Directors, President, Vice President, Chief
Executive Officers.
These individuals are mainly responsible
for controlling and overseeing all
departments in the organization.
They play a significant role in the
mobilization of outside resources
2. Middle-level managers- consist of
General Managers, Branch Managers,
Department Managers.
These individuals are mainly responsible to
the top management for the functioning of
their department.
They devote more time to organizational
and directional functions.
3. First-level managers- consist of
Supervisors, Section Officers, Foreman
These individuals focus more on the
controlling and direction of management
functions
They are the managers that are the
image builders of the company
considering they are only the ones who
have a direct contact with employees.
Management skills
1. Technical skills refer to ones expertise
in a given field
2. Human skills refer to ones ability to
work well with other people.
3. Conceptual Skills refer to ones abilitythink, which includes ones ability to plan
and identify opportunities and to think of
solutions whether a problem comes up.
Management Theories
1. Scientific management Frederick w.
Taylor (father of scientific management)
Output will be increased, while input will
be decreased
Scientific management uses time-a
motion studies to identify this one b
way.
2. General administrative approach
Henri Fayol developed 14 principle
basic management concepts which incl
division of work, authority, discipline, u
of command, among others.
Max Weber introduced concept
bureaucracy an organization wh
there is division of labor, a clearly defi
hierarchy, detailed rules and regulati
and impersonal relationships.
3. Quantitative approach (operat
research or management science)-
approach uses quantitative techniq
such as statistics, linear programming,
management decision models that wo
aid managers in decision making.
4. Organizational behavior the m
important contribution to the developm
of organizational behavior came f
Hawtorne studies, a series of stud
conducted at the Western Elec
Company Works in Cicero, Illinios.
3 Theories of Motivation
1. Maslows theory of motivation
Abraham Maslow said that there
five levels of needs:
physiological needs(need for food, d
and other physical requirements)
Safety needs (need for security,
protection from harm, whether physica
emotional)
social needs (need for affection, belongingne
acceptance, friendship)
esteem needs (need for self-resp
autonomy, achievement, sta
recognition and attention)
Self-actualization needs (need
become what one is capable of becomin
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2. McGregors Theory X and Y Douglas
McGregor has two assumptions about
human nature:
Theory X (that an average person hates
work, wants no responsibility, resists
change, and needs close supervision at
work)
Theory Y (that an average person enjoys
work, seeks responsibility, and exercises
self-direction at work). McGregor
believed that theory Y best captures the
true nature of workers and should guide
management practice
3. Herzbergs motivation-hygiene theory
Frederick Herzberg said that:
Intrinsic factors (called motivators
such as achievement, recognition, work
itself, responsibility advancement, growth)
are related to job satisfaction.
Extrinsic factors ( called hygiene
factors such as supervision, company
policy, relationship with supervisor,
working conditions, salary, relationship
with peers, relationship with subordinates,
status, security) are associated with job
dissatisfaction.
Lesson 2 (Business Ownership)
Small Business- independently owned and
managed business that doesnt dominate its
market
Small business plays a critical role in the
economy:
1. Job creation
2. Innovation
3. Importance to big businesses
Single Proprietorship is the simplest form of
organization.
It is a business structure owned by an
individual who has full control or
ownership over the business and owns all
the assets, personally owes and answers
all liabilities or suffers all losses, but
enjoys all the profits.
Advantages of sole proprietorship
Ease and cost of formation
Secrecy
Distributions and use of profits
Government regulations
-taxation -closing the business
Disadvantages of sole proprietorship
Owner lacks liability and experience
Difficulty in attracting good employees
Difficulty in raising capital
Limited life of firm
Unlimited liability
Partnership a legal association of two or m
persons a co-owners of an unincorpora
business
According to book, it has a le
personality separate and distinct from t
of each partners.
Advantages of Partnership:
Ease of formation
Pooling of knowledge and skills
More funds available
Ability to attract and retain employees
Tax advantage
Disadvantages of Partnership:
Limited life
Potential conflict between partners
Difficulty in dissolving the business
Unlimited Liability
Types of Partnerships:
1. General partnership an associatio
two or more person, each with unlim
liability, who are actively involved in
business.
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2. Limited partnership an arrangement in
which the liability of one or more partners
is limited to the amount of assets they
invested in the business.
Corporation - A legally chartered enterprise
with most of the legal rights of a person,
ncluding the right to conduct a business, to own
and sell property, to borrow money, and to sue or
be sued.
According to book, it is a business entity
that acquires a legal personality separate
and distinct from its owners
Has a name, and has a maximum of 50
years (renewable to another 50 years)
At the time of its creation, a corporation must
have a minimum offive and a maximum of15
owners (incorporators). Other people may also
become owners(stockholders) upon purchase of
the corporations shares of stocks.
Advantages of corporation:
Limited liability
Ease of expansion
Ease of transferring ownership
Relatively long life continuity
Disadvantages of corporation:
More expensive and complicated to
organize SEC
Double taxation
More government restrictions and
reporting requirements
Employees lack personal identification and
commitment
Types of Corporations
1. Closely Held ( Private ) Corporation
2. Publicly Held ( Public ) Corporation
3. Limited Liability Corporation (LLC)
4. Professional Corporation
5. Multinational or Transnatio
Corporation
Stockholders - owners of corporations
Stock- share of ownership in a corporation
- Common Stock -Preferred Stock
Corporate Governance Hierarchy
Stockholders > Board of Directors > Officers
Special Cases in Corporate Ownership
Joint Ventures & Strategic Alliances
Employee Stock Ownership Progra
(ESOPS)
Institutional Ownership
Mergers and Acquisitions
Divestitures and Spin-offs
Entrepreneurship vs. Small Business
Entrepreneur: Accepts the risks
opportunities of creating, operating,
growing a new business.
Small Business: Doesnt have plans
growth
Trends in Small Business Start-ups
Emergence of E-commerce
Crossovers from big businesses
Opportunities for minorities and women
Global opportunities
Increased survival rates
Reasons for Success and Failure
For Failure:
Poor management
Neglect
Weak control systems
Insufficient capital
For Success:
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Hard work drives dedication
Market demand
Strong
Financing the Small Business
Personal resources
Loans
Venture capital companies
Small business investment companies
Small Business Association (SBA) -
Financial aid and management advice
Franchising an ownership opportunity
Advantages of franchising:
Proven business opportunity
Access to management expertise
Disadvantages of franchising:
Start-up costs
On-going payments
Management rules and restrictions
Chapter V (Types of EntrepreneurialActivities)
*An entrepreneur goes into business to earn or
gain profit.
Lesson 1 (Retailing)
Retailing is selling goods directly to
consumers.
Types of Retailing
1. Store-based retailing Store retailing
can take the form of an over-the-counter
service or a self-service store, a big
department store, or a small kiosk offering
a variety of goods. Store retailers
operate on a fixed location which can draw
a lot of walk-in customer.
Supermarket a large self-service store that
carries a wide variety of household, food, and
laundry products. Eg are Rustans Supermarket,
SM Supermarket, and The Landmark
Supermarket
Convenience store a retail store tha
located near a residential area tha
usually open 24 hours a day, 7 day
week. Eg are 7-eleven, ministop and s
select
Department store - a retail store t
carries a wide variety of product lin
usually clothing, shoes, accessories,
home furnishing. Eg are Robinso
Department Store, SM, Rustans
Specialty Store -a retail store t
specializes on a certain product line.
are Kamiseta and Bayo(clothes), Mend
and Celine(shoes), and The B
Shop(skin care)
2. Online retailing In this type of retail
retailers connect to individual consum
through the Internet
3. Nonstore Retailing call it
revolutionary way of retailing, it keeps
with competition by reaching a wider ba
Catalog and Direct-Mail retailing
retail format that allows customers
choose products from catalogs
brochures that are sent them directly
mail.
Direct Selling- is a retail format whe
in the distributor (seller) contacts
customer directly at home or at work
offer products. It is a highly form
retailing where face-to-face discuss
between the buyer and seller take place
Television home shopping is a re
format that uses television as a medium
demonstrate the feature and benefits
product and allows customers to p
their orders through the telephone.
Vending-machine retailing is
nonstore format wherein products such
soft drinks, coffee, and chips are availa
to customers through the vending mach
Types of Retailing by Ownership
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1. Independent, single-store
establishments
2. Corporate retail chains is a company
operating several retail units under a
single ownership management
Decision making is centralized in this
type of retailing.
3. Franchising is a contractual agreementbetween a franchisor (one who grants a
franchise) and a franchisee (one who
buys a franchise) that allows a franchisee
to buy the rights to use the parent
companys name and sell its product or
service in exchange for an up-front
franchise fee (price vary between
industries) and on going royalties, usually
3-6 percent of sales.
Advantages of franchises
1. An established brand
2. Training
3. Volume purchasing power
4. Advertising
5. A proven business model
6. Accounting and budgeting systems
7. Other help in running ones business
Disadvantages of franchises
1. Franchises can be expensive.
2. Franchisors may require the franchisee to
follow their operations manuals to the
letter.
3. Buying a franchise is like marryingsomeone you have not known for very
long.
The average length offranchise contract
is 10.6 years, according to International
Finance Association
4. The relative security offered by franchises
may be exaggerated.
Questions to ask before buying a franchise:
*When one buys a franchise, he or she
putting big money on the line and his or
success does not entirely depend upon him
her.
1. What type of franchise is it?
Packages franchises businesses s
as fast-food, restaurants, muffler shops
hotels that come complete with ev
business model laid out by the par
company. That model covers everyth
from financial controls to hiring guidelin
Product franchises - businesses such
a car dealerships and gas stations t
mainly to distribute the parent compan
goods. Owners of product franchi
have more control over the way they
their businesses.
2. Does business lend itself to
franchise model?
3. How many franchises does
organization have?
4. How much is the franchisee fee?
franchisee fees depend on how
demand a product or service is, or established the parent company is
5. How much will one has to pay
royalties?
Franchisors generally charge royalt
equal to three percent of e
franchises revenues.
6. How much money will ones busin
really make?
7. Can one work with these people?
8. How will be the franchisor help
franchisee?
9. Is the franchisors compa
legitimate?
Department of Trade and Indus
(DTI) and the Philippine Franch
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Association determine the legitimacy of
franchise.
The Retail Advantage
1. Entrepreneurs do not worry about delays
in production or excess inventory.
2. They do not need large capital to start
their business.
All they have to do is to choose the right
products for their target market and exercise
heir selling skills.
Lesson 2 (Manufacturing)
Manufacturing is a business activity wherein
aw materials are transformed into finished
goods mechanically or chemically by means of
high-powered machine or equipment, or simply
by hand.
Manufacturing is synonymous to
production.
What a Manufacturing business requires
1. Define the business.
2. Determine the kind of skills the
business requires.
3. Find out how much space thebusiness needs to occupy and how
suitable it is for future expansion.
The place should complement and adapt
to future development as the business
grows and improves in the competitive
landscape.
4. Consider operational costs.
Loan guarantee is usually required to
prove that the borrowed money can be
paid in case of the business fails.
Personal loan is a more preferable
option, although the interest rates may be
a bit higher.
Types of manufacturing business
Food, beverage, cosmetics, apparel,
pharmaceutical, electronics, household
appliances, paper products, agribusin
and furniture and fixture
Creativity pursuit
Creativity is important in manufacturing
maintain competitiveness, bring do
costs, and build more interact
workforce.
Creativity contributes to improving quality of a product or in bring
something new together.
Choosing the best manufacturing busines
1. Identify a need
Aspiring manufacturer must h
clear thought-out business idea that wo
satisfy the needs and wants of the tar
market.
2. Research about the market
Production Planning
Production Planning involves the acquisi
and allocation of scarce resources needed
production to satisfy demand over a spe
period.
4 stages of production
1. Operation is the initial (main) ste
production, where raw materials unde
transformation in preparation to the n
step.
2. Assembly is the step wherein part
product are put into one whole piece.
3. Finishing is the enhancement of
appearance or value of product such
varnishing, coating, or glazing.
4. Inspection is the run- through st
that checks a product for its acceptab
and merit. This is better known as qua
control.
Consider the following to avoid product
slips:
Source of raw materials for products
The method of production to be employ
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Special skills requires of the workers
Location and layout best suited for
business.
Choosing a location
Location and layout requirements in a
manufacturing business are more stringent
than those in retail and service businesses.
Factors in choosing suitable location in
manufacturing business:
Accessibility to transportation
Adequate water and electric supply
Accessibility to the distribution sitessuch as markets, schools, and the
community
Efficient water disposal system
Size of the property
Suitability of the building to business
activity
Availability of adequate community
institutions like banks, stores,churches, and hospitals
Availability of labor skills that match the
work force needed.
In mapping layout and design of the workplace
or plant, consider effective space utilization
and flow of movement.
Economic Benefits
Manufacturers gain access to global
markets, raise the standard of living,
and generate jobs for their business
and for the sectors where they get
their sales.
Lesson 3 (Services)
Services refers to jobs done for you
Types of Services
1. High- contact services this type
service involves personal visits by
customer to the service establishm
There is a high level of phys
interaction in this kind of service
Eg are haircut, massage, educat
banking services and hotel services
2. Low contact services this type
service involves minimal or no phys
interaction between customer and
service provider
Eg are phone banking,
telecommunication services
Forms of Service Business
1. Lifestyle-related services laundry
dry- cleaning shops, beauty salons, b
fitness center or gym
2. Education services tutorial, compu
training, review, and day-care services
3. Information services - desk
publishing and printing services
4. Professional and business servicerecruitment agencies, remittance serv
centers, security agencies
5. Repair services shoes, bags,
computer repair shops
6. Rental services internet shops,
rental companies
7. Entertainment and recreatio
services party needs shops, amusemcenters
8. Tourism services travel-and-to
agencies, hotels
*Service Business will be measured in term
appeal, quality, and diversity.
Service Boost
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1. Advertisement use a catchy
advertisement at very first opportunity
to introduce the business.
2. Press releases Press releases deliver
the same message in the same way
advertisements do, only they require
words.
3. Newsletters a publication that can be
distributed to customers can provide them
additional information about the service
business such as promotions and other
activities.
4. Flyers and leaflets - Flyers and leaflets
can be handed out to people within the
business area or pinned under windshield
wipers to freely and readily promote ones
business to target market
5. Web site Entrepreneurs can come up
with their own sites on World Wide Web
where they can present their business
profiles and invite customers to comment
or ask questions about their offerings
Service Business it supports a community by
esponding to the consumers needs and
providing jobs to the residents.
Lesson 4 (Business Practices)
Price Tags
Price tag through this, customers can check
he price of an item and compare it with prices of
other brands.
Markup is the profit entrepreneurs make from
ndividual items sold.
Selling price= unit cost/ (1-desired return
on sales)
desired return on sales the percent
divided by 100 or move the decimal place
twice to the left.
Markdown happens when there is a reduction
n price, even to the extent that the cost of a
product is higher than its selling price, bring
negative profit to the entrepreneurs.
Entrepreneurs first order of business
Filling
Tracking
Managing customers
Issuing receipts not only serve
acknowledgements for cash transactions but a
an efficient means to monitor purchases w
exhibiting transparency bin business.
Promotions and packaging
Promoting ones product and servi
means communicating the merits of ones o
to target customers so that they will choose
or her product over rival brands
Attractive come-ons- innovative promot
and packaging
Long term campaigns not one-shot deals
Advertising is a sure-fire formula for
business crisis or even in a no-crisis situation.
One has a variety of options: print, ra
television, outdoor display, or direct-m
advertising.
It is the most efficient way to drum
interest for ones business.
Personal selling a cheaper, more perso
approach
One does a one-on-one, face-to-face sa
talk with prospective customers, in or
of ones store.
Sales Promotions come in the form of spe
offers, free samples, buy-one-take-one treats.
Through these kinds of promotio
customers can actually road test
product and give more value for t
money.
Courtesy call
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Even in the heat of moment, one should display
absolute courtesy, attention, and endurance
where customers are concerned.
One should remember that success of his or her
business is very much dependent on his or her
customers patronage.
Customer satisfaction is a key to a
uccessful business.
Customer rights
Republic act 7394 (Consumer Act of the
Philippines) state policy of protecting the
ights of customer
This act shall implement measure to
achieve the following objectives:
Protection against hazardous to health and
safety
Protection against deceptive, unfair, and
unconscionable sales acts and practices
Provision of information and education to
facilitate sound choice and the proper
exercise of rights by the consumer
Provision of adequate rights and means of
redress
Involvement of consumer representativesin the formulation of social and economic
policies
8 Consumer Rights
1. The right to satisfaction of basic needs
2. The right to safety
3. The right to be informed
4. The right to choose
5. The right to be heard
6. The right to redress
7. The right to consumer education
8. The right to a healthy and sustainaenvironment
Chapter VI (Entrepreneurial Qualities a
Self-assessment)
Lesson 1 (Entrepreneurial Characteristics)
10 Personal Entrepreneurial Characterist
(PECs)
Pecs Clusters: Achievement, planning, a
power
The Achievement Clusters
1. Opportunity seeking Entreprene
know a good business opportunity w
they see one. They seize the chance
start taking action.
2. Persistence Entrepreneurs t
positively, face every difficult squar
and hang on. They do not let setbacks
in the way of their business decisions.
3. Commitment Entrepreneurs help t
employees get things done. They think
responsibility for problems that may a
and work ways to solve these problems
4. Risk taking Entrepreneurs take chan
in the hope of reaping the benefits later
5. Value for efficiency and quality
Entrepreneurs always aim to go bey
the standards and do not settle for less
The Planning Cluster
1. Goal setting Entrepreneurs are firm
the way that specifically want to achiev
2. Information seeking Entreprene
want to know more about the cho
venture(clients, suppliers, competitors
3. Systematic planning and monitorin
Entrepreneurs make intelligent forec
and from there chart the business p
they have to take.
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The Power Cluster
1. Persuasion and networking
Entrepreneurs make connections with
people, cultivate relationships with people,
and talk to people into their ideas
2. Self confidence Entrepreneurs
believe in themselves and their ability to
achieve what they want.
Entrepreneurial Assessment
Ronnie Pasola invented the board
game which, unlike chess, cannot be
mastered by the human mind.
Jane del Rosario can mount colors
upon colors in a different work of art that
goes beyond the customary landscape,
portrait, and still life.
Lesson 2 (Entrepreneurial Potentials)
Francis Kong Entrepreneur that perform his
mission out of duty and conviction
He was keen on the idea of this new experience,
enough to believe that he was capable of
conquering the odds. He established Company
B.
He is now the president ofBusiness Matters, a
nonstick, nonprofit organization that drives
Filipinos to strive for success in the international
community.
Kongs piece of advice for would be
entrepreneurs:
Have the knowledge
The passion
The network of supportive people
The firm determination to succeed
To enhance ones entrepreneurial
potentials, Kong suggests that an
entrepreneur should:
Go out attend conventions
Training program
Build a network
Passionate about learning
Chapter VII (Business Opportunities in
Environment)
Lesson 1 (Identifying Business Opportunities)
Community is the first place to iden
business opportunities.
If one is not sure of the right product or serviceoffer, he or she should consider the f
categories of human needs (physiolog
safety, social, esteem, and self-actualization)
Business Ideas
Idea is the start of business venture
Internal Considerations include:
Ones personal goals and interests
Ideas from ones observations of d
living conditions
Ones educational background
Ones skills and training
External considerations include:
Government support and assistance
Industry growth prospects
Lesson 2 (Environmental Scanning)
Factors that affect the performance
business:
1. Demographic conditions
Demography is the study of hum
populations in terms of size, dens
age, gender, race, occupation,
other statistics.
Baby Boomers (those born 19
1964)
-are not so much interested
digital technology as compa
members of Generation X.
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Generation X (born 1965-1977) is the
target of manufacturers of digital gadgets
in promoting their products
Generation Y(born 1978 - 1994)
-more interested in digital technology
GenXers- are presumed to have stable
jobs giving them more purchasing power
than members of Generation Y.
2. Economic conditions affect the
consumers buying power and spending
patterns.
Changes in disposable income,
fluctuations in the exchange rate,
inflation (general increase in the price of
goods and services), and interest rates
all affect the performance of a business.
3. Natural environment
A business needs natural resources as
inputs.
From time to time, an entrepreneur might
experience a shortage of raw
materials.
Natural disasters(typhoons,
earthquakes, and volcanic eruptions)
affect the supply of raw materials
4. Technological conditions
Technological developments
(computers, internet, mobile phones) -
have contributed much to faster and more
efficient ways of doing business.
5. Political or legal conditions
Entrepreneurs must also be aware of lawsthat regulate business, like E- commerce
Act of 2000, which regulates trading via
Internet.
6. Sociocultural conditions
Religion, customs, traditions, and
values shape culture.
Culture dictates the kinds of product
and service people would prefer.
7. Competitors
Business is like war.
Entrepreneurs have to know t
competitors so they can think
strategies to help them go ahead.
8. Internal environment
Ones company including resour(finances, equipment, and manpow
processes, management style, strateg
and organizational culture should be ta
into consideration.
Questions to ask:
Do you have strong financial capabilit
support your strategies?
Are you doing the right approach to att
your target market?
Are you an effective leader?
Are your employees motivated?
*Environmental scanning - helps
entrepreneur screen information to anticip
and interpret changes in the business. With
this, one will find it difficult to come up w
strategies or appropriate actions in response
relevant issues in the environment.
SWOT Analysis
-is used to assess how the changes or trend
the environment can affect a business. It he
one identify and overcome his or
weaknesses, build on his or her strengths, se
opportunities, and handle threats to his or
business.
-it is used as basis for the appropriate strategentrepreneurs should be successful. It can h
entrepreneurs capitalize on their strength
seize opportunities.
Strengths refer to the things
possesses that enable him or her to
standards in quality and efficiency. Th
strong points serve as his or
advantage in effectively delive
products and services. An excellent tr
record in sales and marketing and g
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management skills are examples of these
plus points.
Weaknesses refer to the traits that keep one
from meeting his or her targets. These may
include ones apparent resistance to change or
fear of unknown.
Opportunities refer to outside factors
that one can take advantage of to achieve
his or her business goals. These may come
in the form of great demand for the
product or service, the absence of
competition, or the expected large profit.
Threats refer to the eventualities one
has to look out to protect his or her
business. These are the external factors
that may work against him or her such as
reduced purchasing power, increased
production costs, and higher taxes andlicense.
Chapter VIII (Basics of Business Planning)
Being on top of business enterprise is a
plum post of which an entrepreneur has to prove
himself or herself worthy. One must have a
managerial philosophy to live by and a
clear-cut vision of what lies ahead for his or her
business.
Business planning is defining ones business
and identifying ones goals. It is how one intends
o run his or her enterprise and implement
activities to meet his or her business objectives.
t is a business model a sort of road map that
gives one direction to where his or her business
s headed.
Lesson 1(Business Plan)
mportance of business pan/business plan
helps entrepreneurs:
1. Adapt to changing conditions An
entrepreneur who insists to change is
bound to fail because conditions are
always uncertain.
Planning will enable an entrepreneur to
keep his or her options open and make
wise business decisions. It will also help
him determine specific actions taken.
2. Concentrate on targets if one ha
clear business plan, he or she can focus
his or her goals even in the face
advertise. With business plan, o
objectives are well laid down.
3. Operate effectively - With business p
ones venture can run steadily, especi
where money matters are concerned.
Business Plan Components
1. Name and description of a busines
this includes the name, address, con
numbers, and contact persons of busine
Business description indicates
nature of the venture.
2. Objectives this refers to w
entrepreneurs like his or her busines
attain over a given period.
It can be in terms of revenues, profits
market share.
Objective must be SMART(spec
measurable, attainable, realistic and ti
bound) example is to earn 1 000 00
revenues in one year
3. Market study this presents the kind
product or service one intends to offer, target market, the volume of product
the scope of service to be offered, and
location of the business.
This also includes ones product or ser
strategies, pricing, forms of promotio
and methods of distribution.
4. Productive study this presents
process of production, the equipm
needed, facility requirements, supply-chnecessities, and the people who will h
in the production.
5. Financial aspect This involves
working capital to cover all busin
expenses, source of funds, product
service costs, and financial projecti
(expected revenues, profits,
profitability ratios)
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6. Organizational aspect this explains
the business type (single proprietorship,
partnership, or corporation), the people
who will manage the business, and the
role of the owner in the enterprise.
Market Survey
The people who patronize a product or service
comprise the market.
Market dictates the product an
entrepreneur should sell or produce, or the
service he or she offer.
Products or services should meet the
needs and demands of the market.
n surveying the market, an entrepreneur
should ask himself the ff questions:
What will my market buy? Some goods aremore difficult to sell because of certain factors
ike purchasing power and inflation. Examples are
luxury items such as jewelry and motor
vehicles.
Consumables(food, beverages, toiletries,
detergents) more sealable goods
Essential Services
Communication services (newspapers)
Transportation services(taxi)
Health services(medical and dental
services)
1. Why will my market buy from me?
Ones market purchases goods and avails
itself of services to meet certain needs
and wants
2. Who will buy from me? People havediverse needs and wants.
3. How will the buying be done? -
Consumers usually go for a product or
service to satisfy a need, just as they
would buy a cold drink to satisfy their
thirst. Consumer purchase is usually
determined by price, quality, brand,
packaging, and availability of the product.
*To get fairly accurate response to th
questions, entrepreneurs can conduct a surv
They can give consumers questionnaires to k
their target markets reference.
Lesson 2 (Production Planning)
*Production involves a set of inputs (resou
such as land, labor, and capital) to yield a se
outputs (finished goods or products that
usable).
Production planning helps entreprene
know how much goods they should m
available to their customers at any given time
The ultimate goal of this is to make
right amount of goods available at
right time to keep customers satisfied.
It includes sales forecasts, activ
schedule, materials, work force, amachine requirements.
Importance of Production planning:
It enables entrepreneurs to allocate t
funds properly for purchase of
materials and equipment
Identification of inventory levels
Determining the right number of peo
needed and other costs like utilities
insurance costs
Sales Forecast dictates when to produce m
and when to produce less. It is an impor
component of a production plan.
Lesson 3 (Organizational Planning)
Organizational plan is the wise managem
of human resources.
Organizer a notebook that works as a d
planner of entrepreneur.
Organizational Planning
Organizational Planning is arranging
controlling human resources to attain maxim
efficiency.
Organizational structure preve
duplication of tasks and ensures efficiency
work, healthy working relationships, and
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development of employees capabilities. One
creates this so that workers will know their roles
n the organization and perform it.
Ultimate goal is for an organization to operate
effectively and economically.
Organizational Chart
Organizational Chart is a diagram of the
order of authority and relationships that exist inan organization. It is used to guide people in an
organization to work harmoniously and efficiently.
For small business tasks can be
lumped together into one department.
Bigger companies can have several
departments to take care of different
tasks.
Departments the positions in theorganization
Highest position highest level in the
diagram
Vertical diagram shows the chain of
the command (the line of authority from
top level to the bottom level) which
indicates who reports to whom.
The advantage of having organizational
chart is that it shows clearly the
arrangement of functions, separation
of duties, and the chain of command.
Simple organizational chart is prepared
based on:
1. Function shows related positions in a
department according to tasks or functions
formed.
2. Product shows related positions classifiedaccording to product lines.
Lesson 4 (Feasibility Analysis)
How realistic ones business idea is can be
determined by making a/ feasibility
analysis:
1. Marketing assessment an essen
part of a feasibility analysis is determin
the size of the market. The idea is to d
many customers who will boost revenue
Customers who will ultimately de
whether ones business is workable or n
2. Financial assessment an entrepren
should have an idea of how much mo
his or her business will make.
3. Technical and production assessm
this tests looks into such factors a h
the products will be manufactured,
technology to be utilized, the volume
the products, the facility site,
manpower requirements, and
equipment to be used.
4. Socoieconomic assessment -
entrepreneur should know the benefit
his or her product to society.
5. Management assessment - T
assessment responds to organizatio
management, where business organiza
and skills specifications are concerned.
Financial Requirements
*Before getting the business moving, it
important for an entrepreneur to do the math
Financial planning is necessary to identify
need for and source of ones funds and to kn
how to maximize ones financial position.
Financial requirements come in the form
1. Financial capital This includes cos
land and building, machinery,
equipments. These are investments for
long haul.
2. Preoperational capital This inclu
cost of license and other fees necessar
putting up a business.
3. Working capital This is the sp
money one will needs to keep his or
business doing. This will take care of
workers wages, bills payments, and sto
purchase.
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These are needed to produce funds for his
business.