NATURE AND RELEVANCE OF ENTREPRENEURSHIP

“The entrepreneurship always searches for change, responds to it, and exploits it as an opportunity.” - Peter
Ducker

Entrepreneurship is a science of converting processed ideas into a remarkable business venture (Marife Agustin-
Acierto, 2019). It is also a capacity for innovation, investment and expansion in new market, products/services and
techniques (Fajardo, 2009). Thus, this definition implies that an enterprise is at work whenever an individual takes
the risks and invests resources to make something new or unique, innovates or creates new markets. An
entrepreneur is an individual who is alert to profitable opportunities for the exchange of goods and services. He is
also who organizes, manages, directs and assumes the risks of a business or enterprise. Being an entrepreneur is a
lifestyle or an attitude (Acierto, 2019).

Entrepreneurship is a catchword in the era of a globalized economy. It is a foundation and catalyst for economic
growth and innovation across nations. Entrepreneurial activities thrive in societies with supportive government
policies and which give much importance to innovativeness and risk-taking to turn new ideas into breakthrough
solutions. Smalls and mediums enterprises (SMEs) are the concrete manifestation of entrepreneurship. According to
a United Nations report, in developing countries, they account for only over 50% of these same measures. It is
interesting to note that over the years, the meaning of entrepreneurship has had a lot of variations. These are some
of the definitions that have been given to entrepreneurship from early on to the present time:

CONTRIBUTOR DEFINITION
Knight (1934) Having profited from bearing uncertainty and risk.
Schumpeter (1952) Carrying out of new combinations of firm organization-new products, new services, new
sources of raw material, new methods of production, new markets, and new forms of
organization.
Hoselitz (1952) Uncertainty bearing…coordination of productive resources… introduction of
innovations and provision of capital.
Cole (1959) Purposeful activity to initiate and develop a profit-oriented business.
McClelland (1961) Taking a moderate risk
Shapero (1975) A kind of behavior that includes: (1) initiative taking (2) the organizing of reorganizing
of social-economic mechanism to turn resources and situations to practical account, and
(3) the acceptance of risk failure.
Casson (1982) Decisions and judgments about the coordination of scarce resources.
Ronstadt (1984) The dynamic process of creating incremental wealth. This wealth is created by
individuals who assume the major risk in terms of equity, time, and/or career
commitment of providing value for some product or service. The product or service may
or may not be new or unique, but the value must somehow be infused by the
entrepreneur by securing and allocating the necessary skills and resources.
Drucker (1985) Behavior rather than a personality trait. Its foundation lies in concept and theory rather
than in intuition.
Gartner (1985) Creation of new organization.
Hisrich & Brush Process of creating something new with value by devoting the necessary time and effort,
(1985) assuming the accompanying financial, psychic, and social risks and uncertainties, and
receiving the resulting rewards of monetary and personal satisfaction.
Stevenson, and The pursuit of opportunity without regard to resources currently controlled.
Grousebeck (1989)
Hart, Stevenson, and The pursuit of opportunity without regard to resources current-controlled. But
Dial (1995) constrained by the founders’ previous choices and industry-related experience.
Shane (2003) An activity that involves the discovery, evaluation, and exploitation of opportunities to
introduce new goods and services, ways of organizing, markets, process, and raw
 materials through the organizing efforts that previously had not existed.
Kuratko (2009 The dynamic process of vision, change, and creation that requires an application of
energy and passion toward the creation and implementation of new ideas and creative
solutions.
Dyck and Neubert Conceiving an opportunity to offer new or improved goods and services, showing the
(2012) initiative to pursue that opportunity, making plans, mobilizing the resources necessary to
convert the opportunity into reality.

Different authors give their definitions’ views and insights about entrepreneurship from slightly distinct perspective,
however they all have the following common elements:
✓ Innovation
✓ Opportunity seeking and exploitation
✓ Resource mobilizing
✓ Encountering risks and uncertainties
✓ Economic and personal rewards.

There are a lot of factors that influence the friendliness of a country to entrepreneurs; among these are the
employment regulations, bankruptcy laws, and tax policies of a country. It is always inevitable that there are people
who will take up the challenge to become an entrepreneur in spite of the competitive business environment. Culled
from various sources, here are examples of entrepreneurship in these 10 countries:
• United States – noted to be one of the friendliest countries for entrepreneurs in the world, the United States is
home to thousands of successful entrepreneurs as shown by companies like Apple, Google, Starbucks, Walmart,
and Walt Disney.

• China – this emerging country is home to budding entrepreneurs who manufacture different products that range
from toys, gadgets, electronics, and cars. Most of the new businesses in this country are home-grown because of a
new breed of entrepreneurs who realize the potential in their country. However, a lot of products in China are
generic brand names though.

• Singapore – this is literally a small country that controls a significant portion of the economy in Asia. Many of
their entrepreneurs innovate on existing services for local and international use.

• Canada – Entrepreneurs in Canada are exploring opportunities over their internet. For example, people from a
region called Sanikiluag are known for their wood carving skills and entrepreneurs are selling their products online.

• India – entrepreneurship plays a dominant role in the country’s economic landscape, with the government
providing a venue, called Delhi huts, to start-up entrepreneurs that promote local handicrafts. The cottage industry
compound is another venue put up by the Indian government for the development of local products manufactured
and retailed by start-up entrepreneurs. In fact, India is one of the countries in the Asia-Pacific rim with a strong base
of entrepreneur organizations led by the youth and women.

• Taiwan – entrepreneurship is encouraged here through the small and medium enterprise incubation centers for the
purpose of nurturing young firms, new products, and technologies. These incubators provide space, facilities,
hands-on management assistance, and access to technologies and financing to clients, helping them to survive and
grow during the start-up period. There are hundreds of incubators that have been sponsored by the Taiwan SME
development fund.

• Hong Kong - with a knowledge-based economy, Hong Kong utilizes its human resources to make its economy the
best possible through entrepreneurship. There are many entrepreneurial endeavors that flourish from the real estate
enterprise to retail and food business. Entrepreneurial activities related to tourism and agricultural exports have
likewise continually received strong support both from the government and private sectors. Honk Kong is known as
a “shopping haven.”
• Thailand – the extent of government support to entrepreneurs is very evident in, for example, in its international
airport in Bangkok, where a huge section is subsidized by the Bureau of small and medium Enterprises for the
promotion of local products marketed by entrepreneurs. Tourism for the international markets and agricultural
exports are two major sources of income generated by Thai entrepreneurs.

• Malaysia – this country is becoming friendlier to entrepreneurs and this appears in the number of businesses, both
international and local, which decided to locate in Malaysia. Its current emphasis on tourism as a business venture
for entrepreneurs is gaining popularity.

• South Korea – South Korea emerged from the Asian financial crisis better than any other country in the region.
The enterprising spirit is quite obvious in such companies as Samsung and Kia that have now become well-known
even outside the country.

A Brief History of Entrepreneurship in the Philippines

The Philippines is an entrepreneurial country, where 99.7% of all firms operating in the country are small and
medium enterprises employing 69% of the labor force; and 47% of the 803,476 registered establishments are SMEs
owned by women. SMEs and large enterprises are predominantly found in and around Metro Manila, while micro-
enterprises are relatively less geographically concentrated.

The government, among its major strategies, is focused on promoting entrepreneurship with the right environment.
This pertains to its regulatory frameworks, financial resources, and support programs for entrepreneurship in
general. Examples of SME-friendly laws are the Magna Carta for Small Enterprises and the Barangay Micro-
Business Enterprises Act which provide for incentives to registered BMBEs, such as exemption from minimum
wage law, exemption from income tax, special financing, and technical assistance. The 2004 to 2010 SME
Development Plain identifies the following specific programs to promote entrepreneurship:
(1) Provision of Business Opportunities;
(2) Strategic Business Planning, Training and Self-help packages to Develop Strategic Plans;
(3) Product Development Design Services;
(4) Support to Start-up Enterprises in Selected Areas;
(5) Business Opportunity and Enterprise-Creation Approaches;
(6) Entrepreneurship Training Camps and Enterprise Development Programs;
(7) Business Opportunity Development and Investment Promotion for Innovative ideas;
(8) Institutionalization of the SME Opportunities Caravan;
(9) Franchising Seminars; and
(10) Cooperatives Business Development Program.
Although legislation certainly helps, entrepreneurs are also given opportunities for training and promotion and to
gain a wide range of skills and varied experiences, so that they can sustain their firm or establish their own
businesses. To date, the programs and services provided for entrepreneurs are relatively adequate. At the same time,
universities/colleges, non-government organizations, employers, and associations of entrepreneurs are providing
support independently or in coordination with the government agencies.

The government focuses on promoting entrepreneurship in the right environment. This includes regulatory
frameworks, financial resources, and support programs for entrepreneurs, as well as business practices and social
attitudes towards entrepreneurship in general.
DEVELOPMENT OF
ENTREPRENEURSHIP

Evolution of the Field of Entrepreneurship

The evolution of the field of entrepreneurship has

been formulated by scholars based on theories that are rooted
in economics, psychology, sociology, anthropology, and
management. The table below provides an overview of the rich
historical knowledge on entrepreneurship using these theories.
The overview consists of six historical periods where the
entrepreneurship contributors or scholars are cited based on their
work. The classic contributors considered are Cantillon, Say, Marshall, Schumpeter, Knight, and Kirzner. The
modern contributors considered are Drucker, Hisrich, Timmons, and Shane.

PERIOD THEORY AND CONCEPT

The Earliest Based on the idea that an entrepreneur is a person who sells goods on behalf of the good’s
Period owner, entrepreneurship was exhibited by Marco Polo (1254-1324), the merchant from
Venice who travelled to many places in Asia to trade. He would enter into a formal
agreement with a capitalist to sell his goods. He bore all the risks of possible damage or loss
of the goods. After everything was sold, profits were divided between the capitalist and the
trader as agree. (OUM, n.d.).
The Middle Ages The term entrepreneur was used to describe both an actor and a person who was in charge of
and managed large production projects. This person merely managed the projects using the
resources provided by the government. In this case, he did not assume any risks. The
entrepreneur in this age was the person who was in charge of great architectural works such
as public buildings and cathedrals” (OUM, n.d.).
The 17th Century Entrepreneurship has become associated with risk. The entrepreneur was someone who
would enter into a formal agreement with government to provide products or services. It was
common practice to agree /on the price as part of the terms in the agreement. In effect, the
entrepreneur either reaps profits or bear losses (OUM, ND). A prominent theorist during this
period was Richard Cantillon (1680-1734), an economist who viewed the entrepreneur as a
risk taker and a bearer of uncertainty (Van Praag, 1999).
The 18th Century The entrepreneur was distinguished from the capitalist who simply provides money for the
creation of products to be sold. Jean-Baptiste Say (1767-1832), a French economist and
businessman, describe the entrepreneur as a person who play central coordinating role both
in producing and selling goods. He was someone who coordinates, leads, and manages all the
activities of the firm. (Van Pragg 1999).
19th and 20th There was very little distinction between an entrepreneur and a manager. However, towards
Centuries the middle of the 20th century, Joseph Schumpeter (1883-1950), an Australian-Hungarian-
American economist and political scientist, refuted the idea of entrepreneurship as innovator
who seeks opportunities and leads “existing means of production into new channels.” “The
entrepreneur is neither a risk bearer nor a manager or a capitalist” (Van Pragg, 1999; pp319-
321). Risk and financing are relegated to the banker or to some other party whose sole aim is
to provide needed capital. On the other hand, it was also during this period that business
expert Peter Ducker (1909-2005), came up with a behavioural concept of the entrepreneur –
one who actually searches for change, respond to it, and exploit change as an opportunity
(Holden,2011)
21st Century Hailed as a DotCom era, entrepreneurs in the 21st century are considered the heroes of free
enterprise (OUM, ND). Creativity and innovation have made many of these entrepreneurs
 able to exploit high growth potentials.’’ Today, many people regard entrepreneurship as
‘pioneership’ on the frontiers of the business” (Kuratko & Hodgetts, 2004). Much of the
significant changes revolutionizing the world of business was due to the Internet which
provided countless opportunities for entrepreneurs.

ENTREPRENEURHIP THEORIES CONTRIBUTORS/SCHOLARS

CLASSIC CONTRIBUTORS MODERN CONTRIBUTORS
Cantillon (1734) Drucker (2005)
Say (1832) Hisrich
Marshall (1936) Timmons
Schumpeter(1950) Shane
Knight (1972)
Kirzner

Evolution of Entrepreneurship in the Philippines

Entrepreneurship has existed in the Philippines since the interaction of the early Filipinos with foreign traders,
especially the neighboring countries like Malaysia, Indonesia, and China. They started business transactions
through the barter system wherein goods and services were the means of exchanges. Then countries moved towards
a money economy when people used different forms of money to pay for the goods that they bought. However,
when Spain, Japan and America colonized the Philippines for hundreds of years, they changed the structure of the
society, the economy, education, and the political system we became a predominantly family-centered, Catholic,
capitalistic, and democratic country. After independence, the Philippine government realized the importance of
entrepreneurship to individuals, society, and country, and how it contributes to the nation’s economic development.

The small and medium enterprises (SMEs) became the embodiment of entrepreneurship in the country. The SME
development regulatory framework and policies started in 1935 when the 1935 Philippine Constitution first
recorded the national commitment to economic success through industrial and technological growth. The historical
data show that the intensification of entrepreneurship development started in the 1970s. For the first time, the SME
sector was given emphasis in the Philippine Development Plan (1972-1976). Then, the 1987 Philippine Constitution
reinforced the commitment for the development of the private sector and provided for a wide range of government
reforms and reorganization.

The Magna Carta for Small Enterprises is the landmark legislation that reflects the current government policy to
foster a dynamic SME sector, particularly rural and agricultural-based manufacturing ventures. On the other hand,
R.A. 7882, the Act Providing Assistance to Women, recognizes the special role of women in development and
supports women entrepreneurs who are engaged in the manufacturing, processing, service, and trading businesses.
Under this program, government financing institution (GFIs), Like the Landbank of the Philippines (LBP) and the
Development Bank of the Philippines (DBP), are mandated to provide assistance to; (1) non-governmental
organizations (NGOs) engaged in developing women’s enterprises up to P 2 million, provided the non-government
organization has a minimum operating track record of one year; (20 existing women enterprises to the upper limit of
P 50,00; and (3) potential women entrepreneurs with sufficient training up to a limit of P25,000 each.

There is no doubt that the government, through the Department of Trade and Industry and its attached agencies and
bureaus, recognizes that the promotion of entrepreneurship demands a holistic, integrated, and strategic set of
interventions in order to hasten the economic development of the Philippines in the midst of this globally
competitive government. To implement these plans, significant enabling laws, policies, and programs were
instituted by the government with the support of international development organizations, non-government
organizations, and the private sector.
THE RELEVANCE OF ENTREPRENEURSHIP AND ENTREPRENEURS IN ECONOMIC DEVELOPMENT
AND SOCIETY

Entrepreneurship has an enormous impact on the economy and society. Globally, the level of entrepreneurial
activity has contributed significantly to the national level of economic growth of many countries.

It was Joseph Schumpeter, an Austrian economist, who first articulated the importance of entrepreneurship to the
economy and in society in 1934. The increase in entrepreneurial activities has also initiated changes in the structure
of business and society. Specifically, entrepreneurship has these contributions to the economy and society:

1. Creates employment. When entrepreneurs put up their businesses, they employ people who possess
different competencies and personal values to help them operate the enterprise.
2. Develops new markets. Entrepreneurs are opportunity-seekers, creative, and resourceful. They seek new
buyers or customers of their products or sold services. They go beyond the existing places where their products and
look for other people who will be interested.
3. Introduces innovation. Entrepreneurs innovate. Innovations can be something ordinary or technological
or breakthrough. This innovation is done for the product, service, or technology towards commercialization and
generates economic wealth. Due to innovation, other businesses fold, while others will open or flourish. Some even
restructure like merging or buying-out firms, to respond to the changes that are required in order to become
sustainable in the business.
4. Generates new sources of materials. Entrepreneurs are always in constant search for better and cheaper
sources of materials they need. Finding new material providers help in the economic growth of the place. These
could be sourced from because of the value creation.
5. Stimulates investment interest in the new business ventures being created. When entrepreneurs engage in
a new business, it stirs curiosity for other people to invest in the business because of the benefits it offers. This new
investment contributes to economic growth.
6. Improves the quality of life. The new products and services developed by the entrepreneur contribute to
the increase in the personal benefit and convenience of people in society. The use of automatic gadgets in cooking
or washing clothes, mobile phones, internet services, agricultural machines, and many other innovations leads to a
better quality of life.
7. Serves as role models. Entrepreneurs are people to be emulated by younger generations in the community
and society at large. The attitude, behavior, and personality traits, like proactiveness, opportunity recognition, risk-
taking, alertness, and creativity, are some of the characteristics that will also make them successful entrepreneurs in
the future.
8. Brings social benefits to the people. Entrepreneurs pay taxes for every product or service sold in the
market. They also pay for the permits and licenses to operate their businesses. The income derived from all these
taxes by the government are then used for the people, especially the poor to have more access to social services
such as education and health, as well as improvement in infrastructure facilities, such as roads and bridges for faster
and safer transportation of people from the various destination.
9. Utilizes and mobilizes indigenous resources. Small and medium enterprises will always look for cheaper
and local materials to supply their needs. They also make use of idle or unused resources to meet their needs. This
saves much in terms of foreign currency as local enterprises patronize their own resources and they do not become
dependent on imported materials.
10. Provides more alternatives for consumers. The stiff competition in the market for quality and cheaper
products and services requires the entrepreneurs to come up with more products and services consumers can choose
from. Entrepreneurs also become more concerned about the welfare of their consumers, and ethical in producing
and selling their products or services, in order that consumers will prefer them over the other enterprises selling the
same.
“New information is important in explaining the existence of entrepreneurship opportunities” – Schumpeter

Starting a business is a positive decision on the part of the entrepreneur to exploit entrepreneurial
opportunities which are an important and worthwhile endeavor. There are other several reasons, like financial
stability, self-fulfillment, helps the family, and provide employment to others, for an entrepreneur to have his/her
own business. An entrepreneur has several ways to start a new venture. The most frequently used forms by
entrepreneurs are a start-up, buying an existing business, and franchising.

A start-up enterprise is a company that is recently formed, where the founder establishes a completely
new business from scratch.

Advantages Disadvantages

• Control
• Leverage of OPT (other • Difficult
people’s time) • High Failure Rate
• Unlimited Revenue • No Guarantee
• Flexible Hours • Managing People
• Freedom to Express Yourself

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

Advantages Disadvantages
 • Inheritance of the
• Existing Track Record company’s problem
• Established Customer base • Being stuck with the
• Focus on Improvements company’s bad reputation
• Established Connections • Facilities and Equipment
might be outdated or in
need of repair
 • Difficulty in changing a
company’s culture

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

Advantages Disadvantages

• Initial Payout
• Established Brand and • Royalty Payments
Customer base • Marketing/advertising Fee
• Marketing Support • Limited Creativity
• Reputable Suppliers • Sole Sourcing
• Business Support • Dependent on Franchisor
• Trainings Success
• Reduced Risk • Risk
• Financial Assistance • Lock up on long term
contracts

” Examples of these are Jollibee, Mang Inasal, Ricky Reyes Salon, 7-eleven, Mini Stop, and Tapa King
Franchise"

Given the forms of starting a business, there are many other important factors to consider before an
entrepreneur can actually begin the enterprise. These are the following.

FOCUS AND DIRECTION

 It is imperative to have a very good objective grasp of the business and where it will be headed many
years from the start of the operation. It means that there should be a clear and documented vision-mission and
strategies, to begin with. Start right by “beginning with the end in mind”.

SOURCES OF CAPITAL

There are different sources of capital that can be used depending on the need to start the venture. These
can be from personal funds, family and friends, a retirement account, banks /financial institutions, a
government loan, and/or the stock market. Which of these sources will provide you the needed capital given
your financial constraints and credibility?

GOOD NETWORK
 Building good relationships and working with other people could help start the business. Formal
networks like associations and professional groups, as well as informal networks, like childhood friends, family
members, and former classmates, can be drivers to build self-confidence and direction, providers of information
that are not readily accessible to others, suppliers of raw materials, and serve as mentors/coaches.

LEGAL REQUIREMENTS

It is very important to know the laws and regulations that govern the type of business that will be opened
to avoid major problems that can arise if legal requirements are overlooked. Examples are the copyright and
patent laws, environment and sanitation regulations of the municipality, and labor laws. Do not go into an
illegal business where the consequences are greatly unfavorable. There are also businesses with restrictions
which might give you difficulties in operation, like mining and quarrying.

DEGREE OF RISK

Consider the degree of risk related to a specific business opportunity. A business is said to be risky
when the probability or chances of failure is high. It means the odds are great in many aspects against starting
the business-like limited market, stiff competition, high cost of financing the business, and few supplies of
needed labor.

RESEARCH AND DEVELOPMENT

There should be strong research and development that should be undertaken. The government should
provide adequate support to inventors, scientists, and engineers and their new technologies to commercialize
their R&D products. The presence of new technology, science, and knowledge transfer from universities and
public research centers to new and growing businesses, and the support for the creation of new technology-
based ventures, are good indicators to start a business in this area.
PERSONAL COMPETENCIES

The personal competencies like creativity, opportunity seeking, self-confidence, persistence,

commitment, and risk-taking, as well as technical background (e.g. accounting, personal computing) and related
experiences needed to run the particular business, are necessary to start running the business.

AVAILABILITY OF RESOURCES
 Resources pertaining to raw materials, human resources, and machinery/equipment. Specifically, the
raw materials that are indigenous to the community and available in certain quantities, like clay, sand, abaca,
and other natural fiber. Knowing where and how other entrepreneurs get their materials and where they source
them is also vital. Local people's specialized skills may be tapped from and developed for commercial purposes.
In Laguna, for example, the availability of a group of people who are skilled in woodcraft making. Modern
machinery/equipment, even locally manufactured, might be useful in upgrading or improving a traditional
production system or starting a new business altogether.

OTHER CRITICAL FACTORS FOR A NEW VENTURE. The table below shows a checklist that an
entrepreneur should consider in the assessment of a new venture.

A Checklist of New Venture Ideas:

NO. AREA ASSESSMENT QUESTION

• Can the product or service work?

• Is it needed?
Basic Feasibility of the
1
Venture
• Is it legal?

• Is it ethical to offer this product or service?

• What specific competitive advantage (price, quality) will the
product or services offer?
Competitive Advantages of
2
the Venture • How are competitors likely to respond?

• What product or service differentiation will you offer?

• Who are the customers likely to be?

Buyer Decision in the • Where are these customers located?

3
Venture
• How much will each customer buy, and how many
customers are there?
• How much will be spent on advertising?

• What share of the market will the company capture?

Marketing of the Goods and
4
Services
• Who will perform the selling function?

• How will you establish the brand in the market?

 • Will the company make or buy what it sells?

• Are sources of supplies available at reasonable prices?

• Will the raw materials be imported or locally available?

Production of the Goods and
5
Services
• Are there reliable sources of equipment/machinery for the
goods/services to be produced?

• What appropriate technology will you utilize to produce

your products and service?
• How will competencies in each area of the business be
ensured?
Staffing Decision in the
6
Venture • Who does the recruitment and selection of the personnel?

• Do you have enough needed talents to start the business?

• What records will be needed? When?

7 Control of the Venture • Will any special controls be required?

• Who will monitor and assess the performance?

• How much the working capital will be needed?

• Who will be providing the financing?

8 Financing the Venture
• What will be the cost of getting outside financing?

• How long will it take to secure the financing?

Businessman vs Entrepreneur

It is a common assumption that businessman and entrepreneur are the same, but both words refer to a
different individual possessing a distinct approach to business. to put it in other words, a businessman follows a
set path engraved by some other person with an unoriginal idea, whereas an entrepreneur thinks and believes in
making his own path with new ideas.

In the future, an entrepreneur can become a businessman. However, between businessman and
entrepreneur, there is a thin line difference between businessman is a market player, whereas, the entrepreneur
is a market leader. In the below article, we will help you understand the differences between businessman and
entrepreneur.
 A businessman is an individual who operates or starts a business with the same old business idea. The
businessman chooses to do business that is high in demand or give him maximum profits in return. The firm
faces stiff competition because many companies already exist in the market having the same business ideas.
However, the risk factor is very less as the concept has been tried and tested by other existing companies, so the
chance of failure is low.

An entrepreneur is an individual who has an exclusive idea to initiate and establish a new venture and
bring a change in the world. An entrepreneur is highly creative and innovative, takes a risk, and end ures the
unpredictability of business. A business started by entrepreneurs with a new concept for the first time is known
as Start-up. The entrepreneur is an integral part of the operation, who builds and deploys the other functions of
the operations i.e. labor, land, and capital. Later in the future, the entrepreneur becomes a businessman.

Now, let us focus on Businessman vs Entrepreneur.

Businessman Entrepreneur

Definition

A businessman is an individual who operates An entrepreneur is an individual with an

or starts a business with the same old exclusive idea to initiate and establish a new
business idea. venture

Market state

Market player Market leader

Market

Makes his place in the market Creates a market

Risk factor

Less Approximately high

Procedure

Traditional/Ordinary Unconventional

Focus

Profit Employee, customer, and public

Competition

Extremely High Low

Identifying BusinessOpportunities

The identification of business opportunities is central and key to starting a business. Generally, an
entrepreneurial opportunity is a favorable set of conditions that will enable the entrepreneurs to create new
products or services by combining resources that will result, not only in a profit but for the common good of the
society and environment. Shane (2003) noted that entrepreneurial opportunities can take the forms of;

• new products (e.g. medicine for cardiovascular disease) or

• services (e.g. home delivery of passport or birth certificate),
• new raw materials (e.g. stem cells, organic vegetables, multigrain bread),
• new markets (e.g. foreign tourist for alternative medicine like acupuncture), and
• new production processes (e.g. digital production of pictures).

Given the opportunities, entrepreneurial firms either start because of;

• external stimulation (e.g. customer demand for new products or services to make more convenient) or by
• internal stimulation (e.g. when an entrepreneur recognizes a problem or opportunity gap and decides to fill it).

Regardless of the source of stimulation to start a new business, it is said that opportunities are “tough to
spot.” Opportunity recognition is not simply imitation or a different version of what is already in the market. As
cited in Barringer (2006), an opportunity has four essential qualities, namely:

• attractive,
• durable,
• timely, and
• anchored in a product/service or business that creates or adds value for its buyer or end-user"

For entrepreneurs, they need to capitalize on the so-called "window of opportunity." This is the time when a
firm can realistically enter a new market and attempt to establish a competitive position in the industry. An
example of this is when Facebook and Twitter entered the social network industry to compete with Google.
Most good business opportunities do not suddenly appear but result from an entrepreneur being alert in
identifying potential opportunities.

How do entrepreneurs identify opportunities? One approach is by observing trends like fashion, eating
habits, people communication, and recreation. Closely examine how they create opportunities for entrepreneurs
to pursue. Observation data can come from actual experiences or from market research studies of reputable
research firms in the industry. Moreover, consumers, business associates, members of the distribution system,
and technical people are also the best sources of ideas for a new venture.

Another approach to identify opportunities is by solving a problem and looking for solutions to solve it.
Scout for problems and this can lead to good business ideas. An example is when working people complained
that they do not have the time to wash their clothes and cook their food. Eventually, laundry shops and fast food
delivery became available to them.

According to Barringer (2006), the figure below on the opportunity recognition process, shows that the
environmental trends are composed of the economic (e.g. disposable income, consumer spending patterns);
social (e.g. demographic changes, such as age, civil status, and what people think is in); technological (e.g.
new and emerging technologies); and political and regulatory (e.g. government support services, new laws)
factors.

On the other hand, personal characteristics include prior experiences, cognitive characteristics, social
networks, and creativity. The diagram also illustrates that "there is a connection between an awareness of
environmental trends and the personal characteristics of the entrepreneur because the two facets of opportunity
recognition are independent." For example, an entrepreneur with a well-established connection to access
information on the preferences of local and international tourists may be in a better position to identify
emerging tourism trends, than an entrepreneur without access to such information. The awareness of the
emerging trend, such as medical tourism, may prompt an entrepreneur to travel to places known for medical
tourism or even attend seminars or conferences to learn more about the topic and get access to more
information. It is also important to bear in mind that the evolution of electronic commerce has created many
new opportunities and new businesses. Those entrepreneurs, who use a Website catalog containing online
information about their company to promote, sell and get feedback about their products/services online, may
also be in a better position to identify new trends, than those who do not avail of technologies that utilize
electronic commerce.
The opportunity Recognition Process

Moreover, entrepreneurs should be able to identify, seize, and pursue business opportunities, successful
entrepreneurs are those who can exploit business opportunities. Drucker has identified seven potential sources
of opportunity in the external context, namely:

(1) the unexpected

Opportunities can be found when situations and events are unanticipated. The event might be an unexpected
success/good news or unexpected failure/bad news that can be an opportunity for entrepreneurs to pursue.

(due to the pandemic, the customized mask business rise significantly)

(2) the incongruous

Incongruous situations happen when there are inconsistencies in the way they appear (out of place, unsuitable,
inappropriate). For example, there are opportunities to capture when conventional wisdom about the way things
should be no longer holds true. In these types of situations, entrepreneurs who are willing to think beyond the
traditional approach may find a potential opportunity.
 (there are new business appearing because of the new normal)

(3) the process need

Entrepreneurial opportunities could also surface throughout the process of discovery such as the process of
research and development done by the researchers and technicians of a product or service. Even before a
breakthrough, there will be numerous opportunities that could be seized by the entrepreneurs during the process.

(due to the need of having CCTS card to go around, business like this is now on-demand)

(4) industry and market structures

Changes in technology, social and customer’s tastes can change the structure of an industry and market. These
situations, however, will give entrepreneurs opportunities to innovate their products or services.

(5) demographics

Changes in demographics will influences industries and markets, upon their target market segmentation. There
can be entrepreneurial opportunities in anticipating and meeting the needs of the population.
 (In this pandemic there is a sudden change in demographic, unemployment rises but also the online sellers)

(6) change in perception

Perception is one’s view of reality. Changes in perception get to the heart of people’s psychographic profiles of
what their values are, what they believe in, and what they care about. Changes in these attitudes and values
create potential market opportunities to alert entrepreneurs.

(healthy living perspective; organic fruits and vegetables, natural juices, and fitness gyms are now on-demand)

(7) new knowledge

New knowledge can be a source of opportunities for entrepreneurs. Examples of new knowledge are new
technologies and new discoveries that can be sources of information for entrepreneurial innovation.
Entrepreneurs who come out with new products can manipulate this kind of knowledge.

In the Philippines, experts had acknowledged that entrepreneurial opportunities have considerably
increased in the past years. The potential sources of opportunities are the positive attitude of Pilipino workers,
low labor cost, Literacy of the workforce, large market potential because of our big population size, changing
preferences and lifestyles of Filipino consumers, the abundance of natural resources, and availability of
competent middle management and creative technical talents.

Types of Business Available to Entrepreneurs

 In general, entrepreneurs can identify more ideas and opportunities from the types of businesses available to
them in the community and the country at large. There are a number of ways to classify enterprises which they
can choose from:

• According to Size
• According to Forms of Ownership
• According to Industry Classifications

According to Size:

The size of the enterprise is based on its total assets or the number of employees who work for it. The
Department of Trade and Industry, through the Bureau of Small and Medium Enterprise Development
(BSMED), categorized them as micro, cottage, small, medium, and large enterprises, for purposes of
rationalizing assistance and incentives to these business enterprises. Description of each are as follows:

Micro Enterprise

It has an asset size not exceeding P50,000. It is usually a home-based enterprise, operating in makeshift
or temporary quarters. The owner heads the enterprise and employs from one to not more than 10 people to help
him/her.

Examples of these are the self-employed vending food like taho, puto, or fishballs; those selling in the public
market; and those having sari-sari or rolling stores.

Cottage Enterprise

It has an asset of P50,000 but not exceeding P500,000. It is a home-based business that is often managed and
operated by the members of the family.
Examples of these are the subcontractors of footwear like shoes and slippers; and food manufacturers of peanut
butter/coco jam or pastillas, as well as decorative products like vases, candles, and lanterns.

Small Enterprise

It has an asset of P 500,000 but not exceeding 2.5 million. It is owned by an individual or group and has
enough resources to continue operating. It employs from 10 to 20 people.

Examples of these are groceries, bakeshops, beauty salons, medical/dental clinics, toymakers, jeepney
manufacturers, and travel/tour agencies.

Medium Enterprise
It has an asset of P5 million to less than 20 million and employs 100 or more workers. It is owned by a single
individual, business partners, or a corporation. It employs more than 20 to.100 people. These workers are more
skilled and possess the technical expertise to run the business with machines/equipment and utilize various
quality controls to make the products.

Examples of these are fine dining restaurants with branches, computer importer-dealers, garment
manufacturers, human resource providers, and private educational institutions.

Large Enterprise

It has an asset of P20 million or more. It is often owned and managed by a corporation. It is large in scope of
operation and number of products or services that it offers to the market. It employs 100 or more workers who
are hired on the basis of their expertise. Its Board of Directors is responsible for its governance and it has a
Chief Operating Officer to oversee the implementation of the directives of the Board. It operates in highly
formalized but complex systems of management.

Examples of these are the big fast-food chains, large department stores, big bookstores, family-owned
commercial banks, and insurance companies.
According to forms of ownership:

There are four forms of businesses, based on ownership, namely: single proprietorship, partnership, corporation,
and cooperative. The table below describes briefly each form of ownership with its corresponding advantages
and disadvantages culled from the DTI handbook and other sources. Most of our businesses are in the form of
single proprietorship. This form dominates the retailing, agriculture, and service industries.

FORMS OF BUSINESS
ADVANTAGES DISADVANTAGES
OWNERSHIP
• Demanding on
• Easy to set up
owner's personal time
• Decision-making left
• Growth limited by the
entirely to the owner
owner's financial
Single Proprietorship is • Easy to dissolve
means
owned and usually managed • Retention of all profits
• Unlimited liability
by one person. They register • More flexibility
• Lack of stability
with the Department of Trade • Tax incentives and
• Limited access to
and Industry (DTI). less government
credit
regulation
• Limited business skills
and knowledge

• A partnership may be
• Relatively easy to set endangered by
A partnership is an
up conflicts between
association of two or, more
• Check and balance partners
persons who act as co-owners
maintained with two • A decision made by
of a business. Each partner
or more owners one partner is binding
contributes money, property,
• Availability of more on all other partners
or service to the business.
capital and credit • Generally, liability for
They register with the
• Retention of profits to debts incurred is
Securities and Exchange
fewer owners unlimited
Commission (SEC).
• Lack of Stability

• Risks and losses are

shared with the other • Complicated setting-
shareholders up process
A corporation is an artificial • Maximum flexibility • Individual
being created by operation of for growth stockholders may have
law, having the right of • Limited liability of limited influence on
succession, and the powers, individual management
attributes, and properties shareholders • A tendency to
expressly authorized by or • Greater room for institutionalize a
incident to its existence. They professionalism in bureaucracy
register with the Securities management • Strictly regulated and
and Exchange Commission • Easy to raise capital supervised by the
(SEC). • Assured of at least 50 government
years of existence by
law
 Cooperative is a duly
registered association of
persons, with a common bond
of interest, who have
voluntarily joined together to
• Least likely to be
achieve a lawful common
dissolved
social or economic end,
• Limited liability • Shared control of the
making an equitable
• More people benefit business
contribution to the capital
from the business • Consensual decision
required, and accepting a fair
• Professional managers making
share of the risks and benefits
may be employed by
of the undertaking in
the members
accordance with the
universally accepted
principles of the cooperatives.
They register with the
Cooperative Development
Authority (CDA).

According to industry classification:

There are many types of businesses based on the Philippine Standard Industrial Classification
(PSIC). They either produce goods or services for the use of individuals, groups, or organizations in society.
Goods are products that are processed from raw materials that are consumable. They are things that people use
such as clothes, shoes, tables, books, cosmetics, toys, jewelry, and many more. Services are activities that help
are demanded by consumers based on their needs and wants. Examples of these services are medical, dental,
banking, transportation, printing, publishing, insurance, education, and wellness programs. Usually, starting
entrepreneurs with limited capital engage in the retailing and trading business.

These industries are the following:

Agriculture, Forestry, and Fishing

 This section includes the exploitation of vegetal and animal natural resources, comprising the activities
of growing crops, raising and breeding of animals, harvesting of timber and other plants, animals, or animal
products from a farm or their natural habitats.

Mining and Quarrying

This section includes the extraction of minerals occurring naturally as solids (coal and ores), liquids
(petroleum), or gases (natural gas). Extraction can be achieved by different methods such as underground or
surface mining, well operation, seabed mining, etc.

Manufacturing
 This section includes the physical or chemical transformation of materials, substances, or components
into new products.

Electricity, Gas, Steam, and Air-Conditioning Supply

This section includes the activity of providing electric power, natural gas, steam, hot water, and the like through
a permanent infrastructure (network) of lines, mains, and pipes.

Water Supply; Sewerage, Waste Management, and Remediation Activities

This section includes activities related to the management of various forms of waste, such as solid or non-solid
industrial or household waste, as well as contaminated sites.
Construction

This section includes general construction and specialized construction activities for buildings and civil
engineering works. It includes new work, repair, additions and alterations, the erection of prefabricated
buildings or structures on the site, and also the construction of a temporary nature.

Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles

This section includes wholesale and retail sales (i.e sale without transformation) of any type of goods and the
rendering services incidental to the sale of these goods.

Transportation and Storage

This section includes the provision of passenger or freight transport, whether scheduled or not, by rail, pipeline,
road, water, or air and associated activities such as terminal and parking facilities, cargo handling, storage, etc.

Accommodation and Food Service Activities

This section includes the provision of short-stay accommodation for visitors and other travelers and the
provision of complete meals and drinks fit for immediate consumption.

Information and Communication

This section includes activities of the production and distribution of information and cultural products; the provision of the means
to transmit or distribute these products, data, or communications; information technology activities; the processing of data and other
information service activities. The main components of this section are the following: (a) p ublishing activities ; (b) software
publishing, motion picture and sound recording activities; (c) radio and TV broadcasting and programming activities; (d)
telecommunication activities; (e) information technology activities; and (f) other information serv ice activities.
Real Estate Activities

This section includes acting as lessors, agents, and/or brokers in one or more of the following: selling or buying real estat e, renting
real estate, providing other estate services such as appraising real estate, or acting a s real estate escrow agents.

Professional, Scientific, and Technical Activities

This section includes specialized professional, scientific and technical activities. These activities require a high degree o f training and
make specialized knowledge and skills availa ble to users.
Administrative and Support Service Activities

This section includes a variety of activities that support general business operations. These activities differ from those in Section M
since their primary purpose is not the transfer of specialized knowledge.

Arts, Entertainment, and Recreation

This section includes a wide range of activities to meet varied cultural, entertainment, and recreational interests of the ge neral public,
including live performances, operation of museum sites, sports, gambling, and recreation activities.

Public Administration and Defense; Compulsory Social Security

This section includes activities of governmental nature, normally carried out by the public administration, this includes the enactment
and judicial interpretation of laws and their pursuant regulation, as well a s the administration of programs based on t hem, legislative
activities, taxation, national defense, public order and safety, immigration services, foreign affairs and the administration of
government programs.

Education

This section includes education at any level or for any profession, oral or written as well as by radio and
television or other means of communication. It includes education by the different institutions in the regular
school system at its different levels as well as adult education, literacy programs, etc.
Human Health and Social Work Activities

This section includes the provision of health and social work activities, involving a wide range of activities,
starting from health care provided by trained medical professionals in hospitals and other facilities, over
residential care activities that still involve a degree of health care activities to social work activities without any
involvement of health care professionals.

Other Service Activities (as a residual category)

This section includes the activities of membership organizations, the repair of computers and personal and
household goods, and a variety of personal service activities not covered elsewhere in the classification.
 Watch: [Link]

Questions:

1. Differentiate Corporation and Cooperative.

2. Search the internet. What are the top 5 industries (based on the classification) in the Philippines last year
(2019)?

Government Support and Legal Requirements

 Small and medium enterprises (SMEs) are the lifeblood of the economy. Without entrepreneurs
managing in these enterprises, there can be no additional production, innovation, and contribution to economic
and social development. Governments, past and present, have learned to make and have entrepreneurship a
priority in their economic programs. In the Philippines, the creation of millions of new entrepreneurs tops the
10-point economic agenda, and it also includes the creation of millions of jobs through more opportunities for
entrepreneurs and tripling loan amounts made available to SMEs.

Local governments support small and medium entrepreneurs through organizing various livelihood
programs.

Government Support

The Department of Trade and Industry (DTI) report shows that small enterprise promotion and
development has, in fact, attained the status of a national movement, participated in by more than 50
government agencies, each of which offers support services to the small businessman. The private sector has
also joined the "small is beautiful" bandwagon including industry chambers, trade associations, schools and
universities, civic and non-government organizations, and church-based groups. The Small and Medium
Enterprise Development (SMED) Council was created in 1991 to integrate and synchronize the various efforts.
The SMEDC has an array of programs to assist small businesses. The areas of assistance cover finance,
marketing, training, and human resource development, and product development and technical assistance.

These are the support services they provide:

a. Finance

Government banks, like the Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP),
Small Business Corporation (SBCorp), Quedan and Rural Credit Corporation, Philippine Export-Import Bank,
and the National Livelihood Support Fund, have agreed in 2003 to simplify and standardize lending procedures,
lower interest rates, and facilitate loan releases to small enterprises under a unified scheme called SULONG.
Even before SULONG synchronized the respective programs of these banks, lending to small businesses, often
with some special considerations, has been going on for quite a time already. Some, Iike DBP and SBCorp, are
"wholesale'" lenders that use commercial banks, rural banks, thrift banks, and other financial institutions as
"retailers" to reach out more readily to small businesses everywhere in the country.

For micro-enterprises, countless microfinance institutions now proliferating throughout the country are doing a
good job of providing small but quick and no-hassle loans that require no collateral. They provide an alternative
to the s0-called "five-six" lenders, who are actually loan sharks. Below are the different financing programs and
their providers which are available to the entrepreneurs:

Micro Financing Programs:

Asiatrust Development Bank

▪ Salary Loans
Department of Agriculture

▪ Agri-Fishery and Microfinance Program

▪ Fisheries Financing Program
▪ Agri-Microfinance Program (AMP) for Small Farmers and Fisherfolk and their Households
▪ Cooperative Bank Agri-Lending Program (CBAP)

Department of Social Welfare and Development (DSWD)

▪ Self-Employment Assistance- Kaunlaran (SEA-K) Program

Development Bank of the Philippines

▪ Microfinance Program
▪ Retail Lending for Micro and Small Enterprises

Foundation for a Sustainable Society, Inc. (FSSI)

▪ Microfinance Eco-Enterprise Program (MEEP)

GSIS Family Bank (GFB)

▪ GSIS Family Bank Microfinance Lending Program

Land Bank of the Philippines (LBP)

▪ Microfinance Program for Microfinance Institutions - Retailers

▪ Credit Program tor Cooperatives
▪ Accelerating Change in the Countryside thru Equity sharing strategy (AC-

National Livelihood Development Corporation (NLDC)

▪ Livelihood Credit Assistance Program (LCAP)

▪ Livelihood Development Program for Overseas Filipino Workers (LDPO)

Opportunity Kauswagan Bank, Inc.

▪ Proyekto sa Kauswagan sa Katilingban (PKK)

▪ Micro Enterprise Transition Program (METP)
▪ Micro Enterprise Development Program (MEDP) 3
▪ Micro, Small &Medium Enterprises Development Lending Program (SMED)

People's Credit and Finance Corporation (PCFC

▪ Microfinance Program
▪ Micro-Housing Loan Facility
▪ Micro-Energy Credit Program
▪ MFI Employees' Loan Facility
Philippine Microenterprise Development Foundation (PMDF)

▪ Balikatan sa Kaunlaran (Partnership for Progress)

▪ Micro Lending Through Lead Micro Finance Institutions (Micro-LEAD)

▪ Micro Lending Through MSME-Oriented Rural Banks (Micro-LOCAL)
▪ Micro Lending Through Small Micro Finance Providers (Micro-LEAP)
▪ Wholesale Lending Window for Graduating Micros and BMBES

b. Marketing

The DTI, through its various agencies, provide marketing support to small enterprises by means of:

•
o exposure in local and international trade fairs, expositions, trade missions to various countries-trading
partners, and other trade events through the Center for International Trade Expositions and Missions
(CITEM)
o provision of domestic trade database, including local suppliers courtesy of the Bureau of Domestic Trade
(BDT)
o provision of export trade database and consultation services by the Bureau of Export Trade Promotion
(BETP) and the Bureau of International Trade Relations (BITR)

c. Training and Human Resource Development

The DTI, in cooperation with local government units and local industry associations, has set up SME Centers
Nationwide manned by business counselors who are trained to assist entrepreneurs in their finance, marketing,
technology, and training needs.

In terms of formal training, entrepreneurs may check out the following services in SME Centers:

•
o Skills and other production-related training – from the cottage industry Technology Center (CITC) and
the Technical Education and Skills Development Authority (TESDA)
o Entrepreneurship, managerial training, including business improvement – from the UP Institutes of
other schools and universities
o Export marketing training – from the Philippine Trade Training Center (PTTC)

d. Product Development and Technology Assistance

For assistance in product design and development, the agency to approach is the Product Development
and Design Center of the Philippines (PDDCP).

For packaging design, testing, and analysis, it is the Packaging Research and Development Center (PRDC).
 On the other hand, the Department of Science and Technology (DOST) has a number of research and
development institutes that undertake R&D for new products and product innovations. These include The
Industrial Technology Development Institute (ITDI), the Technology Application and Promotion Institute
(TAPI), the Metals Industry Research and Development Centre (MIRDC), the Philippine Textile Research
Institute (PTRI), and the Forest Products Research and Development Institute (FPRDI).

e. Legal Requirements
A new enterprise has to be registered in various government agencies. The complexity of registration varies
according to the legal form of the business. A single proprietorship is the easiest to register, while a corporation
requires more elaborate procedures. Below is the list of various government agencies and local government
units where the entrepreneurs should secure the necessary legal requirements to operate their business.

Registering with the Department of Trade and Industry (DTI)

The DTI-NCR and DTI Provincial Offices Nationwide administer the registration of business names.

If you are a single proprietor and your business is using a name other than your true name, that business name
should be registered. By registering your business name with the DTI, you are assured that no other entity may
legally use your business name anywhere in the Philippines.

Where to register:

1. Metro Manila Area

Area 1 Office (Manila, Pasay, Makati)

2/F, Park and Ride Lawton, P. Burgos Ave., cor. Dr. Basa St. Ermita, Manila
(Beside LRT 1 Central Station and Metropolitan Theater)
Telephone No. 536.7153/ Fax No. 527.7429
Email: eca@[Link]/dticr@[Link]
Area 2 Office (Las Piñas, Parañaque, Pasig, Muntinlupa, Pateros, Taguig)
2/F, Atrium of Makati Bldg., Makati Ave., corner Paseo de Roxas St. Makati City
Telephone No. 501.5135/ Fax N0. 811.8271
Email: aadr@[Link]/dticr@[Link]
Area 3 Office (Mandaluyong, Quezon City, Marikina, San Juan)
Ground Floor, Highway 54 Plaza, EDSA
Mandaluyong City (Across Mega Mall)
Telefax No. 706.1767
Email: mgrs.@[Link]/dtincr3@[Link]
Quezon City Satellite Office
2/F, Cooling Tower, Quezon City Hall (Beside Quezon City Post Office)
Area 4 Office (Caloocan, Malabon, Navotas, Valenzuela)
5/F, Araneta Square Mall Bonifacio Monument Circle, Rizal Ave. Ext.
cor. Samson Rd., Caloocan City
Telephone No. 332.0829/ Fax No. 362.7664
Email: emd@[Link]/dticnr4@[Link]
Valenzuela Satellite Office
3/F, Valenzuela Convention Center, Valenzuela City Hall Compound
2. For businesses located outside Metro Manila, you can register your Business Name at the DTI Provincial
Office in the place where the business is located.

3. For complete details and on-line registration, visit [Link] (Links to an external site.)

Steps for over-the-counter registration:

1. Obtain application forms (duplicate copy) and fill these up completely.

o Only the owner of the business of his/her Attorney-in-Fact (who is authorized in a proper legal
instrument) is authorized to sign all the forms.

2. Meet the following requirements (For Single Proprietorship):

Must be a Filipino citizen, at least 18 years old. Filipinos with names suggestive of alien nationality must
submit any of the following proof of citizenship: birth certificate, PRC ID, voter’s ID, or valid passport. If the
applicant has acquired Filipino citizenship by naturalization, election, or by other means provided by law,
he/she must submit any of the following proof of his/her Filipino citizenship: naturalization certificate oath of
allegiance, the card issued by the Bureau of Immigration and Deportation and Affidavit of the election, or
ID card issued by the Bureau of Immigration and Deportation.

▪ Certain types of Business may have other requirements, such as service and repair shops, real
estate brokers, dental/medical engineering/architectural services and other services provided by
professionals.

3. Submit the application form to the DTI Processor. The DTI processor will check if the Business Name is
still available, if yes, you will be asked to pay the application fee.

4. Pay the required registration and processing fee. A penalty is imposed if the BNRS certificate is not
renewed within the 3-month grace period from the certificate’s expiration date.

5. After showing the receipt to the Processor, the Business Name Certificate will be released.

6. Your Business Name Certificate is valid for 5 years from the date of registration.

(Note: During peak season, the applicant will be given a scheduled date to file his/her application)

Registering with the Securities and Exchange Commission (SEC)

The SEC is the government agency that gives the business enterprise its legal personality. Partnerships and
corporations need to be registered with the SEC. Single proprietorships need not required to register.

Register your business at:

Securities and Exchange Commission (SEC)

SEC Bldg., EDSA, Greenhills, Mandaluyong City
Tel. No. 584.0923/FAX No. 584.5293/ Email: mis@[Link]

Requirement Documents for Applicant Corporation (Stock [S] and Non-Stock [NS] and Partnership [P]

1.
1. Name Verification Slip (S/NS/P)
2. Articles of Incorporation and By-Laws or Articles of Partnership (S/NS/P)
3. Treasurer’s Affidavit/Authority to Verify Bank Account (S)
4. Bank Certificate of Deposit (notarized in the place where the bank is located (S)
5. Written undertaking to Change Corporate Name by any Incorporator or Director, Trustee,

Partnership (S/NS/P)

1.
1. Registration Data Sheet (S/NS/P)
2. Clearance from other government agencies (S/NS/P)
3. Resolution of the Board of Trustees that the corporation will comply with SEC requirements

For non-stock corporations (NS)

1.
1. List of members certified by the Secretary and undertaking to submit a list of additional
members to SEC from time to time (NS)
2. List of contributors and their corresponding contributions certified by the Treasurer (NS)
3. Affidavit of Affirmation or Verification by the Chief Priest, Minister, Rabbi or Presiding Elder
(for religious organizations (NS)
4. Customs Broker Licenses and PTR of at least 2 Officers or Partners (for custom brokerage
(NS/P)
5. Articles of Partnership (for limited Partnerships, this should be executed under oath) (P)
6. Foreign investment Application Form (for subscribers of a foreign corporation) (S)

Registration Procedures:

1.
1.
1. Verify/reserve the proposed name with the Name Verification Unit.
2. Draw up the Articles of incorporation and By-laws in accordance with the Corporation Code.

Blank forms are also available from the CRMD.

1.
1.
1. If required, get endorsements from the other government agencies.
 2. Deposit paid-up capital/contribution (for foundations only) in the bank.
3. Present six (6) sets of the accomplished forms and documents for pre-processing at the CRMD.
Only complete application documents are accepted for processing. All documents executed
outside the Philippine must be authenticated by the appropriate Philippine Embassy or consulate
in the area concerned.
4. Pay the filing fees to the Cashier
5. Claim the Certificate/License from the Releasing Unit, Records Division upon presentation of the
official receipt issued for payment of filing fee.

For complete details and online registration, visit [Link]/[Link] (Links to an external site.)

Registering with the Social Security System (SSS)

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

Register at:

Social Security System (SSS)

SSS Bldg., East Avenue, Diliman, Quezon City
Tel. Nos. 920.6401/920.6446
Email: member_relations@[Link]/website:[Link]

Single Proprietorship

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

Partnerships

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

Corporations

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

For complete details and information, visit [Link] (Links to an external site.)

Registering with the Cooperative Development Authority (CDA)

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

Register at:

Cooperative Development Authority (CDA)

6/F, Benlor Bldg., 1184 Quezon Ave., Quezon City
Tel. No. 373.6895
Website: [Link] (Links to an external site.)

Steps:

•
o
▪ Submit four copies of the Articles of Cooperation.
▪ Submit four couples of the By-Laws.
▪ Submit four copies of the Economic Survey (feasibility study).
▪ Submit Bond Accountable Officers (Fidelity, Cash, or Surety).
▪ Capitalization should not be lower than P2,000 (depending on the activities registered).
▪ At least 15 members are required.

For complete details and information, visit [Link] (Links to an external site.)

Registering with the Bureau of Internal Revenue (BIR)

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

•
o Secure a permanent record file number of Tax Identification Number (TIN) from the BIR from
National Office in Diliman, Quezon City.

•
o Register the business /trade name at the BIR Office nearest you. Secure and file an application

form, together with supporting papers, as follows:

•
o Mayor’s Permit
o Certificate of Business Name Registration from the DTI
o Articles of Partnership or Corporation
o Community Tax Certificate
o Secure authority to print books of account, invoices, receipts, and other accounting records by filing up
for copies of an application form. Attach four draft copies of the material to be printed as well as a copy
of the job order.

•
o Register book of accounts, invoices, receipts, etc.
 For complete details and information, visit [Link] (Links to an external site.)

Registering with the Department of Labor and Employment (DOLE)

Business establishments with one or more employees are required to register with DOLE, the agency which
monitors compliance with labor laws.

The Bureau of Local Employment administers the registration of establishments.

To register, secure, and fill up a registration form. Corporations are required to attach a Photostat copy of the
SEC Certificate of Registration.

Register at:

Department of Labor and Employment (DOLE)

2/F, Dy International Bldg., San Marcelino cor. Gen. Malvar St. Malate, Manila

Tel. No. 339.2013/527.8000

Email: osec@[Link]/Website: [Link] (Links to an external site.)

Registering with the Local Government

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

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

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

Registering with the Other Agencies

Depending on the type of products they manufacture or handle and on their market orientation, certain firms are
required by law to register with other government agencies.

Bureau of Food and Drugs (BFAD)

Civic Drive, Fillnvest Corporate Center,

Alabang, Muntilupa City
Tel. No. 809.4390
Fax No. 807.0751
Email: bfad@[Link]
Website: [Link] (Links to an external site.)

(Links to an external site.)For manufacturers of drugs, cosmetics, and food products

National Food Authority (NFA)

Department of Agriculture

North Avenue, Diliman, Quezon City

Tel. Nos. 435.3900/981.3800
Fax No. 453.3900
Email: mailbox@[Link]
Website: [Link]

For rice, corn, and flour dealers

Fiber Industry Development Authority (FIDA)

Asiatrust Bank, Annex Bldg.,

1424 Quezon Avenue, Quezon City
Tel. Nos. 373.7486/ 434.4126
Fax No. 373.7494
Email: fida@[Link]
Website: [Link] (Links to an external site.)
For processors and traders of fibers and fiber products

Bureau of Fisheries and Aquatic Resources (BFAR)

Philippine Coconut Authority Bldg.,

Elliptical Road, Diliman, Quezon City
Tel. Nos. 929.9597/ 929.8974
Email: info@[Link]
Website: [Link] (Links to an external site.)
For those engaged in the export of fish and fish products, and other aquatic products
Bureau of Animal Industry (BAI)

Visayas Avenue, Quezon City

Tel. Nos. 926.6883/ 927.0971
Email: [Link]@manila_online.net
Website: [Link]

For exporters of animals and animals by-products

Bureau of Plant Industry (BPI)

692 San Andres St., Malate, Manila

Tel. No. 525.7857/ Fax No. 521.7650
Email: buplant@[Link]
Website: [Link] (Links to an external site.)

(Links to an external site.) (Links to an external site.)For exporters of plant and plant products

Forest Management Bureau

FMB Building, Visayas Ave.,

Diliman, Quezon City
Tel. No. 927.4788
Fax No.(63-2) 928.9313
Email: fmbdenr@[Link]
Website: http;/[Link]

For exporters of forest products (e.g., logs, lumber products, plywood, etc.)

National Tobacco Administration

NTA Bldg., Panay Avenue corner

Scout Reyes Street, Quezon City
Fax No. 373.2097/ 374-3987
Email: mis@[Link]
Website: http;//[Link]/

For those engaged in the production or export of flue-cured Virginia type tobacco, Burley tobacco, and
Turkish/Oriental tobacco products.

Intellectual Property Office of the Philippines (IP Philippines)

I [Link] (Links to an external site.)
P For firms wishing to register patents and trademarks
O
B
l
d DTI- Bureau of Trade Regulation and Consumer Protection
g (BTRCP)
.
, 2/F. Trade and Industry Bldg.,
3 3
5 6
1 1
S S
e e
n n
. G
G i
i l
l P
P u
u y
y a
a t
t A
A v
v e
e .
. M
, a
M k
a a
k t
a i
t C
i i
C t
i y
t T
y e
Tel. l
No. .
752.54 N
50 o
Fax .
No. 7
890.48 5
62 1
Email: .
mail@i 0
pophil. 3
[Link] 8
Websit 4
e: Email: btrc@[Link]
 For in the servicing, repair or maintenance of vehicles, engines and
ente engineering works, electrical components, electronics, air
rpri conditioning and refrigeration, office machines and data
ses processing equipment, medical and dental equipment. Technical
eng personnel, (e.g., mechanics or technicians) are also within the
age scope of the BTRCP.
d
dire
ctly
or DOLE, SEC, DTI are among the different government agencies
indi responsible for the registration of new enterprises.
rect
ly The Business Plan

The business plan is a blueprint of the business that the entrepreneur would like to start. It aims to
establish if a business idea will bring in a fair return to one's investment, will be beneficial to society, and will
bring no harm to the environment when it is operated. There are many business ideas that may look attractive to
the entrepreneur at first, but not necessarily "doable."

The goals of a business plan are;

• to assess the feasibility of the business idea,

• develop business strategies to make the business idea doable, and
• to use it for obtaining resources, especially loans from financial institutions like banks.

According to the Department of Trade and Industry, through the Bureau of Small and Medium Enterprise
Development (BSMED) the following are the reasons why an entrepreneur still needs to make a business plan,
no matter how good the business idea seems to be:

1. Reduce, if not remove, the risk of losing money invested in a poorly re-searched or unstudied business
idea. The entrepreneur should find out where one's money is going before letting go of it.
2. Avoid costly mistakes. Every sudden or careless decision the entrepreneur makes for the business entails
costs that one might not be able to recover.
3. Anticipate financial requirements. It is always wise to foresee sudden increases or decreases in the
demand for the product or service so that the entrepreneur can plan for the lean months and ensure that
the business will have enough resources to meet business obligations during the periods when sales are
low.
4. Organize the activities beforehand. As a road map on unfamiliar territory, it allows the entrepreneur to
estimate how the business will perform in the future and to prepare for contingencies in case things will
not turn out as planned.
5. Assess actual performance against set goals. It enables the entrepreneur to set targets in terms of sales
volume and revenues, as well as expenses, among others. Once the business is put up, the entrepreneur
can always go back to the business plan to compare actual performance against the set goals.
6. Apply for financing from lending institutions. A well-prepared business plan can be the back-up
support to convince possible sources of capital, especially banks, that something good will come out of
the business idea.
 A business plan is very important to various parties. Among those who need business plans are the
management team, shareholders, bankers or creditors, customers, suppliers, and employees. To gain
their confidence, these stakeholders will have to be informed about what are the purposes, directions,
core business, and financial situation of the business venture from the time it will start and in the next
few years based on its forecast. Therefore, a good business plan is made up of the following essential elements
as shown below:

Business Plan Outline (basic requirements)

1. Executive Summary

o Description of the proposed business and business model

o Description of the market opportunity to capture, or market problem the business solves
o Reasons for why this is an attractive business opportunity
o Key distinctions or differentiators of the business versus competitors
o Overview of the sales, marketing. and operations strategy and plan
o Description of the execution plan and timeline
o Overview of projected financials containing revenues, costs, profits, and assumptions

2. Management and Organization

o Company Name, Logo, and Address

o Vision and Mission Statements
o Key personnel
o Workforce and Support personnel
o Organizational chart
o Ownership, Capitalization, Compensation, and incentives
o External Management Support

3. Product/Service Plan

o Purpose of the product/service

o Product's unique features
o Material requirements and sources of supply
o Process and equipment that will be used to manufacture the product/render the service
o Production/Service Process and Controls
o Distribution logistics
o Regulatory and other compliance issues
 4. Market Plan

o Market Analysis which includes demand and supply vis-à-vis competitors

o Marketing and Sales Strategies
o Product/Service Characteristics or features
o Pricing policy
o Sales Projections

5. Financial Plan

o Start-up Costs requirements

o Financial Projections
o Breakeven analysis
o Budget

Sample of an Actual Simple Business Plan

Executive Summary

My T-Shirt Company will offer personalized, good quality, and fashionable printed casual T-shirt wear
that are attuned to the needs of the youth in Bulacan. Historical data shows that there is an increasing demand
for t-shirts among high school and college students in Bocaue, Bulacan. However, the existing five big
competitors are not able to meet such demand resulting in a big gap. This means that there is a big unmet
demand in the market for the printed silkscreen t-shirt. Our primary strategy is to offer customers a variety of
options for choosing their own custom shirts. Most of the orders will be for white t-shirts; however other
colored t-shirts will be available both for women and men. The customers may choose from the existing
designs, supply their own, or have our graphic designer create a design for them. Our business will initially
operate a home-based and use social media (e.g. Facebook and Twitter) to showcase designs and actual T-shirts
with silkscreen designs for ease of browsing and ordering. Any customer will have the option to pick-up their
merchandise or have it delivered at their convenience. The pre-designed shirts will also be available on school
bazaars, have a number of competitive features that will be used to its advantage to achieve market penetration
such as its large catalog of graphics and the affordability of the shirts. Initial capitalization for the business is
Php 49,700 good for a one-month expense. Expected revenue for Year 1 is Php 147,532,80 while the total cost
of goods sold amounted to Php 568,800.00.

(note: You can make your executive summary after all parts of your business plan are done)
Management and Organization

Company Name: My T-Shirt

Logo:

Address: 88 Ocampo Street, Bocaue, Bulacan

Vision Statement:

"My T-Shirt will be a leading provider of personalized, good quality, and fashionable printed casual T-
shirt wear that is attuned to the needs of the youth.'

Mission Statement:

"My T-shirt is a socially responsible company providing high quality, personalized, and reasonably priced
printed T-shirts which caters to the clothing needs of the youth in Bulacan."

Key personnel: manager

Workforce and Support personnel: graphic designer/production assistant

Organizational Chart:
 (Note: Add the description/work of each position in your organizational chart)

ex. Manager - He will be the overall in-charge of the business. He will manage the operations, financial,
and marketing areas of the business.

Ownership: Single Proprietorship

Capitalization: P49,700.00 (note: make a detailed breakdown of your capitalization in the financial section)

Compensation and incentives: Minimum wage based on a daily rate as provided by law.

External Management Support: Parents and Entrepreneurship teacher will be tapped as Advisory Council.

Product Plan

Purpose of the Product

My T-Shirt will offer customers a variety of options for choosing their own custom shirts. Most of the orders
will be for the white-shirts; however other colored t-shirts will be available both for women and men who are
looking for casual yet trendy shirts. The customers may choose from the existing designs, supply their own, or
have our graphic designer create a design for them.

Product's Unique Features

My T-Shirt has two unique features. The first is the wide array of graphic designs and create your own or
personalized design, graphics, and slogans that connect with the customers and reflect their opinions and
personality. The second unique feature is the high quality of screen printing which is made from the premier
silkscreen ink and paints and handled with utmost care in every print. Below is a sample of a T-shirt design.

Sample t-shirt:
Material and Equipment requirements and sources of supply

The materials requirements and their sources are as follows:

MATERIALS SOURCE
Silkscreen printing specialty store in
Screen printing press
Divisoria

Wood screen Hardware store in Bocaue, Bulacan

Squeegee Hardware store in Bocaue, Bulacan
Silkscreen printing specialty store in
Silkscreen fabric ink
Divisoria
Silkscreen printing specialty store in
Photo emulsion
Divisoria
Lightbulb Hardware store in Bocaue, Bulacan
Shirt Wholesale Store in Divisoria
Transparency or acetate film Bookstore in Bocaue, Bulacan

Production Process and controls that will be used to manufacture the product

Below is the Silk Screen Process using the Photographic Emulsion Method

1. Create your design

▪ Print out a solid image design on a transparency paper

▪ Or cut out a stencil pattern depending on the design

2. Prepare the frame

▪ Coat the screen with photo emulsion

▪ Leave it to dry in a darkroom from light and heat, especially direct sunlight

3. Transfer image

▪ Lay the screen on top of a black cloth or board for better light absorption.
▪ Place the transparency or stencil on the screen with scotch tape or lay a piece of glass
over the image to hold it tight to the screen
▪ Expose the emulsion under a light source, preferably a lightbulb or direct sunlight, for 20-
30mimutes to harden
 4. Clean the screen

▪ After emulsion has been exposed, remove transparency

▪ Rinse off the ink on the screen with water until the design can be seen

5. Screen the shirt

▪ Lay the shirt top of the silkscreen press

▪ Mount the screen in the clamps of the press and push the screen down on your fabric
▪ Place a small amount of printing ink along the top of the screen then pull it over the
image with a squeegee

6. Clean up

▪ Lift the screen and remove the shirt to dry

▪ Immediately wash off the ink on the screen so it can be used again in the future, as the
ink dries fast and can ruin the screen
▪ Iron or oven the shirt after has been dried to beat set it and prevent the design from
washing out after repeated washing

The t-shirt printing quality control will be ensured in each of the steps in the production process based
on standard since screen printing is an old technique that has stood the test of time. The Photographic Emulsion
Method is one of the most popular methods for printing onto t-shirts; screen printing can produce a durable and
long-lasting result. However, a labor-intensive initial setup means screen printing is the most cost-effective
when printing in bulk. When screen printing complex designs or designs more than four to five colors, the
owner-manager will supervise and work closely with the graphic artist/production assistant to be sure that the
best quality will be produced as desired. The quality control of the T-shirt is of utmost importance. This means
that the quality of the T-shirts to be used and the prints needs to be top-notch. A pattern that fades and cracks or
a t-shirt that shrinks and rips easily will make the customer to come back and repurchase. Quality t -shirts
encompass several factors, including fit, sizing, material, softness, and weight. To ensure that these will be met
and decide which blank t-shirt to use is to get feedback of some of the most popular blank t-shirts for printing.

Then, personal canvassing in Divisoria of each of the t-shirts will be done.

Distribution logistics

My T-shirt Company will initially operate home-based and use social media (e.g. Facebook and Twitter)
to showcase designs and actual T-shirts with silkscreen designs for ease of browsing and ordering. Any
customer will have the option to pick-up their merchandise or have it delivered at their convenience. The pre-
designed shirts will also be available on school bazaars, local bazaars in Bocaue, and fairs on some occasions.
Regulatory and other compliance issues

My T-shirt Company will be registered as a single proprietor enterprise with the Department Trade and
Industry provincial office. A Barangay clearance will also be secured before it applies for a Mayor’s permit to
operate as a home-based business micro-enterprise. The BIR registration will also be done after getting all the
necessary registration documents and permits from DTI, Barangay, and Mayor’s Office. The owner/manager
and the graphic designer production assistant will be registered with the Social Security System.

Market Plan

Market Analysis which includes demand and supply vis-ả-vis competitors

Historical Total
Total Supply: Previous 5 Years T-Shirts
Data Supply
Demand Sold by the Competitors per Year
(5 years)
A B C D E
Year 1 196,029 1110 1221 1343 1477 1625 6776
Year 2 245,037 1221 1343 1477 1625 1788 7554
Year 3 306,296 1343 1477 1625 1788 1966 8198
Year 4 382.870 1477 1625 1788 1966 2162 0919
Year 5 478,588 1625 1788 1966 2162 2379 9920

(Note: Just assume values for this table since you can't go out to collect data. this data will be used for financial
projections.)

The above table shows that there is an increasing demand for t-shirts among high school and college
students in Bocaue, Bulacan. However, the existing five big competitors are not able to meet such demand
resulting in a big gap. This means that there is a big unmet demand in the market for the printed silkscreen t -
shirt.
Marketing and Sales Strategies

Marketing Strategy

An aggressive marketing campaign will aim to increase the visibility of My T-Shirt. This will emphasize the
customer’s preference to completely customize or personalize their design. My T-Shirt will utilize a number of
venues to communicate this message.

▪ Social Media – the company will be active on social media platforms specifically Twitter,
Facebook, Instagram, and Pinterest, to increase awareness and visibility to the younger
generation, particularly the millennial.

▪ Student Organizations – the company will attempt to gather data on the various student
groups who actively purchase shirts for their members. A linkage will be established with
them so that they become aware of the My t-Shirt products. This will achieve through a
combination of sponsorship of student organization events as well as advertisements
through tarpaulins and flyers that specifically target this demographic.

Sales Strategy

The sales strategy will emphasize that ordering and buying a shirt from My T-Shirt is very easy, accessible, and
a pleasing experience. The sales effort will work on the possibility of having its own website in the long run, the
main tool used for ordering. It will be quite to have a friendly, easy to use the web interface in the future course
of the business.

My T-shirt will also rely on three other factors to help boost sales. The first is exemplary customer
service. Having excellent service will provide the customer with the feeling that the business is looking out for
the customer’s interest. Second, when a customer places an order, they will probably be excited to see the
finished product, so My T-Shirt will ensure the shortest turnaround time possible. Lastly, sales will be boosted
by offering customers a very good product. My T-Shirt will ensure economical value for the T-shirt without
sacrificing its quality.

Product Characteristics or features

My T-Shirt products have a number of competitive features that will be used to its advantage to achieve market
penetration.

o Large catalog of graphics – customers will be offered an array of designs or graphics to choose
from which are conceptualized by the in-house graphic designer. Your T-Shirt! pays a royalty for
use of these graphics.
o Affordability of the shirts – teenagers still being dependents and having a limited budget to
splurge, it is favorable for them to have access to inexpensive yet quality shirts.
Pricing policy

My T-Shirt Company will adopt the differing price based on the size and complexity of the design policy. As
such, below is the pricing scheme that will be adopted:

SIZE OF THE T-SHIRT PRICE (PESO)

Small 160
Medium 170
Large 180
Extra Large 190

Sales Projections

Market Analysis Summary

The demand for silkscreen printed shirts in Bulacan has shown steady growth over the last 5 years. It was
observed the high school and college students are among the biggest market for the product. These market
segments favor trendy and quality shirts at an affordable price. To increase market penetration, My T-Shirt will
offer a large catalog of graphics aside from the affordable shits to its intended market segment. At the same
time, an aggressive marketing campaign will be done to increase the visibility for My T-Shirt through the use of
social media and tapping the various school student organizations. My T-Shirt offers a price differential based
on the size and complexity of the t-shirt design with prices ranging from Php 160-190.

Financial Plan

• Start-up Costs Requirements

• Financial Projections
• Breakeven Analysis
• Budget
(Note: in this section, you are not required to do all the financial plans. Only the start-up summary is required)

References

(Note: write all your cited articles/insights from the net)

 LESSON 4

Entrepreneurs and Entrepreneurial Competencies

“What is emerging today is a class of professional entrepreneurs who rely more upon their brains than their
guts and who have been trained to use both methods and technology to analyze the business environment." -
Dollinger

Concept of Competencies Entrepreneurs Today

There is no universal definition of an entrepreneur. Being an entrepreneur means different things to

different people. From an economist's point of view, it is someone who brings resources, labor, materials, and
other assets into combinations that make their value greater than before; also, one who is “typically driven by
certain forces such as the need to obtain or attain something, to experiment, accomplish, or perhaps to escape
the authority of others," is an entrepreneur. But from a management perspective, the entrepreneur is "someone
who identifies opportunities, plans, mobilizes resources, manages, and assumes the risks or a business to have a
positive impact on society"

The 21st century is considered the entrepreneurial era. This number of entrepreneurs increases every
year, such that in 2006, about half a billion people worldwide were either actively engaged in starting a new
venture, or were owner-managers of a new enterprise. The Global Entrepreneurship Monitor (GEM) reported
that also in 2006, approximately 19 million Filipinos, or 39% of the population, are engaged in various types of
business activity. GEM further recorded that the Philippines had the highest established business rate globally,
with one out of five Filipinos or 19.73% owning and managing an established business.

Globalization is coupled with changes in the social, economic, political, and technological environment.
These factors altered the specific dimensions of being an entrepreneur. What is emerging as the characteristics
of entrepreneurs today is shown in the table below:

ENTREPRENEUR
IN THE PAST TODAY
DIMENSION

Educational Attainment Less Educated Highly educated

Gender Older Younger

Mixed ownership by women and

Previous Experience Dominated by males men
Less business and experience More business or employment
Knowledge of Business
employment experience

Utilization of Relies on manual systems Proficient in and uses to a large

information technology extent of information technology

Innovation orientation Automation for efficiency Values innovation for a new

venture creation and discovery

Goal Economic and financial gains Social, ecological and economic

gains

Ethical, transparent, and group

Principle of governance Compliance and centralized
accountability
More flexible to better balance
Use of work structure Highly structured to meet demands
their work and family lives

Leadership Style Directing Empowering

Drive orientation To get ahead To make a difference
Perspective of self-
“ I can do it” “We can do it”
confidence

A review of the literature showed that the personal characteristics often attributed to entrepreneurs are
confidence, flexibility, need to achieve, responsibility, commitment, creativity, persevering, goal-oriented,
realistic, sincere, hardworking, visionary, disciplined, feedback-seeking, moderate risk-taker, and many
more. These data likewise revealed some common profile dimensions which are also applicable even among
Filipino entrepreneurs today. The following is a compilation based on various sources:

Calculated Risk Taker

Calculated risk-taking is doing everything possible to get the odds in their favor, and they often avoid
taking unnecessary risks.

Examples of this includ, creditors giving discounted interest rates, and suppliers offering special terms of
payment for the raw materials. These could all help to lessen the risks entrepreneurs have to face in
managing the business.

Committed

Commitment is the unwavering dedication to work for the common good of the society through one's
business.

Examples of this include a willingness to use one's own savings, sacrificing family time, and working long
hours, and traveling to different places to acquire needed resources.
 Feedback-seeker

Feedback-seeking is the taking of steps to know how well they doing and how they might improve their
performance.

One example is by constantly asking for comments, reactions, and suggestions from their employees and
customers, then using this feedback to improve their product or services.

Persevering

Perseverance is the determination to succeed by overcoming obstacles and setbacks. Often,

entrepreneurs will not easily give up when problems come their way. They will try to see opportunities
even in times of crisis and look for options for the business to succeed.

Examples of this include borrowing money from other sources to augment capital; looking for and training
employees when there is an exodus of people to work abroad; and asking for the help of the government to give
more support to small businesses.
 Achievement Oriented

Drive to achieve is the internal desire to pursue and attain challenging goals. Entrepreneurs examine the
situation, plan how to achieve their goal given the conditions, and then push ahead.

Examples of this include assessing their business performance regularly based on set standards; analyzing how
one's competitors are doing in the market; and planning strategically to sustain the business.

Self-confident

Self-confidence is the belief that together with other people, things can be done in the business.
Entrepreneurs seldom waver in their conviction.

An example of this is having a positive belief and allowing those around them to help during a crisis or non-
profitable period for the business.
 Opportunity Oriented

Opportunity orientation is a constant awareness of opportunities that exist in everyday life. Entrepreneurs
begin with the opportunities they see and utilize these opportunities.

Examples of this include studying the change in consumer preferences to improve an existing product/service or
introduce a new one importing more of the needed raw materials when the government provides more tax
incentives to import raw materials; and availing of additional capital when interest rates for loans from banks
are low and there are no other sources accessible.
 Innovative

Innovativeness is the ability to come up with something different or unique every time. This can be in
terms of a new product, service, process, market, or technology. This trait is often related to creativity
or thinking- out-of-the-box in any given situation to look for an opportunity for business.

Examples include the development of new models of iPod/mobile, Phones, home delivery of products from
supermarkets/drugstores, online buying of many products (books, clothes, jewelry, food); introduction of online
services (class enrolment, payment of bills, deposit/withdrawal of accounts); and ethnic cuisines prepared in
attractive ways by restaurants.

Responsible

Responsibility is their willingness to put themselves in situations where they are personally responsible
for the success or failure of the business operation. This is the essence of being accountable for whatever
is done by subordinates.
Examples of this include taking on the blame for mistakes of the employees; admitting to customers that there is
an error that was done and that this will be corrected; and standing up for what is right for ethical issues that
will put the company in a dilemma.

Resilient

Tolerance for failure is using it as a learning experience. Serious setbacks and disappointment become
an integral part of the learning process. Entrepreneurs are realistic enough to expect such difficulties,
so they do not become disappointed, discouraged, or depressed by a setback or failure.

Examples of this include confronting the source of their problems like employees or suppliers; not repeating the
same mistake in the production of a product; and admitting to the customer that there is a need to improve their
services so that the same or similar complaints are avoided in the future.

Marketing

The 7Ps of Marketing

 “Everything matters with marketing and that broad, integrated perspective is often necessary”. (Kotler &
Keller)

estimate potential market demand. Estimation is an educated guess. The best way to be very certain and
confident about estimates for potential market demand is to look for facts about the industry where the
entrepreneurs intend to enter. Census data is a good source of estimates to be able to project sales.

The traditional marketing mix elements comprised of the 4Ps of product, price, place, and promotion
has enjoyed tremendous popularity over the years in an era where most business sold products. In 1981, Booms
and Bitner extended the marketing mix by 3 new Ps that directly relate to the service provision industry. These
new elements are people, physical evidence, and process. The marketing mix decisions are made for
influencing the trade channels as well as the ultimate customers’ solution, cost, convenience, and awareness of
what is being offered in the market. These 7Ps or element of the Marketing-mix can be defined base on the
publication cites in 7Ps in Marketing (2014) and other sources about the topic: (Adapted from entrepreneurial-
[Link])
Product

The product should do what the customer wants or needs it to do. Whether it’s a CPG product
(Consumer Packaged Goods), a luxury item, digital service, or anything else, it should live up to the
expected level of quality.

In order to design or identify a suitable product, the business should conduct thorough research
into the tastes, requirements, and buying habits of its target audience. This research-backed approach
provides a surer path to commercial success than simply creating a product under the assumption it will find its
place in the market.

In the manufacturing industry, the production and consumption of the product are not simultaneous and
it is tangible, not always diverse nor usually perishable. “In the service industry, the production and
consumption of the product are simultaneous and the product is intangible, diverse, and perishable. The
nature of this ‘product’ allows for on the spot customization. This also means that the point at which this
activity is occurring becomes very important.”

Price

The product should be sold at a price that the target audience deems to be good value-for-money.

When calculating product price, we must take into account all the costs entailed in producing,
promoting, and delivering that product. If production and promotion are set to carry relatively high costs, this
should be reflected in an appropriately high price.

Effective pricing is not a simple matter of offering a cheaper alternative to the competition. Imagine
you’re in a supermarket, browsing the wine section. Whether consciously or not, you will likely select a bottle
within a quite specific price range, which is habitual to you. You’re highly unlikely to consider the bottles well
outside of your habitual price range – even if a cheaper alternative is in-fact better suited to your taste. Thus,
the cut-price vintner’s underpricing of the product causes them to miss out on a sale.

The superior approach, then, is to identify the price your target customer is used to paying for products
and services similar to your own, taking into account your costs and the profit margin required.
 With a product, the materials that go with it can be measured and its actual tangible cost of production is
also measurable Therefore, it is not that difficult to put a price tag on it. However, “since a service cannot be
measured by what material goes into its creation nor is the actual tangible cost of production measurable,
it can be challenging to put a price tag on it. There are some tangibles of course, such as labor costs and
overheads. But additionally, the ambiance, the experience, and the brand name also factor in to the final
price offering.”

Place

The product should be available where the customer expects to find it, e.g. in supermarkets, at
boutiques, or online. Let’s say you’ve got an amazing sandwich bar in the making, and you decide to place it
in a top restaurant district. This would be a serious misplacement, as you’d be targeting the wrong market.

Further, we must identify how the product should be presented in each context. For example, which aisle
of a supermarket should a CPG product be stocked in? Should it be sold in a trade promotion? In which contexts
should it appear as an online ad?

The place also takes into account the logistical factors affecting a product’s profitability, such as
storage and distribution. This is as true of digital products and services as it is of traditional ones, with factors
such as website design and hosting costs to consider.

In e-commerce, the device type preferences of the target audience should also be factored into your
planning. Your customers’ desktop, tablet, and mobile usage habits should determine the level of priority you
give to each device in your digital marketing.
 The product is not necessarily produced and consumed in the same place. The place of
production or the plant site can be different from the place of distribution or selling.

"As mentioned, the service is produced and consumed in the same place. It cannot be owned and taken
away from the location. This is why the place at which this transaction occurs is of vital importance. The
location of the service provision is carefully analyzed to allow ease of access and the desire to make the effort to
reach it. Fast food restaurants and sales and service centers may be located in busy main streets to allow walk-in
customers, while a fine dining restaurant may be located in a quiet street to maintain exclusivity and privacy."

Promotion

The product should be promoted to the appropriate audience via appropriate channels, using
advertising methods that resonate with that audience. These channels may include (and are not limited to):

• branding
• advertising
• PR
• corporate identity
• social media
• content marketing
• influencer marketing
• sales management
• promotions
• exhibitions

The product/service benefits and features highlighted through promotion should align with the audience’s
most compelling requirements. Promotion may differ somewhat in tone and content from channel to channel –
but never in such a way as to create contradictions.

It fulfills the same role as it does in any other marketing context. Service may be more easily replicated
than a physical product. To prevent a service from becoming interchangeable with its competitors, it becomes
vital to create a desirable brand image and name in the market. Differentiation becomes a key goal in order to
attract both new and repeat customers.
 People

The team involved in the delivery of the project should possess the skills and qualities needed to ensure
its success (barring unforeseen mishaps).

This is perhaps especially true of customer-facing staff, whose communication and behavior will greatly
impact the audience’s perception of the brand. You could well have developed the best product of its kind – but
if your customer-facing people are off-putting to customers, the project will not reach its full commercial
potential.

As such, marketing campaign teams must put in place processes and best practices for how customer-
facing team members behave publicly and communicate with customers. Methods for doing this include
distributing a social media policy (Links to an external site.), paying attention to communication skills when
hiring customer-facing staff, providing training on good communication, and imposing disciplinary measures to
deter misbehavior.

In the production of a product, the people needed to do the tasks are not directly dealing with customers
so that the customer service training is not a priority but production-related training is. People element is vitally
important in the service marketing mix. “When a service is being delivered, the person delivering it is not
unique from the service itself. When dining at the restaurant, if a rude waiter is encountered, the entire
experience will be labeled as bad service. This is why many businesses invest in defining the right kind of
person to fill their service role and then making efforts to find or train people to fit this definition.”

Process

The processes involved in a product’s delivery will significantly affect the customer’s experience, level
of satisfaction, and lifetime value to your business. These processes may include (and are not limited to):

• Website user experience

• Delivery time
• Delivery methods and service
• In-store wait time
• Communicating with customer support
• Aftercare
 In addition to the processes used to deliver a product or service, we must also have processes in place for
when something goes wrong – for example, the allocation of appropriate compensatory gifts for customers
who’ve had a bad experience.

Production of a product can be standardized, customized/personalized, or both. The processes of

production can involve steps/procedures that require precision and standard measures of inputs to produce the
desired quality and quantity of the product. However, "since service provision needs to strike a balance between
customization and standardization, the process involved in the activity requires special mention and attention. A
process needs to be clearly defined for the service provider. This basic process should ensure the same level of
service delivery to every customer, at any time of day, on any day. Within this process, there should provide a
unique experience"

Physical Evidence

The final P refers to the physical context and paraphernalia (such as receipts, “thanks for ordering”
cards, confirmation emails, and PDF invoices) that come along with the product. In order to reinforce the
product’s and the seller’s credibility, these components should exhibit the qualities customers expect of them,
based on up-to-date industry standards.

For example, precious jewelry might be displayed within a locked cabinet; ethical supermarkets might
choose to use as little print as possible on their receipts (or offer digital receipts as an alternative), and doctors’
surgeries should look suitably clinical.

In a nutshell, “Physical evidence” is all about ensuring every component involved with the product
adheres to the same brand values as the product itself. This creates a consistent, convincing experience for the
customer.
 With a product, the location of the manufacturing site or plant site is dependent on the availability and
accessibility of materials, manpower, machinery, nature of the product, and the target market “With service, the
location of the service delivery also takes on significance. The level of comfort and attractiveness of a service
location may make a lot of difference to the user experience. A calm and soothing environment with thoughtful
comfort measures may provide a sense of security to a new customer which will make them return."

Watch the video for more explanation.

[Link]

Sample:
 Market Research

“Research is formalized curiosity. It is poking and prying with a purpose.” (Zora Neale Hurston)

Market research is the process of gathering information that will make the company more aware of how
the people the company hopes to sell to, will react to the company’s current or potential products or services. It
is simply an information-gathering exercise to determine the viability or acceptability of a product or service an
entrepreneur can have the information needed to make informed business decisions about start-up, innovation,
growth, and the 7Ps. Rather than making decisions based on just the entrepreneur’s own ‘gut feeling’, market
research leads to more informed and therefore better decision making about the business. Market research is
important for every business, and should not be just a one-off activity. Successful businesses conduct
research on a continual basis to keep up with market trends and to maintain a competitive edge. Regardless
of whatever an entrepreneur is starting or expanding its business, market research is necessary for understanding
its target market and increasing sales (“The importance of market research,” n.d.).

Today, business owners conduct market research for a lot of reasons such as the following (“The
importance of market research,” n.d.);

Identify potential customers

Who is going to use your product/service? How old are they? Are they male or female? Are they married,
single, or separated? do they have children? Where do they live? What is their level of education?
 Understand existing customers

Why do customers choose your product over competitors? What do they value? It is service. Product quality or
the prestige associated with consuming your product/service? Who influences their buying decision? What
magazines do they read? What websites do they visit? What do they enjoy doing?

Set realistic targets

From the information, you collect you will be able to set realistic targets for areas such as growth, sales, and the
introduction of new products/services.

Develop effective strategies

From your research, you will be able to make informed marketing decisions about how to price your
product/service, how to distribute product/service, which media channels to use (e.g. newspaper, radio, or direct
marketing) or whether to develop a new product/service. It will also help you make an informed decision about
starting, building, consolidating, diversifying or reducing business activity.

Examine and Solve business problems

If you have identified a business problem, research will help you work out what is happening. For example, if
your sales have fallen you might discover that brand awareness has also fallen, or that a new competitor has
entered the market or a substitute product has become available.

Prepare for business expansion

The research will help you identify areas for expansion and test the market’s readiness for a new
product/service. For example, you could be looking to open a new retail store and you need to find the right
location or you could plan to or make changes to your distribution channel (e.g.; from home parties to retail).
 Identify business opportunities

Your research could identify new business opportunities. You may find an un-serviced or under-serviced
market. You could identify changing market trends such as population shifts, increasing levels of education, or
leisure time which bring new opportunities.

According to the Guide to market research and Analysis (2015), to conduct market research, it is important to
set clear goals for the market research market and define what is needed to be known and why. Then, it is vit al
to develop a strategy and select data gathering techniques that will be used. This can be done either through
primary and secondary research.

1. Primary research is information gathered directly from the respondents who answered a set of
questions. This information is usually collected through surveys, observation, focused group discussion,
or experimentation. Surveys are the most common way to gather primary research with the use of a
questionnaire or interview schedule. These can be done via direct mail, over the phone, internet (e.g.
Google survey) or email, face-to-face, or on the web (e.g. Skype or Viber). When designing or
constructing your own research questionnaire, remember the following guidelines:

▪ Keep it as short and simple as possible.

▪ Make sure it is visually appealing and easy to read.
▪ Cluster or block related questions.
▪ Move from general questions to specific questions.
▪ Move from easy to answer questions to more difficult to answer questions.
▪ Make sure questions are brief and easily understood.
▪ Avoid leading questions, questions with ambiguous words, questions that are too difficult
to answer (due to recall problems, etc.).

Focus group discussions (FGDs) are now gaining wider usage in market research due to substantial
information gathered given a time limit. It can be moderated group interviews and brainstorming
sessions that provide information on users’ needs and behaviors. As explained in the Guide Market
Research and Analysis (2015).
 FGDs can be useful for the following types of discussions:

Exploratory-Obtain information on general attitudes, understand the circumstances under which

customers might require your product or service, understand their desired outcomes.

Feature prioritization - If trade-offs have to be made among various customer needs, focus
groups can be helpful in prioritizing them.

Comparative analysis – Understand where else customers go to get similar information,

services or products and what attracts them to those sources.

Trend explanation- If you notice a trend in the way that customers use your website (for
example, they always use the research function rather than navigating through the structured
product list), then focus groups can be used to better understand why this is happening.

Furthermore, the Canada Business Network ("Guide to market research and analysis, 2015), also
discussed the following considerations in the use of FGDs in market research:

▪ Limit the length of the session to between 90 and 120 minutes.

▪ Generally, conduct focus groups with 5 to 10 participants per group (recruit 10 to 12
participants to ensure that 8 to 10 show up)
▪ Use a knowledgeable moderator/ facilitator who can manage group dynamics, probe
skillfully to obtain a deeper understanding of issues, and capture a broad spectrum of
opinions.
▪ Use a semi-structured or open-format discussion.
▪ Strive for uniformity in the group’s composition. For example, it may not be advisable to
have business customers and retail customers in the same focus group, if their needs are
very different.
▪ If you feel that the group influence is likely to be a strong factor (participants will be
influenced greatly by what others are saying), then personal interviews or small groups
may be an option to consider than FGD.
Personal interviews are a traditional method of data collection which is normally done in a face-to-face
manner with the respondents. They can either be semi-structured discussions with individual or open-
ended questions where the interviewer can probe further to understand underlying perceptions and
behaviors of customers or other types of respondents.

As discussed in the Guide to Market Research and Analysis (2015), personal interviews are a more
expensive alternative to FGDs and generally used in the following situations:

▪ The topic is too personal or sensitive to be discussed in a group, or the confidentiality of

the participant is required.
▪ A person’s opinion may easily be influenced by others in the group.
▪ It is important to learn as much about what people don’t know about a subject, as what
they do know. In a group setting, knowledgeable participants may inhabit less
knowledgeable ones from participating.
▪ Logistic problems may make groups impractical. For example, if participants are
geographically dispersed, travel time and costs may be prohibited.
▪ The interview respondents are executives from competing firms who would be reluctant
to open up in a group situation.
▪ The interview respondents are busy and it is difficult to schedule group sessions, or it is
important to visit interview respondents individually at their
convenience.

Furthermore, the Canada Business Network (Guide to market research and analysis (2015), also describe
the following considerations in the use of personal interviews in market research:

▪ It can be helpful to use a list of mostly open-ended questions to be asked in person or by

telephone.
▪ An in-depth interview gives participants the opportunity to express their views.
▪ Interviews typically last from 15 to 40 minutes, but they can last longer, depending on the
participant’s interest in the topic.
▪ This technique allows the interviewer to get detailed descriptions of individual
experiences.
B. Secondary research gathers data from existing available resources like company records, databases, and
research reports published in the media, internet search engines, libraries, and books which answer the
question at hand. It is normally less time consuming than primary research and can be less expensive as well.
Existing company records such as sales invoices, receipts, and formal complaints are important
secondary resources that businesses can utilize. Oftentimes these records shed light on the same issues
businesses seek to address through primary research, and therefore an examination of company records should
be done before considering a customer survey or other form of primary research. Another key secondary
resource is statistical data from official statistics providers (like National Statistic Office; NEDA;
Department of Trade and Industry) and other organizations (Marketing Associations; Chambers of
commerce: Industry Associations). These statistics in turn can feed into analytical papers and market profiles
that can help to put the numbers in context.
 BRANDING

According to Canon, Perrault, McCarthy (2008), branding means “the use of a name, term, symbol, or design
– or a combination of these – to identify a product.” It encompasses the use of brand names, trademarks, and
practically all other means of product identification. A brand combines dimensions that differentiate the
offering in some way from other offerings designed to meet a similar need. These variations may be
functional, rational, or tangible – related to the brand’s product performance. They may also be more
symbolic, emotional, or intangible – related to what the brand represents (Canon, Perrault, and McCarthy,
2008).

The brand name has a narrower meaning. A brand name is a word, letter, or group of words or letters.

Examples of brand names are Air21; Datu Puti; TV5; PLDT; LBC; knorr; Fashion 21; Lucky Me!; The
Philippine Star; Downy; Mr. Clean; Cebu pacific; Close up, Mang Inasal; Dunkin Donuts; and Bench.

Well-recognized brands make shopping easier. Many customers are willing to buy new things – but they like to
buy a sure thing the next time. Brand names connect a product with the benefits a customer can expect. The
connection may be learned from the past consumer experience, from the company’s promotion, or other
advertising strategies (Canon, Perrault, and McCarthy, 2008).

Trademark is a legal term. A trademark includes only those words, symbols, or marks that are legally
registered for use by a single company. A service mark is the same as a trademark except that it refers to a
service offering. Below are the examples of recognized local trademarks/logos:

Brand logos are graphic marks or symbols commonly used by commercial enterprises, organizations
and even individuals to aid and promote instant public recognition.

Therefore, branding is providing products and services with the power of a brand. Branding is all about making
differences. To brand a product, it is essential to teach consumers “who” the product is – by giving it a name
and using other brand elements to help identify it – as well as “what” the product does and “why” consumers
organize their knowledge about product and services in a way that simplifies their decision making and, in the
process, offers value to the firm (Canon, Perrault, and McCarthy, 2008).

Here are the characteristics of a good brand name when an entrepreneur would like to develop a brand name:
 CHARACTERISTICS OF A GOOD BRAND NAME

Short and simple Suggestive product benefits

Easy to spell and read Adaptable to packaging/labeling needs
Easy to recognize and remember No undesirable imagery
Easy to pronounce Always timely (does not go out-of-date)
Can be pronounced in only one way Adaptable to any advertising medium
Can be pronounced in all languages (for
Legally available for use(not in use by another firm)
international market)

Types of brand names:

1. Descriptive
2. Evocative
3. Invented
4. Lexical
5. Acronymic
6. Geographical
7. Founder

In what follows, we take a look at the pros and cons of each of these types of brand names, as well as some
important things to keep in mind in any naming or renaming project.

1. Descriptive Brand Names

Descriptive brand names are those that readily convey the service or product offered by a company. Because of
this, they tend to be unremarkable. While functional and utilitarian, descriptive names leave little room for
creativity or interpretation. They often rely on a clever tagline to do the work of storytelling or conveying
personality.

Descriptive names include brands like:

• Toys R Us
• E*Trade
• General Motors
• The Coffee Company
• [Link]
 The upside of descriptive names is that they clearly communicate your company’s core competency. The
potential downside is that they hamstring your brand as it grows and looks to diversify. Descriptive names are
also notoriously difficult to trademark as, by definition, they rely on common words or phrases.

2. Evocative Brand Names

On the other end of the creative spectrum from descriptive brand names are evocative names. Evocative
names use suggestion and metaphor to bring to mind the experience or positioning of a brand. Evocative brand
names are often creative and unique and can make for powerful differentiators.

Because they leave some room for interpretation, evocative names enable you to tell a powerful brand
story, creating a brand that’s bigger than just the products or services you offer. In this way, an evocative name
can be the cornerstone of a brand’s positioning, where other types of brand names cannot.

Powerful examples of evocative names include:

• Nike
• Smart
• Datu Puti
• Puma
• Apple

Their originality means that evocative names are generally easier to trademark than descriptive names. It
can sometimes be challenging to get corporate buy-in on an abstract name that requires unpacking, though.
That’s why it’s so important to define expectations at the outset of a naming project.

3. Invented Brand Names

The best part about brand names is that if you can’t find the perfect word, you can always make one up.
Invented names are etymological fabrications that are nothing if not distinctive.
 Invented brand names offer the most creative latitude for a brand, but that doesn’t mean they’re easy to
conjure. Many invented names are built from Latin, Greek, or other foreign root words and modified to best
embody the brand’s personality.

Successful invented names include:

• Kodak
• Jollibee
• Penshoppe
• Adidas
• Google

Each of these brands has managed to build monumental brand equity with their invented name over the
years. The challenge with invented brand names, though, is that they have no inherent meaning when first
invented. While they’re a breeze to the trademark, invented names can require significant time and marketing
spend to build a meaningful narrative around them.

4. Lexical Brand Names

Lexical brand names rely on wordplay for their memorability. Puns, phrases, compound words,
alliteration, onomatopoeia, intentional misspellings, and foreign words are all styles of this popular naming
type.

Lexical names are often clever—sometimes, arguably, too clever—and get their impact from pairing or
modifying existing words for linguistic effect.

Examples of lexical brand names include:

• Dunkin’ Donuts
• Fibr
• Uniqlo
• Flickr
• Tumblr

The risk with these types of names is that they can come off as shamelessly salesy. Modern audiences have
been exposed to decades of schlocky advertising techniques and don’t often identify with clever wordplay.
That said, lexical brand names aren’t all bad. Intentionally misspelling a word so you can leverage its original
meaning while skirting trademark concerns, is a subtler approach to lexical names that have been used to great
effect by notable brands like Flickr and Tumblr.

Just keep in mind that in branding, as in everyday life, there’s nothing worse than a pun that makes your eyes
roll out of their sockets.

5. Acronym Brand Names

Acronyms have been used for brand names since branding first crawled out of the primordial soup. A
long history does not mean this type of brand name is effective, though. While functional and utilitarian,
acronyms are sorely lacking in meaning and emotion.

Examples of brands with acronymic names include:

• IBM
• GMA
• SPAC
• ABS-CBN
• DBP
• SM
• HP

Brands like IBM, GMA, BP, and PBA haven’t been hampered in the least by the fact that their names are
nothing more than a series of unrelated uppercase letters. KFC’s diversion to acronymic naming type allowed
the brand to temporarily disassociate itself from the consumer backlash against trans fats.

A startup these days would be hard-pressed to come up with a great reason to name their company with an
acronym, though. As a rule, acronyms are hard for audiences to remember and even harder for attorneys to
trademark.

6. Geographical Brand Names

 Cebu Pacific, Rural Bank of Digos—sometimes brands are inextricably tied to the regions that birthed
them. Geographical names imbue a brand with all the cultural and historical associations of its namesake—for
better or worse.

You’ll most often find geographical names tied to companies that once catered to a geographically
limited audience but have since made it big.

Examples of the geographical naming type include:

• Palawan Pawnshop
• Manila Bulletin
• Tokyo Tokyo
• Kentucky Fried Chicken
• Cebu Pacific

Naming or renaming your brand after its home region obviously has inherent limitations. It’s also likely to
have been done already. Put a city or a state name in front of a product or service and you’re almost certain to
find an existing entity.

7. Founder Brand Names

Whether for reasons of heritage or hubris, there will always be brands named for the people who started
them. This tradition stretches back to the earliest brands as well. The era when Fords tooled every street and
Kellogg’s sat atop every breakfast table was one where few brands weren’t named for their founders.

These days, founder-based names are less common, but brands like Kelloggs, Ford, and Ralph Lauren
have certainly made them work.

Examples of founder names include:

• Ford
• Aboitiz
• Ayala
• Lhuillier
• Kawasaki

Aside from sating the egos of their principals, founder names are definitely easy to trademark. They can be
distinctive if positioned correctly, but require some marketing efforts to build equity (unless, of course, the
founder is already famous).
 Marketing Management Practices

Marketing involves getting the message out to customers about your product or service. The American
Marketing Association’s definition of marketing is: “The process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual
and organizational objectives.” Each of these functional areas involves a lot of coordination and planning to
arrive at the best advertising, public relations, and sales package to best present your product or service to the
customer. In a small business, it may happen that only one person is performing all these marketing functions,
therefore, good knowledge of each area is important to develop a focused effort.

Best Marketing Management Practices

Estimate potential market demand

Estimation is an educated guess. The best way to be very certain and confident about estimates for
potential market demand is to look for facts about the industry where the entrepreneur intends to enter. Census
data is a good source of estimates to be able to project sales.
 Analyze the competitors

It is first knowing what the competitor's marketing is and then, understanding why the target market is
buying or will buy from the competitor. Knowing what the competitor is marketing includes: the competitor's
products or services, how much they cost, how they are distributed, and how they are made known to the target
market. The best way to do this is to go out there and see the competition yourself. Some entrepreneurs even go
to the extent of buying the products or using the services of competitors. In this way, they are able to assess and
differentiate their own and the competitor's product or service, determine the marketing needed, be ahead of the
competition, and ride with the market trends.

Price the product/service reasonably

A product can have great features and benefits, but the price of the product can have a greater influence
on how it will sell in the marketplace. Some people will pay a higher price for a particular product if it is of
better quality and will perform better and last longer. For others, if the price of your product or service is higher
than what the customers can afford or are willing to pay, chances are they will not patronize your business. Set
your price, after considering all costs, at an affordable amount for your target market .
Adopt a good product name for branding

Will my product's name be remembered? When a name is different or unusual, it may attract attention, and
perhaps arouse curiosity. Is it something that is interesting, such as one that is part of a rhyme or evokes humor?
A good example is Jollibee. Consider a name that creates a mental picture of an image. Example: Red Ribbon
provides an image that is easy to remember. Is it distinct enough from other names, to prevent people from
confusing your product with another? If the name meaningful and fits with the product, it tends to generate
higher recognition and recall.

Put price tags

All goods which are being sold must have a price tag. A price tag is a label to the price of an item being sold in
a store. It is the amount of money a buyer pays in order to own the item.
 Placing a price tag on goods being sold have the following advantages:

(1) The price of an item is readily available to a buyer;

(2) It eliminates inconveniences on both the seller and the buyer as to process inquiry regarding the price of
goods being sold;
(3) A buyer can save time in choosing goods because he can easily pick out goods he can afford; and
(4) The government can easily monitor stores that are selling goods at a higher price than the prices
specified by the Price Control Council.

Promote the products/services in various ways to increase sales

Products or services of the firm need to be advertised in order to generate sales. The entrepreneur has to devise
ways of making people know and want to buy their products. This phase of the business falls under sales
promotion. Sales promotion may be accomplished through any of the following ways:

▪ Newspapers, radio, and other forms of media.

Putting up advertisements in the newspapers and commercials on television and radio

regarding a certain product.
▪ Window displays.

Putting up attractive window displays in front of a department store or supermarket.

▪ Fashion shows.

The latest finds in men's and women's wear may be advertised by hiring professional models
to model the clothes.

▪ Exhibits.

Goods may be put on display by exhibiting them in the lobby of a hotel or in a shopping
mall.
▪ Lecture and demonstration.

Products may be advertised by inviting prospective customers to attend a lecture about the
product. A demonstration is a process of showing others how a certain product works or is
used.

▪ Product sampling.

New products such as cosmetics, food items, or beverages may be advertised by giving
prospective customers free samples to taste, drink, or use.

▪ Quantity discounts

To attract buyers to buy a certain product, the store owner may announce a big discount on
such products.
▪ House-to-house selling.

This method is bringing the product directly to the doorstep of potential buyers.

▪ Telephone.

Calling up people by telephone and telling them about a new product is one way of directly
reaching the consumer.

▪ E-mail.

Sending flyers or brochures via email to customers is a very convenient way to promote your
business.
▪ Website.

▪ Put up your business web6ite where products or services are uploaded for customers to know
about.

▪ Social network.

Advertise your product or service on social networks like Facebook and Multiply.
▪ Sales events.

Stores announce the celebration of certain events, such as anniversaries, year-end inventory,
opening, and closing sales, pre-post-holiday sales, and other events, to attract buyers to go
into the store and buy their goods.

▪ Poster.

A poster is a listing of prices of various goods found on a shelf or corner for the information
of the customers. It may also show some special information about new products/services. It
is a way of attracting customers to read about and consider buying a new product.
 Issue official receipts to customers.

All business establishments are required to issue official receipts. However, there are some which do not issue
receipts unless the customers ask for it. Others do not issue receipts at all. Failure by a business establishment to
issue a receipt means a financial loss to the government in terms of payment of taxes. The official receipt is one
of the ways by which the government determines how much sales have been made by a business establishment
and how much taxes need to be paid. This is also an ethical management practice that shows the honesty of the
entrepreneur.

Practice courtesy and efficiency in serving customers.

When customers experience courteous and efficient service in a business establishment, most likely, they will
patronize again the business and even recommend it to others. Treating customers in a courteous manner means
greeting then upon entering the store and thanking them upon leaving, promptly attending to their orders,
informing customers as to the length of time an order can be finished, requesting people to sit down while
waiting for their orders, answering all queries from the customers, and delivering the service or product on the
date and/or time promised to the customer.

Pack the goods bought by customers properly.

The service to a customer does not end when the customer pays for his goods. Loading goods inside the paper
bag should be done properly. Breakable items must be packed in such a way that they will not be damaged or
broken. Wet items need to be grouped together and placed in a separate bag from the dry items. Items that are
toxic such as detergents, insect spray, muriatic acid, and other poisonous household cleaning agents must be
separated from food items. Recyclable plastic bags should be lined with a carton at the bottom to make them
sturdier. Remember to use environment-friendly packing and wrapping materials in the company.

Observe the rights of consumers.

The government realizes that consumers need protection from manufacturers who produce poor quality goods
and from service providers who provide inefficient service. It has passed several laws protecting the following
rights or consumers which the entrepreneur should comply with:
 The 8 Consumer Rights:

Refers to a consumers’ right to be safe, informed, choose, and give input to the producers of the goods and
services they use. This leads to proper procedures that make transactions smooth and beneficial to both the
seller and buyer.

Right to BASIC NEEDS

The government shall ensure the availability of basic prime commodities at an affordable price and of good
quality.
Right to SAFETY

Consumers have the right to be safe against goods that are harmful to one’s health and life. All products
are required to be checked for safety, reliability, and quality.

Art. 2187, RA 386, Civil Code of the Philippines – Manufacturers are accountable for the death, sickness,
injury, or harm upon anyone resulting from the use of its products.
Art. 10, RA 7392 Consumer Act of the Philippines – Products found unsafe and dangerous are not to be sold
nor distributed to the public.

Right to INFORMATION

This protects customers from dishonest or misleading advertising or labeling. It gives the right to consumers
to be informed.

RA 306 – The manufacturer is accountable for all the information it gives out regarding a particular product.
Art. 10, RA 7392 – This Act provides a listing of food, cosmetics, drugs, and others that are unsafe to the
consumers.
Art. 546, RA 3940 – Fake advertisements not allowed.
Right to CHOOSE

Consumers have the right to choose from a variety of products. In case of a monopoly, the government
needs to monitor such manufacturer to safeguard the welfare of the public.

This gives emphasis on the right to choose products with competitive prices but with the assurance of
satisfactory quality.

Right to REPRESENTATION

Consumers have the right to complain to the proper authorities regarding any dissatisfaction from the use
of a product or service.

The right to express consumer interest in the making and execution of government policies.

Art. 159, RA 7392 – Complaints from consumers should be entertained.

 Right to REDRESS

Consumers have the right to claim compensation for any harm done as a result of the use of a particular product.

This will ensure the right to be compensated for misinterpretation, substandard goods, and unsatisfactory
services.

Art 1547, RA 386 – The seller should provide a guarantee attesting to the safety of the product and must be
responsible for whatever harm may be inflicted on the consumer.

Right to CONSUMER EDUCATION

The right of consumers to acquire the knowledge and skill necessary to become an informed customer.
Right lean environment that is not threatening or
to hazardous to the well- being of every single
HEAL Individual
THY
ENVI
RON
MENT

Thi
s
g
i
v
e
s
i
m
p
o
r
t
a
n
c
e
t
o
a
h
e
a
l
t
h
y
a
n
d
c
LESSON 6
OPERATIONS and HUMAN RESOURCE MANAGEMENT

"Multistream managers use practical wisdom to achieve multiple forms of well-being for multiple stakeholders."
(Gutstein & Sheely)

Management is the art of getting things done with and through other people. For the owner-manager of the
business, there are basic managerial concerns that should be attended to. There are a lot of ways to manage the
business so that it operates effectively and efficiently. The business model that works best for an entrepreneur
will be related to one's vision, objectives, what its product or service is, and the entrepreneur's personal
operational Style. As such, the marketing, production, human resource, and finance functions of every business
need to be addressed on a day-to-day as well as on a long-term basis. It is imperative for an entrepreneur,
especially the starting ones, to know about how to keep the business running with the least effort.

Production/Operations Management

The materials may be raw materials, semi-processed or semi-finished goods, or even finished products.
Machinery, equipment, methods, and processes are the basic elements of production" ("Production, n.d).
These 4Ms of production were given more in-depth discussions by Hobert and Chad Counts (n.d.) as
follows:

Method.

Using the Inventory Management System to establish what is needed and at what inventory stock levels, Based
on what is known, the manager can determine the volume of products that need to be processed and who will be
responsible for each step of the process. The Manager will determine the most efficient way for each portion of
the process to be done to eliminate damage to the product and to eliminate areas where time and manpower are
being wasted. Controlling waste is the key to efficient and profitable production.
Manpower

When examining the Methods you now have in place, what is the ideal number of people it will take to perform
these methods and what positions should they be in. How will the personnel be trained and measured for
performance? What is the "cycle time" of each part of the method?

Machine.

When examining your facilities, vehicles, and tools, do you have everything you need to ensure the safety of the
employees while maximizing the efficiency and productivity of the company? Do all workers have access to the
same tools and equipment if needed? Do the tools enable them to perform tasks independently? Are they trained
on how to maintain the machinery and tools?

Materials

Do you have the materials needed to perform all parts of production and are they conveniently located to
minimize waste? Example: All material needed to clean and packages are always available and are placed to
minimize effort. Does the layout of the production department minimize wasted movement? Example: Does the
part flow go in one direction or does it zig and zag throughout your facility.

On the other hand, operations management refers to the activities, decisions, and responsibilities of managing
the resources which are dedicated to the production and delivery of products and services. Operations
management can significantly contribute to the success of the business by using one's available resources to
effectively produce products and services in a way that satisfies customers. To do this, you must be creative,
innovative, and energetic in improving processes, products, and services. The four main advantages of an
effective operation can provide to the entrepreneur's business include:

o reducing the costs of producing products and services, and being efficient
o increasing revenue by increasing customer satisfaction through good qual.
o reducing the amount of investment that is necessary to produce the required type and quantity of
products and services, by increasing the effective capacity of the operation
o providing the basis for future innovation, by building a solid base of operations skills and knowledge
within the business

Production/Operations Management Practices

Plan and control production.

Production planning and control is the key to efficient and effective production management. It deals with
decisions that will enable the entrepreneur to produce goods or offer services:

(1) according to customers' specifications or needs;

(2) in the quantity demanded;

(3) by the schedule demanded; and

(4)) at minimum costs. When the entrepreneur plans ahead, one can anticipate problems, and work out
solutions to prevent problems from occurring.
Adopt the standard production models

Whatever the business needs to produce to be able to sell, it means it is vital to have a production process in
place that will help the entrepreneur make certain that the company has a quality product/service that is needed
and produced the way it was planned. Adopt the standard production models that can help make this part
of the business operate efficiently and economically. ("Operating a small business," n.d.)

Design plant layout for better efficiency

Layout pertains to "the way machines, workplaces, and storage areas are located in relation to one another.
This means arranging and putting together the right space, appropriate furniture, and proper equipment in such a
way as to minimize the movement and handling of materials to accomplish the tasks called for by the business.
According to DTI-BSMED, a good layout is one that facilitates the manufacturing process, minimizes
materials handling and investment in equipment, maximizes the use of floor area, promotes the effective
utilization of manpower, and provides for employee convenience, safety, and comfort at work."
Choose the right machines and equipment

The choice of machine and equipment affect the overall profitability of your business. Moreover, the money
used to buy machines and equipment is a form of investment. From the very beginning, the entrepreneur has to
decide whether the firm's production process will be of the machine-driven/automated, or labor-
intensive/manual type, or a combination of both. The DTI-BSMED Guide (2010) indicated that when choosing
machines and equipment, the following considerations should be kept in mind by the entrepreneur:

o Operating characteristics. The most important thing to consider in selecting the supplier or brand for a
particular production machine is the operating characteristics of the machine you need. Establish first
your requirements, the intended function of the equipment, and the operating characteristics of the
machine you need for your operations. For instance, if your operations call for the sewing of parts,
decide on what type of sewing machine you will need. Which of the following models will meet your
requirements: A Brother TZ1-B652 (that's an industrial straight and zigzag sewing machine)? A Brother
SL-755 (industrial single needle straight lock stitcher with self-oiling system and reverse feed)? or a
Brother DB2-B737-413 (industrial programmable single needle straight 1ock stitcher with self-oiling
system and reverse feed, thread trimmer, auto backtrack, needle position)? Or would a Singer 20073
sewing machine (a straight and zigzag machine with up to 12mm zigzag stitching capability) be a better
choice?
o Engineering features. Closely related to the machine s operating characteristics are its engineering
features. These features must be compatible with your other equipment, process, and plant layout.
Consider the machine’s size, power requirements, maintenance, and safety features.
o Cost. After you've found several machines that fit your requirements, analyze and compare the cost of
each machine in relation to its capacity, efficiency in its use of fuel, and other technical considerations.
o Qualitative factors. Consider all possible suppliers before making a final decision. Who among them is
willing to provide installation assistance, warranty, and/or maintenance service? You don t necessarily
have to acquire brand new equipment. You can buy a second-hand machine, lease equipment, or even
fabricate your own machine. You can also consider subcontracting part of your process so you need not
buy an expensive piece of equipment. There are advantages and disadvantages to each option. Carefully
study each option before deciding on one.
Purchase based on needs and on time

It is imperative to procure the raw materials, components, machinery, equipment, supplies, and
necessary services needed in the production process on time. This can reduce costs and ensure the quality of
needed materials. To be able to do these, determine correctly what needs to be ordered, the reliable sources of
supply; the quotations, prices, and terms for supplies; and the contracting for the supplies or services. Check the
goods upon delivery, or services upon completion, before final payment.

Maintain machines and equipment properly

It is important to keep machines and equipment in good running condition. Their proper care and maintenance
ensure that there is no disruption of production due to machine breakdown. Machine breakdowns cause
delays, as well as financial costs for repair.
According to the DTI-BSMED Guide (2010), some tips for proper maintenance are: cleaning machine parts
after every use; applying lubrication on machines regularly (at least once a week) checking for worn-out parts at
least once a month; checking electrical parts and wiring every month; and calibrating machines regularly.

Manage inventory/stock well

Stock/inventory pertains to "all the goods a business has for sale, and all raw materials or parts a business keeps
to ensure continuous operations. Avoid poor inventory practices by keeping just the right amount of stocks of
merchandise, supplies, raw materials, in-process, and finished goods that are needed to meet the sales targets. It
is not good practice to keep too much or too little quantities of materials and goods in stock. To know the right
quantity, keep track of your fast and slow-moving items, check stocks regularly, and arrange stocks properly for
easy inspection.

Ensure quality control

Defective products can be a result of a lack of control.

Some guideline to observe to ensure quality control in production:

(1) check the quality of your raw materials;

(2) calibrate measuring and testing equipment regularly:

(3) maintain machines properly and make sure they are in good condition:

(4) conduct adequate tests to verify whether the product meets quality standards or not; and

(5) inspect for quality.

 Human Resource Management

According to Noe, Hollenbeck, Gerhart, and Wright (2006), human resource management (HRM) refers to
"the policies, practices, and systems that influence employees' behavior, attitudes, and performance."

HRM practices, as viewed by them, include:

o analyzing and designing work,

o determining human resource needs (HR planning),
o attracting potential employees (recruiting),
o choosing employees (selection),
o teaching employees how to perform their jobs and preparing them for the future (training and
development),
o rewarding employees (compensation),
o evaluating their performance (performance management), and
o creating a positive work environment (employee relations).

As cited further by Noe, et al (2006), effective HRM has been shown to enhance company performance by
contributing to employee and customer satisfaction, innovation, productivity, and the development of a
favorable reputation in the firm's community. Next are some of the important HRM practices that should be
considered by the entrepreneur in managing one's business effectively.
Human Resource Management Practices

Design an effective recruitment strategy

Recruitment is "any practice or activity carried on by the organization with the primary purpose of identifying
and attracting potential employees." However, because of differences in companies’ strategies, they may
assign different degrees of importance to recruiting. In general, all companies have to make decisions in three
areas of recruiting:

(1) personnel policies,

(2) recruitment sources, and
(3) the characteristics and behavior of the recruiter

These aspects of recruiting have different effects on who the organization ultimately hires. An applicant's
decision to accept a job offer - and the organization's decision to make the offer - depending on the match
between vacancy and applicant characteristics (Noe, Hollenbeck, Gerhart, & Wright, 2004).)
Adopt a good selection process.

Selection is the "process by which the organization attempts to identify applicants with the necessary
knowledge, skills, abilities, and other characteristics that will help the organization achieve its goals". The
process of selecting the employees varies considerably from organization to organization, and from job to job.
In most organizations, the selection includes the steps of; (Noe, Hollenbeck, Gerhart, & Wright, 2004).

•
o screening applications/resumes;
o testing and reviewing work samples;
o interviewing candidates;
o checking references and background and
o making a selection
Develop effective training programs.

Training is a set of activities aimed to facilitate the learning of knowledge, attitude, and skills among people
in the organization, to, in turn, improve their current job performance and contribution to the achievement
of organizational goals. It has become part of organizational learning and change in employee performance.
Noe (2002) believed that training is a planned effort by a company to facilitate employees' learning of job-
related competencies. These competencies include knowledge, skills, or behaviors that are critical for
successful job performance.
Conduct performance management.

Performance management is the "process through which managers ensure that employees’ activities and
outputs contribute to the organization's goals" (Noe, et al., 2004). Performance Management is crucial,
especially when the business is more complex, and goals are constantly changing. Measuring and managing
performance is a challenging task and one of the keys to gaining a competitive advantage. The conduct of
regular performance assessments either twice a year or yearly will enable the employees to know how they are
doing in their job. During this occasion, skills and abilities gaps must be identified and appropriate training
must be given to fill in these gaps. In other words, if they are not doing as expected, the employees can be
equipped with the right skills and knowledge to positively contribute to the achievement of business goals.
Implement an attractive compensation scheme.

Compensation refers to all forms of financial returns and tangible services and benefits that employees receive
as part of an employment relationship. Employee benefits, in particular, refer to the part of the compensation
package, other than pay for the time worked, provided to employees in whole or in part by employer payments
(e.g., life insurance, pension, workers compensation, and vacation). Compensation also pertains to the methods
and practices of maintaining a balance between the interests of operating the company within the fiscal budget
and attracting, developing, retaining, and rewarding high-quality staff through wages and salaries which are
competitive with the prevailing rates for similar employment in the labor markets.

Design work-family balance programs.

Work-family balance may be defined as the degree to which an individual is able to simultaneously balance the
temporal, emotional, and behavioral demands of both paid work and family responsibilities (Hill, Hawkins,
Ferris, and Weitzman, 2001). Work-life balance has been an increasing concern for employees. The increased
demands on the job and at home have made managing work and family life increasingly difficult (Shore, 1998).
But there are ways to help employees balance their work and personal lives, such as flextime and flexplace
programs. Although flextime and flexplace programs have been adopted at many companies, these may not be
fully utilized by employees (Hochschild, 1997). The study of Hill, Hawkins, Ferris, and Weitzman (2001) also
examined the influence of perceived flexibility in the timing and location of work on work-family balance.
Results indicated that perceived job flexibility is related to improved work-family balance after controlling for
paid work hours, unpaid domestic labor hours, gender, marital status, and occupational level. Perceived job
flexibility appears to be beneficial both to individuals and to businesses. Given the same workload, individuals
with perceived job flexibility have a more favorable work-family balance.

Observe fair employee relations practices.

Employee relations or labor relations pertains to a set of processes and procedures utilized in the interaction
between employees and employer to attain their respective goals while accommodating the needs of both
parties. This interaction can include communication, interpersonal relationships, participation, discipline, and
grievance resolution. Research on human resource management (HRM) suggests that new forms of work
organization quality circles, work teams, high-performance workplaces, lean production directly affect workers'
and managers' expectations of what constitutes acceptable effort and, as such, requires new forms of
employment relations (Verma and Chaykowski 1999; OECD 1999).

Determine the entrepreneur's role in the business.

Many small businesses begin with the founder-owner doing all the management functions of marketing,
production, human resource, and finance without the help of specialized staff. However, a few would rather
concentrate on one function, and be on top of that function. The DTI-BSMED Handbook Guide (2010)
indicated the following factors which can help the entrepreneur to choose which role(s) to take in one's
business.

o Education and Training. If you are an engineer or you have some technical training, it will be natural for
you to consider being in the technical or production area. Or if you are an accountant or have a
background in banking or finance, you may want to handle the finance function.
o Experience. Have you experienced working for a manufacturing firm? Were you ever a member of the
kitchen staff of a hotel? How successful were you in doing automotive jobs for that service center? Your
 experiences will be handy in performing certain management functions. You might ask, "What if I don't
have any work experience at all?” What if I'm just a fresh graduate and trying my luck in
entrepreneurship?" Did you learn some skills while helping a relative in the ceramic business during one
of those summer breaks? What did you gain from your summer job or during the internship? Remember
the skills you learned from these experiences. You might need them when deciding which management
function to assume in your business.
o Interest and Talent. Not having the education or the experience to back up your inclination to take on a
specific management function will not disqualify you. For all you know, you might have the interest or
the talent for it. lf you have people skills that are cheerful but commanding and persuasive, you may do
well in sales or in personnel management even without any experience or formal training After all, you
can develop these skills by attending some seminars or short courses. On the other hand, if you enjoy
working with your hands and putting things together, you can handle production.
o Time. Granting you have the training, the experience, and the interest and talent to assume a management
function, do you have the time for it? Can you devote most of your time to the particular management area
you selected? Take time to do an objective personal assessment of the situation. Ask yourself if you are
able and will have the time to handle all the management functions in case you decide to be on top of
everything. Remember, you are not only an entrepreneur. Ours is a pluralistic society. Besides being a
spouse, a parent, an offspring, or even a sibling, you are also part of your community. Nonetheless, if you
think you can be a jack-of-all-trades and be everywhere in your business without sacrificing any of life's
essentials, then go for it!
o The Pros and Cons of Having a Bird's Eye View. Finally, weigh the advantages and disadvantages of
having a broad view of your business. Being "everywhere" in your business will allow you to see the
interrelationship among the four management areas; where one area supports and draws support from the
three other areas. While the age-old saying jack-of-all-trades, master of none" is true, consider the setback
if you indeed plan to become a master of something. If you concentrate on one area, say finance, you
might neglect the other areas that are just as important. Let us Say you opted to concentrate on
production. As you look for ways to become more efficient in order to produce more at a faster rate, you
might lose sight of the other areas, like sales and finance. This could lead businesses to end up with too
many unsold stocks and incur losses due to overproduction and an over-investment in machines.

Get the right people.

In starting a business, the entrepreneur may begin with family members, relatives, friends, neighbors, or
acquaintances as the workforce, but be clear about requiring them to be professional in the workplace,
especially when dealing with you. Match each position with someone who will meet the requirements of the
position. Do not limit applicants to trained and experienced. Be open to those who can help the enterprise
grow. Choose people who possess the expected work values and are willing to be trained and to stay in the
company after being trained.

Prepare an employee manual.

It is always advisable to prepare an employee manual. This should contain information pertaining to company
policies and procedures on working conditions, compensation, other benefits, discipline, and grievance
processing, among others.

Invest in human capital.

Human capital is the quality and quantity of skills, education, and talents a person has. When people attend
classes, become apprentices, obtain graduate degrees, and receive on-the-job training, they are investing in or
improving their human capital. Allocate sufficient budget for the cost of specialized training that human
resources may need to meet the skills necessary to be able to make the product or complete the service to be
offered to acquire or develop a market. There should also be a budget allocated for training people on human
relations and leadership skills.
Motivate people in the workplace.

Motivation is a function of willingness and ability (skills) to do the job, as well as help employees, work at high
energy levels. Open communication, respect, fair compensation, training, work-life balance, and empowerment
activities and programs will definitely motivate people in the workplace.

Maintain employees' commitment and loyalty.

One way of doing this is to ensure that the work environment is safe, healthy, caring for employees, and at
least compliant with government rules and regulations, as well as company social responsibility. Competitive
compensation and training will also help a lot toward this objective.
Effectively communicate policies and practices with employees.

Communication is very important so that employees feel they are really part of the
organization and, thus, work more and better. When employees know what is expected of
them, how they will accomplish their tasks, instructions are clear, and they are allowed to
give feedback to the concerned stakeholders in the enterprise, they will feel valued and
respected. This can lead to better performance and higher productivity.

Human resources play an important part in developing and making a company or organization
at the beginning or making a success at the end, due to the labor provided by employees.