DO YOU WANT TO

GO INTO BUSINESS?
 DO YOU WANT TO
GO INTO BUSINESS?

CONTENTS
WHY GO INTO BUSINESS 3

REWARDS OF GOING INTO BUSINESS OR

ENTREPRENEURSHIP 5

STARTING A SMALL BUSINESS: PROCESS FLOW 7

LOOKING WITHIN 9

LOOKING OUTSIDE 12

DETERMINING PRODUCT LINE AND BUSINESS TYPE 14

TYPES OF BUSINESS ACCORDING TO OWNERSHIP 16

WRITING A BUSINESS PLAN 17

RAISING CAPITAL 21

SEEKING OTHER SOURCES OF ASSISTANCE 24

LOCATING YOUR BUSINESS 25

REGISTERING YOUR BUSINESS 27

HIRING AND TRAINING PERSONNEL 33

 WHY GO INTO BUSINESS

E ntrepreneurship is a way of life. Being entrepreneurial means being able to identify, start,
and maintain a viable and profitable business, particularly a small enterprise.

People spend most of their lives working for someone else. Some people eventually rise to
positions of wealth and power, while the rest languish in unchallenging and low-paying jobs. On
the other hand, there are a select few who strike it out on their own, rather than work for others.
They put up their own enterprise.

You may ask: “Why should I risk my resources in an unpredictable business when I could
hold a stable job with permanent tenure and an assurance of a regular monthly income, without
any risk?” In other words, why be an entrepreneur rather than an employee?

Having your own business has tremendous rewards, but be sure to weigh prospective
returns against potential risks and losses.

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4
 REWARDS OF GOING INTO BUSINESS OR
ENTREPRENEURSHIP

Having unlimited opportunity to make money.

When you have your own business, you will most certainly have unlimited potential to earn
money. How much money you earn depends on the time and effort you put into your enterprise.
Successful entrepreneurs have earned their wealth and prestige through hard work and by
having the right product for the right market at the right time.

Being your own boss.

As manager of your business, you make the decisions for your enterprise and take full
responsibility for these. The quality of these decisions will translate into either gain or loss for
your business. Being your own boss means you are in control of your future. You have a better
grasp of what you want to be.

Tapping your creativity.

A business usually starts out as an idea. You will have the opportunity to harness this
creativity and turn your idea into products and processes.

Overcoming challenges and finding fulfillment.

Starting a business is by itself an accomplishment. Running a business tests an
entrepreneur’s capability in securing and managing resources. How well a business turns out
depends on the owner’s ability to face challenges and overcome difficulties.

Helping others.
In the process of running a business, an entrepreneur employs workers, and pays them
income which improves their lives. An entrepreneur who succeeds and grows also helps
suppliers, sub-contractors, dealers and other businesses connected to him succeed and grow
too.

Building an entrepreneurial legacy.

A business can be a lasting legacy to the family. It can ensure employment for some
members of the family. It can create an enterprising culture than can be handed down through
the generations.

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6
 RISKS OF GOING INTO BUSINESS OR
ENTREPRENEURSHIP

Possibility of failure.
There is always the possibility of failure – a single wrong business decision can bring a
business to bankruptcy.

Unpredictable business conditions.

A small business is vulnerable to sudden changes in the business environment. In a fast-
paced industry, a small firm may not have the financial capability or the organizational capacity to
respond adequately to new opportunities and their concomitant problems.

Long hours of work.

A prospective entrepreneur must be ready to spend most if not all his waking hours in the
business. Also, family time and personal affairs may be sacrificed.

Unwanted or unexpected responsibilities.

The entrepreneur may eventually find himself saddled with management responsibilities he
did not bargain for.

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 STARTING A SMALL
ENTERPRISE:
PROCESS FLOW

Look Within: Do you have what it takes?

Look outside: What are the helping/hindering

factors?

Determine your product/service line and type

of business

Write your business plan

· Marketing Aspects
· Technical (Production) and
Organizational Aspects
· Financial Aspects

Raise capital

Seek other sources of assistance, if necessary

Choose your business location

Register your business

Hire/train personnel

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 LOOKING WITHIN
(SELF-ANALYSIS)

Do you have what it takes to go into

business?

A successful entrepreneur possesses

personal qualities that help his business grow
and thrive. Extensive research by the Management Systems International reveals ten personal
entrepreneurial competencies (PECs) that lead to success. These are grouped into what are
known as the Achievement Cluster, the Planning Cluster, and the Power Cluster.

Take a look at these competencies. Try to see if you have some of them and to what extent.

ACHIEVEMENT CLUSTER

1. Opportunity-seeking
· Perceives and acts on new business opportunities
· Seizes unusual opportunities to obtain financing, equipment, land, work, space or
assistance.

2. Persistence
· Takes repeated or different actions to overcome obstacles
· Makes sacrifices or expends extraordinary effort to complete a task
· Sticks to own judgment in the face of opposition or disappointments

3. Commitment
· Accepts full responsibility for problems encountered
· Helps own employees to get the job done
· Seeks to satisfy the customer

4. Risk-taking
· Takes calculated or studied risks
· Prefers situations involving moderate risks

5. Concern for quality and efficiency

· Always strives to raise standards
· Aims for excellence
· Strives to do things better, faster, cheaper.

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PLANNING CLUSTER

6. Goal-setting
· Sets clear and specific short-term objectives
· Sets clear long-term goals

7. Information-seeking
· Personally seeks information on clients, suppliers, and competitors
· Seeks experts for business or technical advice
· Uses contacts or networks to obtain information

8. Systematic Planning and Monitoring

· Develops logical, step-by-step plans to reach goals
· Looks into alternatives and weighs them
· Monitors progress and shifts to alternative strategies when necessary to achieve goals.

POWER CLUSTER

9. Persuasion and Networking

· Employs deliberate strategies to influence or persuade others
· Uses business and personal contacts to accomplish objectives

10. Self-confidence
· Believes in self
· Expresses confidence in own ability to complete a difficult task or meet a challenge.

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WHAT ELSE IS IN YOU THAT
WILL ORIENT YOU TO
BUSINESS?

While you are looking at yourself, consider what

else is in you that will orient you towards a business.
Think experience, education, hobbies, and interests.

1. What previous jobs have you held that may

help you succeed in business? Teachers, for
example, start tutorial services or schools,
seamstresses go into garments and soft toys
manufacture, carpenters into sash making or
contract work in construction.

2. Do you have a hobby that you can expand into

a business? It can be interior designing,
pottery, embroidery, or baking.

3. Have you had technical training on which a

business can be based? Perhaps you have
taken up auto repair? computer assembly?
bookkeeping? or welding/forging?

4. Are you genuinely interested in getting into a

potentially-risky business rather than a stable
8 to 5 job?

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LOOKING OUTSIDE

A fter looking into yourself – your personal qualities, your interests, skills, experiences
and hobbies and how these would orient you towards a business of your own, you may
now look around. See if the environment is a conducive one for entrepreneurship.

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Here are some questions to ask about the “outside world.”

1. How adequate is the infrastructure for business in your community, province or city? Are
there enough provisions for basic requisites like roads and bridges, power and water
supply, telephone, telegraph, postal and internet facilities, as well as banking services?

2. Is the environment peaceful, safe and orderly? Investing hard earned money is already a
big risk. Operating in an unsafe environment makes it even more risky.

3. What are the incentives, assistance programs and other support that the national and
local governments make available to business, especially to small, start-up businesses?
Ask about tax exemptions and discounts, low-interest financing, technical assistance,
marketing and promotional services, training, etc.

4. How prepared is the government bureaucracy to serve the needs of businessmen? Are
civil servants courteous and service oriented? Are procedures and requirements for
business registration, for example, clear and simple?

5. Study national and local market trends, business growth and market share, purchasing
power of the public, confidence in the economy.

6. Study imports. What goods does the country import from abroad?. What goods and
services does your particular community or town “import” from Manila and other big
cities? Think whether you can provide these goods and services locally. This is known
as “import substitution.”

7. Think of other possibilities: subcontracting, a promising way by which small firms can
start supplying parts or services for bigger companies; public sector purchasing, which
small businesses might explore because government offices are required by law to
purchase supplies from local producers; and franchising, dubbed as the “business with
the least fears.”

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 DETERMINING PRODUCT LINE AND
BUSINESS TYPE
Determining Your Product/Service Line

You can now focus on what specific type of product or service you want to sell. Some of the
factors given for consideration will help you come up with a great idea for a product. What
specific fields are you interested in? Can you apply your skills, hobbies or work experience to
this field?

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 Below are the broad types of product and service lines:

1. Product industries – You may choose to manufacture your own product, either for the
mass market or for specialized or individual demands. Canned goods, wooden or plastic
toys, and ready-to-wear garments are examples of goods produced for the mass market,
while precision instruments for industrial use of made-to-order furniture are examples of
specialized products.

2. Service Industries – You may choose to sell services. Service enterprises include
repair and maintenance shops, printing and machine shops, and food retailing and
catering establishments. Beauty parlors, dress and tailoring shops, recreation centers
(bowling alleys, billiard halls, badminton courts) and entertainment businesses (theaters,
videoke parlors, bars and pub houses) are also considered service business. The
sunrise Information Technology (IT) industry is largely service. Think call centers,
internet cafes, computer hardware and software shops, and business solutions
programming companies.

3. Process industries – You may decide to perform only one or two operations in the total
manufacturing process. If so, you are not, strictly speaking, a “manufacturer” bur rather a
“process” enterprise. The activities you perform can be initial operations on raw
materials (milling, corrugating, sawing or cutting), final operations (finishing, assembly,
packing or binding), or skilled or precision operations (embroidery, testing, woodcarving).

4. Subcontracting industries – If you choose to be a subcontractor, you will undertake

subcontracting work for other enterprises, usually bigger ones. Big companies
sometimes subcontract the manufacture of components, supplies or other specialized
operations to smaller shops because the quality required is not cost effective for their
high-capacity operations. Many big companies also find subcontracting a cheaper and
faster way to manufacture products. On the other hand, you, as subcontractor, are
assured of a market for your products. You can probably avail of technical and financial
assistance from your principal (the big firm), too. There is, however, a drawback to
subcontracting: you may tend to rely on only one or two partner firms to stay in business.

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 TYPES OF BUSINESS ACCORDING TO
OWNERSHIP
Would you want to run a business on your own, with a partner, or with more people? Weigh
the odds:

FORMS OF BUSINESS ADVANTAGES DISADVANTAGES

Single proprietorship Easy to set up Demanding on owner’s
personal time
Decision making left entirely
to owner Growth limited by owner’s
financial means

Partnership Partnership may be

(at least two parties) endangered with conflicts
between partners
Relatively easy to set up
A decision made by one
Check and balance partner is binding on all other
maintained with two owners partners.

Generally, liability for debts

incurred is unlimited

orporation You share the risks and Complicated setting-up

(at least five parties) losses with the other partners process

Maximum flexibility for growth Individual stockholders may

have limited influence on
Limited liability of individual management
shareholders
Tendency to institutionalize a
Greater room for bureaucracy
professionalism in
management

Cooperative Least likely to be dissolved Shared control of the business

(big number of members)

Limited liability Consensual decision making

More people benefited from
the business

Professional managers may

be employed by the members

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 WRITING A BUSINESS PLAN

A fter you have made the preliminary decisions, you can start preparing a business plan.
There is no such thing as an all-purpose business plan. You should write your
business plan according to the unique factors and conditions of your enterprise.

The business plan has three main components: the marketing plan, the technical and
organizational plan, and the financial plan.

The following guidelines may help you in writing your business plan:

INTRODUCTION

1. State your objectives. This section, which precedes all business plans, tells your reader
who you are, what your business goals are, and when you expect these goals to be
accomplished. If your business has a track record of say, three years, then you can approach a
bank and indicate how much you want to borrow and what you plan to do with the funds.

2. Describe the business. This section gives background information on your business and
how it is currently doing.

For a new business - Instead of a brief history, explain what the business will be, how the
idea for your business was conceived, and how the business is expected to develop.

For an existing business - Provide the following information: business name, date and place
of registration, date when operations began, brief history of the business, names of owners,
partners or major investors.

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THE MARKETING PLAN

3. Describe your products or services.

Give a detailed description of your products or
services to give the reader a clear idea of
what you are selling. Describe as well
applications or uses of your products that may
not be apparent.

This section of your plan is also for

presenting the competitive advantages your
product has over similar products as well as
for identifying the products you will compete
with. State your product’s advantages and
disadvantages.

4. Identify your potential market.

Determine who are your present or projected
customers and how many. Be as specific as
possible. Are you selling to bookstores?
Grocery stores? Small ladies’ boutiques? If
you are selling to the general public, you may
need to group potential customers according
to age, gender, income, education and other
demographic factors. You then ask yourself
how you can make use of the information. If,
for example, you know that your potential
customers will likely be children aged three to
ten, what does this tell you about your
location? your advertising? your prices?

5. Identify your competitors. Competition

need not be a threat. Rather it should spur
you to do your best. Learn as much as you
can about your competitors. Include the
following information in your plan:

a. Description of competitors. Identify businesses likely to become your competitors.

b. Size of competitors. Determine your competitors’ assets and sales volume.
c. Profitability of competitors. Which of your competitors are making money? Which are
losing? By how much?
d. Operating methods. Determine the operating methods of each of your major competitors
in terms of pricing strategy; quality of products and services; servicing, warranties and
packaging; methods of selling and channels of distribution; credit terms; location;
advertising and promotion; reputation; and inventory levels. Discuss only the items
relevant to your business.

6. Consider your pricing policy. In pricing your goods and services, all relevant factors
should be considered, like cost of production and distribution and the degree of acceptance by
the market. Another factor to account for is the pricing structure of your competitors. Of course,
the aim of your pricing policy should be to set the price at a level that maximizes profit in the long
run.

7. Determine your marketing methods. Selling a good product at a reasonable price is not
enough. Your business plan must answer the following questions:

a. How will you promote or advertise your business?

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 b. How will you sell your product? Will you employ sales people? Will you have your own
outlet? Will you engage marketing agents?
c. What channels of distribution will you use to reach your customers?
d. What do your customers think of your product? How can you improve your image as an
enterprise?

THE TECHNICAL (PRODUCTION) AND ORGANIZATIONAL PLAN

8. Identify your material requirements

and sources of supply. List down what
materials you will need and where you will
get them. Include only direct materials;
office supplies and other indirect materials
should not be included in the list.

Tabulate your material requirements.

For each item, state how many suppliers
there are, who your main supplier is, and
why. Your readers will see that you have
carefully thought out who your best
suppliers will be.

9. Determine the process and

equipment you will use to manufacture your
product. Give a detailed explanation of your
production process. For each step, explain
the work done, as well as the equipment
and materials used. If you are presenting a
complex process, include a diagram
showing the work flow.

10. Determine your key personnel.

Identify the key people in your business,
including you as owner and manager. If
your business is a corporation, list the
names and addresses of all directors. If
your business is a partnership, list the
names and addresses of all the partners.

11. Identify your work force and support

personnel. List down the skills and
positions) you need, the number of people
for each position, and their corresponding
salaries and wages.

THE FINANCIAL PLAN

12. Determine your financial requirements. Prepare a forecast that outlines all your capital
requirements. There are three: fixed capital, working capital, and pre-operating capital.

Fixed capital includes cost of land and building, or lease deposits on them; cost of improving
the land or renovating the building; machinery and equipment; furniture, furnishings and fixtures.
These are and fixtures. These are usually one-time expenses, and will generally last the lifetime
of the business.

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 Working capital is the reserve money you need to run the business until it becomes self-
supporting. This may take from one to six months or even longer. You need working capital to
purchase your raw materials, compensate your workers, and pay for transportation, telephone,
electricity and water bills.

Pre-operating capital includes money you spend to register your business, acquire licenses
for franchises, or pay a consultant or lawyer. This is money that you spend before your business
begins to operate.

Be sure that no significant item is overlooked. Be realistic and do not underestimate your
requirements. Provide for contingencies and a margin of safety to avoid cost overruns later.

13. Prepare a budget. The budget should include marketing, production and general and
administrative expenses. Marketing, which provides the revenues of the business, requires
expenses in selling and distribution, storage, discounts, advertising and promotion. Production
cost includes cost of materials and components, labor, and manufacturing overhead. General
and administrative expenses include salaries of administrative staff as well as legal and
accounting costs. Projections should be prepared every month during the first year of operations
and every quarter for the second and third years.

At this point, you are ready to implement your plan. It is time to raise funds, register your
business, find a suitable location, purchase equipment and supplies, hire and train people, and
start operating. In other words, from here on, you put what you have written into action.

Remember, though, that what you have written is not cast in stone. Be flexible in order to
cope with any changes that may affect your business.

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RAISING CAPITAL

M oney with which to start and run your new small business can be raised in various
ways.

Obviously, the money can come from your own pocket. This may be what you have saved
for years. Or this may be proceeds from selling a car, a lot, jewelry or other prized personal
belongings. Possibly, you have stock certificates or government bonds which you can readily
convert into cash.

Using your own money is, of course, the safest way to finance a business. The next safest
way is to borrow from close relatives and friends. You’ll have to pay them back, naturally, but
they are usually prepared to be more flexible about when you repay them. Furthermore, you may
also be able to get away with paying very low interest rates or none at all.

Sometimes, however, what can be raised from your personal resources and from relatives
and friends are not enough to meet all the requirements of your business. Then you can start
looking for outside sources.

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EXTERNAL SOURCES OF CREDIT

You can consider the following sources of money:

1. Pawnshops – You can get quick cash by pawning jewelry and other valuables.
2. Credit cooperatives – These are a popular and easy source of credit especially in the
rural areas. It may therefore be very useful for you, as entrepreneur, to join one.
Usually a credit coop will lend an amount up to five times bigger than the money a
member has deposited in it. Interest charges are often minimal.
3. Money lenders – These are people who lend quick money without collateral but charge
exorbitant interest rates. They are otherwise known as “five-six” operators, because they
usually charge about a peso interest per month for every five pesos they lend.
4. Lending investors – These are business enterprises engaged in money-lending
operations. Considered a cross between money lenders and banks, lending investors
extend short-term loans quickly to individuals and businesses with or without collateral.
Interest rates are higher than bank rates but lower than those charged by money lenders
– usually ranging from 3 to 5 per cent a month. Lending investors have proliferated all
over the country and have become an important source of credit to small enterprises.
5. Formal sources of credit – These include banks, financial institutions and certain
government development agencies and development-oriented non-government
organizations. They are called formal sources of credit because they have the legal
authority or mandate to lend money to individuals and businesses.

TYPES OF LOANS

There are various types of credit available from formal lending institutions.

1. Short-term loans - These are loans payable in one year or less. They are normally
self-liquidating, meaning that they are used to buy raw materials and supplies, labor and other
requirements that will generate funds for the business and in turn be used for paying back the
loan. Collateral is usually required. However, a bank may extend a collateral-free loan,
otherwise known as a clean loan to a client with an excellent credit track record.

Short-term loans may come in the form of a revolving credit line – an agreement by the
bank to xtend a loan, not to exceed a specific amount, whenever needed by the borrower. A
credit line is automatically renewable, as each loan transaction is paid by the borrower.
Commercial banks are the most commonly-used sources of short-term loans.

2. Intermediate loans – Otherwise known as term loans, these are loans that provide
capital repayable in one to three years. These are available from banks and other financing
institutions. For a start-up entrepreneur, term loans may be very useful. It is backed up by
collateral securities and paid back in installments.

3. Long-term loans – These are extended only if the lending institution is assured that
the borrowing enterprises would still be in business – and making a profit – over the long-term
period of the loan which is up to ten years. Thus, to qualify, your business must be seen to be
stable and sustainable. These are usually extended by private and government banks.

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SME-friendly banks

Most banks lend to small business. But it is also true that some bank are more SME-friendly
than others, given the well-known risks and transaction costs which SME lending is associated
with.

In its November 2000 issue, Entrepreneur Philippines short-listed five banks as “best for
small business.” These are: the Development Bank of the Philippines, the Land Bank of the
Philippines, Consumer Savings Bank, Metrobank, and Planters Development Bank.

Other government institutions with specialized SME credit programs include the Department
of Science and Technology and the Technology and Livelihood Resource Center with facilities
for financing technology-oriented small business projects; the Philippine National Bank which
implements the Pangkabuhayan Loan Program; and the Small Business Guarantee and Finance
Corporation which, aside from its loan guarantee program, implements its own small business
lending facility.

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 SEEKING OTHER
SOURCES OF ASSISTANCE

Y ou might need help in writing your business

plan, especially if you need a bank loan. Who do you approach?

The Department of Trade and Industry (DTI) has field officers who may be able to do the
research for you for a nominal fee.

There may also be freelance consultants who can do the service. Since they are in business
for themselves and do not have big overhead expenses, they will tend to charge you lower than
consulting firms. Try also extension offices of business schools. For example, in Baguio, there
is the St. Louis University Extension Institute for Small-Scale Industries. Angeles University in
Pampanga has also a similar extension unit. So does Notre Dame University in Cotabato. Or
you can try talking with business professors – the business plan you need may be a good
practicum subject especially for graduate students.

Possibly, you can find others who are in comparable products and markets with you with
whom you can share the expense of a study.

If you need entrepreneurial training, get in touch with the U.P. Institute for Small-Scale
Industries. It has “start your own business” programs that will teach you about business
identification, planning and pre-operationalizing.

Need technical training for your people? Try the Technical Education
Development Authority (TESDA), the Technology and Livelihood Resource Center (TLRC), and
some units of the Department of Science and Technology (DOST).

If it is product design and development, including packaging, the DTI’s Product Development
and Design Center of the Philippines (PDDCP) has experts who can help.

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 LOCATING YOUR BUSINESS

F iinding a site for your business is crucial. In the retail business, your sales potential
depends mainly on your location. Like a tree, a store draws its nourishment from the
area around it. A storeowner is already half successful if he sets up shop in a good
place.

Study the population in the trading area. Is the neighborhood starting to be run down? Is the
population moving away? Is it new and on the way up? Assess the purchasing power of the
population. Do they own cars? Do they live in nice homes?

Look at the competition. Are the stores doing well? Or barely getting by? How many went
out of business in the area last year? How many stores opened? Identify which could be your
biggest competitors. If you intend to put up a sporting goods store, for example, you may find it
advantageous to locate your store near your competitors’ because the combined appeal of two or
more similar stores creates greater customer traffic.

Watch out for factors that might be detrimental to your business, such as smoke, dust,
disagreeable odors and noises, proximity to garages, bars and pubhouses, hospitals, etc.

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 SOME GUIDELINES TO LOCATING YOUR BUSINESS

Having in mind the business you have chosen, look at a prospective

site taking into account the following:

1. Raw materials – Are sources of raw materials you need for your
business accessible to the site?

2. Market – How far are you from your target buyers?

3. Transportation – Consider cost of transporting raw materials and

finished goods. Check the availability of public transport for your
customers and employee.

4. Labor – Can you employ people living in the vicinity? Do they

have the skills you need? Are they within commuting distance?

5. Utilities – Are light and water available? Are these reliable and
adequate?

6. Community – How are the community’s rules and regulations in

relation to your business? Does the local government encourage
certain types of business to set up in the area? Is it physically
attractive? progressive? safe?

7. Site – If you need land, is a suitable lot available? For how much?
Is it necessary to excavate or put in landfill? Is the land properly
titled? If the site is within a building, what do you need in terms of
lighting, airconditioning and parking? How long is the lease
contract? Are the terms affordable and fair? How much will it
take you to renovate the place?

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REGISTERING YOUR BUSINESS
A new small enterprise has to be registered in various government agencies. The complexity
of registration varies according to the legal form of the business. A single proprietorship is the
easiest to register, while a corporation requires more elaborate procedures.

REGISTERING WITH THE DEPARTMENT OF TRADE AND INDUSTRY (DTI)

The DTI-NCR administers the registration of business names.

If you are a single proprietor and your business is using a name other than your own name,
that business name should be registered. Business name registration with the DTI is optional for
partnerships and corporations. By registering your business name with the DTI, you are assured
that no other entity may legally use your business name anywhere in the Philippines.
Register your Business Name at:

Department of Trade and Industry - NCR

Ground floor, DTI Main Building
361 Sen. Gil Puyat Ave., Makati City
or at designated Satellite Registration Centers in selected cities in Metro Manila
Tel. No. 890-4854
Website: [Link]

Steps:

1. Obtain application forms (duplicate copy), preferred name slip, and index card from the
Information Desk and fill these up completely. Only the owner of the business is authorized to
sign all the forms.
2. Meet the following requirements (For Single Proprietorship):
· Must be a Filipino citizen, at least 18 years old. Filipinos with names suggestive of alien
nationality must submit proof of citizenship such as birth certificate, PRC ID, voter’s ID,
passport. If the applicant has acquired Filipino citizenship by naturalization, election, or
by other means provided by law, he must submit proof of his Filipino citizenship such
as naturalization certificate and oath of allegiance; or card issued by the Bureau of

27
 Immigration and Deportation and affidavit of election or ID card issued by the Bureau of
Immigration and Deportation.
· Must provide two recent passport-size pictures.
· Certain types of business may have other requirements: Service and repair shops,
real estate brokers, dental/medical clinic/hospitals, pawnshops, manpower services,
engineering/architectural services, other services provided by professionals.
3. Proceed to the designated window for evaluation.
4. Pay required fees at the cashier
· Registration and processing fee
· A penalty is imposed if the BNRS certificate is not renewed within the 3-month grace
period from the certificate’s expiration date.
5. Get priority number.
6. Proceed to the waiting area and wait for your number to be called by the examiners at
Windows 1-10.
7. Business Name Certificate is released within 10-15 minutes upon approval.

REGISTERING WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC)

The SEC is the government agency that gives the business enterprise its legal personality.

Only partnerships and corporations need to be registered with the SEC. Single
proprietorships need not register.

Register your business at:

Securities and Exchange Commission

SEC Bldg., EDSA, Greenhills, Mandaluyong City
Tel. No. 726-0931
Website: [Link]

Basic Requirements of a Partnership

1. Name Verification Slip
2. Articles of Partnership
3. Undertaking to Change Name
4. Registration Data Sheet
5. If it is a Limited Partnership, the word “Limited” is added to the name. Articles of limited
partnership should always be under oath only (JURAT) and not acknowledged by the
partners before a notary public
6. Partnerships need clearance from concerned government agencies

Additional Requirements for a Partnership

1. License of custom brokers for custom brokerage
2. For foreign partnerships:
- Foreign Investment Agent Application Form
- Proof of Inward Remittance of non-resident alien partner or affidavit manifesting
intention not to register investment with the Bangko Sentral ng Pilipinas
- If the document was signed abroad, it must be authenticated by the Philippine
Consular Office in the country it was executed.

Registration Procedures:
1. Secure name verification slip from the Records Division.
2. Proceed to Cashier for payment of filing fee.
3. Submit documents to the Receiving Unit of the Records Section.
4. The documents are then forwarded to the Company Registration and Monitoring
Department (CRMD) and assigned to processors.

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 5. Typing pool prepares Certificate of Registration and returns to a processor (or a lawyer)
and Assistant Director for initials.
6. Director of the CRMD signs the Certificate of Partnership.
7. The certificate of registration is forwarded to the Releasing Unit of the Records Division
(ground floor), where it may be claimed by the applicant upon presentation of receipt as
proof of payment of the filing fee.

Notes:
1. Applications of domestic corporations (stock) where subscribed capital stock are paid
in cash are forwarded by the Records Division directly to the Company Registration
and Pre-Need Department (CRPD).
2. Verified name is deemed unofficial unless approved by the Commission, i.e., after
issuance of the certificate of incorporation.
3. For businesses involving pre-need plans and commodity futures, clearance of the
proposed corporate name from the Pre-need Department and Market Regulation
department is required before verification of the name with the Records Division at
the SEC Annex Building.
4. The application for registration of non-stock corporations is processed solely by the
CRPD.

Application under the Foreign Investment Act of 1991 or those with more than 40% foreign
equity are processed first by CRMD before payment of filing fee.

REGISTERING WITH THE SOCIAL SECURITY SYSTEM (SSS)

An employer, or any person who uses the services of another person in business,
trade, industry or any undertaking must be registered with the SSS. Social, civic,
professional, charitable and other non-profit organizations, which hire the services of employees,
are considered “employers.”

Register at:

Social Security System (SSS)

SSS Bldg., East Avenue, Diliman, Quezon City
Tel. Nos. 920-6401, 920-6446
Email: sssemail@[Link]

Single Proprietorships
An owner of a single proprietorship business may accomplish and submit SSS Forms R-1
(Employer’s Data Record) and R-1A (Initial or Subsequent List of Employees).

Partnerships
Any of the partners of a partnership firm should accomplish SSS Forms R-1 and R-1A and
submit these forms together with a photocopy of the Articles of Partnership. The original copy of
the Articles of Partnership must be presented for authentication.

Corporations
A corporation must accomplish SSS Forms R-1 and R-1A signed by its president or any of
the corporate officers or incorporators. Submit these forms together with the photocopy of the
Articles of Incorporation. The original copy of the Articles of Incorporation must be presented to
the SSS for authentication.

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REGISTERING WITH THE COOPERATIVE DEVELOPMENT AUTHORITY (CDA)

All cooperatives are required to register with the CDA as per Republic Act 6938/6939.

Register at:

Cooperative Development Authority

6F Benlor Bldg., 1184 Quezon Ave., Quezon City
Tel. No. 373-6896

Steps:
1. Submit four copies of the Articles of Cooperation.
2. Submit four copies of the By-Laws.
3. Submit four copies of the Economic Survey (feasibility study).
4. Submit Bond Accountable Officers (Fidelity, Cash, or Surety).
5. Capitalization should be not lower than P2,000 (depending on the activities registered).
6. At least 15 members are required.

REGISTERING WITH THE BUREAU OF INTERNAL REVENUE (BIR)

Every business enterprise has to register with the BIR for taxation purposes. Below are the
steps to follow:

1. Secure a permanent record file number of Tax Identification Number (TIN) from the BIR
National Office in Diliman, Quezon City.
2. Register the business/trade name at the BIR office nearest you. Secure and file an
application form, together with supporting papers, as follows:
- Mayor’s permit
- Certificate of Business Name Registration from the DTI
- Articles of Partnership or Corporation
- Residence Certificate.
3. Secure authority to print books of account, invoices, receipts, and other accounting
records by filling up four copies of an application
form. Attach four draft copies of the material to be printed as well as a copy of the job order.
4. Register book of accounts, invoices, receipts, etc.

REGISTERING WITH THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE)

Business establishments with five or more employees are encouraged to register with DOLE,
the agency which monitors compliance with labor laws. Registration is mandatory for firms which
employ 50 or more workers.

The Bureau of Local Employment administers the registration of establishments. To register,

secure and fill up a registration form. Corporations are required to attach a photostat copy of the
SEC Certificate of Registration.

REGISTERING WITH THE LOCAL GOVERNMENT

All businesses, whatever the legal form, are required to secure a mayor’s permit or municipal
license from the municipality or city where they are located. Various cities and municipalities
have different registration procedures, but the following steps prescribed in Quezon City would
be typical:

30
 1. Go to the Business Permit and Licensing Office of Quezon City Hall. Secure an
application form from the Public Assistance Office.
2. Submit three copies of the form together with a simple sketch of your business location.
· Support application with a Certificate of Business Name Registration from the
DTI-NCR if you are using a firm name
· A partnership or corporation must submit the corresponding Articles of Partnership or
Incorporation duly registered with the SEC together with a photostat copy of the
Certificate of Registration with the SEC and the current class “C” certificate in the
case of corporations
3. Proceed to the City Treasurer’s Office for any payments to be made. Present Mayor’s
Permit for issuance of municipal licenses.

Business establishments are required to exhibit the mayor’s permit conspicuously in the
business establishment.

REGISTERING WITH OTHER AGENCIES

Depending on the type of products they manufacture or handle and on their market
orientation, certain firms are required by law to register with other government agencies.
Remember, ignorance of the law excuses no one.

Bureau of Food and Drugs (BFAD) For manufacturers of drugs, cosmetics,

Philinvest Corporate Center, Alabang, Muntinlupa and food products
Tel. No. 807-0721/ Fax No. 807-0751
Email: Bfad@[Link]

National Food Authority - Regulatory Division For rice, corn, and flour dealers
10th flr., Matimyas Building, E. Rodriguez Sr.,
Quezon City
Tel. 712-1719 / 712-1705

Fiber Industry Development Authority For processors and traders of fibers and
Asiatrust Bank, Annex Bldg.,1424 Quezon Avenue, fiber products
Quezon City
Tel. 373-7489 / 373-9241

Bureau of Fisheries and Aquatic Resources For those engaged in the export of fish
(BFAR) Arcadia Building, Quezon Avenue, Quezon and fish products and other aquatic
City products.
Tel. 372-5057 / 373-7452

Bureau of Animal Industry (BAI) For exporters of animals and animal by-
Visayas Avenue, Quezon City products.
Tel. 927-0971 / 926-8814

Bureau of Plant Industry (BPI) For exporters of plant and plant products.
San Andres, Malate, Manila
Tel. 525-7857 / 524-0768
Bureau of Forest Development For exporters of forest products (e.g.,
FMB Building, Visayas Avenue,Diliman, Quezon City logs, lumber products, plywood etc.).
Tel. 927-4788 / 925-2138

31
National Tobacco Administration For those engaged in the production or
NTA Bldg., Panay Ave., cor. Sct. Reyes St. Quezon export of flue-cured Virginia-type
City tobacco, Burley tobacco, and
Tel. No. 374-3987/ 374-2505 Turkish/Oriental tobacco products

DTI- Bureau of Product Standards (BPS) For commodity clearance for producers,
3/F, Trade and Industry Bldg., 361 Sen. Gil Puyat manufacturers or exporters (Their
Ave., Makati City products will be tested to ensure that they
Tel. No. 890-4965/ 890-4924Fax No. 890-5131 meet established standards.)
Email: bps@[Link]

National Subcontractors Exchange (SUBCONEX) For businesses interested in tie-ups with

DTI – NCR export-oriented firms as sub-
12/F, Trafalgar Plaza, 105 H.V. dela Costa St. contractors/suppliers provided they fall
Salcedo Village, Makati CityTel. No. 811-8231 to under any of the following sectors:
33Email: ncr@[Link] garments and handwoven fabrics, gifts
and housewares, furniture and fixtures,
footwear and leather goods, fresh and
processed foods and jewelry

Intellectual Property Office (IPO) For firms wishing to register patents and
IPO Bldg., 351 Sen. Gil Puyat Ave. Makati City trademarks
Tel./Fax No. 890-4862; 890-4942
Email: ipo@[Link]

DTI - Bureau of Trade Regulation and Consumer For enterprises engaged directly or
Protection (BTRCP) indirectly in the servicing, repair or
2/F, Trade and Industry Bldg., 361 Sen. Gil Puyat maintenance of vehicles, engines and
Ave. Makati City engineering works, electrical
Tel. No. 896-5785; Fax. No. 890-4949 components, electronics, air-conditioning
Email: btrcp@[Link] and refrigeration, office machines and
data processing, equipment, medical and
dental equipment (Technical personnel,
e.g., mechanics or technicians,) are also
within the scope of the BTRCP.)

32
 HIRING AND TRAINING PERSONNEL

E ven if you’re running a very small operation, you cannot expect to do everything
yourself. As manager, you must see to it that you have the right employees, and that
you train them well, and motivate them to do their very best at work.

If you want to be a good employer, the first step is to know the rights of workers. These are:

Equal work opportunities for all. Male and female employees

are entitled to equal compensation as well as equal access to
promotion and training opportunities. It is unlawful to discriminate
against female employees. It is also unlawful to hire a woman on
condition that she should not get married, or to stipulate expressly or
tacitly that a woman employee shall be deemed dismissed if she gets
married.

33
 Security of tenure. Every employee shall be assured security of
tenure. No employee can be dismissed from work except for a just or
authorized cause, and only after due process.

Work days and hours. Work day refers to any day during which an
employee is regularly required to work. Hours of work refer to all the
time an employee renders actual work, or is required to be on duty or to
be at a prescribed workplace. The normal hours of work in a day is
eight hours. This includes breaks or rest period of less than one hour,
but excludes meal periods, which shall not be less than one hour.

Wage and wage-related benefits. Wage is the amount paid to an

employee in exchange for a task, piece of work, or service rendered to
an employer. This includes overtime, night differential, rest day, holiday
and 13th month pay. It also includes the fair and reasonable value of
board, lodging, and other facilities customarily furnished by the
employer.

Safe working conditions. Employers must provide workers with

every kind of on-the-job protection against injury, sickness, or death
through safe and healthful working conditions.

Rest days and holidays. Rest day refers to any rest period of not
less than 24 consecutive hours after not more than six consecutive
work days. Holidays or special days are classified as such by law or
declared by competent public authority, regardless whether it falls on
an employee’s work or rest day.

THREE TYPES OF LEAVES

1. Service Incentive Leave (SIL) - an employee is entitled to a five-day leave with pay
after one year of service.

2. Maternity Leave – This is the leave granted on the occasion of childbirth, abortion, or
miscarriage of a female member of the SSS who has paid at least three monthly
contributions within the 12-month period immediately preceding her childbirth or
miscarriage.

3. Paternity Leave - a male employee can go on leave for seven days with full pay when
his legitimate spouse gives birth or suffers a miscarriage.

34
 Right to self-organization and collective bargaining. Every worker has a right to self-
organization, i.e., form or join a legitimate worker’s organization, association, or union of his
choice free from interference from the employer or from the government. Except for those
classified as managerial or confidential, all employees may form or join unions for purposes of
collective bargaining and other legitimate concerted activities. An employee is eligible for
membership in an appropriate union on the first day of his or her employment.

Workers’ participation and tripartism. Workers have a right to participate in policy and
decision-making processes in matters directly affecting them. They have a right to take part in
tripartite activities with government and employers’ organizations. Through their organizations,
workers are entitled to representation in tripartite decision-making functions as defined by law,
including fixing of wages and resolution of labor disputes.

35
 GETTING YOUR BUSINESS STARTED
Now you can start your business. Remember that being an entrepreneur also means you
have a social responsibility to your employees and to the community you serve. This means that
you must pay decent wages, give your customers their money’s worth, and compete fairly in the
market.

Keep in mind that business is uncertain. Not everything will go according to plan. When the
unexpected happens, don’t blame other people, the government, a poor business environment,
or bad luck. Successful entrepreneurs learn from their failures. Once you have made up your
mind, have laid down your plans, and are determined to face the challenges ahead, you are
ready to join the ranks.

Welcome to the world of

business!

36
37
References
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Almonte, Crispina and Co, Myrna. How to Register Your Business. Philippines: Small Business Guides, SERDEF, 1987.

Co, Myrna. “Advertising for Small Businessmen.” Small Business Entrpreneurs April-June 1985.

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[Link]
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http:// [Link]/[Link]

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Punzalan, Josefina, et al. Fundamentals of Accounting. Philippines: University of the East Publications, 1965.

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[Link]
[Link]

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[Link]

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Sterne, George. How To Start Making Money in a Business of Your Own: George Stern Profit Ideas. California: 1984.

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