COURSE TITLE: THE ENTREPRENEURIAL MIND

COURSE CODE: ENT 101

COURSE DESCRIPTION: This course is design to train the mindset of students by developing
their attitude to become motivated entrepreneurs. Students will be immersed in
situations that could change their lives and inspire them to address these changes using
their skills to carefully evaluate opportunities, productively resolve complications,
effectively communicate with people, and effectively work as an individual and in teams
as how it affects the organization.
PRE-REQUISITE/CO-REQUISITE

COURSE OBJECTIVES:

Comprehend the importance of entrepreneurship and its impact to the economy

Know the activities in their address for an entrepreneurial career
Design a viable business plan and its effectiveness

COURSE CONTENTS

Module 1: The Concept of Entrepreneurship and its Role to the Economy

Module 2: Different Types of Businesses, Its Challenges and Opportunities Contents of the Business
Plan

Module 3: Contents of the Business Plan, Accounting and Legal Requirements of a Business

Module 2 Title: Different Types of Businesses: Trading, Manufacturing and Servicing

Overview

Module Objectives

After module 2, you are expected to:

Coverage:

Module 2:
Topic 1
THREE TYPES OF ENTREPRENEURIAL BUSINESS: TRADING, MANUFACTURING AND SERVICING

Trading or merchandising – is the buying of goods and selling them the same without change in
form. It is the process of buying and selling goods.

Retailing – are selling goods in small quantity

Wholesaling – goods are sold in big quantities or volume.

Examples:
1. Self-service retailer – super market 9. Combination store – Mercury Drug
2. Limited- service retailer – dress store 10. Hypermart – SM hypertmart
3. Full service- retailer – cellphone store 11. Discount Store – 99 store
 4. Specialty store – National Bookstore
5. Department Store – Robinson
6. Supermarket – Waltermart
AVON
7. Convenience Store – 7-Eleven
8. Superstore – SM
12. Factory outlet – Surplus Shop
13. Price clubs - Makro
14. Door-to-door seller or direct marketer -
15. Vending Machine – Coca-Cola
16. Seller by mail or telephone or TV

1. Trading – The most popular non-store trading is direct marketing. The seller builds a
personal and continuous relationship with buyers. The seller knows the need, capacity and
the temperament of the buyer. The seller knows to whom, when and where to make the
offer.

2. Manufacturing – is the process of converting raw material into finished products.

Raw material – are what you see in the completed product.
Direct Labor – is the work on the raw material as it is converted into finished
product.
Factory overhead – resources or cost that need to be paid for in making products
other than raw materials and direct labor

3. Service business – doing work for others.

PROFIT – is the reason for doing the business . It is the excess of revenue over cost or
expenses.
If cost is greater than the revenue, there is a loss. I order to make profit the seller
must sell more than the total cost and overhead, this is called mark-up.
Cost is what is paid for the product purchased which is intended for resale or for
manufacturing into another product.
Direct Cost for retailing is the cost for the product purchased, for manufacturing.
They are the cost of direct materials and direct labor and in a service, they are the
direct costs of rendering the service.

Retailing – is the selling of goods services directly to the final consumers or users. Final consumers
can be individual person or a business unit. Example of retailing is the National Bookstore and
Meralco are traders even with the sari-sari store. Traders can be a retailers and wholesalers at the
same time.

KINDS OF RETAILERS
1. Department Store– carries a wide variety of product line usually clothing, shoes, bags,
beauty products, home furnishings and household goods.
2. Supermarkets – sell a variety of foods and household products.
3. Specialty Store – carry a variety of models for one kind or limited product line. Ex. Cellphone
store carrier brands: Oppo, Samsung etc. with different models and program.
4. Convenience Store – stores that carry high turnover goods, twenty-four hours a day and
seven days a week.
5. Superstore –larger than supermarket and department store have emerged.
6. Factory outlet – different manufacturers are grouped together in one factory outlet mall.
7. Direct selling – is one-on-one selling

Different Types of Trading Business

A. Amount of Service – self-service, limited service, full service
 B. Product Line – specialty store, department store, supermarket, convenience store,
superstore, combination store, hypermarket, service business
C. Retail Prices – discount store, off – price retailer, factory outlet, independent off-price
retailer
Warehouse club, catalogue showroom.
D. Control Outlet – chain store, retailer cooperative
E. Type of Store Cluster – central business district, shopping center

Non-store retailing include:

A. Direct Marketing
a. Door-to-door retailing
b. Automatic vending
B. Direct Mail Marketing
C. Catalogue Marketing
D. Telemarketing
E. Television Marketing
F. Electronic Marketing

The effects of trading in business

In retail business the turnover of goods is fast and the money inflow is also fast. There is an
inflow of cash from the buyers to the company as a result there is a procurement of new materials,
investment on tools and equipment, products are sold either on retail or wholesale.

The benefits of retailing

1. It allows fast movement of products – Discounted price of a product encourage the
customers to buy several or in combination
2. It encourages people to buy more – Promotions like buy one take one encourages customer
to buy in bulk.
3. Enhances buyer-owner relationship – Sellers must be friendly for customer retention
4. Retailing is the answer to small buyers –
5. Retailing is a business strategy – slow moving product are packed with free items, another
strategy is the offering of credit cards to sell goods and services.

MANUFACTURING
It refers to the process of converting raw material to finished products.

Factors to be considered in manufacturing business

1. Capital – How much capital is available for tools, equipment, machines, raw materials,
payment for wages, overhead and other expenses.
2. Production space – How big or small is the space? Is it owned? How much is the rent? What
are the terms for leasing the property?
3. Storage for materials and finished goods – Is there a space for storing materials and finished
goods.
4. Labor costs and labor supply- Is there a ready supply of qualified workers? What is the
prevailing wage rate in the area?
5. Factory overhead – how much would be the factory overhead given the cost of utilities like
water and electricity and other costs?
6. Technology – To produce a product, technology should be available.
7. Cost of manufacturing – If the cost of manufacturing would be higher than that of the
competition then cost must be reduced.
8. Availability of raw materials – the source of raw materials must be available all year round.
 9. Competition – Selling the price higher than competitors causing difficulty in moving the
products.

The general classifications of manufacturers in the country

1. Manufacturers of footwear
2. Canned goods manufacturers
3. Manufacturers of soap and toiletries
4. Manufacturers of food products
5. Manufacturers of garments
6. Manufacturers of school and office supplies

THE FLOW OF OPERATIONS IN MANUFACTURING

INPUT PROCESS OUTPUT

PURCHASE RAW MATERIALS PROCESSES SELLS FINISHED GOODS

RAW MAATERIALS
DIRECT LABOR
FATORY OVERHEARD

FEEDBACK

MANUFACTURING COST or PRODUCTION COST

It is the sum of the cost of direct material or direct labor and factory overhead. The following
are classifications of manufacturing costs:
DIRECT COSTS:
1. Direct materials – pertain to all materials which form part of the finished product which can
be measured and charged directly and which can be identified as forming part of the
product, such as leather to make a bag.
2. Direct labor – is labor used in manufacturing a product which can be charged directly to that
particular product. An example is the wages paid to a carpenter to make furniture.
3. Factory overhead – refers to indirect elements of cost incurred to turn out a finished product
which maybe in the form of indirect materials, indirect labor or other indirect expenses.

INDIRECT COSTS:
1. Indirect materials – are materials needed for the completion of the product but which
consumption with regard to the product is either so small to charge them directly to a
particular unit of product. Example are nails, glue, sandpaper to use in the manufacture of
furniture. These also include factory supplies or physical goods which are used in production
as a whole and not for a particular unit of product like janitorial supplies and other items
needed to keep the factory clean.

2. Indirect labor – refers to human effort used in the factory which cannot be identified as
pertaining to a particular pre and the like.

3. Other indirect expenses – are expenses necessary for the production as a whole such as light
and power, rental, insurance, taxes.
IMPORTANCE OF MANUFACTURERS
1. They contribute to the movement of the economy
2. They provide supply of products needed by the people
3. They provide employment and income to the households
4. They pay taxes to the government

ELEMENTS IN CHOOSING PRODUCTS TO MANUFACTURE OR SERVICE TO OFFER

1. Personal interest – Your interest will determine your success. Perseverance and patience will
finished whatever it is you are into.
2. Your competence – Determine your competency or whatever you are good at.
3. Competition –
4. Available resources
5. Season
6. Capital
7. Personal exposure
8. Market demand
9. Ethics in business

SERVICE BUSINESS
Service business is doing work for others. The service offered could be the service of a single
individual, like electrician to the sophisticated services of hotels and banks. Your idea as how a
product should be marketed commands a price, your artistic talent also commands a price.

Small business service sector:

-beauty parlors, barber shops, daycare centers, restaurants, collection (bayad) centers,
flower shops, pensionne house, bake shops, dress shops, car repair shops, water stations.

Large Corporations
- Banking and finance, hotel and restaurant services, schools, entertainment (theme
parks, movie houses, tv productions), hospitals, call centers, transportation services (bus
companies, airlines, shipping lines).

Professional services
- Medical/dental services by doctors, legal services by lawyers, accounting services,
engineering services, tutoring services, services by architects.

GUIDE IN PRICING YOUR SERVICE

1. Consider the minimum wage as fixed by law
2. Determine how long, more or less, it will take you to finish the job.
3. Find out your competitor’s price.
4. Consider the risk involved
5. Consider the paying capacity of your customer
6. Consider the resources that you will put in
7. Consider the simplicity or complexity of the job to be performed.