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ENT 112 – Entrepreneurship
E
ntrepreneurs engage in various activities – some big, some small, and others in between.
Their activities could be trading, manufacturing, or service business. They are supported by
either the family members or members of the community as employees. Entrepreneurs cater
to the people not only in big cities but in small towns as well.
1) Merchandising or Trading
This refers buying of goods and selling the same without change in form. There are two types of
merchandising: (1) retailing and (2) wholesale.
Retailing – In this type of merchandising, goods are sold in small quantities. The final consumer
may be an individual person or a business unit.
Lenin Computer
These carry a variety of models for one Systems
(3) Specialty Stores
kind or limited product line. Expression Mobile
Center Lenin Hardware
SM Hypermarket
These are larger than supermarkets and
(5) Superstores Puregold
department stores have emerged.
Super 8
Wholesaling – In this type of merchandising business, goods are sold in big quantities or in
volume. Products sold in this type may either be apparel, electrical goods, groceries and related
products, hardware, plumbing, heating equipment, lumber, construction materials, machinery,
equipment, supplies, motor vehicles, automotive equipment, paper, paper products, petroleum,
or petroleum products. Examples of wholesaler would be Unicity and Unitop Zamboanga.
2) Servicing
It is a type of business whose purpose is to do work or to provide services for people. It is a kind
of business that renders or sells services to customers or clients.
3) Manufacturing
It is a type of business who manufactures products by converting raw materials into finished
products. The manufacturer buys the raw materials. Then, it makes the raw materials to finished
products by applying direct labor and factory overhead. There are manufacturers of
shoes/footwear (in Marikina), canned goods, soap and toiletries, food products, garment, school
and office supplies, glass wares, silverwares, China wares, or kitchen wares. Examples would be
Mega Fishing Corporation, Uniliver, Nestle, Nutri Asia, San Miguel Corporation, Toyota Motor
Corporation, and Advance Paper Corporation.
▪ Raw Materials – These are what you see in the completed product. For example, in
shoes and handbags, the leather is the raw material. Paper is the raw material for books.
Wood is the raw material for furniture.
▪ Direct Labor – This is the work on the raw materials as it is converted into finished
product. Direct labor is the work of the carpenter on the wood to convert wood to
furniture.
▪ Factory Overhead – These are the resources needed or costs that need to be paid for in
making products other than raw materials and direct labor. To manufacture handbags,
some examples of factory overhead are the electricity, salary of the supervisors, phone
bill, rental of factory space, and the water bill. Factory overhead refers to all costs in
manufacturing other than raw materials and direct labor.
Although numerous and diverse, the legal forms of business organization fall into three categories:
the sole proprietorship, the partnership, and the corporation. To understand the basic differences
among these forms, we need to define each one and understand its advantages and disadvantages.
1) Sole Proprietorship – A sole proprietorship is a business owned by one person who operates it
for his or her own profit. The typical sole proprietorship is small, such as a sari-sari store,
convenience store, barbershop, parlor, and hardware shop.
2) Partnership – A partnership is formed through ―a contract whereby two or more persons bind
themselves to contribute money, property, or industry into a common fund with the intention of
dividing profits among themselves. (Art. 1767, Civil Code of the Philippines)
ADVANTAGES DISADVANTAGES
3) Corporation – A corporation is an artificial being created by operation of law, having the right of
succession and the powers, attributes and properties expressly authorized by law or incident to
its existence. (Sec. 1, Corporation Code of the Philippines)
ADVANTAGES DISADVANTAGES
▪ The corporation enjoys a continuous existence ▪ It is subject to more taxes.
because of its power of succession. ▪ It is subject to rigid governmental
▪ The corporation has the ability to obtain a strong control.
credit line because of continuity of existence. ▪ The limited liability of its
▪ Large scale business undertakings are made shareholders may weaken its credit
possible because many individuals can invest their capacity.
funds in the enterprise. ▪ It is not easy to organize because
▪ The liability of its investors or shareholders is of its complicated legal
limited to the extent of their investment in the requirements and high costs in its
corporation. organization.
▪ The transfer of shares can take effect without the ▪ Its centralized management
need of prior consent of other shareholders. restricts a more active participation
▪ Its smooth operation is guaranteed because of its by shareholders in the conduct of
centralized management. its corporate affairs.
Quizzer 2: IDENTIFICATION
Direction: Indicate whether each statement corresponds to a service business or a manufacturing
business. Write S if the statement corresponds to a service business or M if the statement
corresponds to a manufacturing business on the space provided.
COLUMN A COLUMN B
______________ 1. Taxi Business A. Entertainment Service
______________ 2. Celebrity Manager B. Medical Service
______________ 3. Dermatologist Clinic C. Transportation Service
______________ 4. Barber Shop D. Food Service
______________ 5. Catering Business E. Personal Service
Answers: 1. C, 2. A, 3. B, 4. E, 5. D
REFERENCE
Banastao, C. B. & Frias, S. A. (2010). Entrepreneurship. Makati City, Philippines: KATHA Publishing Co., Inc.