Republic of the Philippines

NUEVA ECIJA UNIVERSITY OF SCIENCE AND TECHNOLOGY

Cabanatuan City

COLLEGE OF MANAGEMENT AND BUSINESS TECHNOLOGY

Business Administration Department

MODULE
in
ENTREPRENEURIAL
MANAGEMENT
Prepared by:

Ma. Adelaida E. Crisolo, MBA

Mark Edrian P. Macaso, MBA, LPT
Rhea M. Villacorte, MBA, LPT
(CMBT – Sumacab Campus)

Joannie A. Galano, PhD

Edgelly G. Vitug, MBA
(CMBT – San Isidro Campus)

Nestor C. Natividad, MBA, LPT

(CMBT – Atate Campus)

Arbie F. Muyot, MBA

(CMBT- Fort Magsaysay Campus)

Entrepreneurial Management| 0
 PREFACE

Starting a new business is not the same as running an operating business. Over the last
decade, several management practices have emerged that recognize the particular
challenges new ventures face. This session introduces and defines the key concepts of these
entrepreneurial management practices and explores how startups can use them at any step
of their development.

Entrepreneurial Management| 1
 TABLE OF CONTENTS
PAGE
Preface

UNIT I
ENTREPRENEURIAL MINDSET 6
Learning Objectives 6
Setting Up 6
Lesson Proper 7
Introduction 7
Some government agencies that are sources of practical and legal 7
information for business opportunities
Different Factors For The Search For Business Opportunities 13
Some Business Opportunities in the Philippines in 2021 13
References 16
Assessing Learning 16

UNIT II
THE CONCEPT OF ENTERPRISE 18
Learning Objectives 18
Setting Up 18
Lesson Proper 19
What is Enterprise? 20
Creating a Business Enterprise 20
The Role of Entrepreneurship and Small Business 20
Reasons for the re-emergence of small enterprise 20
Summary of approaches to describe entrepreneurship 20
Entrepreneur, Entrepreneurship and SMEs 21
Entrepreneurial or Enterprising Activities 22
Why are Some Individuals More Enterprising than Others? 22
Personality Theories 23
Behavioral Theories 23
Framework for Identifying Enterprise Competency 23
Change in management competencies: 24
Economic Approaches 24
Sociological Approaches 24
Attributes and Resources 24
Integrated Approach 25
Intentions model of entrepreneurial potential 26
References 26
Assessing Learning 27

UNIT III
INTERNAL AND EXTERNAL IMPACTS OF AN ENTERPRISE 33
Learning Objectives 33
Setting Up 33

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 Lesson Proper 33
Internal impacts 33
Human resources 33
Capital resources 34
Operational efficiency 34
Infrastructure 34
Innovation 35
External factors 35
Economic situation 35
7 factors that have direct impacts on business firm 35
Technological factors 35
Customer demands 37
Competition 37
Environmental Scanning 37
Important Factors for Environmental Scanning 38
References 39
Assessing Learning 39

UNIT IV
ENTERPRISE AND SMALL BUSINESS 41
Learning Objectives 41
Setting Up 41
Lesson Proper 41
Who is an Entrepreneur? 41
Types of Entrepreneurs 41
Social Entrepreneur 42
Serial Entrepreneur 42
Lifestyle Entrepreneur 42
Qualities of An Entrepreneur 43
Stages of Small Business 43
Five Key Factors That Influence Entrepreneurship 45
Barriers of a Small Business 47
The Bottom Line: Set Goals and Plan 48
References 50
Assessing Learning 50

UNIT V
ENTREPRENEURSHIP IN THE PHILIPPINES 52
Learning Objectives 52
Setting Up 52
Lesson Proper 53
The Entrepreneurial Traits 53
Most Important Entrepreneurial Traits 53
Characteristics of Successful Entrepreneurs 53
The Entrepreneurial Profiles 54

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 The Filipino Values Favorable to Entrepreneurship 55
55
Why Are Many Still Unable To Venture
Into Business?
HOW TO GoNegosyo? There are three levels to GoNegosyo with A-G 56
steps:
References 62
Assessing Learning 63

UNIT VI
THE BUSINESS STUFF 64
Learning Objectives 64
Setting Up 64
Lesson Proper 64
Four Types of Industries 64
Why Your Business Idea Is the Most Important Thing in Your Startup 66
OVER A HUNDRED BUSINESS IDEAS 66
References 71
Assessing Learning 71

UNIT VII
RAISING MONEY 73
Learning Objectives 73
Setting Up 73
Lesson Proper 74
SOURCES OF FUNDS 74
Advantages of managing an inventory: 75
References 76
Assessing Learning 75

UNIT VIII
FINDING THE RIGHT PEOPLE 78
Learning Objectives 78
Setting Up 78
Lesson Proper 79
STEPS ON HIRING THE RIGHT PEOPLE: 79
HOW MUCH SALARY SHOULD YOU GIVE? 80
GUIDE: LABOR STANDARDS 80
GUIDE: TIPS TO CREATE AN ENVIRONMENT FOR HAPPY AND 80
ENGAGED EMPLOYEES
References 82
Assessing Learning 82

UNIT IX
BUSINESS PLAN 83
Learning Objectives 85

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 Setting Up 85
Lesson Proper 86
Introduction 86
What is the business plan? 87
Reason why we need to make Business Plan 88

7 Steps to make a Business Plan` 89

Reasons of doing business plan according to David Gumpert 89
Rules to be observed in Writing Business Plan 89
Business Plan Format by Hisrich and Peters 89
References 91
Assessing Learning 91

UNIT X
DEVELOPMENT PLAN OF SME’S 96
Learning Objectives 96
Setting Up 96
Lesson Proper 97
Why Plan the Development of SMEs? 97
Role and Importance of SMEs 97
Structural Features of Philippine SMEs 97
Priority Industries of SMEs Subsectors 98
Republic Act No. 9178 98
Barangay Micro Business Enterprises
(BMBEs) Act of 2002
References 102
Assessing Learning 103

UNIT I. ENTREPRENEURIAL MINDSET

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 THE SEARCH FOR BUSINESS OPPORTUNITIES IN THE PHILIPPINES

Lessons Objectives:

At the end of the unit, I am able to:

 Discuss entrepreneurial activities in search of business opportunities.
 Enumerate some of the government agencies that are sources of information/data
about business opportunities in the Philippines.
 Discuss some business opportunities in the Philippines.
 Discuss vital role of Philippine national government in providing opportunities to
every entrepreneur.
 Discuss different factors for the search for business opportunities.

Setting Up

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Directions: Modified True or False: Write T if the sentence is True and F if the statement is
false at the blank before each [Link] you think the answer is false, rewrite or write down
the correct answer or idea after each question.
_______ 1. Ideas and Information about business opportunities in the Philippines can obtain
only thru using internet and social media.
_______ 2. All the useful publications of different agencies of the government are for sale.
_______ 3. Entrepreneurs can start and survive in his own without necessary government
agencies.
_______ 4. A smart strategy to identify business opportunity is to relay on the social media
and interne.t
_______ 5. Seminars and workshop is not applicable during pandemic period.
_______ 6. There is limited business opportunities during pandemic.
_______ 7. Majority of the business opportunities are in the food industry.
_______8. Entrepreneurship limits to urban community.
_______9. Online world is the most popular channel of marketing during the pandemic.

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_______ 10. All government agencies services are limited only to production of publications
and monitoring.

Multiple [Link] choices, write the letter of the correct answer at the blank before
each number.

Choices:
a. Department of Trade and Industry (DTI)

c. Department of Labor and Employment ( DOLE)

d. Department of Health (DOH)
e. Department of Science and Technology ( DOST)
f. Department of Education (Dep Ed)

______ 11. Garments & Textile Industry Development Office

______12. Philippine Coconut Authority
_______13. Philippine Overseas and Employment Administration
_______14. Bureau of Fisheries and Aquatic Resources
_______15.Food and Drug Administration (FDA)
_______16. Design Center of the Philippines (DCP)
_______ 17. Industrial Technology Development Institute
______ 18. Bureau of Animal Industry
_______19. Science Education Institute
_______ 20. Philippine Carabao Center
_______21. Private tutorial center and schools.
_______22. Fabric and textiles
________ 23. Recruitment agencies
________ 24. Food Supplements
________ 25. Metal works and Electronic materials
________ 26. Murrah Buffalo and Goat
________ 27. Security Services.
________ 28. Furniture s and Forest Products
________ 29. Mango Exporting
________ 30. Coconut products

Lesson Proper

Introduction
Entrepreneurship is a way of life. Being entrepreneurial means being able to
identify, start and maintain a viable and profitable business particularly a small enterprise.
There are many business opportunities for an individual with a creative mind. All
business starts with an idea, and it is said that creativity, through innovativeness and the
capacity of bringing something new in the market, spells the difference between a
traditional businessman and an entrepreneur.

Some government agencies that are sources of practical and legal information for
business opportunities

Some of the government agencies provide a wide range of services and information that will
give excellent ideas on how to explore business opportunities. These services are:

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1. IEC (Information, Education and Communication Materials)- most of the
government agencies provides free copies of different reading materials such as
magazine, newsletter, manual, books, leaflets, flyers, pamphlets and others

2. Trade and Exhibits- It is a regular activity of the different government agencies

that they conduct either monthly or yearly trade and exhibits that defends of the
project.

3. Seminars and Workshop- Some of the government agencies provides limited free
training and seminars on first come, first serve basis. Different topics and coverage
are conducting as either weekly, monthly or [Link] and Zoom meetings
became popular during the pandemic period where people are stayed home due to
community quarantine.

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 4. Products and Services Consultation- All of the government agencies are involve in
the consultation services. It can be avail upon the formal request of the clients.

In putting up a business, there are several government agencies you have to register with
depending on the type of your business. The Philippine Business Registry (PBR) is a
government-initiated one-stop shop for registering a business that makes it easier to
transact with these agencies, including the following:

A. Department of Trade and Industry

Source of information about the new food and nonfood products launched in the
Philippines and different products produces in the different region of the
Philippines.

It is necessary to register your business with this agency in order to gain the
exclusive rights to use your business name. Single proprietors are required to
register. Businesses can be registered at any DTI Regional or Provincial office.

Examples
A.1 Garments and Textile Industry Development Office (GTIDO)
- For the manufacturing and production of garments and textile for exports

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A.2 Design Center of the Philippines (DCP)
Promotes industrial designs as a tool for improving the quality and competitiveness
of Philippine products. It services the design needs and requirements of small and medium
enterprises by providing services on product/package design, product technology
demonstration, design & technical information

B. Department of Labor and Employment (DOLE)

Source of information about business opportunities in human resources such as

recruitment agencies, training center, security agency and others.

Business establishments with five or more employees are encouraged to

register with the DOLE for the purpose of monitoring the firms’ compliance with
labor regulations. Registration is required for firms with 50 or more workers.
The Bureau of Local Employment administers the registration of establishments.

C. Department of Agriculture (DA)

Is the executive department of the Philippine government responsible for
the promotion of agricultural and fisheries development and growth

Examples
C.1 Philippine Coconut Authority (PCA)
- for those engaged or want to explore more business opportunities in the
export of coconuts and coconut by-products.

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C.2 National Food Authority (NFA)
-for those engaged or want to explore more business opportunities rice, corn
and flour dealers:
C.3 Bureau of Fisheries and Aquatic Resources (BFAR)
-for those engaged or want to explore more business in the production of
fish and fish products other aquatic products.

C.4 Bureau of Animal Industry (BAI)

-for exporters or want to explore more business in the production of animal
products and other animal byproducts.

C.5 Bureau of Plant Industry (BPI)

-for those engaged or want to explore more business in the export or
production of plant and plant products

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 C.6 Philippine Carabao Center
- is an agency of the Department of Agriculture (DA). PCC is mandated under
Republic Act No. 7307 or the Philippine Carabao Act of 1992 to conserve, propagate
and promote the carabao or native buffalo as a source of milk and meat as well as
draft animal power and hide to benefit the rural farmers.

Source: Philippine Carabao Center, Department of Agriculture

D. Department of Health
D.1 Food and Drug Administration (FDA)
-for those engaged in the production of food, drugs and cosmetic products

E. Department of Science and Technology

E.1 Industrial Technology Development Institute
- Excellent sources of ready to adopt technology in the food, metal, chemical
for aspiring entrepreneurs.

E.2 Science Education Institute

- Sources of informations and data for those who want to establish science
elementary and secondary private school

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Different Factors For The Search For Business Opportunities

1. Markets. Public markets in the Philippines offers low location fee to keep your business
going, compared to other private stalls. Another advantage of acquiring a stall in public
market is the large amount of potential buyers going in and out of the place every day, many
people go to the market to buy their needs and with many potential customer you can
always practice your marketing and management skill. It can be Home-Based Business
Option also.

2. Individual Interests. The differences of individual needs and wants which always
affected by several factors such as social classes, age, sex and group of population will be
sources of ideas for business opportunities. It is also a respond to a problem area.

3. Capital. There are also many financial institutions that provides so many options for
financing business that could extend numerous assistance for business venture.

4. Skills and Manpower. Also provides opportunities for human resources venture.

7. Technology. The available technology provides by the government agencies and

educational institutions is also an excellent source of business ideas.

Some Business Opportunities in the Philippines in 2021

1. Health and Wellness Products -these products are quite common and many
companies are jumping into this kind of business. The most recent common reason
is the pandemic COVID-19 in 2020 that create new enterprises of medicine, health
and wellness products. Virgin Coconut Oil Production is a very good evidence.

2. Online Selling Business – online selling doesn’t require anyone to be a computer

geek in order to sell online. There are many online classified ads and auction sites
that you can use for free. The most popular are Shopee and Lazada Philippines and
[Link] (before it is [Link]). You can also create an online shop for free and
[Link] is the choice of many Filipino online sellers [Link] the
community quarantine implemented in the whole country, online selling business
became the channel of marketing than the tradition market malls and shopping
centers.

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3. Street Food Business – Isaw or grilled intestines is the most popular street food
among Filipinos. There are also many kinds of street food business that are popular.
Fish ball, kikiam, cheese sticks, squid balls and chicken balls that you can buy in
small packs ready to fry. There is also other street food business that you have to
process yourself before grilling on charcoal like the pig intestine or isaw, chicken
intestine or IUD, pig ears or walkman, pork blood or betamax, chicken head or
helmet and chicken feet or adidas. Kwek kwek and tokneneng are also very
[Link] out and food delivery thru channels became the operating procedures
during the pandemic in 2020-2021.

4. Fresh Meat and Meat Products Shop business – meat shops are common in wet
markets. You can set up a meat shop business there side by side with other many
meat shop owners but what I have in mind is setting it up away from the wet market
where there is less competition.

5. Tarpaulin Printing Business – there is a good market for this business and there
are various ways a printed tarpaulin can do. One very popular application is on food
carts. Printed graphics on tarpaulin is very attractive and it is tough too. On other
occasions like birthdays, anniversary and even on a funeral tarpaulin is used.
political candidates on local and national election also used printed tarpaulin on
their campaign.

6. Ukay-Ukay Business – for those not familiar with this business, it is selling used
clothing. The used clothes are imported from other countries. Some of the clothes
are overrun (still brand new but didn’t pass the export standard) but still good. The
reason why many Filipinos patronize it is because of the cheap price. It only cost a
fraction compared when buying in department stores or boutique.

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7. Laundry and Dry Cleaning Business – Nowadays it more practical to get the
service of a laundry shop than hiring a laundry maid or someone to get the job done
especially if you only have few clothes. There are also some clothes or comforter
that cannot be washed with an ordinary washing machine and if the clothes or bed
sheets need to be dry cleaned, you certainly need a laundry shop which a best
business in the Philippines.

8. Food Cart Business – many Filipinos here and abroad are very interested going
into this business because many of local and international foods can sell to the
public by means of this venture and most of them, when they hear or see a food cart,
what they have in mind is “franchising”, which later when the name of food cart
business establish brand in the market. Examples are Master Siomai, Potato Corner
and Pinoy Pao

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 9. Cellphone loading and money transfer business – the good thing about this
business is you can start with a small capital and can be home based. The reason
why is because of the recent technology of eloading, a universal type of loading
where you can sell load on all telecom networks including prepaid game cards and
internet promos.

10. Money Lending- It is an opportunity who lend quick money with or without
collateral but charge interest [Link] learn more about the legal and complete
information to this kind of business send inqiuries to Bangko Sentral ng Pilipinas,
and some attached agencies of Department of Finance and Department of Trade
and Industry.

References

Books:
Azor, Winefreda B.2015. Entrepreneurship in the Philippine Setting. Manila:
Rexbookstore Inc.
Bureau of Micro, Small and Medium Enterprises and University of the Philippines, Institute
of Small Scale Industries.2008. Your Guide To Starting A Small Enterprise Handbook .
Makati City: Department of Trade and Industry, Small and Medium Enterprises Center
Foundation for Asian Management Development and University of the Philippines, Institute
of Small Scale Industries.2008. Entrepreneurial Competency Training Handbook . Quezon
City: Philippine Small Enterprises Research and Development Foundation, Inc.
Gilles Alexander and Mondejar Reuben. 2010. Guide to Entrepreneurship. Pasig
City:University of Asia and the Pacific and Sinag-Tala Publishers
Masa, Dina B.2012. Establishment of Coconut Based Enterprises. Quezon City: Philippine
Coconut Authority.
Orcullo, Norberto A. 2010. Contemporary Entrepreneurship in the Philippine Setting.
Mandaluyong City: Academic Publishing Corporation Inc.
University of the Philippines, Institute of Small Scale Industries.2016. Introduction to
Entrepreneurship . Quezon City: Philippine Small Enterprises Research and Development
Foundation, Inc.
University of the Philippines, Institute of Small Scale Industries.2018. Windows to
Entrepreneurship . Quezon City: Philippine Small Enterprises Research and Development
Foundation, Inc.

University of the Philippines, Institute of Small Scale Industries.2018. Product

Development . Quezon City: Philippine Small Enterprises Research and Development
Foundation, Inc.

Website
Asian Institute of Management [Link]
Ayala Corporation [Link]

Entrepreneurial Management| 16
Department of Agriculture of the Philippines. [Link]
Department of Science and Technology. [Link]
Department of Trade and Industry. [Link]
Food and Nutrition Research Institute. [Link]
Harvard University [Link]
San Miguel Corporation [Link]
University of Asia and the Pacific [Link]
University of the Philippines [Link]

Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

GUIDE QUESTIONS AND ACTIVITIES

1. Conduct a online or personal survey (following the health protocols of IATF) in your
respective municipality or city and in your barangay. You can ask or send inquires to the
business or trade division of your city or municipal about the products or services that are
usually produce in your own [Link] as many as you can in the different opportunities
in your place by survey. What product or services improvement or enhancement that you
will suggest?What are other products or services that are not usually available in your place
but with potential? Tabulate the results of your survey and [Link] and report
this to the online class.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

2. Explore more the different website of various government agencies, if possible majority
of them. If you wish to create your own products or services, what particular agency would
you like to send your inquiries about the technical information?What did you discovered to
their websites? Write down your [Link] and report this to the online class.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

Entrepreneurial Management| 17
3. Based from the lesson, majority of the government agencies produces IEC materials via
electronic or actual reading materials. Try to send an inquiry and request letter for some
reading materials or technical information about the products or services that you would
like or wish to explore. Send directly the request to the right agency or government office
thru their email [Link] you receive any response(s) from them?Did you get the right
information that you needed? Share your experiences and report this to the online class.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

4. With the reference to your interest products or [Link] the existing products or
services that are generally available in common [Link] aspect/criteria of quality of
products or services would like to improve or enhance?Why? Share and report this to the
online class.

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Name: ____________________________ Score:________________________
Year/Section: _______________________ Date: January 30,2025

Entre 1
Activity 2

Direction : Using the format below prepare and analysis of your present location. Conduct
an analysis of your present location. Describe what business can be establish on the
location.

Location Address:

Description of the ( Describe here what are means of livelihood of the community, the
location total population, the business establishment located on the vicinity.

What is the ( Cite the problem foreseen on your analysis. Give your justification )
business
opportunity on
the vicinity?

Man Power What are the man power needed for the propose business.
needed

Entrepreneurial Management| 19
UNIT II. THE CONCEPT OF ENTERPRISE
Overview
This unit deals with the concept of enterprise, entrepreneurship, and small business.
This unit also includes approaches and theories applied in entrepreneurship.

Learning Objectives

At the end of this unit, I am able to:

 explore the concept of enterprise and role of entrepreneurship and small
business;
 explain the entrepreneurial models or approaches in entrepreneurship;
 enumerate the enterprising activities, theories, and models; and
 discuss how gender and ethnicity affect entrepreneurship.

Setting Up

Name : ____________________________________ Date: _______________

Course/Year/Section: ____________________

Directions: To encourage them to understand the characteristics required for

entrepreneurship, students will be given a pre-test survey on their attitudes towards work
and entrepreneurship.

According to the legend below, mark your preference. Please honestly answer these
questions; there is truly no right or wrong answer.

Strongly Agree = Agree = (A) No Opinion =

(SA) Disagree = (D) (NO)
Strongly Disagree =
(SD)

SA A NO SD D
1. I enjoy working hard in order to
achieve my goals. Most businesses
are started by knowledgeable
people. Entrepreneurs need a
creative skill to find workable
solutions.
2. Never showing discouragement is
the mark of a successful
entrepreneur.
3. I feel that I am aggressive in acting
on my ideas.
4. I usually have good concentration
and am not easily distracted.
5. Self discipline is one of my strong

Entrepreneurial Management| 20
 points.
6. I feel best when I am in control of
the game, discussion or situation.
7. Job security will be an important
concept in my future. I like it when
my ideas are used by others.
8. I feel good about risk-taking.
9. I love to work long hours if I know
that I will benefit. I can handle
pressure.
10. I don't often engage in risky
behaviors.
11. I usually take responsibility for my
actions. Family life is an important
idea for me.
12. I feel that I am self-motivated.
13. I feel that I can easily get along with
others.
14. I often encourage others to do their
best.
15. I possess some technical ability to
start my own business.
16. I am loyal to my family and friends.
17. I have the mental drive to succeed.
18. I have the physical drive to succeed.
19. I have self-confidence in my own
abilities.
20. Innovation is the key to success in a
business.
21. I prefer to work for myself
22. I have the talent to analyze complex
situations and draw logical
conclusions.
23. I enjoy working for someone else.
24. I can clearly focus on my goals and
objectives.
25. Part of success in business is pure
luck.
26. Problems for me are a challenge
rather than a frustration.
27. I like being a winner in the spotlight.
28. I like interaction with people of all
ages.
29. I want to own and operate my own
business in the future.

Entrepreneurial Management| 21
Lesson Proper

What is Enterprise?
An enterprise is simply another name for a business. Enterprise means organizing,
starting and operating a business. The word enterprise describes the actions of someone
who shows some initiative by taking a risk by setting up, investing in and running a
business.

“Someone who gets things happen” is a person who takes the initiative. He or she is
also decisive. Risk-taking is slightly different. There is no such thing as a "sure fire bet" in
industry. All business investments carry a risk factor, which is the chance or probability that
something will go wrong.
Someone who shows enterprise is an "entrepreneur".

Creating a Business Enterprise

There is no need for a business enterprise to be on the Microsoft, Apple or Amazon

scale. A business company may be managed by a single person or a small business with a
handful of employees can be referred to. A business's difference is that it is a for-profit
operation. The corporate company operates to make money selling goods or services to
consumers.

The Role of Entrepreneurship and Small Business

The role of entrepreneurship and small business has evolved considerably since the
Second World War. What was once considered to be perhaps necessary drain on Western
economies has become a central strategic instrument for competitiveness in global markets.
Just as it has been important to understand how to manage entrepreneurial firms, it has
now become at least as important to understand how to achieve an entrepreneurial society.
While this emphasis on small entrepreneurial firms as engine of dynamic efficiency may
seem startling after decades of looking at the corporate giants as engines of growth and
development, it may not be so new (Acts and Audretsch, 2001)

Reasons for the re-emergence of small enterprise

Supply Demand
Technological changes Structural changes
 new products  demand for services
 new industries  demand for variety
 fragmentation/ cost advantage  uncertainty of demand
 sub-contracting  individual customer
requirements

Labor force/ unemployment Macro-economic conditions

 redundancy  unemployment
 education
Government Economic developments
 privatization  services
 deregulation  just-in-time

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  tax benefit  niches
Source: Based on D.J. Storey, Understanding the Small Business Sector

Summary of approaches to describe entrepreneurship

Entrepreneurial Central focus or Assumption Behavior and Situation
model purpose skills

‘Great person’ The Without his Intuition, Start-tup

school entrepreneur ‘inborn’ intuition, vigor, energy,
has an intuitive the individual persistence,
ability –a sixth would be like the and self-
sense – and rest of us esteem
traits and mortals, who
instincts with ‘lack what it
which he or she takes’
is born
Psychological Entrepreneurs People have in Personal Start-up
characteristics have unique accordance with values, risk-
school values, attitude their values; taking, need
and needs that behavior results for
drive them from attempts to achievement,
satisfy needs and others
Classical school The central The critical Innovation, Start-up and
characteristics of aspect of creativity, and early growth
entrepreneurial entrepreneurship discovery
behavior is is in the process
innovation. of doing rather
than owning
Management school Entrepreneurs Entrepreneurs Production, Early growth
are organizers of can be developed planning, and maturity
an economic or trained in the people
venture; they are technical organizing,
people who functions of capitalization,
organize, own, management and budgeting
manage and
assume the risk.
Leadership school Entrepreneurs An entrepreneur Motivating, Early growth
are leaders of cannot directing, and and maturity
people; they accomplish his or leading
have the ability her goals alone,
to adapt their but depends on
style to the others
needs of people
Intrapreneurship Entrepreneurial Organizations Alertness to Maturity and
school skills can be need to adapt to opportunities, change
useful in survive; maximizing
complex entrepreneurial decisions
organizations; activity leads to
intrapreneurshi organization

Entrepreneurial Management| 23
 p is the building and
development of entrepreneurs
independent becoming
units to create, managers
market, and
expand services.
Source: J. B. Cunningham and J. J. Lischeron. ‘Defining Entrepreneurship’, Journal of Small
Business Management 1991; 29 (1): 47

Entrepreneur, Entrepreneurship and SMEs

Enterprise according to Gibb, is the exercise of such a set of attributes and the
entrepreneur.
Entrepreneurship is any attempt to create a new business enterprise or to expand
an existing business by an individual, a team of individuals or an established business.
An enterprising individual has a positive, flexible and adaptable disposition towards
change, seeing it as normal, and as an opportunity rather than a problem. To see change in
this way, an enterprising individual has a security, born of self-confidence and is at ease
when dealing with insecurity, risks, difficulty and the unknown. An enterprising individual
has the capacity to initiate creative ideas… develop the, and see them through into action in
a determined manner. An enterprising individual is able, even anxious, to take
responsibility and is an effective communicator, negotiator, influencer, planner, and
organizer. An enterprising individual is active, confident, purposeful, not passive, uncertain
and dependent (OECD/CERJ).
Small and medium enterprises (SMEs) are the backbone of Asian economies,
accounting for 98 percent of all enterprises and 66 percent of the national labor force from
2007 to 2012, according to the Asian Development Bank.
SMEs are classified in the Philippines as any enterprise with 10 to 199 employees
and/or assets valued at between P3 million and P100 million. Together, SMEs and micro
businesses make up 99.6% of the establishment.
RA 9501 or The Magna Carta for MSMEs defines the SME as any business activity or
enterprise engaged in industry, agribusiness, and/or services that have total assets
(excluding land) of up to P100 million.

Entrepreneurial or Enterprising Activities

 autonomy/ independence
 belief in control of one’s own destiny
 creativity
 determination
 flexibility
 goal orientation
 hardwork
 imagination
 initiative
 leadership
 moderate rather than high risk-taking
 need for achievement
 optimism
 perseverance

Entrepreneurial Management| 24
  persuasive powers
 problem-solving ability

Why are Some Individuals More Enterprising than Others?

This question will be answered into the following theories:
 Personality theories;
 Behavioral theories;
 Economic approaches;
 Sociological approaches;
 Attributes and resources;
 A number of integrated approaches

Personality Theories
Personality theories of enterprise consider that it is the personality of individuals
that explains their actions. The simplest theory suggests that it is the possession by
individuals of a trait, or traits, that predisposes them to enterprising behavior; the traits
most often proposed are achievement motivation, risk-taking, propensity and the desire of
control.

Personal Qualities:
 Traits and attributes-behavior
 Achievement motivation-lookout for challenges
 Risk-taking propensity – proactive achievers
 Locus of control – enterprising potential
 Need for autonomy – independence from other people
 Determination – persistence
 Initiative – strong need to achieve
 Creativity - developing new products
 Self-confidence and trust – intrinsic rewards of achievement

Behavioral Theories

Behavioral theorists thought that efficiency was increased by a deeper

understanding of human behavior at work, such as motivation, conflict, aspirations and
group dynamics. Cognitive theories emphasize the individual decision-making process and
the impact of perceived competency on the decision to become an entrepreneur. The
context, or at least the manner in which it is interpreted.

 Competencies – it is a modern term for ‘ability’


The following are some of the enterprise competencies frequently cited:
Dedication Creativity Technical competencies
Decision-making Confidence Sensitivity to changes
Goal-setting Innovation Networking to changes
Planning Risk-taking Developing relationships
Responsibility Insight Project management

Framework for Identifying Enterprise Competency

Entrepreneurial Management| 25
 COMPETENCY

Aspects Knowledge Performance Skill Psychological

variables

Dimensions General Critical

Variations Levels required

Outputs Behavioral/performance indicators

Change in management competencies:

Goals
1. Sensitivity to changes in key personnel, top management perceptions, and market
conditions, and to the way in which these impact on goals of the project in hand.
2. Clarity in specifying goals, in defining the achievable.
3. Flexibility in responding to changes (outside) the control of the project manager,
perhaps requiring major shifts in project goals and management style, and risk-taking.

Roles
4. Team-building abilities, to bring together key stakeholders and establish effective
working groups, and clearly to define and delegate respective responsibilities.
5. Networking skills in establishing and maintaining appropriate contacts within and
outside the organization.
6. Tolerance of ambiguity, to be able to function comfortably, patiently, and effectively in
an uncertain environment.

Communication
7. Communication skills to transmit effectively to colleagues and subordinates the need for
changes in project goals and in individual tasks and responsibilities.
8. Interpersonal skills to transmit effectively to colleagues and subordinates the need for
information, identifying the concerns of others, and managing a meetings.
9. Personal enthusiasm, in expressing plans and ideas.
10. Stimulating motivation and commitment in others involved.

Negotiation
11. Selling plans and ides to others, by creating a desirable and challenging vision of the
future.
12. Negotiating with key players for resources, of for changes in procedures, and to resolve
conflict.

Managing Up
13. Political awareness, identifying potential coalitions, and in balancing conflicting goals
and perceptions.
14. Influencing skills, to gain commitment to project plans and ideas from potential
skeptics, and resisters.

Entrepreneurial Management| 26
15. Helicopter perspective, to stand back from the immediate project and take a broader
view of priorities.
Source: D. Buchman and D. Boddy, The Expertise of the Change Agent (Hemel
Hempstead: Prentice-Hall, 1992) pp. 92-3

Economic Approaches
The economic theories of enterprise are also specifically concerned with
entrepreneurship and the function that an entrepreneur serves in an economy. They see the
entrepreneur as the seeker of opportunities and the innovative coordinator of resources in
the pursuit of profit.

Sociological Approaches

Psychological and economic approaches to entrepreneurship emphasize the degree

of choice exhibited by individual potential entrepreneurs, but some sociologists consider
that individuals are seriously constrained in making career choices.

Attributes and Resources

Attributes may include self-confidence, diligence, perseverance, interpersonal skills

and innovative behavior. Resources may include finance, experience, knowledge, skills, a
network and a track record.

Attributes and Resources Model

Encouragement

Attributes
and Discontinuity or Decision Enterprising
resources other trigger action

Support available

Attributes and resources, and how they are acquired:

Attributes: Resources:
Attitude Ideas
Self-confidence Technical skills
Enthusiasm Interpersonal and
Diligence and perseverance Communication skills
Initiative Information, and access to it
Independence Network
Persuasiveness Finance
Positive outlook Experience
Perception Track record and credibility

Entrepreneurial Management| 27
 Attitude to risk Direction
How acquired: How acquired:
Attributes can be acquired from both nature Resources are acquired through many of the
and nurture. The nurture influences can processes of working and living. They will,
include family, education , culture, work however, be more readily acquired if this
experience, role models, peers, and acquisition is planned and targeted.
economic structure lifestyle and stages of
life.

Integrated Approach

Krueger produced a model of entrepreneurial potential, the intentions to act

entrepreneurially are underpinned by the development of potential which is in turn built
upon credibility.
Krueger contends that to be credible to oneself and to others, entrepreneurs/
enterprising persons must both perceived the probable outcome of their endeavors.

Personal Perceived
desirability desirability

Perceived social Propensity to INTENTIONS Entrepreneurial

norms act (‘potential’) activity

Perceived self- Perceived Precipitating event

efficacy feasibility (‘displacement’)

Intentions model of entrepreneurial potential

Gender and Ethnicity:

 Female enterprise and entrepreneurship-historically most entrepreneurs have been

men and those businesses which have been created by women have generally been in a
limited range of business sectors.
 Personal desirability – individuals have needs and they engage in activities which
should fulfill those needs. Since women and men have historically had a differential
attraction to entrepreneurship it might be that women’s and men’s needs differ and
much of the early research on female entrepreneurs explored their motivation to start a
firm.
 Perceived socials norms- in many parts of the world it is assumed that a woman’s role is
to manage the household and to raise children. Also it is assumed that this required he
so-called feminine qualities such as tenderness and relatedness and these are respected
less than supposed masculine characteristics of material success, competition, and
ruthlessness.
 Perceived self-efficacy – to start and run a business an individual needs to be motivated,
needs to have a viable business idea and needs relevant knowledge, experience, skills
and resources.

Entrepreneurial Management| 28
 Enterprise and Entrepreneurship in Ethnic Groups – ethnic groups are influenced by the
cultural context within which they function.

References:

[Link]
functions/1553
[Link]
[Link]
[Link]
management-thought/behavioral-management-theory#:~:text=The%20behavioral
%20management%20theory%20is,and%20group%20dynamics%2C%20improved
%20productivity.
[Link]
Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Activity
A Famous Entrepreneurs List
Direction: All the individuals listed below have a unique history. We will discover the
characteristics that make them successful entrepreneurs by researching their lives; they can
become role models that we can follow.

Choose one of these business people and be prepared to present an oral report for five
minutes on the life of this person and the qualities he or she used to succeed.

Jeff Bezos [Link]

Jay Van Ande Amway
Alphonse Busch Anheuser Busch
Steve Wozniak Apple Computer
Steven Jobs Apple Computer
Thomas Armstrong Armstrong Floor and Tile
A. P. Giannini Bank of America
P. T. Barnum Barnum & Bailey Circus
Olive Beech Beech Aircraft
William E. Boeing Boeing Aircraft
Michael Dell Dell Computers
Walt Disney Disney Studios
Thomas Monaghan Domino's Pizza
Donald W Douglas Douglas Aircraft
Steven Spielberg DreamWorks Studio
Bill Rosenberg Dunking Donuts
George Eastman Eastman Kodak
Pierre Omidyar EBay
Estee Lauder Estee Lauder Cosmetics
Willy Amos Famous Amos Cookies

Entrepreneurial Management| 29
William Farah Farah Men’s Wear
Fred Smith Federal Express
Henry Ford Ford Motor Company
Alfred P. Sloan General Motors
King Gillette Gillette Razors
Gloria Vanderbilt Gloria Vanderbilt Enterprises
Joyce Hall Hallmark Cards
Milton Hershey Hershey Chocolate
David Hewlett Hewlett Packard
Thomas Watson IBM
Thomas Watson, Sr. IBM
Gordon Moore Intel
John Johnson Johnson Publishing (Ebony
Magazine)
Donna Karan Karan Fashions
Harlan Sanders Kentucky Fried Chicken
Paul Orfalea Kinko’s Copying
Bud Hadfield Kwik Kopy
Levi Strauss Levi Strauss & Co.
Liz Claiborne Liz Claiborne Clothing
Lockheed Brothers Lockheed Aircraft
J. W. Marriott Marriott Hotels
Martha Stewart Martha Stewart. Inc.
Mary Kay Ash Mary Kay Cosmetics
Ray Kroc McDonalds
James McDonnell McDonnell-Douglas
Bill Gates Microsoft
Paul Allen Microsoft, Charter Communications
John Queeny Monsanto
Berry Gordy Motown Records
Debbie Fields Mrs. Fields Cookies
Robert Pittman MTV
Edwin Land Polaroid Camera
David Sarnoff RCA
Richard W. Sears Sears
Herb Kelleher Southwest Airlines
John D. Rockefeller Standard Oil
Howard Schultz Starbucks
Fred DeLuca Subway
Carl Swanson Swanson Frozen Foods
Charles Tandy Tandy / Radio Shack
Anita Roddick The Body Shop
Henry Luce Time/ Life
Donald Trump Trump Enterprises
Ted Turner Turner Broadcasting, CNN
James Casey UPS
Andrew Carnegie US Steel

Entrepreneurial Management| 30
 Al Neuharth USA Today
Richard Branson Virgin Atlantic
Robert Vlasic Vlasic Pickles
Sam Moore Walton Wal-Mart
Wayne Huizenga Waste Management, Blockbuster
Video
Jean Nidetch Weight Watchers

Grading Rubic Oral Presentations

Famous Entrepreneurs

Student’s Name:____________________________________________________
Entrepreneur Selected: ____________________________________________
Grade awarded: ________________________
Item/Skill Evaluated Score Comments
Presentation skills

Assessment of visual(s)
used

Connection to characteristics
discussed

List of Research
Materials submitted

Quality of Research

Entrepreneurial Management| 31
 Overall Presentation

Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Activity

Direction: Discuss the following:

1. Reasons for the re-emergence of small enterprise.
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________

2. Benefits of enterprise
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________

3. Entrepreneurs need motivation, skills, and resources and ideas to start businesses and
women are just capable as men of making a success of a business venture.
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________

Entrepreneurial Management| 32
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________

Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Activity

Direction: Identify the following:

__________________________ 1. It refers to the exercise of such a set of attributes and the
_ entrepreneur
__________________________ 2. Any attempt to create a new business enterprise or to expand
_ an existing business by an individual, a team of individuals or an
established business.
__________________________ 3. An individual who has a positive, flexible, and adaptable
_ disposition towards change.
__________________________ 4. It is a modern term for “ability.”
_
__________________________ 5. It may include self-confidence, diligence, perseverance,
_ interpersonal skills and innovative behavior.
__________________________ 6. It may include finance, experience, knowledge, skills, a network
_ and a track record.
__________________________ 7. Suggests that it is the possession by individuals of a trait, or
_ traits, that predisposes them to enterprising behavior.
__________________________ 8. Emphasize the individual decision-making process and the
_ impact of perceived competency on the decision to become an
entrepreneur.
__________________________ 9. Specifically concerned with entrepreneurship and the function
_ that an entrepreneur serves in an economy.
__________________________ 10. Some sociologists consider that individuals are seriously
_ constrained in making career choices.

Matching Type. Write the letter only.

a. Classical School b. Great Person School c. Intrapreneurship School
d. Leadership School e. Management School f. Psychological
Characteristics School

Entrepreneurial Management| 33
______________ 1. The entrepreneur has an intuitive ability – a sixth sense – and traits and
instincts with which he or she is born
______________ 2. Entrepreneurs have unique values, attitude, and needs that drive them.
______________ 3. The central characteristic of entrepreneurial behavior is innovation.
______________ 4. Entrepreneurs are organizers of an economic venture; they are people
who organize, own, manage, and assume the risk.
______________ 5. Entrepreneurs are leaders of people; they have the ability to adapt their
style
______________ 6. Entrepreneurial skills can be useful in complex organization.
______________ 7. Without this ‘inborn’ intuition, the individual would be like the rest of us
mortals, who ‘lack what it takes’
______________ 8. People have in accordance with their values; behavior results from
attempts to satisfy needs.
______________ 9. The critical aspect of entrepreneurship is in the process of doing rather
than owning
______________ 10. Entrepreneurs can be developed or trained in the technical functions of
management
______________ 11. Innovation, creativity, and discovery
______________ 12. Motivating, directing, and leading
______________ 13. Alertness to opportunities, maximizing decisions
______________ 14. Start-up and greatly growth
______________ 15. Maturity and change

Entrepreneurial Management| 34
UNIT III. INTERNAL AND EXTERNAL IMPACTS OF AN ENTERPRISE
Overview

This unit will cover the internal and external impacts of an enterprise. Also,
environmental scanning will be defined tackling the influencing environmental factors. The
concept of SWOT Analysis will also be discussed.

Learning Objectives

At the end of the unit, I am able to:

 Internal and External impacts of An Enterprise
 Environmental Scanning
 Important Factors for Environmental Scanning

Setting Up

Name: ______________________________________________ Section: ____________________

Date: _______________________________________________ Score: ______________________

1. Think of one (1) small business that thrive during pandemic. List down the factors
that made your chosen business successful.
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
___

Lesson Proper

Internal impacts

Entrepreneurial Management| 35
 The internal factors refer to anything within the company and under the control of
the company no matter they are tangible or intangible. These factors after being figured out
are grouped into strengths and weaknesses of the company. If one element brings positive
effects to company, it is considered as strength. On the other hand, if a factor prevents the
development of the company, it is a weakness. Within the company, there are numerous
criteria need to be taken into consideration.

Human resources

In the modern global economy, where ideas and digital skills - rather than physical
resources are increasingly where economic value is realised, human resource can be a
company’s greatest treasure. In general, the employees can be either a strength or weakness
of the company depending on the level of practical skills, attitudes toward work,
performance and so on. For example, if a business has skilled and motivated workers, they
are sure to be the biggest asset of this enterprise.

Conversely, employees without carefully trained and have negative attitudes to their
task will be an enormous challenge for the company to address. In short, the CEO should
have a strategic and effective human management not only for the sake of company benefits
but also for the positive development of their employees.

Capital resources

From a general view, financial capital is the funds necessary to grow and sustain a
business. CEO takes financial capital to invest in not only tangible goods such as factories,
machines, tools and other productive equipment to produce an output but also intangible
resources such as marketing, employee training, etc.

No company can survive without having capital resources. Once a company has
enough budget, they can easily launch their projects, expand its scale and even achieve
impressive result. It can be said that without the big investment and stable financial
resource, Coca Cola success would not be guaranteed. There are also several ways for an
enterprise to maintain stable budgets by some resources such as investment opportunities,
funding, and annual income.

Operational efficiency

The concept of operational efficiency encompasses the practice of improving all of

your processes, which are all your company’s activities leading to your final product or
service.

Because Operational efficiency directly affects the company’s success in the

marketplace, a businessman needs to truly know his company’s processes and follow them
to discover whether they’re being performed in the correct manner or not.

Here are some suggestions for you to achieve this efficiency:

 Study the business situation
 Pay attention to product cost
 Map process failure and discover failure
 Use technology for better operation productivity

Entrepreneurial Management| 36
  Organizational structure

To have a suitable organizational structure requires the owners have to consider

carefully set up a system to work smoothly within the company. Whether it is a centralized
or decentralized system, the most important thing is how effective the structure is when
applied for the company. The heads of departments need to make sure that the information
flow is widely conveyed to all customers. Suitable rules and regulations are being applied to
ensure the benefits of employees, and the business as well.

Infrastructure

When you already have well-trained and motivated workers, an effective

operational and organizational system, make sure that the infrastructure of the company
are good enough for all your functions. With the modern and high quality facilities, stable
power, internet and wifi connection, and so on your company is likely to perform better. In
other words, the better your infrastructure, the more opportunities for your company to
perform successfully.

Innovation

In the competitive marketplace and industrial revolution we are living now, no

company can survive without upgrade new ideas and technology served overall success.

Fundamentally, innovation refers to the introduction of something new into your

business with the ideas come from inside the business such as from employees, developers,
managers or from the outside world like suppliers, customers, etc. Successful innovation
can bring about productivity, cost reduction, higher competitiveness, brand value, turnover
increase. In contrast, companies which fail to apply innovation will surely face the risks of
losing market share to competitors, underlying profit loss and losing key staff.

Innovation is rewarding for your business only when you step by step start to
holistically approach to innovation, plan and encourage innovation and spread investment
for innovation in your business.

External factors

On the contrary to internal factors, external elements are affecting factors outside
and under no control of the company. Considering the outside environment allows
businessmen to take suitable adjustments to their marketing plan to make it more
adaptable to the external environment. There are numerous criteria considered as external
elements. Among them some most outstanding and important factors need to listed are
current economic situation, laws, surrounding infrastructure, and customer demands.

Economic situation

Economy is one of the most determining factors to the success of the company even
though it is an external element. Within the economy, some contributing factors such as the
fluctuation of interest rate, economic crisis, and so on directly and strongly affects the
consumption of buyers, and consequently, the profits of businesses.

Entrepreneurial Management| 37
 No external factors affect business more than an economic condition, which is the
present state of the economy. As the economy goes through expansion and contraction, it’s
condition changes over time. Positive economy condition can be favorable for business
development and adverse ones may generate negative consequences such as narrow down
business scale, capital shortage or even bankrupt.

There are 7 factors that have direct impacts on business firm.

 Tax rate
 Exchange rate
 Inflation
 Labor
 Demand/supply
 Wages
 Recession
 Laws

The rules and regulations from local government play an integral role in the
development of the company. There are some countries which their laws prevents the
development of some certain industries. That can be a threat to the company. On the other
hand, some industries receive positive and continuous support from local government via
their rules and regulations. Besides, if the laws allow organization outside the countries
invest in local industries, they will indirectly create an enormous source of financial support
for local business.

Technological factors

Artificial intelligence, smart internet searches, and other high tech functions- all
kind of technology has been at the forefront of many business for ages. For instance,
American Airlines started using a computerized flight booking system and Bank of America
took on an automated check-processing system. No matter what the size of your enterprise
is, both tangible and intangible benefits of technology are well-known.

Because it can help you generate profits and produce the results as your customers’
needs. In particular, the culture, efficiency and relationships of a business are obviously
affected by technology infrastructure. Furthermore, it also exerts impacts on the security of
confidential information and trade advantages.

Today it is so decisive to entrepreneurs that technology can be their best friend or

worst friend depending on how it is used in the competitive digital business market.

Customer demands

One of the most fundamental factors we learn in economics is that satisfying

customer demand is a must for every business survival. It is obvious that your product is
served for the needs of customers then under any circumstance, your business can develop
without following this mission. Beside to be the leading company entrepreneurs should not
only identify but also tailor their customer’s interest.

We all know that what people want, what people need, and what they demand are
usually different from each other. Customers need something to communicate with their

Entrepreneurial Management| 38
family member outside their countries, they want to a smartphone which can perform
multi-function; however, they cannot afford that smartphone with a limited budget.
Therefore, their demand is just a typical phone which can perform basic functions. If your
company is not able to figure out what are your customer demands, you will face difficulty
in how to make your products consumed by customers. (Learn how to build loyal customers
for your business)

In the digital age, the face of customer’s preference has changed dramatically under
the influence of different factors. Having a complete understanding of these factors can help
business man build up an effective strategy in producing and marketing process.
Here are noticable changes in customer demand:

 Quality is customer’s preference than price

 Sales process is more and more under customer’s control
 Customer’s loyalty decrease
 The rise of middle-income customer spender
 Female consumption power
 Advancement of new technology
 Intergenerational consumption
There is a lot of legwork to be done to recognize customer’s requirements and generate new
trends in the marketplace. Basically, you should carry out research to determine what
consumers’ needs are, establish yourself as a leader in your industry and then repeatedly
demonstrate your products’ quality.

Competition

Competition exists in any field of our life, even in business. When it comes to
competition, entrepreneurs may thrive to be successful or be hurt to lose its position in the
marketplace.

For the good side, competition brings about innovation, better customer service,
complacency, core market understanding and understanding of your own business- your
strength and your weakness.

For the downside, if you are not prepared to change in competitive market, your
company may be negatively influenced due to scaring investors, market expectations
increase, competitive price and customer disloyalty.

Environmental Scanning

Every organization has an internal and external environment. In order for the
organization to be successful, it is important that it scans its environment regularly to
assess its developments and understand factors that can contribute to its success.
Environmental scanning is a process used by organizations to monitor their external and
internal environments.

The purpose of the scan is the identification of opportunities and threats affecting
the business for making strategic business decisions. As a part of the environmental
scanning process, the organization collects information regarding its environment and

Entrepreneurial Management| 39
analyzes it to forecast the impact of changes in the environment. This eventually helps the
management team to make informed decisions.

As seen from the figure above, environmental scanning should primarily identify
opportunities and threats in the organization’s environment. Once these are identified, the
organization can create a strategy which helps in maximizing the opportunities and
minimizing the threats. Before looking at the important factors for environmental scanning,
let’s take a quick peek at the components of an organization’s environment.

The internal environment offers strengths and weaknesses to business while the
external environment brings opportunities and threats. The four influencing environmental
factors known as SWOT Analysis are:

Strength – an inherent capacity of an organization which helps it gain a strategic advantage

over its competitors.

Weakness – an inherent constraint or limitation which creates a strategic disadvantage for

a business.

Opportunity – a favorable condition in the organization’s environment enabling it to

strengthen its position.

Threat – an unfavorable condition in the organization’s environment causing damage to the

organization.

Important Factors for Environmental Scanning

Before scanning the environment, an organization must take the following actors
into consideration:

Events – These are specific occurrences which take place in different environmental sectors
of a business. These are important for the functioning and/or success of the business.
Events can occur either in the internal or the external environment. Organizations can
observe and track them.

Entrepreneurial Management| 40
Trends – As the name suggests, trends are general courses of action or tendencies along
which the events occur. They are groups of similar or related events which tend to move in
a specific direction. Further, trends can be positive or negative. By observing trends, an
organization can identify any change in the strength or frequency of the events suggesting a
change in the respective area.
Issues – In wake of the events and trends, some concerns can arise. These are Issues.
Organizations try to identify emerging issues so that they can take corrective measures to
nip them in the bud. However, identifying emerging issues is a difficult task. Usually,
emerging issues start with a shift in values or change in which the concern is viewed.
Expectations – Some interested groups have demands based on their concern for issues.
These demands are Expectations.

References:

Business Environment: Environmental Scanning Retrieved from

[Link]
environmental-scanning/
What Are Internal & External Environmental Factors That Affect Business Retrieved from
[Link]
[Link]

Assessing Learning

Name: ______________________________________________ Section: ____________________

Date: _______________________________________________ Score: ______________________

Activity 3

Test I. Identification

_________________1. The fund necessary to grow and sustain a business.

_________________2. These resources can be either a strength or weakness of the company
depending on the level of practical skills, attitudes toward work, performance and so on.
_________________3. An inherent capacity of an organization which helps it gain a strategic
advantage over its competitors.
_________________4. A process used by organizations to monitor their external and internal
environments.
_________________5. Artificial intelligence, smart internet searches, and other high tech
functions are example of what factors.
_________________6. These are specific occurrences which take place in different environmental
sectors of a business. These are important for the functioning and/or success of the
business.
_________________7. Fluctuation of interest rate, economic crisis, and so on directly and
strongly affects the consumption of buyers, and consequently, the profits of businesses are
considered under this factor.
_________________8. An unfavorable condition in the organization’s environment causing
damage to the organization.

Entrepreneurial Management| 41
_________________9. The introduction of something new into your business with the ideas come
from inside the business such as from employees, developers, managers or from the outside
world like suppliers, customers, etc.
_________________10. An inherent constraint or limitation which creates a strategic
disadvantage for a business.

Test II. Illustration

In your own understanding, explain the concept of the figure below.

Test III. Practical Application

1. Create a SWOT Analysis for the following small businesses:
a. Laundry shop
b. Tattoo shop
c. Water Refilling Station

Entrepreneurial Management| 42
UNIT IV. ENTERPRISE AND SMALL BUSINESS
Overview

This unit will clearly define the concept of entrepreneur, its qualities and influences
circling the enterprise. The stages, barriers and variety of small business will also be
covered under this unit.

Learning Objectives

At the end of the unit, I am able to discuss the following:

 Who is an Entrepreneur?
 Stages of a Small Business
 Five Key Factors That Influence Entrepreneurship
 Barriers of a Small Business
 Varieties of Small Business

Setting Up

Name: ______________________________________________ Section: ____________________

Date: _______________________________________________ Score: ______________________

1. List down the qualities you think you possess that will make you a successful
businessman or entrepreneur. If situation and the resources permit, what type of
business will you establish? Discuss.
________________________________________________________________________________________________
________________________________________________________________________________________________
__________________________________________

Lesson Proper

Who is an Entrepreneur?

The word entrepreneurship is a general term that can mean a lot of things to
different people.

An entrepreneur is generally defined as an individual who organizes or operates a business

or businesses. Another definition is an individual who sets up business or businesses,
identifies and solves problems, creative, innovative, opportunist, risk-taker, self-starter, and
open-minded with the hope of making a profit from the enterprise.

Types of Entrepreneurs

Entrepreneurial Management| 43
The major types of entrepreneurs include; social entrepreneurs, serial entrepreneurs, and
lifestyle entrepreneurs.

Social Entrepreneur

This is an individual who pursues innovative solutions to social problems. A social

entrepreneur adopts a style of which he/she can use to create and sustain social values.
Most social entrepreneurs engage in non-profit activities and are overwhelmed by social
responsibilities and conscience. They are primarily motivated to improve socio-economic
well being, educational, health, fundamental, environmental and health conditions of others.
Examples of great social entrepreneurs that ever lived include; Bill Drayton, Vinoba Bhave,
David Brower, Maria Montessori, Florence Nightingale, and some present-day social
entrepreneurs are Ibrahim Abouleish, Bill Clinton and Dr. Abraham M. George.

Serial Entrepreneur

This is an individual who CONTINUOUSLY comes up with new ideas, start the
businesses and often times sell to investors or shareholders. Serial entrepreneurs start-up
several businesses with little intention to operate any of them for a long time. They are high
risk-takers with lots of unique ideas and are not always interested in a career with a
particular business/company. 10 top serial entrepreneurs according to Forbes include Craig
McCaw, Josh Kopelman, Steve Blank, Wayne Huizenga, Michael Rubin, The Samwer
brothers, Lyndon Rive, Omar Hamoui, Niklas Zennstrom and Janus Friis the Skype pair,
Andy Bechtolsheim.

Lifestyle Entrepreneur

This is an individual who creates profit from personal passion. He/she put their
lifestyle ahead of every opportunity. While most entrepreneurs are motivated to build a
business to a certain stage and sell to shareholders or investors, the lifestyle entrepreneur
chooses to build a business they are passionate about and grow the business into a long
term, residual income that is sustainable. Most lifestyle entrepreneurs are completely self-
employed; this is to allow them time to set up their projects. In a nutshell, a lifestyle
entrepreneur is an addict of whatever they find themselves doing, they do it so well, commit
their time, resources and energy to see their project completed. Examples of a lifestyle
entrepreneur according to eCommerce rules include; Tim Ferriss, Pat Flynn, and Chris
Guillebeau.

According to Forbes, here is a list of great Entrepreneurs of our time;

Bill Gates – Microsoft

Larry Page and Sergey Brin – Google
Mark Zuckerberg – Facebook
Michael Bloomberg – Bloomberg
Masayoshi Son – SoftBank
Elon Musk – SpaceX
Terry Gou – Hon Hai Precision Industry
Larry Elison – Oracle

Entrepreneurial Management| 44
Robin Li – Baidu
Aliko Dangote – Dangote Group
Reid Hoffman – Venture Capitalist
Mo Ibrahim – Mo Ibrahim Foundation

Qualities of An Entrepreneur

To be an Entrepreneur, you must possess most of these qualities;

 Be open-minded
 Problem identifier and solver
 Passionate
 Confident and disciplined
 Risk-taker
 A constant flow of ideas
 Creative
 Competitive
 Opportunist
 Determination (Strong-willed)

“An entrepreneur is an individual who sets up business or businesses, identifies and solves
problems, creative, innovative, opportunist, risk-taker, self-starter, and open-minded with
the hope of making a profit from the enterprise”. – Francis Nwokike (Founder, The Total
Entrepreneurs)

Stages of Small Business

Categorizing the problems and growth patterns of small businesses in a systematic

way that is useful to entrepreneurs seems at first glance a hopeless task. Small businesses
vary widely in size and capacity for growth. They are characterized by independence of
action, differing organizational structures, and varied management styles.

Stage I: Existence

In this stage the main problems of the business are obtaining customers and
delivering the product or service contracted for. Among the key questions are the following:
 Can we get enough customers, deliver our products, and provide services well
enough to become a viable business?
 Can we expand from that one key customer or pilot production process to a much
broader sales base?
 Do we have enough money to cover the considerable cash demands of this start-up
phase?

Companies in the Existence Stage range from newly started restaurants and retail stores
to high-technology manufacturers that have yet to stabilize either production or product
quality.

Stage II: Survival

Entrepreneurial Management| 45
 In reaching this stage, the business has demonstrated that it is a workable business
entity. It has enough customers and satisfies them sufficiently with its products or services
to keep them. The key problem thus shifts from mere existence to the relationship between
revenues and expenses. The main issues are as follows:
 In the short run, can we generate enough cash to break even and to cover the repair
or replacement of our capital assets as they wear out?
 Can we, at a minimum, generate enough cash flow to stay in business and to finance
growth to a size that is sufficiently large, given our industry and market niche, to
earn an economic return on our assets and labor?

The organization is still simple. The company may have a limited number of
employees supervised by a sales manager or a general foreman. Neither of them makes
major decisions independently, but instead carries out the rather well-defined orders of the
owner.

Systems development is minimal. Formal planning is, at best, cash forecasting. The
major goal is still survival, and the owner is still synonymous with the business. In the
Survival Stage, the enterprise may grow in size and profitability and move on to Stage III.

Stage III: Success

The decision facing owners at this stage is whether to exploit the company’s
accomplishments and expand or keep the company stable and profitable, providing a base
for alternative owner activities. Thus, a key issue is whether to use the company as a
platform for growth or as a means of support for the owners as they completely or partially
disengage from the company. Behind the disengagement might be a wish to start up new
enterprises, run for political office, or simply to pursue hobbies and other outside interests
while maintaining the business more or less in the status quo.

Stage IV: Take-off

In this stage the key problems are how to grow rapidly and how to finance that
growth. The most important questions, then, are in the following areas:

Delegation

Can the owner delegate responsibility to others to improve the managerial

effectiveness of a fast growing and increasingly complex enterprise? Further, will the action
be true delegation with controls on performance and a willingness to see mistakes made, or
will it be abdication, as is so often the case?

Cash

Will there be enough to satisfy the great demands growth brings (often requiring a
willingness on the owner’s part to tolerate a high debt-equity ratio) and a cash flow that is
not eroded by inadequate expense controls or ill-advised investments brought about by
owner impatience?

The organization is decentralized and, at least in part, divisionalized—usually in

either sales or production. The key managers must be very competent to handle a growing

Entrepreneurial Management| 46
and complex business environment. The systems, strained by growth, are becoming more
refined and extensive. Both operational and strategic planning are being done and involve
specific managers. The owner and the business have become reasonably separate, yet the
company is still dominated by both the owner’s presence and stock control.
This is a pivotal period in a company’s life. If the owner rises to the challenges of a
growing company, both financially and managerially, it can become a big business. If not, it
can usually be sold—at a profit—provided the owner recognizes his or her limitations soon
enough. Too often, those who bring the business to the Success Stage are unsuccessful in
Stage IV, either because they try to grow too fast and run out of cash (the owner falls victim
to the omnipotence syndrome), or are unable to delegate effectively enough to make the
company work (the omniscience syndrome).

Stage V: Resource Maturity

The greatest concerns of a company entering this stage are, first, to consolidate and
control the financial gains brought on by rapid growth and, second, to retain the advantages
of small size, including flexibility of response and the entrepreneurial spirit. The
corporation must expand the management force fast enough to eliminate the inefficiencies
that growth can produce and professionalize the company by use of such tools as budgets,
strategic planning, management by objectives, and standard cost systems—and do this
without stifling its entrepreneurial qualities.

A company in Stage V has the staff and financial resources to engage in detailed
operational and strategic planning. The management is decentralized, adequately staffed,
and experienced. And systems are extensive and well developed. The owner and the
business are quite separate, both financially and operationally.

The company has now arrived. It has the advantages of size, financial resources, and
managerial talent. If it can preserve its entrepreneurial spirit, it will be a formidable force in
the market. If not, it may enter a sixth stage of sorts: ossification.

Ossification is characterized by a lack of innovative decision making and the avoidance of

risks. It seems most common in large corporations whose sizable market share, buying
power, and financial resources keep them viable until there is a major change in the
environment. Unfortunately for these businesses, it is usually their rapidly growing
competitors that notice the environmental change first.

Five Key Factors That Influence Entrepreneurship

Entrepreneurial efforts are like biological experiments in nature: Many variations

are tried, but only a small percentage of those go on to thrive. You, however, have an
advantage over nature. As an entrepreneur, you can set up your experiment with
forethought. Entrepreneurs work under the constraints of their environment – the political
economy.

Five factors will be key to entrepreneurial success: creativity, tolerance for risk,
responsiveness to opportunities, leadership and the ability to take advantage of the rights
afforded to you.

Creativity and Accumulation of Ideas

Entrepreneurial Management| 47
 Do not be dissuaded by the challenge to be creative. You need not be the original
wheel creator to improve upon a stone cylinder. By standing on the shoulders of giants, you
can take existing ideas and make small improvements upon them. Your best ideas may
come to you as you are falling asleep or while you are taking a shower. Recognize when you
have a fresh idea and do not let them get away from you. Write them down! Not every idea
has to be a home run. By accumulating your ideas, you will be able to distill the great ones
from the rest and be ready to run with the best.

Risk Tolerance and Taking Advantage of Opportunity

Rewards rarely come without risk. Your ability to take advantage of an opportunity
will depend, in part, on your tolerance for risk. As the founder of a start-up, investors will
expect you to have a vested interest in your business. If you will not bet on your idea, why
should anybody else?

If you cannot afford the risk, financially or emotionally, then you might make
decisions that are too tepid to be successful. To do well, an entrepreneur needs the strong
sense of self-efficacy to believe the risk will be surmountable.

Responsiveness to Opportunity

Opportunity can leave quickly. With the internet, the spread of information and
ideas has led to deeper, faster competition to be the first mover. The ability to respond to
the market and new business opportunities can be the difference between a successful
entrepreneur and a failed business model.

To be responsive, an entrepreneur must have the flexibility of mind and resources

necessary to see and take advantage of new and upcoming possibilities. Learning from your
mistakes and those of others to implement change can keep businesses afloat. Calcifying
rigidity, on the other hand, can turn a start-up into dust.

Leadership and Inspiring Others

It is up to the entrepreneur to marshal assets. Leaders are challenged with taking

possibilities and turning them into inspiring visions for others. You will inevitably have to
sell either your idea or your product to begin your entrepreneurship. It will be up to the
entrepreneur to take the idea and turn it into actions and products to capitalize on the
opportunity. Leadership can come in many forms, but it is nevertheless essential to
entrepreneurship. You must take the lead for your ideas to come to fruition.

Intellectual Property Rights

Intellectual property laws can provide you with exclusive business rights to your
ideas. If you do not protect your ideas, they may be copied – cheaply. Once an idea is in the
public domain, it may no longer be possible to use that idea as a competitive advantage.
Society values ideas being shared.

In exchange for sharing ideas, governments provide limited monopolies that will allow you
to capitalize on them for a period, making up in part for the costs you have incurred in

Entrepreneurial Management| 48
research and development. Intellectual property professionals can aid you in seeking such
rights.

Barriers of a Small Business

5 Barriers to Small Business Growth and How to Break Through Them

Small businesses are a happy bunch right now. According to Capital One’s latest
Small Business Growth Index, optimism is at a record high with 67 percent of businesses
viewing conditions as “good or excellent”, up from 60 percent a year ago. The majority, 65
percent, cite business growth as the reason behind this enthusiasm followed by national
economic conditions (54 percent), and improved business operation (51 percent).

But optimism aside, many businesses find their growth plans thwarted at every
turn. Whether it’s due to cash flow issues, access to working capital, or supply chain
problems—take your pick! Surprisingly, one of the biggest impediments to growth is the
business itself. Many businesses simply aren’t operationally ready for growth—this could
because a lack of skilled labor, poor hiring decisions, a lack of competitive intelligence, and
so on.

Here’s a round-up of some of the most common barriers to growth and some steps
you can take to break through them:

1. Ignoring Business Indicators

Everyone wants revenue growth, but what form will it take and are you ready to
grow in that area? Study your business indicators regularly to monitor growth
opportunities. This includes your sales pipeline, conversion rates, and market trends.

Things to look out for include success in one market or location and the potential to
expand into another. Is a big sales deal on the horizon? Is your pipeline trending favorably?
Is success in one area of product development opening new doors of opportunity for
others?

If you ignore your business indicators, you won’t be able to capitalize on the
opportunity or prepare for growth when it presents itself.

2. Overlooking the Competition

Competition can be a great driver for growth if you approach it correctly. There’s no
point making it your mission to be better than the competition if you don’t have a deep
knowledge of where you stand against them. A powerful tool for doing this is a simple
SWOT analysis.

SWOT stands for “Strengths, Weaknesses, Opportunities, Threats” and refers to a

process for identifying all four of these things with regard to your business. A SWOT
analysis is also a useful starting point for differentiating yourself against the competition
and drawing out the value you provide that they don’t.

Entrepreneurial Management| 49
3. Forgetting About People Until It’s Too Late

To grow you need to surround yourself with great people. But don’t leave it to the
point of expansion before you start thinking about who can help you grow. Always be on the
lookout for talent. Even if you’re not ready to hire, consider building a stable of independent
contractors who can get to know your business well and contribute on an as-needed basis.
Once you’re ready to grow they can step in with minimal ramp-up and help you meet your
goals. Another option comes in the form of mentors. Having someone beside you who’s been
there before as you enter new territory can be invaluable.

4. Not Accounting for Risk Early in the Growth Phase

Growth doesn’t come without risk. As you plan your growth strategy, have a “Plan
B” in place that accounts for any hurdles along the way that might impede growth. Things
like hiring problems, manufacturing issues, unexpected expenses, cash flow challenges,
patent infringements, and so on.

Go back to your SWOT analysis and identify these risks or threats and think about
ways you can fix or get around them. These are also good conversations to have with your
mentor as well as your accountant and/or lawyer.

5. Failing to Plan for Cash Flow Issues

Cash flow issues are one of the most common reasons why small businesses fail,
alongside a lack of demand and poor management. Cash flow issues also stymie growth—52
percent of small business owners say they’d be less optimistic about growth if they
experience cash flow issues.

Small businesses are particularly susceptible to cash flow problems—90 percent

close their doors for this reason alone. And with growth comes extra cost—inventory must
be procured, marketing campaigns executed, new hires paid, and so on. If your outgoings
are more than your income, even for a short period, paying your bills gets difficult.

The Bottom Line: Set Goals and Plan

If there’s a common thread to breaking through the barriers to growth, it’s this: set
goals and be prepared. It’s common to think that you need to set business goals for the next
five to 10 years. However, it’s hard to reliably predict that far ahead. The business climate
and markets change too rapidly.

A more realistic approach is to set shorter-term goals that are specific, achievable,
and measurable. For example, rather than saying you want to “grow sales over the next five
years”, instead, focus on “attaining 25 percent of market share and increasing sales by 15
percent by the end of the year.”

Your business planning process can help with you set realistic and definable goals.
But planning for growth involves more than creating a business plan that you put in front of
your bank manager.

Varieties of Small Business

Entrepreneurial Management| 50
 Hundreds of different small business options are available for people looking for the
right venture. Although there can be almost as many variations as there are people who
undertake a new business, most small businesses fit into certain main categories, based on
their legal and ownership structure, company size, business location, and whether they are
virtual or brick-and-mortar businesses. Your business probably fits into at least several of
these groupings.

Different Legal Status Options

The simplest legal forms for small businesses are sole proprietorships and
partnerships. Neither is required to be registered with the state and taxes are managed on
the owner's or partners' personal tax forms. These forms are best when there is little capital
property or likelihood of being sued. A corporation is the opposite end of the spectrum,
requiring registration with state and local authorities, separate business tax filings and
regular meetings with an established board of directors.

The S-corporation is a variation suitable for small businesses. Under this

formulation, income is passed through to the individual stockholders and reflected on their
personal tax forms. An LLC, or limited liability company, is another corporate variation
which combines the liability protection of a corporation with the tax structures of a
partnership.

Freelancers and Independent Contractors

Perhaps you are a house-painter, freelance writer or party planner. If you work on
your own, at times and for clients you choose, your business may fall into the independent
contractor category. As the name implies, you create agreements or contracts on a per-job
basis to accomplish a set task.

Although you are doing work for your client in each case, you are considered self-
employed, since you are not employed directly by any of the people for whom you perform
jobs. Self-employed individuals are required to file quarterly estimated taxes and are
responsible for claiming income on their personal tax forms. Many independent contractors
are also home-based businesses.

Physical or Virtual Location

Your small business may have an actual storefront or office, a solely online presence,
or a combination of both. A legal practitioner, seamstress or caterer likely will have an office
or physical location where she can meet with clients and keep the tools of her trade. A
bookseller, translator or freelance writer, on the other hand, might successfully manage his
business without a physical shop and do all his business through a website. Other
businesses are best served by a combination of both physical and virtual presence –
craftspeople in particular typically will display their goods at local craft coops or shows, but
also have a website, perhaps as part of a virtual craft mall.

Government Contract Ownership Criteria

Entrepreneurial Management| 51
 Federal and state governments set aside a limited quantity of contracts or jobs for
minority-owned businesses and women-owned businesses. These programs are aimed at
providing business opportunities to under-represented groups, often at favorable terms.
Businesses owned by veterans of the U.S. military, including some disabled veterans, are
also eligible to compete for some of these set-aside jobs.

References:

Caron, Beesley, Barriers to Small Business Growth, April 2019, Retrieved from
[Link]
through-them/

Griffee, Ryan, 5 Key Factors That Influence Entrepreneurship, February 2019, Retrieved
from, [Link]
[Link]

Kumar, Braveen, What exactly is an entrepreneur and how do you become one today
Retrieved from [Link]
entrepreneur-and-how-do-you-become-one-today

Nwokike, Francis, The Total Entrepreneurs: For Entrepreneurs and Startups, Who is an
Entrepreneur, [Link]

The Five Stages of Small Business Growth, The Harvard Business Review, Retrieved from
[Link]

Thompson, Molly, A List of Different Types of Business, January 2019,

[Link]

Assessing Learning

Name: ______________________________________________ Section: ____________________

Date: _______________________________________________ Score: ______________________

Activity 4
Test I. Fill in the blanks

1. _________________ doesn’t come without risk.

2. Companies in the ________________ Stage range from newly started restaurants and
retail stores to high-technology manufacturers that have yet to stabilize either
production or product quality.
3. An ____________________ is an individual who sets up business or businesses, identifies
and solves problems, creative, innovative, opportunist, risk-taker, self-starter, and
open-minded with the hope of making a profit from the enterprise
4. The greatest concerns of a company entering the resource maturity stage are, first,
to _____________________ brought on by rapid growth and, second, to retain the

Entrepreneurial Management| 52
 advantages of small size, including flexibility of response and the entrepreneurial
spirit.
5. Most ______________________ engage in non-profit activities and are overwhelmed by
social responsibilities and conscience.
6. An ____________________ is generally defined as an individual who organizes or operates
a business or businesses.
7. While most entrepreneurs are motivated to build a business to a certain stage and
sell to shareholders or investors, the _____________ entrepreneur chooses to build a
business they are passionate about and grow the business into a long term, residual
income that is sustainable.
8. In Stage I Existence the main problems of the business are __________________ and
delivering the product or service contracted for.
9. The decision facing owners at this Success Stage is whether to _______________________
and expand or keep the company stable and profitable, providing a base for
alternative owner activities.
10. A _____________ analysis is also a useful starting point for differentiating yourself
against the competition and drawing out the value you provide that they don’t.

Test II. Essay

1. Explain these statement, Research shows that, although it is important to have
adequate financing before beginning an entrepreneurial venture, it is often more
important to have managerial competence and proper planning.

________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
_____

2. In your own words, what is entrepreneurship?

________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
_____

Test III. Research Work

1. List down two (2) young entrepreneurs that has made a great impact in our country.
What type of entrepreneur are they?
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
_____

Entrepreneurial Management| 53
 2. Think of an innovative product in the market, as a budding entrepreneur, how will
you market such product? Discuss your strategy.

________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
____

UNIT V. ENTREPRENEURSHIP IN THE PHILIPPINES

Overview

Entrepreneurship in the Philippines is currently booming and one of the best things
a person can do today is start taking action in putting up its own business or acquiring a
franchise . Entrepreneurship is a state of mind. It is not identified or measured with the type
of business a person is in the success of that business but rather it is the total way of life for
entrepreneurs. This unit discusses distinct personality traits, profiles and values of an
entrepreneur such as having a risk-taking personality, need for achievement, internal focus
of control, tolerance for ambiguity

Learning Objectives

At the end of this unit, I am able to:

 Discuss the different entrepreneurial traits
 Compare and contrast the different entrepreneurial profiles.
 Know how to GoNegosyo.

Setting Up

Name : ____________________________________ Date: _______________

Course/Year/Section: ____________________ Score: ______________

Directions: Identify the words or group of words that best describe the following.

________________________1. The customers are grouped based on lifestyle, personality and

values.
_______________________2. Your market’s general location divided into regions, localities,
provinces, cities and towns.
_______________________3. The chance that a business may not meet expectations or results
in a loss.
_______________________4. It is generally modifying a product for an existing, expanded or
specialized market.
_______________________5. It is referring to becoming successful in attaining a desired end or
aim.
_______________________6. These are your potential customer’s age, gender, personal

Entrepreneurial Management| 54
 income, educational attainment, marital status, religion, total
household income, family size, social class, occupation and other
indicators.
_______________________7. Any person who has the initiative to start and manage his or her
own business and takes the risks.
_______________________8. It is meeting all the challenges that confront them.
_______________________9. This is your market’s knowledge, attitude, use and response to
your product or service.
_______________________10. Refers to how you differentiate your product or brand in the
minds of your selected customers.
Lesson Proper

Entrepreneurship is the development of the economy . Through the creation of

enterprises , there is a potential for employment generation and growth.
Entrepreneur according to Dr. Judd W. Patton, Director of Esping Center of Free
Enterprise at Belleueve College, entrepreneurs don’t just happen . They learn and
develop based upon a desire to succeed.

Any person who has the initiative to start and manage his or her own business and
takes the risks is an entrepreneur. AN entrepreneurs must possess the ability to see
and convert opportunities into marketable ideas in order to help boost the economy.

The Entrepreneurial Traits

1. Need for Achievement. It is referring to becoming a successful in attaining a

desired end or aim.

2. Willingness to Take Risks. Risks is the chance that a business may not meet
expectations or results in a loss.

3. Self-confidence. It is meeting all the challenges that confronts them.

Most Important Entrepreneurial Traits

1. Self-awareness. Start a business that is based on your expertise.

2. Self-motivation. It is the characteristics of getting you going and keeps you
moving.
3. Courage. This is the willingness to take risks when striving for success in
business.
4. Patience. Be ready to all circumstances that may arise especially if the demands
of the customers are unrealistic and impossible. Remember the strategy to
retain your customers: treat the customers as the King and Queen of your
business.
5. Perseverance. The snail reached the ark, so it is with success.
6. Persistence. The problems occur likewise the obstacles are considered as
challenges.
7. Experience. Some business fail because of lack of experience- the know-how
process.
8. Knowledge. Know the factors to considered in putting up a business.

Entrepreneurial Management| 55
 9. Decisiveness. The success of the business depends on the intuition and trust you
are making the right decisions.
10. Drive. The willingness to accept the responsibility and initiative.

Characteristics of Successful Entrepreneurs

 Likes to compete
 Self-starter
 Able to determine risk but not a gambler
 Independent and possesses self-confidence
 Able to do many things at once
 Likes a challenge
 Creative, has dreams and goals
 Like to work and be in control
 Hardworking
 Is not easily discouraged
 Has energy and can handle stress
 Strong self –worth
 Motivated by strong desire
 Positive thinker
 Focuses on chances of success rather than failure

The Entrepreneurial Profiles

Profile Description
Shotgun Sam This type quickly identifies new
promising business opportunities but
rarely follows through on the
opportunity to create a successful new
venture.
Simplicity Sue This type always think everything is a
lot simpler than it is to create a
successful business through one or two
easy solutions. Usually a great
salesperson. This entrepreneur can make
even the most improbable deal seem
possible.
Prima Donna Paul This type is so in love with his own idea
that he feels everyone is out to take his
idea and take advantage of him. This
paranoia does not allow any trust to be
established and help given.
Ralph the Rookie An entrepreneur type who is well
grounded in theory but lacks-real world
business experience.
Meticulous Mary A perfectionist who is so used to having
things under control that he or she
cannot manage during a catastrophe and
cannot handle periods of ambiguity and
chaos.

Entrepreneurial Management| 56
Underdog Ed An entrepreneurial type who is not
comfortable with actually transforming
the invention into a tangible business
success. This entrepreneurial type likes
to attend seminars and discuss
problems but not like putting things into
action, so needs a strong managerial
team.
Hidden Agenda Harry An entrepreneur who does not have the
right motives and objectives for
developing and expediting a new
enterprise.
Inventory Irving An inventor more than an entrepreneur ,
who is more concerned about the
invention itself rather than creating and
expediting a business.

The Filipino Values Favorable to Entrepreneurship

Filipino Values Description
Amor propio It is the self-esteem in Spanish. Filipino
displays superficial behavior (pakitang-
tao) to protect a favorable image.
Bayanihan Cooperative spirit.
Kasipagan Industriousness
Hiya or Shame Filipinos are unduly apologetic
Malasakit Concern for others
Pagtitimpi Self-control
Matapat Being honest to oneself and to others
Pagkamatipid Frugality
Pakikibagay Adjusting or adapting to other people
Pakikisama Togetherness
Pakikipagkapwa Human relationship
Utang na Loob Debt of gratitude for fast favors or good
deeds.

Other Filipino Values

Filipino Values Description
Paki-usap To request and expect something
Pagpupuno sa kakulangan Understanding one’s mistakes and
weakness
Conformity Obeying the culture of a group
Reciprocity Mutual exchange of feelings and privilege
Palabra de honor Doing whatever one has promised (word
of honor)
Modesty Humility
Paumanhin Wanting to be excused
Pagtitiis Endurance of hardships and resignation
to fate
Lamangan Tendency to have an edge over another

Entrepreneurial Management| 57
Paggalang Respect to elders and superiors
Pagmamay-ari High regard for possession and
attainments

Why Are Many Still Unable To Venture

Into Business?

1. LAZINESS in mind or in action. This is something for which we cannot teach the
solution. If you choose to be like Juan Tamad, no book can change it. It all begins
ONLY with YOURSELF- but only if you want to.

2. FEAR of FAILURE: The reason we rarely want to leave our comfort zone. “We are all
enrolled in full-time information called LIFE.” (NEGOSYO book)

HOW TO GoNegosyo? There are three levels to GoNegosyo with A-G steps:

MASTER SELF
Ambition (What do you want to be when you grow up?)

Believe (What stops us from believing? Most of us have been brought up NOT to
believe)
How to start believing?
 Surround yourself with positive and believing people (everything is POSSIBLE,
if it is IMPOSSIBLE it will just take a LITTLE LONGER).
 Flood your mind with positive affirmations (I can do it! I can do it).
 Think and act as if your dreams were already realities that you are enjoying
today (Law of Attraction to work).

Choice, not crisis, not Chance (necessity is the mother of all invention).”The life you
live is the result of the many choices you make in life.” “Your decisions, not your
conditions, determine your DESTINY!”

Dream big, start Small (wrong: All I want is a simple life-help others. I don’t aspire to
have plenty of money).
The reason why most people get stuck after “dreaming” is because they get
overwhelmed by how big their dreams are. They don’t know where to start.

Here’s how:
 Break down the big dream into small, manageable bits (“if you want your
dream to come true…don’t oversleep).
 Celebrate small successes along the way.
 Learn to say “Thank You” every single step of the way.

Employee or Entrepreneur
Way Forward:
1. Study hard and get good grades.
2. If and when possible, go corporate.
3. Learn other skills.
4. Save. Pay yourself first.
5. Use your savings to start up a business.

Entrepreneurial Management| 58
 6. Do not mind initial losses and so –called failures.

Fear or Failure (“To live a life in fear is to live a life half lived”).
Go Master Self (Dream-Believe-Achieve/Goals-Commitment-Milestones/Vission-
Passion-Action).

MASTER OPPORTUNITY

One of the most important factors for success (whether in business or in any personal
endeavor) is to understand clearly your reasons for doing what you are doing.

A compelling reason
Compelling reasons for going into GoNegosyo
 I wanted to preserve the family business
 I wanted to create businesses that can employ at least 10 people
 I wanted to use my businesses as models for the younger generation.
 I wanted to prosper young IT professionals.
 I have always prayed that God will use my businesses as his ‘supply depot’ (TIME,
TALENT, TREASURE)

Bright idea
It happens when your idea is anchored on a PRODUCT or SERVICE that adds value to
the customer (market) where demand (sales) is big and sustainable (so that you may earn
profit).

Drivers of Business Opportunity can either be one or a combination of:

1. Perspiration (Competence), it can come from your talents, skills or hobbies.
2. Inspiration (Chance), AHA Moment (e.g. ivory soap was a rejected soap).
3. Irritation (Crisis). There’s an opportunity in every crisis! (E.g. AIDS-condoms,
HIV drugs; SARS-face masks, flu vaccines).
4.
Choose your market. The market can be broken down according to gender, age, lifestyle,
location and even habits.

CHOOSE A LOCATION: Location, location, location

One of the biggest hurdles a business must face is finding a good location. A good
location not only results in very good sales but also enhances the business’s brand equity.
Thus, a good product coupled with a good location can serve as the cornerstone of success
for any business.

Business Location Options

 Shopping Malls
 Residential and Office Buildings
 Call center buildings

Entrepreneurial Management| 59
 Residential developments

Define the market:

 What market is involved?
 What is the customer’s unmet needs and wants?
 Is the product or service you’re going to offer better than the existing one in the
market?

Types of Market Segmentation:

 Demographics. These are your potential customer’s age, gender, personal
income, educational attainment, marital status, religion, total household
income, family size, social class, occupation and other indicators.

 Behavior. This is your market’s knowledge, attitude, use and response to your
product or service.

 Psychographics. The customers are grouped based on lifestyle, personality and

values.

 Geography. Your market’s general location divided into regions, localities,

provinces, cities and towns.

To asses strengths and weaknesses, ask the following questions to yourself:

 Do you have management skills? Do you have enough experience, or are you
familiar with the business you’re entering? If not, do you have partners who can provide
expertise, experience or both?
 Do you have enough resources-capital, assets and equipment-to start and sustain
your business? If you’re in the service industry, do you have enough back-office support?
 Do you have the right personnel to aid you in starting the business? Do you have
skilled productive workforce?
 Do you have marketing skills? How does your product or service compare to its
rivals? What benefits does your product or service offer that competitors do not, at least
for the time being?

As for Opportunities and Treats, the following are the questions to be

answered:
 How would competitors affect your present or future business?
 How would recent laws, government policies, taxes, tariffs and consumer interests
affect your business?
 How would demographic trend, consumer taste and preferences impact your
business?

Differentiate or Die, you need to differentiate otherwise competition can kill you and you
die.
*Secret: Copying with a slight difference

Entrepreneurial Management| 60
Practical ways of differentiation:
MODIFY *MAGNIFY
MINIFY*SUBSTITUTE

Modify:
 Color (e.g. who said that sun block should always be white?)
 Name (e.g. 7-up named itself as un-Cola)
 Odor (home spray before solvent-based but now its water-based)
 Form (tea bags now Cool and Clear or C2)
 Shape ( long sausage, longanisa to skinless)

Magnify:
 Adding ingredients/more value (toothpaste with bubble gum flavor)
 Strengthening (doublestitched denim pants)
 Enlarging/Thickening (LCD TV, 3D screen, touch screen)

Minify:
 Making smaller (floppy disk to 3.5 diskettes to CD to USB)
 Reducing/Shortening/Making faster ( food delivery, FedEX)
 Omit/Lighten (Diet colas, coke zero)
 Split up (two-door ref., 3-in-1, hot and cold dispenser)

Substitute:
 Use another ingredient/material (cork to crown in a bottle)
 Use another process (fishball to shabu-shabu)

Estimate your sales (Sales = Price x Quantity x Frequency)

Fit=value (solutions to problem/need and happy/good feeling)

POSITIONING, is how you DIFFERENTIATE your product/brand in the minds of your selected
customers.

What are the different ways you can position your product?
 Innovating- is generally modifying a product for an existing/expanded/specialized
market (cultural/ethnic). E.g. Jollibee –LANGHAP SARA
 Rebranding- a positioning technique for an OLD product that failed to attract its
original or former market. (e.g. Marlboro is used to be marketed to the ladies because
of its brown filter but now its Marlboro Man and Marlboro Country)
 Improving- new old product plus.

*Positioning is:
Innovating=new product
Rebranding= new old product
Improving= new old product plus

Go Master Opportunity
MASTER SET-UP
Actual Product (it must be able to compete first in the customer’s mind).

Entrepreneurial Management| 61
 -Mind> Heart> Wallet
e.g. Candles

Holidays- festive atmosphere (pang-saya)

Date- romantic ambiance (pang-lambing)
Family gathering (pang chill-out)
Picnic – shoo way insects (pang –bugaw)
e.g. Festive candles (Masaya)- tan/brown/orange with scents of cinnamon or
stripped red and white or green candles with scents of mint.
Romantic Candles (malambing)- tall, fluted, tapered candles with exotic color(for
first date); floating aromatic candles to enhance mood; red spiraled candles with
scents of rose for valentine’s day.
Outdoor candles (walang hassle)- large and long-lasting candles infused with
citronella as repellant or candles with windproof container or lanterns.

Business model/set-up
Various Business models:
Manufacturer- involved in the manufacture of industrial or commercial like food,
clothing, metals, chemicals or printing materials, etc.
Producer- involved in the growing of agricultural crops or livestock like rice, corn,
vegetables, fruits, cattle or pigs, etc.
Warehouse /Distributor- involved in the storage or transfer of products from
manufacturer /producer to point of sale (wholesale or retail).
Exporter/Importer- involved in buying /transporting/selling of products to/from
abroad.

CAN I DO A BUSINESS SET-UP THAT IS CHEAP, QUICK AND GOOD?

1. A business set-up that is Cheap and Quick (mura at mabilis) WARNING-is not
necessarily Good (e.g. toys made in China).
2. A business set –up that is Cheap and Good (mura at mahusay) WARNING- is
not necessary Quick (e.g. set up your own business).
3. A business set-up that is Good and Quick (mahusay at mabilis) WARNING- is
not necessary Cheap (franchise businesses).

Customer count, Market=Customers (to be able to sell, you need to count. The market does
not come by through miracles. It happens by choice).

Three types of customers:

1. WORKING CLASS- they always go with their families and buy varied fast
foods/snacks.
2. BUDGET CROWD (Masaya/jologs)- they spend time hanging around.
3. UPPER/MIDDLE CLASS - normally enters from the tunnel basement parking.

Do it right, do it legal –register your business to make it legal.

*Basic rule in choosing a name for the business:
 Short and Simple
 Easy to read and spell
 Easy to pronounce
 Suggestive product benefits
 Something unique

Entrepreneurial Management| 62
 Desirable image
Equipment, employee, extras
 Materials
 Machine
 Man
 Methods
 Money
 Minutes (time)

Remember: I-P-O
Input- Money, Materials, Man
Processor- Machine, Methods, Man
Output- Goods/Services

Funding the business

1. If you do not have enough money, another option is to BEG-BORROW-BUY.
2. If just enough money, then use OPM ( other people’s money)
*final advice for financing:
WRONG: Income-Expenses = Savings
RIGHT: Income – Savings = Expenses

Go Master Set-up

Note: BUSINESS IS A LOVE AFFAIR

A. Engagement Ring – you court your idea
B. Wedding Ring - you commit your idea and a baby business is born
C. Suffe-Ring- ups and downs of commitment
D. Endu-Ring- do and hope for the best
E. God’s everlasting offer- Ring

GONEGOSYO SUCCESS FORMULA:

Theory, business frameworks made easy
Inspiration from the heart
Practical examples from gonegosyo mentors as they share their secrets of success.
Start your own Gonegosyo

Entrepreneurial Management| 63
 A Success Story of: HENRY SY (SM)

It all began after the war in 1945 when Henry Sy

began selling American Shoes imported by enterprising

Gls. Soon, he opened a shoe store and quickly put up three

more in partnership with friends. Sy later went on a

business trip to the US in the early ‘50s and came back

with even more shoes.

He expanded his wares to include accessories and

leather goods, and later on established ShoeMart, the first

air-conditioned shoe store in Manila. His confidence in his

capabilities and in the market inspired him to transform

these stores into a full-fledged chain of department stores.

And the success story that is SM continues to be written.

References:

Dean Pax Lapid and Ping Sotto, NEGOSYO by Joey Concepcion: 21 Steps on How to Start
your Own Business

Dr. Richard V, Simangan, et. al, Philippine Entrepreneurship in the New Millennium

Calvin, Robert, Entrepreneurial Management

Entrepreneurial Management| 64
Assessing Learning

Name: ______________________________________________ Section: ____________________

Date: _______________________________________________ Score: ______________________

Direction: Discuss the following:

Activity

Being an Entrepreneur in the future, what is your ambitions? What did you want to
become?
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

List down your reasons why you want to be in business. Be specific, make it personal, make
it emotional, make it compelling.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

What are your bright ideas that you can turn into a product/service that will add value to
your target end-user?
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

Entrepreneurial Management| 65
Think of an existing product/service that you want to improve to make it more
useful/attractive to current buyers/users (in terms of materials, sizes, colors, packaging,
design, features, etc.) Write all the changes you want to make and cite your reasons.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

UNIT VI. THE BUSINESS STUFF

Overview
This unit provides you a detailed view of the types of industries, 7M’s of business
operations, the best location and the best materials guide. This unit also offers a hundred
business ideas since it begins with a great business idea to become an entrepreneur.

Learning Objectives

At the end of this unit, I am able to:

 enumerate the types of industries and 7M’s of business operations;
 explain the requirements of ideal business location and guide to best
materials; and
 explore a hundred of business ideas.

Setting Up

Name : ____________________________________ Date: _______________

Course/Year/Section: ____________________

Directions: The following grid contains ten (10) terms associated with business ideas. Find
and encircle them.

R T A D G H J R U I P L M
P S N A S D F G H J K M K
E Q E W E P R T Y U I O P
T S W W D A E R O B I C S
S Z S X I I M N B V C C E
H H B J J N K L O P A P W
O Y O Y S T G U W L R R I
P T Y G C I S H D K R F N
Q R G H R N D J F M E G G
A E V B I G A R D E N E R
Z W C V P U F B C H T Y U
X S D B T I G N V B A H H
J U N K S H O P B N L R B

Entrepreneurial Management| 66
Lesson Proper

Four Types of Industries

Primary (mining and farming)
Secondary (refining, construction and manufacturing)
Tertiary (services and distribution of manufactured goods
and quaternary (pertaining to knowledge-based industry) (Kenneth Van Voorhis,
Entrepreneurship and Small Business and Management)

All business operations start with inputs, composed of the seven M’s:

1. Machinery, or the basic tools for producing goods or producing services. Tools
have become synonymous with having the right infrastructure and systems in place to
conduct business in the age of digitisation and information.

2. Materials, whether in a service industry or a product industry, are a basic

component of management. This aspect covers raw materials, stock control, etc.

3. Money is the key concern which is the financial health of any company. Outlook
and profitability are determined by issues such as loans, overheads, costs, revenue sources,
investment and capital expenditure.

4. Manpower is the word used in management to refer to human capital, one

without which no organization can do without.

5. Moment (time).

6. Methods (the art of doing).

7. Management incorporates main elements, including marketing, manufacturing,

research & development, finance and operations, that managers have to deal with on a daily
basis.

James L. Riggs, in his book Industrial Organization and Management 1980

enumerates the requirements of an ideal business location:
 It is near your target market and sources of raw materials.
 There are available transportation and communications facilities, and public
services such as a power and water.
 There is ample labor supply and competitive wage scale.
 There are existing enterprises that can complement your business.
 The taxes are moderate.
 Absence of restricting laws and ordinances.

GUIDE: BEST MATERIALS

 Go straight to the source. “Our policy us to go straight to the producers to
decrease middlemen costs.”

Entrepreneurial Management| 67
  Reorder even before you run out of stock. If you wait until supplies run
out, your production would stop, and you would lose sales. Arturo Mangubat,
one of the authors of the book Introduction to Entrepreneurship (1981) says
“once your reserve stock is depleted by half, it is time to replenish it.”

Why Your Business Idea Is the Most Important Thing in Your Startup

You could have a winner if it is original or provides anything better (Matthews,

2019). A product or service is at the heart of every business. This is the lever for persuading
others to give you cash in return for them. It is safe to assume that an idea was behind any
good or service ever sold.

OVER A HUNDRED BUSINESS IDEAS

A
Accounting Services Appliance Repair
Advertising Agency Art Consultant
Advertising Copywriting Art Gallery
Advertising Specialty Sales Artist, Freelance
Aerobics Classes Artist Management
Answering Service Art Restoration
Antique and Collectibles Dealer Attorney/Notary Public
Antique Book and Magazine Dealer Auction Business
Apiary (bookkeeping) Auto Sales
B
Baby Handprint and Footprint Bronzing Bookstore
Service Building/ Home Inspection Service
Baby Shoe Bronzing Service Bumper Stickers
Badminton Courts Bus Service
Badminton Coaching Business Broker
Bakeshop Business Consultant
Balloon and other Party Needs Business Financing Service
Basketball Tournaments Business Plan Consultant
Basket ware Business Plan Writer
Beautician Buttons/Badgets/Pins
Bed and Breakfast Inn
Bibingka and Puto Bumbong Stall
Bicycle Repair
Billiard Hall
C
Cabinet Making Chair and Table Rental
Cake Decorating Cheese Making
Candle Making Children’s Clothes
Car Parts Dealing Children’s Transportation Service

Entrepreneurial Management| 68
Car Rental Childcare Provider
Car Wash Computer Programmer
Canning Computer Repair
Carinderia Computer Training
Carpentry Services Computer Tutor for Children
Carpet and Upholstery Cleaning Consultant, Beauty
Cartoonist Consultant, Business
Catering Service Consultant, Computer
Clip Art Consultant, Image
Coaching Consultant, Internet
Coin Dealer Consultant, Landscaping
Collection Agency Consultant, Small Business
Commercial Artist Consultant, Wedding
Computer Animator Convenience Store
Computer Bulletin Board Owner Cooking School
Computer Consultant Cosmetics Sales
Computer Data Back-up Service Cosmetologist
Concert Promotion Costume Design
Construction Services Crafts
Consultant, Art Crafts Instructor
Chair Caning
D
Dance Instructor Disk Duplication/ Disk Burning
Dating Escort Service Dog Breeding
Day Care Center Dog Training
Daycare for Adults Doll Making
Deli Business Dressmaking/ Sewing
Desktop Publishing Dried Floral Arrangements
Desktop Video Dry Cleaning Services
Dinner/ Lunch Delivery Service Dry Cleaning Pick-up and Delivery Service
Directory Publisher
Direct Sales
E
Editorial Services Errand Service
Email Processing Event Management
Embossed Stationary Event Organizer
Employee Trainer Event Planner
Employment Agency Executive Search
Engineering Consultant Export Agent
F
Finance Broker Forwarding Service
Financial Advisor Framing Service
Financial Planner Franchise Consultant
Fishball stand Franchise Owner
Fish Boat/ Fishing Franchisee
Fish Culture Freebie Ad Magazines
Fish Drying/Smoking Freelance Artist
Fishing Supplies Freelance Photographer
Fish Tank/ Bird Cage Maintenance Freelance Writer

Entrepreneurial Management| 69
And sales Fruit Processing/ Preservation
Fitness Trainer Fundraiser
Flea Market Seller Furniture Making
Flower Shop Furniture Restoration
Food Delivery Service
G
Garage Sales Giveaways
Garage Sales Promotion Goat Raising
Garbage Collection Services Goldsmith
Garden (Commercial) Gourmet Jam and Jelly
Garden Consultant Graphic Artist
Gardener Greeting Cards
Ghost Writer Grocery Shopping Center
Gift Baskets
H
Hairdresser Home Decorating
Handmade Paper Home Furnishings
Handmade soaps Home Healthcare Agency
Handyman Service Home Inspection Service
Hauling Service Homemade Foods
Healthcare Consultant Home Tutoring
Herbalist Housewares
Herb and Spice Business “How-to” Videos
Herb Gardener Human Resource Consultant
Holiday Décor
Hog Raising
Home Accessories Sales
I
Import/ Export Internet Café
Imprinting Internet Marketing
Independent Contractor Internet Recruiting
Indoor Fountains Internet Service Provider
Insurance Sales Interpreter/ Translator
Internet Consultant Inventory Taping Center
Interior Decorating Invitation Printing
J
Jewelry Designer Junk Car Training
Jewelry Maker Junk Shop
Jewelry Sales
K
Knife Sharpening Services
L
Lamaze Instructor Legal Transportation Service
Landscaping Consultant Lending Services
Landscaping Service Limousine Service
Language Translation Lingerie Sales
Laundry Service Locksmith
Lawn Maintenance Long Distance Telecommunication Products
M

Entrepreneurial Management| 70
Magician Medical Diagnostic Clinic
Mailing List Service Medical Office Consultant
Mail House Medical Transcription Service
Mail Order Meeting and Event Planner
Make-up Artist Menu Planner
Manicurist Metalworking/Fabrication
Market Research Mobile Notary Public
Marketing Consultant Mobile Puppet Theater
Massage Therapy Moving Service
Meat Processing Music Lessons
Medical Claims Processing
N
Nanny Finding Service Newsboy
Nature Hikes Newspaper Delivery
New Medical/ Multimedia Prod’n Newspaper Stand
Newsletter Production for Clients Notary Public
Newsletter Publishing Nutritional Supplements Sales
Newspaper Clipping Service
O
Office Organizer Online Researcher
Office Plant Care Online Retailer
Office Support Service Organic Fertilizer Making
Online Internet Training Organic Vegetable Farming
Online Newspaper Outdoor Adventures
P
Picking/ Unpacking Service Picture Framing
Painting Plant Nursery
Paper Recycling Pool Cleaning
Paper Mache Portrait and Wedding
Paralegal Services Photography
Party Planning Portrait Artist
Pawnshop Potted Plants/Potted Vegs.
Payroll service Poultry Farmer
Pedicab Operation Preschool
Personal Fitness Trainer Pregnancy Fitness Class
Personalized Stationary Printing Business
Pest Control Services Printing Broker
Pet Breeding Printer Toner Recharging
Pet Food and Supplies Delivery Private Detective Service
Pet Grooming Service Product Assembly
Pet Stud Service Product Development
Pet Products Consultant
Pet Shop Professional Organizing
Pet Show Business Service
Pet Sitting/Home-Care Service Property Manager
Photos to Video Transferring Public Relations Agency
Photography Public Speaking
Piano Tuning Puto Making and Selling
Q

Entrepreneurial Management| 71
Quail Raising
Quail Egg Selling
R
Real Estate Appraising Restaurant Delivery Service
Recruitment Agency Retail Consultant
Relocation Consultant Reunion Organizer
Remodeling Contractor Risk Management Consultant
Repacking Rubber Stamps Making
Restaurant Booking Service
S
Safety Consultant Shopping Service
Sari-sari store Show Promoting
School Photographer Shuttle Service
Screen Printing Sightseeing Tours
Secretarial Service Sign Design and Painting
Security Video Sevice Small Business Consultant
Self-Defense Instructor Software Creation
Self-improvement Seminars Software Trainer
Self Publishing Spa/Sauna Parlor
Seminars and Workshops Special Event Videos
Seminar Promotion Specialty Consultant
Seniors Exercise Classes Stained Glass
Sewing Street Food Selling
Shoe Repair Stuffed Toy Making
T
Tailoring Shop Tool Rental Service
Tarot Reader Tour Guide
Tax Consultant Training
Tax return preparation service Transferring Photos to Video
Taxicab Operation Translator
Teaching Travel Agency
Technical Writing Service Travel Club
Telemarketing T-shirt Design
Telephone Answering Service Tupperware Sales
Telephone Service Reseller Tutoring Service
Temporary Help Service TV Repair
Time Management Consultant Typing Service
U
Used Books Used Clothes
Used Cars Utility Auditing
Used CDs
V
Vending Machine Business Video Taping Service
Veterinary Clinic Videoke Bar
Video cassette Recorder Repair Vitamin Product Sales
Video Duplication Service Voicemail
Video Editing Service Voice Instructor
Video Production Voice Over
Video Rental Shop

Entrepreneurial Management| 72
W
Watch Repair Window Washing Service
Website Design Wood Carving
Website Development Woodworking
Web Marketing Word Processing
Wedding Consultant Workshops
Wedding Coordinator Writing Audio Cassette
Wedding Planner Scripts
Wedding Video Service Writing Press Releases
Wedding Singer Writing Research
Welcoming Service
Y
Yard Cleaning
Source: DTI

A Success Story of: SOCORRO RAMOS

(NATIONAL BOOKSTORE)
National Bookstore weathered the worst storms, from the wrath of Japanese soldiers
destroying the books they sold to the fires that razed the store to the ground. All these did
not deter Socorro “Nanay Coring” Ramos from persisting in the business. After all, she had
to cater to people’s needs by supplying them with everything from greeting cards to school
and office supplies.

Now considered a true Philippine icon – thanks to Nanay Coring’s positive attitude and
sound business sense – National Bookstore has become more than just a well, bookstore. Its
humble beginnings have given birth to over 100 branches nationwide.

Source: NEGOSYO

References:

[Link]
management/

[Link]
thing-in-your-startup-48d0c7728888#:~:text=The%20business%20idea%20creates
%20a,more%20likely%20to%20face%20competition.

Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Direction: Discuss the following

7M’s of business operations

Entrepreneurial Management| 73
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Among the hundred business ideas, which do you think will you pursue to establish? What
are your reasons in choosing it?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Why a business idea is the most important thing in a startup.

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Entrepreneurial Management| 74
UNIT VII. RAISING MONEY
Overview

This unit discusses about raising money for business operation, sources of funds,
and guide how to cut losses.

Learning Objectives

At the end of this unit, I am able to:

 know the various sources of funds; and
 explain the guide on how to cut losses.

Setting Up

Name : ____________________________________ Date: _______________

Course/Year/Section: ____________________

Direction: Elaborate on how the following can be a source of money for your business.

1. Business Loans

_________________________________________________________________________________________________
________________________________________________________________________________________________
_

_________________________________________________________________________________________________

_________________________________________________________________________________________________

2. Family and Friends

_________________________________________________________________________________________________
________________________________________________________________________________________________
_

_________________________________________________________________________________________________

Entrepreneurial Management| 75
_________________________________________________________________________________________________

3. Credit cards

_________________________________________________________________________________________________
________________________________________________________________________________________________
_

_________________________________________________________________________________________________

_________________________________________________________________________________________________

4. Cut expenses

_________________________________________________________________________________________________
________________________________________________________________________________________________
_

_________________________________________________________________________________________________

_________________________________________________________________________________________________

Lesson Proper

Financing is often a problem that dissuades most people from even trying to put up
a business. Often, when the subject of financing a business comes up, people think about
loans, but there are other ways of raising money for your business.

You may need to obtain financing if you are starting or expanding your business.
Consider the kind of funding carefully, since it could affect your tax responsibilities and cash
flow.

Before sourcing finance:

 Decide how much money you're going to need;
 Creation of a sound business plan;
 Consider the timeline for repaying the loan; and
 Determine the capacity to pay back the loan.

SOURCES OF FUNDS

Personal Savings. In order to grow your savings, explore investing in a high – yielding
financial instrument, like mutual funds, to grow your money faster.

Entrepreneurial Management| 76
Property Sale. You can try to sell some of your property including your car, jewelry,
antiques, furniture, phones, even memorabilia, either by organizing a garage sale or by
auctioning these items on websites like eBay.

Borrowing from friends and family. This kind of fundraising is popular because
borrowers often get little to no interest on their loans, has optional collateral requirements
and very flexible payment terms. To prevent complications when borrowing from friends
and relatives, it is best to put everything in writing. This would spell out when and how
much you would have to pay.

Business Loans. You can also resort loans from banks, microfinance organizations or
cooperatives. If you have no business experience at all, you can explore getting personal
loans from banks in order to startup a business.
An alternative to borrowing from banks is borrowing from cooperative and other
microfinance institutions. Microfinance institutions such as the government-back Small
Business Corp/ (SBC) are mandated to provide assistance to small business with little
capital by providing loans with reasonable terms and affordable terms and affordable
interest rates.

Finally, credit cards are possible fund source because you can get credit without going
through a lot of trouble and without needing a guarantor or collateral.

GUIDE: CUT YOUR LOSSES

Make sure you can get rid of old stock, because pretty soon it turns into dead stock. Offer
discounts until customers bite. If no one buys it for the price you want, lower the price until
they want it. For instance, selling a 4-megapixel camera for P20,000? It may have been
worth that when you got it seven years ago, but no one’s going to buy that when they can
get a 12-megapixel camera with more features for P6,000. Even if you only recover 15% of
your original investment, it still generates cash flow, which you’re not going to get by
hanging on to obsolete stock.

Advantages of managing an inventory:

Managing an inventory is what goes on behind every good company's curtain.

Managing the supply chain so that you always have the right amount of product to make a
profit is the art and science of managing supply and demand within a company. Here are six
inventory management control advantages that are too significant to be overlooked.

1. Ordering too much inventory will result in substantial losses.

2. Failure to meet consumer expectations loses sales and gives the business a bad
name.
3. Proper inventory management, with closely tracked inventory and supply chain
movement, facilitates an organized warehouse.

Entrepreneurial Management| 77
 4. Integrated tools for inventory management automate workflow tasks and allow
your employees to concentrate on other more important areas of their position in the
organization.
5. Intelligent inventory management enhances your cash flow, eliminating the need
to spend large chunks of the budget all at once.
6. Maintaining the optimal quantity of stock and inventory involves walking a
delicate line, a feat that is possible with the correct solutions for inventory management.

The Point-of-Sale (POS) barcode scanner can do the inventory control for you.
Bar codes are the printed patterns of lines, spaces and numerals that appear on the
product. The bar codes are read by the scanner, which then transmits the data to a
computer. Once transmitted, the inventory file is updated and the corresponding sale is also
automatically recorded.

PROCESS:

Bar codes (printed patterns of

lines, spaces and numerals)
The inventory file will be
updated.

The bar codes will be read by a

scanner
Then, the corresponding sale
will be automatically recorded
The data will transmit to a
computer

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References:

[Link]
finance-and-loans

[Link]

Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Activity

Direction: Discuss the following

Different sources of funds for business.

1. Personal Saving
2. Property Sale
3. Borrowing from friends
4. Business loans

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_________________________________________________________________________________________________________
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_________________________________________________________________________________________________________
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________________________________________________________________________________________________
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_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
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________________________________________________________________________________________________

Discuss the importance of POS system.

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_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
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Entrepreneurial Management| 79
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Discuss briefly the importance of managing and monitoring an inventory.

_________________________________________________________________________________________________________
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________________________________________________________________________________________________

UNIT VIII. FINDING THE RIGHT PEOPLE

Overview
This unit gives you an idea on how to hire people in your business, the how much is
the right compensation that an employee should received and to be familiarized with labor
standards.

Learning Objectives

At the end of this chapter, the students are expected to:

 know the steps on hiring the right people,
 know how much salary should you give,
 be familiarized with labor standards,
 be guided by the tips how to create an environment for happy and engaged
employees.

Setting Up

Name: ________________________________________ Date:________________

Entrepreneurial Management| 80
Course/Year/Section: _____________________ Score: ______________

Direction: Answer the given questions.

Assuming that you are the owner or the human resource officer in a company, how do you
recruit the right person for a job?
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Why is hiring the right person important?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Lesson Proper

One of the keys to any successful business is finding the right people for your
company. With the right people; a small company can operate as efficiently and effectively
any company of any size. This also means that your company could save a lot of resources
considering that hiring; training and motivating staff takes time and costs money that
could be put to many other uses.

STEPS ON HIRING THE RIGHT PEOPLE:

1. Know your need. The first step towards hiring the right employees is to know
exactly what you need. Know the positions you need to fill, and what skill sets
are needed by these jobs.

2. Experience d or Newbie? Decide whether you want to hire fresh graduates or

experienced employees.

Advantages of experienced employees:

 Can hit the ground running.
 No need for lengthy training and supervision.

Entrepreneurial Management| 81
  Able to advise on work-related problems and recommend practical
solutions.
Disadvantages:
 Difficult to adapt work culture and ethics; as the saying goes, you can’t
teach an old dog new tricks.
 May command high salaries, it will increase your costs.

Advantages of fresh graduates:

 They could be more easily trained according to company’s culture and
standards.
 Easier to motivate and stay with a company for a long time.
 Salaries are more affordable.

Disadvantages:
 Requires significant training and supervision.
 Put up errors particularly when they are just starting.

3. How to find them? To find employees, you can rely on a mixture of job
advertisements, referrals, even recruitment agencies, post ads, popular and credible
websites and publications. Be very specific about your job requirements.

4. The Interview. During the interview proper, validate and vet the answers given
by the applicant in the application form. Try to get to know the employee better by
asking what he does after work, his hobbies and interests. These questions will help
you gauge a person’s character and dependability, giving you a complete picture of
the applicant you won’t be able to get by just reading his resume.

GUIDE: HOW MUCH SALARY SHOULD YOU GIVE?

It is always good to pay your employees the industry average, unless your
employee has really unique skill sets. You are allowed a 6-month
probationary period before turning a worker into a regular employee. If
the worker fails to meet your standards after this period, you may choose
to terminate his or her work arrangement with you.

GUIDE: LABOR STANDARDS

The normal work hours for any employee should not exceed 8 hours;
work beyond 8 hours is considered overtime, and must be compensated
with an additional 25 percent of his salary.
You can reduce your workers’ hours, but by doing so you cannot
diminish his salary.
Breaks during working hours less than 20 minutes are considered as
hours worked. There is also mandatory one-hour break for lunch.
Those who work between 10 pm and 6 am must be paid a night
differential of 10 percent per hour for each hour of work performed.

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 Employees should have at least one rest day for every 6 consecutive
days of work. If you ask an employee to work during their rest days, you
have to compensate that employee 30 percent of his daily wage.
Every employee must be paid the regular wage on holidays, except for
companies with less than 10 workers. If you need them to work on
holidays, then you will have to pay twice their normal rate.
The 13th month pay is mandatory; it is equivalent to the average
monthly salary of that person for a period of 12 months.
Every employee who has rendered one year of service is entitled to
have a 5-day service incentive leave, which is convertible to cash.
Women having a baby are entitled to a 60-day maternity leave, which
could be extended to 80 days in case of caesarian delivery. Meanwhile,
fathers having a baby are entitled to a 7-day paternity leave.

GUIDE: TIPS TO CREATE AN ENVIRONMENT FOR HAPPY AND ENGAGED EMPLOYEES

1. Design space for mingling. create opportunities for people to

interact- such as monthly birthday celebrations with activities.
2. Make the day-to-day more entertaining. “Keep staff meetings
light,”
3. Be creative, and remember that creative doesn’t mean
expensive. Just make sure you’re engaging people.
4. Stick it out. Expect some initial awkwardness.

Smart Business Ideas: PICTURES ON CHOCOLATES

Have your picture on chocolate and eat it, too! That’s not the way the
idiom goes, of course, but it’s possible literally- if you get hold of a Cool Pix
treat.
ChocoPix Personalized Confectionary, a family business owned by
Christine Ann Revero Cox, is charging the way Filipinos look at chocolate
with its use of technology that can print any picture, or message right onto
the surface of delicious gourmet chocolate. “You can personalize everything-
from compact disks to children’s books-so why not chocolate?” she says.
Through a process called chocolography , Chocopix makes it possible
for anybody to order the custom-made personalized confection as a gift for
whatever event or occasion. “Whether you need favors for your five-year-
old’s party or a unique Christmas gift for your business clients, we can
customize images and texts to suit your taste-literally!” Cox explains.
Cox learned about chocolography when she was searching the Internet
for gift ideas for the family-owned jewelry and gift shop in Cubao, Quezon
City. The proprietary process was invented in 1998 by the New York-based
Chocolate Printing Co. (CPC), and the company offers it as a turnkey
package not a franchise –that buyers can immediately use as a business of
their own.
“After doing a lot of research about it, I contacted the company,” she
recalls. “I then brought the technology here in the Philippines and started
running my chocolography business.”
To make a ChocoPix, you need to load a chocolate bar into a printer so

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 the desired image can be stamped on the chocolate molder using certified
food-grade coloring. The printer is connected to a computer that runs
software called Sweet Memories, which carries a wide range of images,
shapes, and designs that can be instantly rendered as full-color pictures and
text on the surface of chocolate and other confections. Among the traditional
chocolate designs that it can make are lollipops, coins , and mega bars, and it
can also make offbeat designs like greeting cards, portraits, heart boxes,
truffle sets, business cards, chocolate “compact disks,” and ornaments of
every sort.
“Just send us your digital or hard copy photo, logo, or image and we will
do the rest,” Cox says.
ChocoPix uses assorted chocolates- among them milk chocolate, dark
and white, and Belgian-made by the Chicago-based chocolate manufacturer
Bloomer, and imports its truffles from Belgium.
“The market response has been good because people have been
generally curious about ChocoPix and what we have to offer,” Cox says.
“Because our products are personalized, they see ChocoPix not only as a
novelty but also as a unique service. We have a target market that’s not
afraid to experiment or to take risks.”
Most of the clients of ChocoPix pick up their orders from the company
store in Barangay Pinyhan , Quezon City, but the company also accepts
orders for delivery and ships them through LBC.
Despite the growing clientele of ChocoPix, Cox admits that it may take
her three to five years to recover her initial investment in the business. She
explains: “This business has lean months, especially during summer when
chocolates are out of season. We therefore have to stimulate demand by
sending out e-mails, making postings on our website, doing nontraditional
advertising on social networking sites such as Facebook, Friendster and
Multiply. We also give great discounts.”
Cox makes a continuing effort to reinvent ChocoPix by coming up with
new products or more twists to her offerings. She also plans to invest in more
machines, to bring ChocoPix to more locations particularly in shopping malls,
to do more sponsorship packages for colleges and universities, and to join
trade fairs and hold special events.
“We envision ChocoPix to be bigger and better in the future,” she says.
“We want to make ChocoPix a household name and to be top-of-mind when it
comes to personalized gift items.”

Source: Entrepreneur Magazines

References:

Dean Pax Lapid and Ping Sotto, NEGOSYO by Joey Concepcion: 21 Steps on How to Start
your Own Business

Dr. Richard V, Simangan, et. al, Philippine Entrepreneurship in the New Millennium

Calvin, Robert, Entrepreneurial Management

Entrepreneurial Management| 84
Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Enrichment Activity:

Discuss the advantages and disadvantages of experienced applicant from fresh graduate
applicant. Which one do you prefer?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Suggest some additional benefits that you think will make employees satisfied with their
work.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

UNIT IX. BUSINESS PLAN

Overview:
This unit give you idea on what is business plan , importance of preparation of
business plan. It enchance the knowledge and skills in the preparation of business plan. It
explains the different parts of business plan.

Learning Objectives:

At the end of this unit, I am able to;

 Discuss business plan and its importance.
 Identify the steps in preparation of business plan.
 Rules to be observed in writing a business plan.
 Identify the factors to be considered in preparation of business plan.

Setting up

Name: ____________________________ Date: __________________

Course/Year/ Section:________________ Score: __________________

Entrepreneurial Management| 85
Direction: Look at the picture . Kindly describe the relationship of the two picture.

Entrepreneurial Management| 86
Lesson Proper

Introduction

A business plan is a fundamental document that any startup business needs to have
in place prior to beginning operations. Banks and venture capital firms indeed often make
writing a viable business plan a prerequisite before considering providing capital to new
businesses.

Operating without a business plan is not usually a good idea. In fact, very few
companies are able to last very long without one. There are definitely more benefits to
creating and sticking to a good business plan — including being able to think through ideas
without putting too much money into them and, ultimately, losing in the end.

A good business plan should outline all the projected costs and possible pitfalls of
each decision a company makes. Business plans, even among competitors in the same
industry, are rarely identical. But they all tend to have the same basic elements, including an
executive summary of the business and a detailed description of the business, its services
and/or products. It also states how the business intends to achieve its goals.

Entrepreneurial Management| 87
The plan should include at least an overview of the industry of which the business will be a
part, and how it will distinguish itself from its potential
competitors([Link]

What is the business plan?

The business plan is a document that helps

the small business owner determine what resources
are needed to achieve the objectives of the firm , and
provides a standard against which to evaluate
results (Medina , R. 2014).

The business plan is a sort of a business

blueprint and it keeps the entrepreneur on the right
track. It give s a sense of purpose to the business. It
also provides guidance, influence, and relation, as
well as communicating ideas about goals and the
means of achieving them to partners, associates,
employees and other.

Reason why we need to make Business Plan

A business plan is written two main purposes. They are the following:
1. To serve as management’s guide during the lifetime of the business; and
2. To fulfil the requirement for securing lenders and investors.

In the course of writing the business plan, the small business operator(SBO) is
afforded sufficient time to consider all factors relevant to operating the business. Through
analyses of environment and derivation of what can be expected to happen, decision about
various aspects of the business operation can be considered in advance.

A periodic objectives are accomplished one at a time, the business plan serves as a
useful tool for comparing what was planned against what was achieved. Discrepancies will
provide the basis for implementing charges or making adjustments in the business plan.

The timetable indicated in performing the various aspects of operation is also useful
guide for management of the firm.

7 Steps to make a Business Plan`

STEP 1 - Name your business

Choosing a name for your business is not an easy task. It is however a
very necessary step in making the business plan. After all, this is the name you
will be referring when you begin piecing your business plan together. The
business name, to a great extent, reflects the character of your business, so be
very deliberate when choosing one.
Aside from choosing a business name, you may also come up with a
separate name for your product or service, which could serve as your
trademark.
How does business get their names? A lot of Filipino businessmen name
their businesses after themselves or their family and friends; some even use

Entrepreneurial Management| 88
 wordplay and puns in order to grab people’s attention. In choosing names,
always remember that the name should describe the nature of your business.
You cannot use a name that has already been registered with the Department of
Trade and Industry ( DTI) or with other government agencies such as the
Security of Exchange Commission ( SEC), and Department of Labor and
Employment (DOLE). In addition, the law prohibits naming a business or its
products using words that are illegal, scandalous and purely generic, and names
and styles used by the government functions.

STEP 2 – State your mission.

Most people have life goals, and so should your business. Although it
may be easy to say that your business’s mission is simply to make money,
putting up a business is in fact more complex than that. In the mission
statement, spell out the purpose of your business and its goals, including the
product or service concept you plan to adopt.
Keep the business goals and targets realistic, so as not to put off the
reader with fantastic fanciful claims. Always keep in mind that potential investor
or lender will base their decisions on your business plan.

STEP 3 – Introduce the business and its management team.

Make a clear and complete description of the business and how you
plan to start and operate it. You need to state the rationale behind the
business’s establishment. Introduce the people- the team- who will run or
invest in it. It is however not enough to say who they are- include a brief
look at their background including prior professional and business
experience, educational attainment, leadership skills, and personal
resources.

STEP 4 – Elaborate on your product and marketing plan.

You may have great people and a great concept, but how will you sell
and market it? In this part of the business plan, discuss your product or
service in detail, and how it would generate revenues for your business.

Questions to answer in this step:

 Does your product have any unique characteristic?
 How big is its potential market and how much of that potential market can you
attract over a certain period of time?
Enumerate your suppliers, their availability and reliability.
Next, describe your market, and provide a detailed description of your
potential customers, such as their demographic profile and recent trends in
consumption patterns related to your products and services. Write down your
sales projections as well, but do not make overly optimistic forecasts. Keep in
mind that any perception of economic or political uncertainties are likely to
influence consumer decisions, so try to factor in such possibilities.

STEP 5 – Illustrate your financial strategy.

This is where you will need to focus on the bottom line of any business.
This will attract the most interest from your readers – show the flow of money
into and out of the business, coming up with either a profit or loss for a

Entrepreneurial Management| 89
 particular period of time. Keep in mind that fiancé people will be looking at the
numbers and analyze your projected performance ratios.
Seek assistance from an accountant or a financial planner in preparing this
section of the plan.
If your business has been operating for some time, and you have made a
business plan in order to seek additional funding, pay close attention to the cash
flow portion of your financial report. The cash flow analysis shows how
efficient the management team has been in making use of the cash that goes
into the business.

STEP 6 – Write the executive summary.

A business plan can be a very long document with hundreds of pages, so
for the convenience of the reader you need to provide a brief of the plan’s crucial
contents. This section encapsulates your entire business plan for those who
don’t have time to go over the entire document- these are often the decision
makers who should be informed about the business. The executive summary is
usually written last, after the entire document is completed. The executive
summary may appear at the start or at the end of the business plan.

STEP 7 - Go over the entire document.

Whenever it is possible, use charts and graphs to illustrate cash flows
and projected return on investment.

Reasons of doing business plan according to David Gumpert

1. To sell yourself on the business
2. To obtain a bank financing
3. To obtain investment funds
4. To arrange strategic alliance
5. To obtain large contracts
6. To attract key employees
7. To compete mergers and acquisition
8. To motivate and focus on management team

Rules to be observed in Writing Business Plan

1. A business plan must be neat- the appearance is important and it can reflect
the personality of the maker.
2. A business plan must be grammatically correct- it must be edited by qualified or
professional editors
3. A business plan must be realistic and attainable –be honest in your intent and
refrain from exaggeration.
4. A business plan must be in layman’s language- it must be in simple language and
avoid using technical jargon unless needed.
5. A business plan must not overemphasize the product or service- business
requires resources and dependent from one another.

Business Plan Format by Hisrich and Peters

I. Introductory Page
A. Name and address of business
B. Name(s) and address(es) of the principal/s

Entrepreneurial Management| 90
 C. Nature of business
D. Statement of financing needed
E. Statement of confidentiality of report
II. Executive Summary- three to four pages summarizing the complete
business plan
III. Industry Analysis
A. Future outlook and trends
B. Analysis of competitors
C. Market segmentation
D. Industry forecasts
IV. Description of Venture
A. Product/s
B. Service/s
C. Size of business
D. Office equipment and personnel
E. Background of entrepreneurs
V. Production Plan
A. Manufacturing process
B. Physical plant
C. Machinery and Equipment
D. Names of suppliers of raw materials
VI. Marketing Plan
A. Pricing
B. Distribution
C. Promotion
D. Product forecasts
E. Controls
VII. Organizational plan
A. Form of ownership
B. Identification of partners or principal stakeholders
C. Authority of principals
D. Management-team background
E. Roles and responsibilities of members of organization
VIII. Assessment of Risk
A. Evaluate weakness of business
B. New technologies
C. Contingency plans
IX. Financial Plan
A. Pro forma income statement
B. Cash flow projections
C. Pro forma balance sheet
D. Break-even analysis
E. Sources and applications of funds
X. Appendix( if applicable)
A. Letters
B. Market research data
C. Leases or contracts
D. Price lists from suppliers

Entrepreneurial Management| 91
References:

Cuyugan, Jorge H. 2005, A Business Planning Manual, Bright Concepts Printing House,
City of San Fernando, Pampanga, Philippines

Stoweres ,Joshua , 2020, How to Start a Business: A Step-by-Step Guide,

[Link]

Assessing Learning

Name: ____________________________ Score:_______________

Year/Section:_______________________ Date: _______________

Activity 9.1
Post Test

True or False :
Direction: Write the word “TRUE” if the statement is correct and write “FALSE” if the
statement is incorrect. Write the answer on the space provided before the number:

___________________1. The difference between the actual and plan will be the basis for the
business for the revision of the business.
___________________2. The best way of moving the product directly to ultimate consumer is
through direct selling.
___________________3. A list or capital equipment is necessary before venturing in the
business.
___________________4. A well define organization structure is important for investors and
lending institution.
___________________5. The business plan serve as a road map of business to success.
___________________6. The statement show the financial position of the business in a given
period is called cash flow statement.
___________________7. Sales coupons, premium awards and the like is an example of sales
promotion.
___________________8. The product event can be considered as public relation.
___________________9. A product description must be included as part of marketing strategies.
___________________10. Knowing the business competitive edge leads the business to product
positioning.
___________________11. Analysing the strength and weaknesses of competitors is a promotional
strategy of the business.
___________________12. Maintenance requirement, number of uses, ease of operation and the
like are ways to differentiate product offering from competitors..
___________________13. Price setting on the basis of prices of competitors is called mark –up
pricing.
___________________14. Assets , liabilities and capital are the elements showed in the income
statement.
___________________15. The supporting documents are the justification of all data found in the
business plan.

Entrepreneurial Management| 92
 Activity 9.2

Matching Type:
Direction: Match the word found in the box with the statement that best describe each
word in the box. Write the answer on the space provided before the number. Write the
letters only. (Note: No Erasures Allowed)

A. Title page and contents B. Executive summary C.

Description of the business

D. description of the product E. market Strategies F.

Analysis of competition
G. Operation management H. Financial Data I. Supporting
document

_________1. It summary of the whole business plan.

_________2. A well define organization structure.
_________3. The important features of the product or services.
_________4. The financial statement like the Income statement, balance sheet and cash flow
are presented .
_________5. The cover page of the business
_________6. Describe the market objective of the firm.
_________7. Analysis of competitors and opportunity are included in this portion.
_________8. Are photos and letters gathered during the conduct of preparation of business
plan.
_________9. Product positioning is describe in this
_________10. A short explanation of the business .

Entrepreneurial Management| 93
 Activity 9.3
Direction: Think of a least a 3 products in different categories. What makes this product
unique from their competitors.

Categories Product Competitive Advantage

Food Sector

Service Sector

Electronic Gadgets

Cars Industry

Entrepreneurial Management| 94
Name: ____________________________ Score:
Year/Section:_______________________ Date: _______________

Activity 9.4

Test I: Theory
A. Fill in the Blanks: Fill in the blanks with the word or group of words that best
describe the statement below. Write the answer on the space before the number.

________________1. ___________________ is a sort of business blueprint and keeps the entrepreneur

on the right track.
________________2. ___________________Is that portion of the business plan indicating the capital
needs of the business, how the money will be used among others.
________________3. Marketing strategies are formulated after undertaking____________________.
________________4. _____________________ is one where the firm identifies a target market segment
and develops a unique strategy mix to address the desire of the segment.
________________5. _____________________is that pricing method that covers all costs, plus an extra
increment to deliver profit.
6. ____________________ The most effective channel if the plan is to move
goods directly to the ultimate user.
7. _____________________are means used to support the sales message like
special sales, coupons, contests and the like.
8. The costs of goods of trading firms consist of _______________________.
9. The __________________shows the income, expense and profits of the firm
over a period of time.
10. The _______________ is financial statement that shows the financial
condition of the business as of given time.
_________________11. The document that helps the SBO determine what resource are needed to
achieve the objectives and goals of the firm , and the like is called _________.
_________________12. The part of the business plan that indicates the name of the business, the
name of the proposed business, address and others is included in __________.
_________________ 13. The part of the business plan which contain the capital needs of the
business, how the money will be spent, what benefits will be derived by the business
from loan or investment, among other is ______________.
_________________ 14. When the SBO is determining which part of the total potential market
will be served by the firm , he actually developing a market strategy referred to as___.
__________________15. When the SBO wants to know what customers really want to buy from
the firm , he is starting to develop a ____________.
__________________16. A method of pricing where the firm sets prices based on buyer desires is
Called __________.
__________________17. Selling directly to customer is called____________.
__________________18. Portion of the promotion strategy is detailed presentation of the
publicity strategy of the firm is called ____________________.
___________________19. The portion of the business plan that contains the organizational
structure , operating expenses, capital requirements and cost of goods sold is
_____________.
____________________20.The financial statement that shows the financial condition of the
business as of given date.

Entrepreneurial Management| 95
Name: ____________________________ Score:
Year/Section:_______________________ Date: _______________

Activity 9.5
Test I: Theory
A. Identification: Fill in the blanks with the word or group of words that best
describe the statement below. Write the answer on the space before the number.

________________1. It refers to business blueprint and keeps the entrepreneur on the right
track.
________________2. The portion of the business plan indicating the capital needs of the
business, how the money will be used among others.
________________3. This will be done after undertaking marketing research.
________________4. It is one where the firm identifies a target market segment and develops a
unique strategy mix to address the desire of the segment.
________________5. Pricing method that covers all costs, plus an extra increment to deliver
profit.
6. The most effective channel if the plan is to move goods directly to the
ultimate user.
7. It is the means used to support the sales message like special sales,
coupons, contests and the like.
8. It consist the costs of goods of trading firms .
9. The statement which shows the income, expense and profits of the
firm over a period of time.
10. The statement which shows the financial statement that shows the
financial condition of the business as of given time.
_________________11. The document that helps the SBO determine what resource are needed to
achieve the objectives and goals of the firm .
_________________12. The part of the business plan that indicates the name of the business, the
name of the proposed business, address and others .
_________________ 13. The part of the business plan which contain the capital needs of the
business, how the money will be spent, what benefits will be derived by the business
from loan or investment.
_________________ 14. The determination which part of the total potential market will be
served by the firm.
__________________15. The process of knowing what customers really want to buy from the
firm .
__________________16. A method of pricing where the firm sets prices based on buyer desires .
__________________17. It refers to Selling directly to customer.
__________________18. Portion of the promotion strategy is detailed presentation of the
publicity strategy of the firm .
___________________19. The portion of the business plan that contains the organizational
structure , operating expenses, capital requirements and cost of goods sold.
____________________20.The financial statement that shows the financial condition of the
business as of given date.

Entrepreneurial Management| 96
UNIT X. DEVELOPMENT PLAN OF SME’S
Overview

This unit explains the development plan of SMEs. The SME Development Plan 2004-
2010 aims to transform the SME sector into a significant contributor to national
development by 2010. This vision shall be attained through clear and integrated strategies
to attain global competitiveness for Philippines SMEs, within a supportive operating
domestic climate.

The Plan details strategies and corresponding programs drawn up through

extensive and joint efforts between the private business sector and the concerned
government implementation stage.

Learning Objectives
At the end of the unit, I am able to:
 know the development plan of SMEs,
 recognize the role and importance of SMEs,
 identify the priority industries of SMEs,
 familiarize with the R.A. 9178: Barangay Micro Business Enterprises
(BMBEs) Act of 2002

Setting Up
Name: ____________________________ Score:_______________
Year/Section:_______________________ Date: _______________

Activity 1

Direction: Watch the interview with the Trade Secretary Ramon Lopez on CNN
Philippines through the link given below. Answer the following questions.
1. What are the current issues, challenges, and opportunities in MSME Sector?
2. What is the government assistance to MSMEs?

Link: [Link]

Entrepreneurial Management| 97
Lesson Proper

Why Plan the Development of SMEs?

Despite the overwhelming presence of Philippine SMEs (over 99% of all firms,
nearly 70% of total workforce, and near 1/3 of aggregate value added), their opportunities
to improve are still enormous.

The productivity of SMEs has lagged behind in comparison with the performance
of large Philippine establishments or of SMEs in nearby Asian countries. This is traced
mainly to the interrelated factors of: (1) fierce competition in export markets that
globalization has spawned , aggravated by the inability of Philippine SMEs to update
themselves with fast changes on products and manufacturing methods, and (2) a domestic
operating environment that is not sufficiently supportive or conducive to SMEs.

SME are thereby threatened from growing - or, from continuing to exist. SME
products are vulnerable to imported equivalents even in the local market.

These challenges demand that resources be marshaled properly through well-

crafted strategies and programs. It is imperative to encourage cooperation between
private sector participants and government agencies – with the use of a clear long-term
blueprint. Thus, “SME Development Plan 2004-2010” was designed on the joint efforts of
the SMED Council, the DTI, and the various entities involved in Philippine SME development
(including foreign donor organizations).

Role and Importance of SMEs

Many countries have advanced economically and socially through strategies of

developing SMEs. This impact has been enhanced by ease in establishing SMEs, become
more flexible and affordable capitalization are needed , and appropriate exploitation of
niche products and services are typically not viable for large-scale operations.
Since SMEs are important in national agenda for economic growth and alleviation of
poverty, significant efforts and policy support have been aimed over time for SME
development.

Structural Features of Philippine SMEs

1. SMEs are overwhelming in Number

At latest (2001) count, SMEs were 99.7% of the national total of business firms. Micro
enterprises account for about 92% of enterprises. The small, medium and large enterprises
have smaller contributions in terms of the employment, and have a greater impact in terms
of sales and value added.

2. Two of every 3 Employees work in SMEs

SME sector employees are 69.1% of total establishment personnel, even as total number of
employees has been declining recently. The micro-enterprise subsector employs the most
people, 38% of employment in all categories.

3. SMEs Contribute Over 30% of Sales and Value Added

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In terms of value added, large enterprises dominate with almost 70% of the total. This
suggests very significant opportunities for improvement of SME sector contribution, even as
this has already increased recently.

4. SMEs are Concentrated in a few Areas, mainly NCR

National Capital Region accounting for 23.9% of establishment number and 40.1% of
employees.
About 65% of SME establishments are located in NCR, Regions 3, 4, 7 and 11. These five
regions also account for 76.3% of total employees. In these regions, the medium and large
establishments have relatively larger concentration.

Priority Industries of SMEs Subsectors

1. Food Industry
2. Organic and Natural Products
3. Marine Products
4. Wearables’ (Costume Jewelry, Fine Jewelry, Footwear)
5. Leather goods (handbags and belts, travel goods and gloves)
6. Home Furnishings
7. Construction Materials
8. Micro- electronics
9. IT Services
10. Motor Vehicle Parts and Components

Republic Act No. 9178

Barangay Micro Business Enterprises
(BMBEs) Act of 2002

Barangay Micro Business Enterprises Law

The “BMBEs Act of 2002” encourages the formation and growth of
barangay micro business enterprises by granting them incentives and other
benefits.
The act was signed into law by President Gloria Macapagal-Arroyo
on November 13, 2002. Its implementing Rules and Regulations (IRR) which
was issued on February 7, 2003, as DTI Department Administrative Order
No. 1, Series of 2003, was published twice in the February 11 and 26, 2003
issues of the Manila Bulletin.
A BMBE is defined as any business enterprise engaged in production,
processing, or manufacturing of products, including agro-processing, as well
as trading and services, with total assets of not more than P 3 million. Such
assets shall include those arising from loans but not the land on which the
plant and equipment are located.
For the purpose of the Act, “services” shall exclude those rendered
by any one, who is duly licensed by the government after having passed a
government licensure examination, in connection with the exercise of one’s
profession (e.g., Accountant, Lawyer, Doctor, etc.).
The DOF Department Order No. 17-04 also provides that, an
enterprise can only qualify for registration if it is not a branch, subsidiary,
division or office of a large scale enterprise and its policies and business

Entrepreneurial Management| 99
modus operandi are not determined by a large scale enterprise or by
persons who are not owners or employees of the enterprise (i.e., franchises).

Objective of BMBE Act of 2002:

BMBEs are essential to the country’s economic development since
they effectively serve as seedbeds of Filipino entrepreneurial talent. Thus,
the Act primarily aims to integrate micro enterprises in the informal sector
into the mainstream of the economy. Strengthening BMBEs would mean
more jobs and livelihood, and a better quality of life for Filipinos.

Incentives of BMBEs:
Registered BMBEs can avail of the following incentives:
 Income tax exemption from income arising from the operations of the
enterprise;
 Exemption from the coverage of the Minimum Wage Law (BMBE
employees will still receive the same social security and health care
benefits as other employees);
 Priority to a special credit window set up specifically for the financing
requirements of BMBEs; and
 Technology transfer, production and management training, and
marketing assistance programs for BMBE beneficiaries.
The LGUs are also encouraged to either reduce the amount of local taxes,
fees, and charges imposed or exempt the BMBEs from local taxes, fees, and
charges.

Agencies mandated to provide assistance in the areas of technology

transfer, production and management training, marketing assistance:
The agencies concerned are the following:
 Department of Trade and Industry (DTI)
 Department of Science and Technology (DOST)
 University of the Philippines Institute for Small Scale Industries (UP-
ISSI)
 Cooperative Development Authority (CDA)
 Technical Education and Skills Development Authority (TESDA)
 Technology and Livelihood Resource Center (TLRC)

Funding agencies designated to set up special credit window for

registered BMBEs
The following government financial institutions will provide a special
credit window for BMBEs:
 Land Bank of the Philippines;
 Development Bank of the Philippines;
 Small Business Guarantee and Finance Corporation;
 People’s Credit and Finance Corporation;
 Quedan and Rural Credit Guarantee Corporation;
 Government Service Insurance System (for members only); and
 Social Security System (for members only)
Only registered BMBEs may take advantage of the credit facility and
other benefits granted under the law. This means that the enterprise must
first have a Certificate of Authority which authorizes it to operate as a BMBE.

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 Registration of BMBE:
Based on the guidelines issued by the DTI under DTI DAO No. 01-03
and DOF under the DOF D.O. No. 17-04 (as amended by DO No. 31-05) any
person, cooperative, or association owning an enterprise that fits the
description of a BMBE may register for the first time or renew its
registration with the Office of the Treasurer of the city or municipality
where the business is located.

Basic requirements for new applicants and for BMBEs applying for
renewal of registration:
a. Duly filled out application form (BMBE Form 01) in triplicate, signed by the
owner or manager of the entity applying for registration; and,
b. Three passport size ID pictures.

Additional Requirements for new applicants:

a. For those with assets worth three hundred thousand pesos (P300,000)
and less –
1. Registration as a business entity or enterprise from the appropriate
government agency (e.g., Securities and Exchange Commission (SEC)
registration in the case of corporation, partnership or association;
Cooperative Development Authority (CDA) registration in the case of
cooperative; Department of Trade and Industry (DTI) business name
registration in the case of sole proprietorship); and
2. Mayor’s permit or City/Municipal Business Permit.
b. For those with assets worth more than three hundred thousand pesos
(P300,000) up to three million pesos (P3,000,000) –
1. Registration as a business entity as explained above in item no.
7.2a.1
2. Taxpayer Identification Number (TIN);
3. Certificate of Registration from the Bureau of Internal Revenue
(BIR);
4. Mayor’s Permit or City/Municipal Business Permit;
5. Sworn affidavit executed by the sole proprietor of the President of
the enterprise, as the case may be, that the enterprise is barangay-
based and micro-business in nature and scope;
6. Sworn Statement of Assets and Liabilities supported by pertinent
documents;
7. Pictures of the place of business and its assets, other than cash,
receivables and intangibles;
8. Copy of Loan Contract/s, if any, and duly-notarized Certification of
Amortization Payments on the Loan; and
9. Income tax Return (ITR).

Additional requirements for the renewal of BMBE registration:

a. For those with assets worth three hundred thousand pesos (P300,00) and
less-
1. Documents previously listed in item 7.2a for new applicants with assets
worth three hundred thousand pesos and less; and

Entrepreneurial Management| 101

 2. Annual Information Return (for the year immediately preceding the
renewal of registration) duly filled with the BIR, together with its
attachments.
b. For those with assets worth more than three hundred thousand pesos
(P300,000) up to three million pesos (P3,000,000.00) –
1. Documents previously mentioned in item 7.2b (1-8); and
2. Annual information Return (for the year immediately preceding the
renewal of registration) duly filled with the BIR, together with its
attachments.

Procedures:
a. Accomplish BMBE Form 01 in triplicate and submit to the Office of the
Municipal or City Treasurer.
b. The Municipal or City Treasurer evaluates the application. The application
shall be processed within 15 working days upon submission; otherwise, the
BMBE shall be deemed registered.
c. A registered BMBE shall be issued a Certificate of Authority as proof of
registration, effective for a period of two years. The application is renewable
every two years.

Cost of Registration:
Registration and issuance of the Certificate of Authority of the LGU is
free of charge and shall be done promptly. However, to defray the
administrative costs of registering and monitoring the BMBEs, the LGUs are
allowed to charge a fee not exceeding P1,000.00.

BMBE exemption from the coverage of the minimum wage law:

Once a BMBE is registered and issued with a Certificate of Authority by the
Municipal or City Treasurer, it is automatically exempted from the minimum
wage law.

The effect of law on wages of existing/newly hired employees:

Existing employees shall continue to receive their wages, allowances,
and other benefits. On the other hand, wages of employees hired by BMBEs
after the latter’s registration shall be exempted from the coverage of the
minimum wage law. BMBE workers shall continue to be covered by
applicable labor laws and regulations, including the non-diminution rule on
existing wages and benefits.
The exemption from the coverage of the minimum wage law is
prospective in nature. The rule is that laws shall have prospective
application only. Thus, an enterprise’s exemption from the coverage of the
minimum wage law can only be applied to employees hired after its
registration as a BMBE.
The compensation of a BMBE worker depends between him and the
employer. They shall mutually agree on the acceptable wage rate.
Steps in availing of the Income Tax Exemption:
The BMBE registers with the BIR Revenue District Office (RDO) where the
principal office or place of business is located and its submission of the
necessary documents.

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 The documents to be submitted to the BIR to avail of Income Tax
Exemption:
a. Copy of the BMBE’s Certificate of Authority
b. Sworn Statement of Assets of the BMBE and/or its affiliates, supported by
pertinent documents
c. Certified list of branches, sales outlets, places of production, warehouses and
storage facilities.
d. Certified list of affiliates.
e. Latest audited Financial Statement or Account Information Form or its
equivalent.
In lieu of an income tax return, an income tax exempt BMBE is required to
submit an Annual Information Return. This is filled on or before the 15 th day
of the 4th month after the close of the taxable year with an Account
Information Form, which contains data from its financial statement and
Sworn Statement of Assets Owned and/or Used.

The income tax exemption privilege of a BMBE may be revoked for any of
the following reasons:
a. Transfer of place of business;
b. Value of its total assets exceeds P3M;
c. Voluntary surrender of the Certificate of Authority;
d. Death of the registered individual owner of the BMBE; violation or non-
compliance with the provisions of R.A. 9178;
e. Merger or consolidation with an entity which is not eligible to be a BMBE;
f. Sale or transfer of the BMBE, if it is a sole proprietorship without prejudice
to the transferee applying for registration;
g. Submission of fake or falsified documents;
h. Retirement from business, or cessation/suspension of operations for one
year; and
i. Making false or omitting required declarations or statements.

References

[Link]
%20Entrepreneurs%20and%20MSMEs%20in%20the%20Philippines_0.pdf

Assessing Learning

Entrepreneurial Management| 103

Name: ____________________________ Score:_______________
Year/Section:_______________________ Date: _______________

Activity 10.1

Test I. COMPLETION TYPE. Given the acronyms below, write in full what does it stands for.

1. MSMEs _______________________________________________________

2. DTI _______________________________________________________

3. CALABARZON _______________________________________________________

4. MSMEDC _______________________________________________________

5. CDA _______________________________________________________

6. NLDC _______________________________________________________

7. PCFC _______________________________________________________

8. OTOP _______________________________________________________

9. DA _______________________________________________________

10. DILG _______________________________________________________

11. DOST _______________________________________________________

12. DOT _______________________________________________________

Activity 10.2

True or False: Write the word “True” if the statement is correct and write the word
“False” if the statement is incorrect.

____________1. The “BMBEs Act of 2002” encourages the formation and growth of barangay
micro business enterprises by granting them incentives and other benefits.
____________2. Registration and issuance of the Certificate of Authority of the LGU has
minimum charge and shall be done promptly.
____________3. The Certificate of Authority issued by the Municipal or City Treasurer assures
tax exemption of registered BMBEs.
____________4. The exemption from the coverage of the minimum wage law is prospective in
nature.
____________5. The LGUs are also encouraged to either reduce the amount of local taxes, fees,
and charges imposed or exempt the BMBEs from local taxes, fees, and charges.

Entrepreneurial Management| 104

____________6. Only registered BMBEs may take advantage of the credit facility and other
benefits granted under the law.
____________7. The enterprise must first have a Certificate of Authority which authorizes it to
operate as a BMBE before enjoying the priveledge given to BMBE.
____________8. BMBE may register for the first time or renew its registration with the Office of
the Treasurer of the city or municipality where the business is located.

____________9. The compensation of a BMBE worker depends between him and the employer
and shall be mutually agree on the acceptable wage rate by both parties.

____________10. The BMBE registers with the BIR Revenue District Office (RDO) where the
principal office or place of business is located and its submission of the necessary
documents.

Activity 10.3

Fill in the blanks. Complete the following sentences with the word or group of words that
will make the sentence complete. Write the answer on the space provided .

1. The enterprise must first have a ___________________ which authorizes BMBE to operate.
2. The LGUs are also encouraged to either reduce the amount of local ___________ , ____________
, and _____________ imposed or exempt the BMBEs from local taxes, fees and charges.
3. The BMBE register with the __________________ where the principal office or place of
business is located.
4. Annual ___________ duly filed with the BIR together with its attachments.
5. In lieu of an income tax return, and income tax exempt BMBE is required to submit a
__________________________.
6. The BMBE form 01 application shall be processed within _________________ upon
submission.
7. A registered BMBE shall be issued a _______________ a proof of ___________________ , effective
for a period of _______ years.
8. To defray the administrative costs of registering and monitoring the BMBEs, the LGUs
are allowed to charge a fee not exceeding ___________________.
9. Once a BMBE is registered and issued with a certificate of authority by the municipal or
city treasurer, it is automatically exempted from the_______________________.
10. __________________, ___________________ and _____________________programs are incentives for
BMBE beneficiaries.

Entrepreneurial Management| 105

 Activity 10.4

A. What is the importance of SMEs?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

B. What are the structural features of Philippine SMEs?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

C. How much should a BMBE worker be paid for his services?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

D. Is the income tax exemption of a BMBE irrevocable?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Entrepreneurial Management| 106

 E. How can a BMBE avail of the exemption from the coverage of the minimum wage
law?
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
________________________________________________________________________________________________

Entrepreneurial Management| 107