LEARNING OBJECTIVES

After reading and studying this chapter, we are

expected to: LO 6-1 Explain why people take the risks
of entrepreneurship; list the attributes of successful
entrepreneurs; and describe entrepreneurial teams,
intrapreneurs, and home- and web-based businesses.
LO 6-2 Discuss the importance of small business to the
American economy and summarize the major causes of
small-business failure. LO 6-3 Summarize ways to learn
about how small businesses operate. LO 6-4 Analyse
what it takes to start and run a small business. LO 6-5
Outline the advantages and disadvantages small
businesses have in entering global markets.

SUMMARY CHAPTER 6: Aliya Prameswari (

(
), Riska Noor
), Yubitre Mauren ( )
ENTREPRENEURSHIP For Introductory Business Class - C

AND STARTING SMALL

BUSINESS
 CHAPTER 6:
ENTREPRENEURSHIP AND STARTING SMALL BUSINESS

THE AGE OF ENTREPRENEUR

Entrepreneurship is accepting the risk of starting and running a business. With the
current high unemployment rate, job creation is even more critical. Today most of young people
who want more control over their destiny working in or starting a small business makes sense.

The job-creating Power of Entrepreneurs in The United States

In United States high unemployment rate is critical. Entrepreneurs in the U.S takes
part in creating jobs and help shape the U.S. economy. Example of some of the greatest
entrepreneurs are:
1. DuPont, manufacturers of product like Teflon and Lycra, started in 1802 by French Immigrant
Éleuthère Irénée du Pont de Nemours. Some 18 shareholders provided $36,000 in start-up money.
2. Avon, the familiar beauty products retailer, started in 1886 with $500 David McConnell borrowed
from a friend.
3. Procter & Gamble, now a multinational marketer of household products, was formed in 1837 by
William Procter, James Gamble, and a total of $7,000 in capital.
4. Ford Motor Company began with an investment of $28,000 by Henry Ford and 11 associates.
5. Amazon.com began with investments by founder Jeff Bezos’s family and friends. Bezos’s parents
invested $300,000, a huge portion of their retirement account. Today they are billionaires.
These entrepreneurs had the same idea of borrowing money from friend and family to start
a business. Now they employ thousands of people and helps the country prosper. Even now,
spotlight on small business box highlights several young entrepreneurs who started business
while still in school.

Why People Take the Entrepreneurial Challenge

Taking the risk in starting business can be scary. Here are some reasons why people
are willing to take the entrepreneurial risk.
1. Opportunity. They find that starting their own businesses offers them more
opportunities then working for others.

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 2. Profit. Profit is another important reason to become an entrepreneur, to be like
Bill Gates, one of the richest people in the world.
3. Independence. Simply many entrepreneurs do not enjoy working for someone
else
4. Challenge. Some people believe that entrepreneurs are excitement junkies who
thrive on risk. In general, entrepreneurs seek achievement more than power.

What Does It Take to be An Entrepreneur?

Personality traits that are needed to be an entrepreneur are
a. Self-directed. Comfortable being your own boss because you will be
responsible for your own success or failure.
b. Self-nurturing. Believe in your own idea even when no one else does.
c. Action-oriented. Great business ideas are not enough, the most important
thing is a desire to actualize it into reality
d. Highly energetic. It’s your business and you must be emotionally,
mentally, and physically able to work long and hard.
e. Tolerant of uncertainty. Successful entrepreneurs take only calculated risks, but
still able to take some risks.

Turning Your Passions and Problems into Opportunities

Entrepreneurs must able to empower their passion and courageous enough to see business
opportunities where others only see problems. To look at problems and/or passions and see
opportunities in them, ask yourself this questions: what do I want, but can never find? What
product or service would improve my life? What really irritates me, and what product or service
would help? Keep in mind, however, that not all ideas are opportunities. If your idea doesn’t
meet anyone else’s needs, than the business won’t succeed. You may have a business idea
that is a good opportunity if:
a. It fills customers’ needs
b. You have the skills and resources to start business.
c. You can sell the product or service at the price customers are willing and
able to pay and still make profit

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 d. You can get your product or service to customers before your window of
opportunity closes
e. You can keep the business going

Entrepreneurial Teams
An entrepreneurial team is a group of experienced people from different areas of business
who join to form a managerial team with the skill to develop, make, and market a new
product. A team may be better than an individual entrepreneur because team members can
combine creative skills with a production and marketing skills right from the start. Having
a team also can ensure more cooperation and coordination later among functions in the
business.

Micropreneurs and Home-Based Businesses

Some entrepreneurs are interested in maintaining a balanced lifestyle while doing the
kind of work they want to do, such business owners are called micropreneurs.
Micropreneurs know they can be happy even if their companies never appear on a list of
top-ranked business. Many micropreneurs are home-based business owners. Many home-
based businesses are owned by people combining career and family. Here are more reasons
for the growth of home-based businesses
a. Computer technology has levels the competitive playing field, allowing
home-based businesses to look and act big as their competitors.
b. Corporate downsizing has led many to venture out on their own.
c. Social attitudes have changed
d. New tax laws have loosened restrictions on deducting expenses for home
offices.

Working at home also has its challenges such as;

a. Getting new customers, because you don’t have a retail storefront.
b. Managing time, it takes self-discipline to use time wisely
c. Keeping work and family tasks separate, it also takes self-discipline to leave
your work at the office if the office is at home

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 d. Abiding by city ordinances, government ordinances restrict the types of
businesses allowed in certain parts of the community
e. Managing risks, home-based entrepreneurs should review their
homeowner’s insurance policy, since not all policies cover business
related claims.

Home-based entrepreneurs should focus on finding opportunity instead of accepting

security, getting results instead of following routines, earning a profit instead of earning
pay check, trying new ideas instead of avoiding mistakes, and creating a long-term vision
instead of seeking a short-term payoff

Web-Based Business
Internet helps small web-based business sell literally everything around the world. It is so massive
to the point where it possesses 8 percent of all retail sales, or around $262 billion in 2013. Based on
Forrester Research prediction, online retail is expected to reach $370 billion by 2017. This kind of
business sells because it got a lot more to offer than just the products we could buy at stores—they
must offer unique products or services. One example is Marc Resnik--who sells things like
ventriloquist dummies and fake vomit—that got two-thirds of the company’s revenue, selling futile
product placed in promotional section off the web’s store. Resnik’s business got successful because
of his exceptional service and quick turnaround time.
Of the easiest way to start a web-based business is through affiliate marketing, which is an online
marketing strategy, where a business rewards individuals or other businesses (affiliates) for each
visitor or customer the affiliate sends to its website. You basically got commissioned when people
use the link address you shared to buy the product from the company you’re affiliated with. Social
commerce services such as SkimLinks, made it even easier and efficient to do affiliate marketing. as
they register and connects you as an affiliate for a multiple e-tailers right after you posted links that
is affiliated with both parties. You then get a portion of commission on sales based on your visitors
click count on the link. Although saves you from time-consuming work and become peer-to-per
affiliates for e-retailers and user to make money, aren’t enough to lead you to success. A web-based
business is prone to failure due to the limits of our technology. It takes time and you can learn from
someone else’s failure and spare yourself some pain.

Entrepreneurship within Firms

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 Intrapreneurs are creative people who work as entrepreneurs within corporations, often reflected
as an achievement of entrepreneurship in large organization. They were able to use company’s
existing resources—human, financial, and physical—to launch and generate new products for profits.
One example is 3M, which expect their managers to devote time to create innovation in adhesives.
This result in the creation of various adhesive-based product, such as scotch tape, to nonwoven
material for industrial use, and the famous Post-it Notes, developed by one of its employees, Art Fry.
Although first struggle to exist, it finally gains recognition and widespread use after a chain of major
sales and marketing programs directed to secretaries of top executives in the country.
Another intrapreneurial venture is Lockheed Martin’s skunkworks, that create first United States’
fighter jet in 1943 and the Stealth fighter in 1991.

Encouraging Entrepreneurship: What Government Can Do

Part of the Immigration Act passed in congress in 1990 introduces “investor visas” that allows
10,000 people to come to the United States if they invest $1 million in enterprises that creates or
preserved 10 jobs. This idea is expected to draw more entrepreneurs, create jobs, and grow the
economy of the United States. Other ways to encourage entrepreneurship is enterprise zones
(empowerment zones or enterprise communities), a specific-geographical-areas to which
governments try to attract private business investment by offering lower taxes and other government
support. This zones, calls on federal agencies to help business owners cut through bureaucracy t win
federal grants and bring schools, companies, and non-profits together to support literacy program
and job training.
The government could also offer tax break to make investment that create jobs and initiate the
‘’Jumpstart Our Business Start-ups (JOBS)’’ act in 2012 as an effort for small businesses to raise
funds and create new jobs. This topic is further discussed in chapter 19.
State commerce department often supports entrepreneurs by creating incubators and technology
centers to reduce start-up capital needs. Incubators are centers that offer new businesses low-cost
offices with basic business services, such as accounting, legal advice, and secretarial help. It is
revealed by NBIA that 87% of incubator graduates remains in business, while 32% of them have ties
to a university.
Some states offer assistance to qualified candidates under the Self-Employment Assistance (SEA)
program. The program allow participant to collect unemployment checks and get training and
counselling while they build their business. The government brings many effort and initiative to
‘’celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation.’’.

5
GETTING STARTED IN SMALL BUSINESS

It’s easier to start out business with a small scale rather than a giant global firm. But the management are
similar in both scale. The management of charities, government agencies, churches, schools and unions is
much of the same. Understanding management in general is essential, as all organizations demand capital,
good ideas, planning information management, budgets (and financial management in general), accounting,
marketing, good employee relations, and good overall managerial know-how.

Small Versus Big Business

The Small Business Administration (SBA) defines a small business as one that is independently
owned and operated, is not dominant in its field of operation, and meets certain standards of size in
terms of employees or annual receipts (such as under $2.5 million a year for service businesses). It
is only entitled ‘’small’’ when compared to other business in its industry, as a wholesaler can sell up
to $22 million a year and still be considered as small business by the SBA.
But small business can still be a big art of a country’s economy, proven by some of these facts below:
1. There are 28 million small businesses in the United States.
2. Of all nonfarm businesses in the United States, almost 97 percent are considered small by
SBA standards.
3. Small businesses account for more than 50 percent of the gross domestic product (GDP).
4. Nearly 600,000 tax-paying, employee-hiring businesses are started every year.
5. Small businesses have generated 65 percent of the new jobs since 1995.
6. Small businesses employ about half of all private-sector employees.
7. About 80 percent of U.S. workers find their first jobs in small businesses.

Importance of Small Business

The nation’s economy consists of 60-80 percent jobs from the small business. Not only provide
employment opportunities, small firms offer more intimate service with its customer—more personal
customer service and the ability to respond quickly to opportunities. Small business is able to gain
profit from filling small roles big business weren’t able to cover.

Small-Business Success and Failure

Not all business end in a happily-ever-after. SBA said half of new business don’t last for five
years. Some suggest the failure rate is much lower than the statistic suggest, it is because owners who

6
closed down their business to start another, or changing ownership forms are counted as a failure.
This prompt an idea of entrepreneurs failure rate are much lower that reported.
The following are some of the causes of small-business failure:

1. Not allowing for setbacks and unexpected expenses.

2. Buying too much on credit.
3. Extending credit too freely.
4. Expanding credit too rapidly.
5. Failing to keep complete, accurate records, so that the owners drift into trouble without
realizing it.
6. Carrying habits of personal extravagance into the business.
7. Not understanding business cycles.
8. Forgetting about taxes, insurance, and other costs of doing business.
9. Mistaking the freedom of being in business for oneself for the liberty to work or not, according
to whim.
10. Plunging in without first testing the waters on a small scale.
11. Under-pricing or overpricing goods or services.
12. Underestimating how much time it will take to build a market.
13. Starting with too little capital.
14. Starting with too much capital and being careless in its use.
15. Going into business with little or no experience and without first learning something about
the industry or market.
16. Borrowing money without planning just how and when to pay it back.
17. Attempting to do too much business with too little capital

Some of the causes are caused mainly due to managerial incompetence and inadequate financial
planning. Good entrepreneurs learn from their mistake, might be more successful in their future
ventures. Milton Hershey is an example of entrepreneur who does not succumb to his failure, slowly
building up perseverance and work ethic and eventually made the world’s largest candy company,
and were able to make schools, churches, and housing for his employees. Another example is Arianna
Huffington who put failure not as an obstacle, but a stepping stone.
Choosing the right type of business is critical, that why business with low failure rates avail due
to advance training to start—veterinary services, dental practices, medical practices, etc. But human
are limited to their abilities, so if you want to be independent and rich, go after high growth business
such as technology firms.

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 Meanwhile there is business such as restaurants—easiest to open but have the least growth and
greatest failure rate. The easiest to keep alive are most difficult to started, and the one that makes you
rich are both hard to start and to keep going. Starting your own business needs a lot of thinking
because it may unlikely goes the way you plan it to be. So choose characteristic that matter most;
and plan it to multiple alternatives.
The following factors increase the chances of small-business success:
1. The customer requires a lot of personal attention, as in a salon.
2. The product is not easily made by mass-production techniques (e.g., custom-tailored
clothes or custom auto-body work).
3. Sales are not large enough to appeal to a large firm (e.g., a novelty shop).
4. The neighbourhood is not attractive because of crime or poverty. This provides a unique
opportunity for small grocery stores and laundries.
5. A large business sells a franchise operation to local buyers. (Don’t forget franchising as
an excellent way to enter the world of small business.)
6. The owner pays attention to new competitors.
7. The business is in a growth industry (e.g., computer services or web design).

LEARNING ABOUT SMALL BUSINESS OPERATION

These are hints for would-be entrepreneur before they start their business
Learn from Others
Search around local classes on small business and entrepreneurship. Many gather entrepreneurs
from diverse background who form helpful support networks. Find good location for your business,
enough capital to start it—the more the better, and lastly--look for and retain good workers. Keep
good records and hire a good accountant and lawyer before you start.
Get Some Experience
Many successful entrepreneurs gain experience from their previous jobs, with the rule of thumb
like ‘’have three years of experience in a comparable business first’’. Back in 1818 Cornelius
Vanderbilt work to a steam-boat company before quitting, and before he start his $100 million
steamship company.
Running a small business part-time during off-hours and week-ends can bring rewards, while still
working under a pay check. The making ethical decision box can teach ethical question about using
the knowledge you’ve gained as an employee to start your own business.
Take Over Successful Firm

8
 There are two ways to take over successful firm
1. Profit sharing. While the owner benefits with 60 percent without having to work, you
benefit by making 40 percent of the profits of a successful firm. Small-business owners
tend to get board due to the effort and time invested, and are eager to get away or have
long vacation. This is a good opportunity to find apprenticeship and training from a
successful businessperson who owns small business. work for them for a year or so,
then start to learn all about the business—suppliers, inventory, bookkeeping, customers,
promotion, etc. By the following year you can propose a profit-sharing plan with the
owner while paying yourself a salary.
2. buy the business outright. Determine a fair price of a business based on the values of
what the business owns, what it ears, and what makes it unique.

If both ways prevail, you could quit and start your own business fully trained.

MANAGING A SMALL BUSINESS

Poor management has become the major cause of small business failure. To help you succeed in becoming
a business owner, in the following sections we explore the functions of business in a small-business setting:
1. planning
2. financing
3. marketing
4. human resource development
5. accounting
Although all hold an important role to the business, the first two—planning and financing—are the most
primary concerns when starting your own business, while the others could be taken care of once operations
is under way.
Begin with Planning
Entrepreneur need a business plan, which is a detailed written statement that describes the nature
of the business, the target market, the advantages the business will have over competition, and the
resources and qualifications of the owner(s). from specifying the product or services offered, their
competition, calculation on starting capital, and cover other detail of operation, as it is mandatory for
talking with bankers or other investors.
Lenders need a credible business to support to, so you need to pick a bank that serves your scale
of business and get a good accountant to prepare a complete set of financial statement and a personal

9
balance sheet. Gives good impression to the bankers and state your needed amount of money in
specific.
Writing a Business plan can take along time, but bankers only need five minutes to catch their
interest to invest. Comprehensive and organized business plan can help new business evolves, and
there are numerous software and books that teach you how to make one. So explore the knowledge
and complete your business plan into the right hands so findings funding to your new venture will
pay off later.

Getting Money to Fund a Small Business

 Family and business associates

The most common source of funding after personal savings is friends and family. You
may even want to consider borrowing from a potential supplier to your future business.
Helping you get started may be in the supplier’s interest if there is a chance you will be a
big customer later
 Banks and finance institutions
The credit crunch spurred by the recent financial crisis made it necessary for
smallbusiness owners to do a little extra shopping to find a friendly lender.
 Angels and venture capitalists
Individual investors are also a frequent source of capital for most entrepreneurs. Angel
investors are private individuals who invest their own money in potentially hot new
companies before they go public. A number of websites match people who want money
with those willing to lend it.

Venture capitalists may finance your project—for a price. Venture capitalists may ask for
a hefty stake in your company (as much as 60 percent) in exchange for the cash to start
your business. If the venture capitalist takes too large a stake, you could lose control of
the business.

OUTLINE OF A COMPREHENSIVE BUSINESS PLAN

A good business plan is between 25 and 50 pages long and takes at least six months to
write.

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 Cover Letter
Your cover letter should summarize the most attractive points of your project in as few words
as possible. Be sure to address the letter to the potential investor by name.
 Section 1—Executive Summary
Begin with a two-page or three-page management summary of the proposed venture. Include
a short description of the business, and discuss major goals and objectives.
 Section 2—Company Background
Summarize the firm’s financial condition, and include past and current balance sheets,
income and cash flow statements, and other relevant financial records.
 Section 3—Management Team
Include an organization chart, job descriptions of listed positions, and detailed résumés of
the current and proposed executives. A mediocre idea with a proven management team is
funded more often than a great idea with an inexperienced team.
 Section 4—Financial Plan
Provide five-year projections for income, expenses, and funding sources. Don’t assume the
business will grow in a straight line.
 Section 5—Capital Required
Indicate the amount of capital needed to commence or continue operations, and describe how
these funds are to be used.
 Section 6—Marketing Plan
Discuss strengths and weaknesses of the product or service. The most important things
investors want to know are what makes the product more desirable than what’s already
available and whether the product can be patented.
 Section 7—Location Analysis
Provide a comprehensive demographic analysis of consumers in the area of the proposed
business as well as a traffic-pattern analysis and vehicular and pedestrian counts.
 Section 8—Manufacturing Plan
Estimates of product costs should be based on primary research.
 Section 9—Appendix

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Provide a bibliography of all the reference materials you consulted. This section should
demonstrate that the proposed company won’t be entering a declining industry or market
segment.

The Small Business Administration (SBA)

Is a U.S. government agency that advises and assists small businesses by providing
management training and financial advice and loans. The SBA started a microloan
demonstration program in 1991. The program provides very small loans (up to $50,000) and
technical assistance to small-business owners. It is administered through a nationwide
network of nonprofit organizations chosen by the SBA. Rather than award loans based on
collateral, credit history, or previous business success, the program judges worthiness on
belief in the borrowers’ integrity and the soundness of their business ideas.

Knowing Your Customers

One of the most important elements of small-business success is knowing the market ,
which consists of consumers with unsatisfied wants and needs who have both resources and
willingness to buy. Once you have identified your market and its needs, you must set out to
fill those needs. How? Offer top quality at a fair price with great service.

One of the greatest advantages small businesses have is the ability to know their
customers better and adapt quickly to their ever-changing needs. The only way to know what
your customers’ needs are is to listen, listen, listen. Don’t let your passion and ego get in the
way of changing your products or services to fit what customers really want.

Managing Employees

Employees of small companies are often more satisfied with their jobs than are their
counterparts in big business. Why? Quite often they find their jobs more challenging, their
ideas more accepted, and their bosses more respectful.

Keeping Records

A businessperson who sets up an effective accounting system early will save much grief
later. Accurate recordkeeping enables a small-business owner to follow daily sales,

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 expenses, and profits, as well as help owners with inventory control, customer records, and
payroll.

Looking for Help

An inexpensive marketing research study may help you determine where to locate, whom
to select as your target market, and what is an effective strategy for reaching it. Thus a
marketing consultant with small-business experience can be of great help to you, especially
one who has had experience with building websites and using social media. Two other
invaluable experts are a commercial loan officer and an insurance agent. The commercial
loan officer can help you design an acceptable business plan and give you valuable financial
advice as well as lend you money when you need it. An insurance agent will explain all the
risks associated with a small business and how to cover them most efficiently with insurance
and other means like safety devices and sprinkler systems.

GOING GLOBAL: SMALL-BUSINESS PROSPECTS

Technological advances have helped increase small business exporting. PayPal makes it possible
for small businesses to get paid automatically when they conduct global business online. The
Internet also helps small businesses find customers without the expense of international travel. As
people acquire more wealth, they often demand specialized products that are not mass-produced
and are willing to pay more for niche goods that small businesses offer.

Still, many small businesses have difficulty getting started in global business. Why are so many
missing the boat to the huge global markets? Primarily because the voyage includes a few major
hurdles: (1) financing is often difficult to find, (2) would-be exporters don’t know how to get
started and do not understand the cultural differences between markets, and (3) the bureaucratic
paperwork can threaten to bury a small business.

Small businesses have several advantages over large businesses in international trade:

• Overseas buyers often enjoy dealing with individuals rather than with large corporate
bureaucracies.

• Small companies can usually begin shipping much faster.

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• Small companies can provide a wide variety of suppliers.

• Small companies can give customers personal service and undivided attention, because each
overseas account is a major source of business to them.

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15
Summary on the Undang-Undang Republik Indonesia No.9 Year 1995 ( the
Law on Small Business)

This law weight the decision and recognition for the law on small businesses based on the
Pancasila and UUD 1945 (1945 Constitution), in agenda of implementing national
development of government, business community, and prosperous society. in relation to this
matter, Small-scale Enterprises need to be more empowered in utilizing business opportunities
and responding to the challenges of economic development in the future.

Chapter 1, article 1 defines the meaning of the following:

1. Small Business is a small-scale community economic activity that meets the criteria of
net assets or annual sales and ownership as stipulated in this Law;
2. Medium Enterprises and Big Businesses are economic activities that have criteria for
net worth or annual sales results greater than net worth and the results of annual sales
of Small Businesses;
3. Empowerment is an effort undertaken by the Government, the business world, and the
community in the form of growing the business climate, fostering and developing so
that the Small Business is able to grow and strengthen itself into a strong and
independent business;
4. The business climate is a condition that is sought by the Government in the form of
stipulation of various laws and regulations in various aspects of economic life so that
Small Businesses obtain certainty, equal opportunities, and business support to the
fullest so that it develops into a strong and independent business;
5. Guidance and development is an effort carried out by the Government, the business
world, and the community through the provision of guidance and reinforcement
assistance to grow and enhance the ability of Small Businesses to become strong and
independent businesses;
6. Financing is the provision of funds by the Government, the business community, and
the community through financial institutions, banks, non-bank financial institutions, or
through other institutions in the context of strengthening the capital of Small
Businesses;
7. Loans are the granting of collateral for Small Business loans by a guarantor institution
as support to increase opportunities to obtain financing in order to strengthen their
capital;

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 8. Partnership is business cooperation between Small and Medium Enterprises or Large
Enterprises accompanied by coaching and development by Medium Enterprises or
Large Businesses by taking into account the principles of mutual need, mutual
reinforcement, and mutual benefit.

Chapter 2 article 2, 3, and 4 states basis, principles and objectives of the law in order, as it
further elaborates the Small business empowerment holds the principle of kinship, and aims to
grow and improve small business to develop and to increase the role of small business in the
formation of national products, expanding employment and business opportunities, increasing
exports, and increasing and equitable distribution of income as a backbone to strengthen the
national economy.

Chapter 3, article 5 elaborates the criteria of a small business, including

1. Net worth no more than Rp200,000,000.- excluding land and buildings for
business
2. Annual sales result od at most a billion rupiah
3. Belong to an Indonesian citizen
4. Is a standalone; not subsidiarized, owned, controlled, affiliated in any way with
medium or large business.
5. Are in the form of individual business that is not a legal entity or body.

Chapter 4 talks about the business climate of small business including the aspect which this
law covers in article 6; funding, competition, information, partnership, licensing, and
protection. Article 7, 8, 9, 10, 11, 12, and 13 are filled with attempts on how government
improve small business climate aspects in order.

Chapter 5 talks about development of small business in Indonesia, mainly discussed the
effort that government gives to the community in conduct coaching and development of small
business in the fields of production and processing, marketing, human resource and technology,
as explained in article 14. In terms of the ways, as stated in article 15, includes improving
managerial skill, ability in design and engineering, and also provide facilities in procurement
of production processing facilities and infrastructure. Article 16 to 20 further elaborates the
ways of improving these effort in their respective fields.

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 Chapter 6 stated the funding and loaning process which considered legal within the small
business. In article 21, The government gives help in the funding in bank loans, credits, capital
venture, and other kind of funding. In article 22 it is restated the access given in funding to
small business by the government. Chapter 8 talks about effort in coordination and controlling,
as stated in article 33 that the president can form a controlling body for small businesses, and
its minister responsible for small business empowerment.

Chapter 9. article 34 and 35 stated the provision and criminals for anyone with the intention
of benefiting themselves illegally through small business trough government work to intended
and reserved for small business can lead to five years of maximum jailtime and maximum fine
of two billion rupiah. Article 35 restated that the act in article 34 is a criminal offense. Chapter
10 talks about the administrative sanctions which in article 36 stated can leas to maximum fine
of 5 billion rupiah by authorized agency, and if committed by or on behalf of the business
entity, sanctions can be in the form of temporary revocation.

Chapter 11 is the closing which stated that the enactment of this Law, all laws and
regulations relating to the regulation of Small Businesses remain valid as long as they do not
conflict with this Law. This law is legalized by the president at the time, Soeharto.

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