FISHERIES

ENTREPRENEURSHIP

Prepared by:

IRENE CRIS P. TAGHAP

Instructor
COURSE SPECIFICATIONS

Name of Author: IRENE CRIS P. TAGHAP

Course Title Fisheries Entrepreneurship

Course This course aims to learn ideas on how to increase income from fish production
Description through promotion of small-scale enterprise.
Units/Credits 3 units
Equivalent
Course Upon completion of this course, each student should be able to:
Outcomes 1. Identify the fundamentals and responsibilities of entrepreneurship by
knowing entrepreneurship in the Philippine context with ASEAN and Global
perspectives.
2. Develop an entrepreneurial mindset and competencies by realizing the
positive outcomes of possessing them.
3. Develop leadership skills by understanding the role and function of
leadership and management.
4. Develop basic understanding of fishery businesses and fisheries
management.
5. Acquire knowledge on the laws and guidelines of the Philippines on
fisheries.

COURSE PACK STRUCTURE

Modules Intended Learning Outcomes Lessons

Introduction to  State the meaning of Lesson 1: Entrepreneurship and
Entrepreneurship entrepreneurship; Entrepreneur
 Describe the importance of
entrepreneurship;
 Outline the qualities of a successful
entrepreneur.
Entrepreneurship in  Recognize the impact and value of Lesson 2: Top Ten (10)
the Philippines entrepreneurship to the Philippine Entrepreneurs in the Philippines
economy.
 Discover the top entrepreneurs in
the Philippines.
The Nature of Small  Define small business; Lesson 3: Small Business and its
Business  Identify the different types of small Different Types
businesses; and
 Discuss the advantages and
disadvantages of operating a small
business.
MODULE I
Module Overview

Hi. Good day everyone! Welcome to ST312 (Fisheries Entrepreneurship)! This module
introduces the concept of entrepreneurship and describes its importance.

Module Objectives/Outcomes

Upon completion of this module, you should be able to:

 State the meaning of entrepreneurship;
 Describe the importance of entrepreneurship; and
 Outline the qualities of a successful entrepreneur.

Lessons in the Module

This module consists of Lesson 1 – Entrepreneurship and Entrepreneur.

MODULE I: ENTREPRENEURSHIP AND ENTREPRENEUR

Lesson I Entrepreneurship and Entrepreneur

Learning Outcomes

At the end of this lesson, you should be able to:

 State the meaning of entrepreneurship;
 Describe the importance of entrepreneurship; and
 Outline the qualities of a successful entrepreneur.

Time Frame: 6.5 hours

Introduction

Hi everyone! Welcome to Lesson 1! In this lesson you will be able to define entrepreneurship
and its importance. You will also be able to discuss the qualities or characteristics of entrepreneurs.
Lesson 1 is intended to help you develop a deep understanding of entrepreneurship.

Activity

To start this lesson, please find the words on the crossword puzzle.

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

1. entrepreneurship 4. disciplined 7. capitalist 10. innovation

2. entrepreneur 5. businessman 8. venture 11. market
3. risk-taker 6. adaptability 9. process 12. product
 Analysis

1. What is the primary motivation for an entrepreneur?

desire to be their own boss and desire to pursue their own ideas

Abstraction

Defining and Understanding Entrepreneurship

The concept of entrepreneurship is not new. The word itself derives from the French word
entreprendre, which literally means “to undertake.” Joseph Schumpeter defined entrepreneurs
as innovators who drive the “creative–destruction” process and their function is to reform or
revolutionize the pattern of production. Entrepreneurs assemble and then integrate all the resources
needed – the money, the people, the business model, the strategy – to transform an invention or an
idea into a viable business.

Today, entrepreneurship is commonly defined as the relentless pursuit of opportunity without

regard to resources currently controlled. In this regard, entrepreneurship is concerned with the
discovery and exploitation of profitable opportunities. This is in line with the early works of Joseph
Schumpeter, who focused more on the entrepreneur as an innovator and an agent of change rather
than a person who necessarily starts a new business. Hence, entrepreneurship can occur any time one
or several individuals engage in an activity that adds value to what already exists. Thus,
entrepreneurship can be viewed as a function of:
 identifying and using the opportunities exist in the market;
 converting the ideas into action; just as managements regarded as what managers do;
entrepreneurship is regarded as what entrepreneurs do;
 undertaking promotional activities to launch an enterprise;
 striving for excellence in his/her field of work;
 bearing the risk and uncertainties involved; and
 harmonizing.

The Importance of Entrepreneurship

It has been said that entrepreneurship is essential for economic development. In capitalistic
economies, the entrepreneurs played an important role in their development while in socialist
economies, the state played the role of the entrepreneur.
 But in a developing country like Philippines which followed the path of mixed economy, both the
government and the private entrepreneurs played an equally important role. Thus, entrepreneurship:
 helps the formation of capital by bringing together the savings and investments of people;
 creates new business and job opportunities;
 improve standards of living and create wealth, not only for the entrepreneurs, but also for
related businesses; and
 help boost national income and tax revenue

Why Become and Entrepreneur?

There are three primary reasons why people want to be an entrepreneur and start their own
firms:
1. desire to be their own boss
2. desire to pursue their own ideas
3. financial rewards

Qualities of Successful Entrepreneurs

Figure 1.1 Qualities of successful entrepreneurs

A successful entrepreneur must possess these four (4) primary qualities.

Passion for business

 The number one quality shared by successful entrepreneurs is a passion for the business.
 This passion typically stems from the entrepreneur’s belief that the business will
positively influence people’s lives.

Product/Customer focused
 A second defining quality of successful entrepreneurs is a product/customer focus.
 An entrepreneur’s keen focus on products and customers typically stems from the fact that
most entrepreneurs are, at heart, craftspeople.
Tenacity despite failure
  Because entrepreneurs are typically trying something new, the failure rate is naturally high.
 A defining quality for successful entrepreneurs is their ability to persevere through setbacks
and failures.

Execution intelligence
 The ability to fashion a solid business idea into a viable business is a key quality of successful
entrepreneurs.

Other Common Qualities:

Initiative
 An entrepreneur must have an innovative aptitude, pick the right opportunity, and initiate
action. If he/she does not initiate action at the right time the opportunity may be lost.
Leadership qualities
 An entrepreneur should possess the qualities of a good leader. He/she should have the traits of
self-discipline, presence of mind, sense of justice, honour and dignity and above all, a high
moral character.

Self-confidence
 A person who lacks confidence can neither do any work himself/herself nor inspire others to
work. Self-confidence is reflected in courage, enthusiasm and the ability to lead.

Adaptability
 The entrepreneur must understand the ground realities of the business environment. He/she
should be prepared to adapt to the changes taking place in the system.
Disciplined
 If you can discipline yourself to do what you should do, whether you feel like it or not, your
success is virtually guaranteed.

Issues and Problems Faced by Entrepreneurs

Selection of business
The entrepreneur might be having a very good business idea.
However, successful implementation of the idea into business activity
involves a painstaking exercise. First of all, he/she has to study the
market to know whether the idea of products or services could be
accepted by the market.
For the purpose, the entrepreneur has to determine the market
demands of the intended products/services and carry out exercises to
find out the projected costs of the product or services. In this way, the
entrepreneur shall be able to know as to whether the venture is
profitable or not.
Illustration 1.1 Selection of business
This systematic exercise is known as a Feasibility Study and presented in the form of a report
known as Feasibility Report or Project Report. Not only that, an entrepreneur may conceive number of
ideas and identify many new business opportunities. In view of limited resources he may like to give
shape to most the profitable one. The feasibility studies shall help him/her to identify the same
.
Choice of form of business
There are various options available to the entrepreneur as far as the choice of form is
concerned. He/She may go in for sole proprietorship, a partnership or a joint stock company. The
choice is rather difficult issue. However, there are certain lines of business where one has no choice.

Financing
The problem of arranging finance always troubles the entrepreneur. As you know, without
capital no business activity can be started.
Location
The problem of locating the business unit is another issue for consideration that should be
carefully handled by entrepreneur. Location of a business unit depends upon many factors like
availability of raw material, availability of transport, power, water, nearness to market etc.

Machines and equipment

The choice of machines, equipment and processes is a delicate problem before starting a new
venture. This depends on various factors like availability of funds, size of production, and the nature of
production process. The emphasis should be placed on productivity. Availability of facilities of repairs
and maintenance, availability of spare parts and after sale service are also an important consideration
while selecting a particular equipment and machinery.

Suitable manpower
If the size of business is large, the entrepreneur has to find suitable competent persons for
various functional areas. He/She has to identify the right persons for each area and motivate them to
join the set up. It is not that easy. It involves a lot of patience and persuasion.

----------

Application

Please write the correct answer on the space before the number.

Entrepreneurship1. _ is commonly defined as the relentless pursuit of

opportunity without regard to resources currently controlled.
Entrepreneur 2. An _ assembles and then integrates all the resources
needed – the money, the people, the business model, the strategy – to
transform an invention or an idea into a viable business.
TRUE 3. True or False:
The problem of arranging finance always troubles the entrepreneur.
Assessment

After reading the lesson, how do you think being an entrepreneur affects a person’s life?
Explain your choice and write your answer in a space provided below.

Choosing to be an entrepreneur is one of the most empowering things one

can do, but starting a business can be emotionally consuming, stressful
experience and is likely to affect a person’s life. Imagine two people -
entrepreneur and armless guy. Having no arm isn’t a very satisfying way of
life. This is an obvious problem. So, entrepreneur can affect the life of such a
person in a very positive way. By delivering prosthetic arm to try to ‘bring
back’ his lost arm. So, the life of the armless guy is less miserable and more
enabling to do stuff.

Entrepreneurs are to solve problems with their commercial solutions.

Generally, when you have a problem, you can buy a solution from an
entrepreneur. This way entrepreneur can make a person’s life better.

Closure
Congratulations for finishing Module 1 – Lesson 1!  You may now proceed to the next
module.

Module Summary
In this module, you have learned the following:

 Entrepreneurship is the process involving various actions to be undertaken by the

entrepreneur in establishing a new enterprise. In fact, what the entrepreneur does is
regarded as entrepreneurship.
 Entrepreneurs are innovators who drive the “creative–destruction” process and their
function is to reform or revolutionize the pattern of production.

References

 Greene, Cynthia (2013). ENTREPRENEURSHIP. Cengage Learning Asia Pte Ltd

 Hisrich, R. & Peters, M. (2000). Entrepreneurship: Starting, Developing, and Managing a
New Enterprise. Chicago: Irwin.
MODULE II
Module Overview

Hi everyone! Welcome to Module 2. This module describes entrepreneurship in the Philippines

setting and also identifies the top ten (10) successful entrepreneurs in the Philippines.

Module Objectives/Outcomes

Upon completion of this module, you should be able to:

 Recognize the impact and value of entrepreneurship to the Philippine economy; and
 Discover the top entrepreneurs in the Philippines.

Lessons in the Module

This module consists of Lesson 2: Top Ten (10) Entrepreneurs in the Philippines
 MODULE II: ENTREPRENEURSHIP IN THE PHILIPPINES

Lesson II Top Ten (10) Entrepreneurs in the Philippines

Learning Outcomes

At the end of this lesson, you should be able to:

 Recognize the impact and value of entrepreneurship to the Philippine economy; and
 Discover the top entrepreneurs in the Philippines

Time Frame: 6 hours

Introduction

Hello students! Lesson 2 recognizes the impact and value of entrepreneurship to the Philippine
economy. In this lesson, you will also be able to discover the top entrepreneurs in the Philippines.

Activity
To start this lesson, list at least 5 names of local successful entrepreneurs in Davao Region and
include their business name/type.

1. Leo Revita ( Leo Revita Beauty Salon/SEVICES )

2. Antonio Floirendo Sr. ( Banana Plantation )
3. Sanico Bongabong ( Medical Clinic/SERVICES )
4. Edward tee ( Agri ventures )
5. Jose “Boy” Tuason Jr.(Hijo Resources Corporation (HRC)

Analysis

1. What are the factors that stimulate entrepreneurship in the Philippines?

Government support
Strong Tourism Industry
Security
Culture

These factors play a significant role in stimulating entrepreneurship in the

Philippines. With government support, strong tourism industry, security, and hospitable
culture, entrepreneurship in the Philippines is thriving and is steadily growing.
 Abstraction

Entrepreneurship in the Philippines

In the Philippines, 6.2% of the adult population are established business owners and 18.4% are
engaged in early-stage entrepreneurship. Nearly half (46%) of all Filipinos have a very positive view of
the entrepreneurial opportunities in their country; furthermore, 66% believe they have the
entrepreneurial capabilities needed to start a business.

Although perceived entrepreneurial capabilities of Filipinos are high, 89.5% did not receive
formal training at school. Filipino entrepreneurs see owning a business as a path to being independent
as well as the opportunity to earn a living and improve one’s economic lot. More than half
(52%) of Filipino entrepreneurs are in the age group 18-44 years. Eighty–three percent (83%) of
entrepreneurs are involved in retail trade, hotels, and restaurants while only 3% are involved in the
transformative sector – manufacturing, construction, and transportation. Four percent (4%) are in
agriculture, forestry, and fishing. Notably, there are more women (58%) involved in entrepreneurship at
the early stage as well as in established business (55%).

Top Ten Entrepreneurs in the Philippines

Below are the stories from ten (10) of the most successful entrepreneurs in the Philippines.

Henry Sy (Shoe Mart)

Henry Sy came from an impoverished family in Jinjiang, a town near

Xiamen, China. The entire family left China in 1936 to help the family patriarch
manage a thriving convenience store in Manila. Unfortunately for the family,
their store was burned down during World War II.
However, business-minded Henry saw an opportunity selling used
Illustration 2.1 Henry Sy military combat boots and other postwar goods from supportive American
soldiers! His success led to the opening of his first shoe store, the SM in Avenida, Manila. Henry had
problems finding shoe manufacturers who could design shoes according to what he had in mind, but he
persisted. He spoke to customers and built his own network of suppliers and manufacturers. That
never- say-die attitude got Henry Sy to where he is now: one of the richest men in the world and a
world-class commercial center developer who provides opportunities to both entrepreneurs and the
working class!

Tony Tan Caktiong (Jollibee)

Also coming from an immigrant family from China, Tony learned the value of hard work and
dedication from his father who worked as a cook in a Buddhist temple. Tony’s father started a Chinese
restaurant in Manila with his savings so he can send him to college.
 In 1975, Tony bought a Magnolia ice cream parlor. However, it was not generating enough
business. After talking with his customers and people within the neighborhood, Tony decided to include
sandwiches, fried chicken, and French fries in the menu. In time, the restaurant found itself packed to
overflowing capacity. By 1978, Tony had opened six more restaurants, but the main item was no longer
ice cream. Tony then decided to adapt the McDonald’s concept and named his franchise after his
work ethic of being as “busy as a bee.”
Today Jollibee has grown to more than 2,500 stores in the Philippines plus locations in the US,
China, Saudi Arabia, Vietnam, Singapore, and Brunei.

John Gokongwei Jr. (JG Holdings)

John Gokongwei Jr. life’s story is a “rich-to-rags-to riches” story.

John Jr. was born in China to the scion of one of the wealthiest families in
Cebu. When his father died, the business and the family fortune they have
was gone. John Jr. supported his family by peddling items along the streets
of Cebu by bike. Soon, he was trading items by boat to Lucena City and to
Illustration 2.3 John Manila by truck.
Gokongwei Jr.
In 1957, he borrowed Php 500,000 from China Bank and started a
corn milling business named Universal Corn Products. By 1961, Universal
started
diversifying its products and launched several popular brands such as
Blend 45. Universal Corn Products was renamed Universal Robina
Corporation. Today, the Gokongwei family owns several successful and
highly diversified businesses. Among these are Robina Land Corporation
and Cebu Pacific.

Socorro Ramos (National Bookstore)

This woman’s brother marries scion of a wealthy bookstore owner in Manila. The girl
finds job as a saleslady at 18, meets and falls in love with the son of the owner; thus, he is technically
her in-law! Their parents forbid the relationship and sends the girl back to the province. However, their
love is so strong, girl and boy stand up to the parents, get married, and have twins.
The boy takes over a branch with the girl, and they renamed it in
National Book Store. However, a war breaks out, and the store is destroyed!
They rebuild the store, but everything is held under suspicion of being
“questionable.” They relocate the store in Avenida, but as the business
 picks up, a storm destroys their roof. Soon, they rebuild the store, and every
centavo is used to build a nine-story National Book Store. The girl is Socorro
and the
Illustration 2.4 Socorro boy is Jose. Today, National Bookstore has grown to over 100 stores. Despite
Ramos
digital technology, it continues to flourish!

Cecilio Kwok Pedro (Lamoiyan Corporation)

Cecilio’s life is not a typical rags-to-riches story; instead, it embodies the

entrepreneurial spirit of overcoming seemingly insurmountable odds. Cecilio
used to head Aluminum Container Inc., which produced the aluminum
toothpaste tubes for Procter and Gamble, Philippine Refining Company (now Illustration 2.5 Cecilio Kwok
Pedro
Unilever), and Colgate-Palmolive. However, environmental concerns led his
clients to shift to plastic-laminated toothpaste tubes. Aluminum Container Inc.
failed and closed its shop in 1986.
He put up Lamoiyan Corporation and manufactured toothpaste that
was priced 50% lower than his competitors. These included the still-popular
brands Hapee and Kutitap. Although the foreign brands countered by
lowering their brands by 20%, Cecilio responded by introducing toothpaste
targeted for children that featured the characters from Sesame Street.
Cecilio’s brands have made it to other markets in Asia, such as China,
Vietnam, and Indonesia. Cecilio’s greatest accomplishment was not
limited to manufacturing. He is also known for his advocacy to help hearing-
impaired people find employment in the country. His programs include free
housing for more than 30 deaf–mute staffs.
Mariano Que (Mercury Drugstore)

Many of today’s entrepreneurs would learn the value of

customer experience and innovation through Mariano Que. Like many of the
entrepreneurs discussed so far, Mariano found opportunities for
entrepreneurship after World War II. Mariano had been working in a local
drugstore when the war destroyed several businesses in the city.
Mariano saw the need to supply sulfa drugs, which were used to treat
Illustration 2.6 Mariano Que
bacterial infections. He started to buy sulfa tablets and sold them at affordable
prices. Soon, other people followed and adapted Mariano’s strategy. However, only Mariano sold
high- quality sulfa tablets, which ensured him a steady clientele. With his hard work and dedication to
build up savings, he was able to put up his first drug store in 1945, which he named Mercury Drug.

Alfredo M. Yao (Zest-O)

When Alfredo lost his dad at age 12, his mother was left to support
him and his siblings by becoming a sidewalk vendor. A relative was able to
give financial aid, which allowed Alfredo to reach, but not complete, college at
the Mapúa Institute of Technology.
Alfredo took several odd jobs, which included time at a printing press.
During his stay there, Alfredo learned how to print cellophane wrappers for Illustration 2.7 Alfredo Yao
candies and biscuits. His experience prompted him to start his own printing business. However, his
discovery of the Doy Packaging system from Europe was the turning point of his entrepreneurial career.
He tried to sell the system to juice manufacturers, but no one was interested. Thus, Alfredo ventured
into the juice business by concocting flavors in his kitchen.
These juices were not only delicious but also appealing to parents as they found the light and
brightly colored packs easy to include in their children’s lunch boxes. Best of all, the packaging
allowed the juice to stay chilled longer. Zest-O was born.

Corazon D. Ong (CDO Food sphere)

Corazon was a dietician by profession. She used her knowledge to

create processed meats that were affordable enough to compete with the
popular foreign brands. She developed corned beef, hamburger patties,
Illustration 2.8 Corazon Ong
meat loaf, and hotdogs, which were sold purely as a home business.
 By 1975, Corazon decided to scale her newfound business and established CDO Food sphere.
The company’s reputation to develop high-quality but low-priced processed meats quickly spread
and made CDO a regular staple in every shopping cart. As a mother herself Corazon understood the
value of having meals that can be prepared easily, taste good, and fit the family budget. In time, CDO
expanded to industrial markets. Today, CDO supplies processed meats to 90% of quick service
restaurants or QSRs in the country.

Engr. Gregorio G. Sanchez Jr. (LactoPAFI)

While working as a provincial board member in Cebu, Gregorio

noticed that pigs sold to market were apparently malnourished. He decided to
look into the cause of malnutrition by doing research in his spare time. He
discovered the pigs were suffering from a type of bad bacteria. His solution Illustration 2.9 Engr.
was a probiotic bacteria that would increase the level of good bacteria in the Gregorio Sanchez
body. The bacteria
would be called LactoPAFI Probiotic Bacteria. Gregorio’s discovery would reach global acclaim as a
leader in probiotics. It is now exported to New Zealand, Norway, France, Australia, Hong Kong, Japan,
and US.

Diosdado Banatao (Computer Chips)

Diosdado’s life story exhibits perseverance, hope, determination, and the power of self-belief.
The son of a farmer in Cagayan, Diosdado would walk barefoot just to complete his high school
education. His resilience made him a Magna Cum Laude graduate in electrical engineering.
Diosdado’s experience working with the top technology
companies led to his design of the first single-chip 16-bit microprocessor
calculator. By 1981, Diosdado was commissioned by Seeq Technologies to
assist the Ethernet to find an efficient way of linking computers. Diosdado
designed the single-chip controller that provided data-link control and the
transceiver in the first 10-bit Ethernet CMOS. His success opened doors to
build his own
Illustration 2.10 Diosdado company, Monstroni, in 1985 and Chips and Technology, which made US$
Banatao
12 million in the first quarter alone. By 1996, Diosdado sold Chips and
Technology to Intel for US$ 430 million!
 ----------

Application

Please choose the correct answer. Write your answer on the space provided before the number.

Engr. Gregorio G. Sanchez Jr. 1. A Filipino entrepreneur who conducted several tests and
experiments on how to alleviate the state of malnutrition of Cebu’s
livestock.
Socorro Ramos 2. The founder and CEO of National Bookstore.
6.2 % 3. How much percentage of the adult population are established business owners?
Corazon D. Ong 4. A Filipino entrepreneur who is a dietician by profession.

Jollibee 5. What is Tony Tan Caktiong’s first business?

Socorro C. Ramos 6. She was a saleslady at the age of 18.
Henry Sy 7. Known as one of the richest men in the world and a world-class commercial
center developer.
Alfredo M. Yao 8. Known as a successful juice manufacturer.

Assessment

1. What would you do if your business or only source of income was destroyed like what
happened to Henry Sy, Socorro Ramos and Mariano Que?
I will never confuse a lack of motivation with emotional or physical fatigue. I’m
here because I am motivated and must be positive always that everything happens for a
reason. If the problem is truly motivational, then I’m not an entrepreneur yet. Motivation
happened long ago. It happened when I had the choice between staying in school or dropping
out, keeping a job or quitting, asking for money or bootstrapping. These are the motivational
choices. Once they have been made, you really don’t have a choice.

Although, maybe these were never really choices? The soul of an entrepreneur will force
you to build businesses, be proactive, and exert the influence on to the world the best way I
know how. For many, dropping out of school wasn’t even a choice. We were entrepreneurs
before we knew it. With all the hardships and uncertainty an entrepreneur must endure,
chances are you will eventually lose your motivation if it isn’t who you are.

2. How would you react if you had lost everything you had gained in a blink of an eye like what
happened to John Gokongwei Jr. and Cecilio Pedro?
I will think about why I started in this field in the first place. I will rejuvenate my business
strategy and come up with a new and tailored business plan and Get rid of the old system as
 its obviously failing me.

3. What would you do if you woke up one morning and realized you were living in extreme poverty
as what Alfredo Yao, Tony Tan Caktiong, and Diosdado Banatao experienced?
If I woke up in the morning and realize that I am living in an extreme poverty I will motivate
myself that I can surpass all the problems came into my life or in my business. I will think
another strategy and I will stay focus on my mission and vision that is very important in
business, make my own destiny and love my way then work on it. I think one or two time before
taking any new decision or changing any existing process, I will never give up at any time if I’m
fallen this is steps for success. Design workflow, business planning very powerful and it useful
to a lot of customers and I think innovative ideas and apply it in my business and make sure
that I will succeed in my path.

Closure
Congratulations for a job well done!  Should there be some parts of the lesson which
you need clarification, please message me directly. You can now proceed to Module 3.
 Module Summary

In this module, you have learned the following:

 In the Philippines, 6.2% of the adult population are established business owners and
18.4% are engaged in early-stage entrepreneurship.
 Nearly half (46%) of all Filipinos have a very positive view of the entrepreneurial
opportunities in their country;
 Around 66% believe they have the entrepreneurial capabilities needed to start a business.

References

 Asor, W. (2009). Entrepreneurship in the Philippine Setting. First Edition. Rex Book Store,
Inc.
 Top 10 Successful Entrepreneurs in the Philippines Story, Roel Manarang -
https://tycoon.ph/top-10-successful-entrepreneurs-philippines-
story/, retrieved August 3, 2019
MODULE III
Module Overview

Hi dear students! Welcome to the last module which is Module 3. In this module, you will be
able to learn about small business and identify different kinds of small businesses. This also explains
the advantage and disadvantages of operating a small business.

Module Objectives/Outcomes

Upon completion of this module, you should be able to:

 Define small business;
 Identify the different types of small businesses; and
 Discuss the advantages and disadvantages of operating a small business.

Lessons in the Module

This module consists of Lesson 3: The Nature of Small Business.

MODULE III: THE NATURE OF SMALL BUSINESS

Lesson III Small Business and its Different Types

Learning Outcomes

At the end of this lesson, you should be able to:

 Define small business;
 Identify the different types of small businesses; and
 Discuss the advantages and disadvantages of operating a small business.

Time Frame: 6.5 hours

Introduction

Hi students! Welcome to Lesson 3. This lesson will help you understand the nature of small
business and identifies different types of small businesses. Hope you will enjoy this lesson.

Activity
To start this lesson, please rearrange the letters to form a correct word.
1.c e r v s i e = Service
2.n s u i b s s e = Business
3. n g i r t a e I I = Retailing
4. i r m f s = FIRMS
5. g r i n n u c a t m f u a = MANUFACTURING
6. l a p c i t a = CAPITAL
 Analysis

1. Why start a business?

Starting a business has several financial benefits over working for a wage or salary. First, you’re
building an enterprise that has the potential for growth and your wallet grows as your company
does. Second, your business itself is an asset. As your business grows, it’s worth more and more.
You may decide to sell it, or you may hold on to it and pass it down to your heirs. Either way, it’s
valuable. Opening your own business are very profitable these days, you'll have more freedom
and independence working for yourself. Owning and running your own business can be more
satisfying and fulfilling than working for someone else,

Abstraction

Business size is one factor that does not prevent one from engaging in entrepreneurship. Since
only a small number of people have capital large enough to start a large enterprise, the bigger number
of people with minimal resources are forced to operate on a small-scale basis, if they decide on
becoming entrepreneurs.

Since most new ventures will be

small business, it is expected that majority
of the efforts of those involved in the
propagation of entrepreneurship will focus
on small business management. The
premise is that if small businesses are
managed properly, their chances of
becoming large
enterprises are increased. Figure 3.1 Small and big amounts of capital

Since it is well-known that large enterprises bring certain benefits to the economy, small business
management is an activity worth pursuing. But if many small businesses will not develop into large
businesses, their contribution is still very significant.

Small Business

The Magna Carta for small enterprises (R.A. 6977) defines a Small Enterprise as “any
business activity or enterprise engaged in industry, agribusiness and/or services, whether single
proprietorship, cooperative, partnership, or corporation whose total assets, inclusive of those arising
from loans but exclusive of the land on which the particular business entity”.
The office, plant and equipment situated must have a value of above Php1,500,000.00 to
Php15,000,000.00. It is one which is independently owned and operated and which is not dominant in
its field of operation.
 Independently owned – means ownership is by a private individual, a partnership or a
corporation.
 Not dominant – indicates that a small business does not control a sizeable share of its market.
It is one marked by a limited number of employees and a limited flow of finances and
materials.
Five Types of Small

Business Manufacturing
This involves in converting raw materials into products needed by society. Examples are:
• printing press
• garments manufacturing
• furniture shops
• car assembly shop
• vinegar and patis manufacturers

Service
This type of business provides services in one way or another.

Classifications of Service Businesses

Classification Definition Examples
Business service provides service to other businesses • accounting firms
• janitorial services
• security services
• collection agencies
Personal service provides service to other person • tutoring services
• massage parlor
• voice lessons
Repair service provides service to owners of • auto repair shops
various machinery and appliances • watch repair
• plumbing services
Entertainment and provide facilities for recreation • movie houses
Recreation service activities and other entertainment to • resorts
the customers • billiard pool centers
Hospitality service provides facilities for • hotels and lodging
accommodation • restaurants
• travel and tours
Education service provides education • Montessori schools for
children high school
• correspondence schools
Table 3.1 Classifications of service businesses

Wholesaling
This refers to the activities of those persons or establishments which sells to retailers and other
merchants and or to industrial institutional and commercial users but who do not sell in large amounts
to final consumers. Examples are:
• soft drinks wholesalers in local areas
• dealers of supplies and office equipment
• grains wholesalers

Retailing
Retailing covers all the activities involved in the sale of goods and or services to final consumers.
• retail drugstore
 • fast food shop
• appliance store

General Construction Firm

Those engaged in the construction of buildings whether for private individuals or for the government.
Many of them perform subcontracting jobs for the bigger contractors such as installing electrical
facilities and sewerage.
Characteristics of a Small Business

Small business has their own distinctive characteristics.

1. Independent management
• the owner is also the manager
2. Small capital requirements
• small businesses require only small capital, and this can be supplied by a single or a
few individuals
3. Mostly local operation

• small business usually operates in a certain locality although there are cases when the
market is not confined to a local area

Functions of a Small Businesses in the Economy

1. Providers of economic opportunities for entrepreneurs

• People who do not feel comfortable as employees have the option of engaging in small
business operation.

2. Providers of products and services to consumers

• The production of many products and services are oftentimes not feasible for big and
medium business operation.
• These limited opportunities are naturally passed on to small businesses.

3. Suppliers of products and services to other businesses

• Some businesses require raw materials, semi-finished parts, finished components or
even labor which they could not produce.
• The small business perform this task for them.

4. Distributors of products and services of other businesses

• Some manufacturers are not able to distribute their products and services.
• Many small business assume this role for them.

5. Supporters of government
• Small businesses support the government by paying taxes and performing other
functions.

6. Providers of employment
• A large proportion of the labor force are employed by small businesses.
Advantages of Operating a Small Business

An individual has various options to improve his economic lot. They are the following:
1. be an employee,
2. be a professional, or
3. be a small business owner

Employee
• An employee enjoys a fixed working schedule like 8:00 AM to 5:00 PM.
• The pay he receives, however, is limited and dependent to a large extent on industry norms
and the financial capability of the company
• In some firms, the employee’s pay depends on the whims of the owner.

Professional
• A professional may generate higher income through the effective practice of his profession.
• A physician, for example, may set his clinic in a certain area and proceed to treat patients for a
fee.
• His income, however, is limited by the number of patients he attends to everyday as he cannot
delegate his skill to others.
• Although, he is useful to the community, his desire to provide employment to more people is
severely limited by the nature of his work

Small Business Operator (SBO)

• A small business operator keeps long working hours and absorbs whatever damages that
happen as a result of his faulty decision-making.
• However, he is afforded the following benefits:
 Opportunity to gain control over his own destiny,
 Opportunity to reach his full potential,
 Opportunity to reap unlimited profits; and
 Opportunity to make a contribution to society and receive recognition for his efforts.

Disadvantages of Operating a Small Business

There are certain disadvantages that must be considered in operating a small business.
Zimmerer and Scarborough listed the following potential drawbacks for small business:

1. Uncertainty of income;
2. Risk of losing your entire capital investment;
3. Lower quality of life until the business get established;
4. Complete responsibility;
5. Having to serve undesirable customers;
6. Paperwork and other chores; and
7. Long hours and demanding work condition.
Employment and Small Business Operation Comparison

Factor Small Business Operation Employment

1. Income Uncertain Certain
2. Capital investment Risk of losing None required
3. Quality of life Lower until business gets Consistent at a certain level
established
Responsibility
a) Gain control over his own Present Absent
destiny
b) Reach his full potential Present Absent
c) Reap unlimited profits Present Absent
d) Make a contribution to society Present Limited
and receive recognition for his
efforts Make a contribution to
society and receive recognition
for his efforts
Table 3.2 Comparison of employment vs. small business operation

Application

Please choose the correct answer. Write your answer on the space provided before the number.

Not Dominant1. It is one marked by a limited number of employees and a limited flow of finances and
materials.
Wholesaling 2.This refers to the activities of those persons or establishments which sells to retailers
and other merchants and commercial users.
Business service 3. A type or classification of service that provide service to other business.
Manufacturing 4. A type of small business which involves in converting raw materials into products
needed by society.
Independent management5. A characteristic which means that the owner is also the manager.

Assessment

1. What type of small business would you like to put up in the future? Share your thoughts.

The small business I am thinking is to buy a Franchise of a growing organization. Franchising is a

term most entrepreneurs and business professionals are familiar with, yet few have taken the time
to explore as a career opportunity. Centralized franchise support is without doubt one of the
biggest advantages of owning a franchise. The benefits of franchise support span the entire
spectrum of the franchisee journey, from the moment you become a franchise to the day you open
your business and beyond. This can include everything from negotiating preferred supplier
discounts to marketing. Franchise is pivotal in case you're hoping to begin a business in another
industry and one that you are not acquainted with or don't have any related knowledge in.
Franchise business is on fire these days, my ideas for best franchise as looking forward to this
period is the company, who is achieving success day by day because of their working ethics and
responsibility of fulfilling their customers’ needs at time. I still don’t find the best company to rely
on or spending my money on these days I still need to do a research.
 Closure

Congratulations!  You have successfully completed this module. We hope that this
course fulfilled your expectations.

Module Summary

In this module, you have learned the following:

 A small business is one which is independently owned and which is not dominant in its field
of operation.
 There are five (5) types of small businesses which are: manufacturing, service,
wholesaling, retailing and general construction firms.

References

 Greene, Cynthia (2013). ENTREPRENEURSHIP. Cengage Learning Asia Pte Ltd

 Asor, W. (2009). Entrepreneurship in the Philippine Setting. First Edition. Rex Book Store,
Inc.
 Hisrich, R. & Peters, M. (2000). Entrepreneurship: Starting, Developing, and Managing a
New Enterprise. Chicago: Irwin.
 Medina, Roberto (2007). Entrepreneurship and Small Business Management. REX Book
Store.