BUSINESS OPPORTUNITIES

IN SMALL BUSINESS
Introductory Message
For the facilitator:
(This gives an instruction to the facilitator to orient the learners and support the parents,
elder sibling etc. of the learners on how to use the module. Furthermore, this also
instructs the facilitator to remind the learners to use separate sheets in answering the
pre-test, self-check exercises, and post-test.)
For the learner:
(This communicates directly to the learners and hence, must be interactive. This
contains instructions on how to use the module. The structure and the procedure of
working through the module are explained here. This also gives an overview of the
content of the module. If standard symbols are used to represent some parts of the
module such as the objectives, input, practice task and the like they are defined and
explained in this portion.)
This module has been written in simple, clear and concise language which college
student can easily understand. As a writer, I have always impressed upon my student
readers the importance of social responsibility. To me, the acquisition of knowledge and
skills – no matter how excellent they are – has no social value if these are used for
personal interests only.
The ultimate benefits of knowledge and skills must seep down to the level of the
masses. This is the true essence of education, particularly in society where there is a
widening gap between the rich and the poor.
This module is basic or introductory to entrepreneurship has been written for
those who are planning to put up their own small business. You will find this book
helpful and an effective guide as well as a source of inspiration. It contains much
information business, and stories of rags-to-riches entrepreneurs, among others which
will be very useful not only as theoretical education, but also for practical purposes.
This module was designed and written with you in mind. It is here to help you
master the Economic Development and Entrepreneurship. The scope of this module
permits it to be used in many different learning situations. The language used
recognizes the diverse vocabulary level of students. The lessons are arranged to follow
the standard sequence of the course. But the order in which you read them can be
changed to correspond with the reference you are now using.
I. TOPIC TITLE: SMALL BUSINESS IS BEAUTIFUL
II. INTRODUCTION:

The title of his chapter is patterned after the book Small Business is Beautiful by
E.F. Schumacher. In this book, he argued that in poor or developing countries small
projects are much better than big projects. Schumacher defended his recommendation
by stating the advantages of a small projects in every village compared with a few big
projects scattered throughout the country. The author further said that such small
projects utilized local labor, local materials and local management. Together with
intermediate technology. This kind of technology is between modern technology and
primitive technology.
In the same manner, small business is better than big business, especially in a
poor country. The poor masses cannot start with a big business. Obviously, their
business opportunities are found in micro and small business. Although small business
has its shortcomings or disadvantages, it is more relevant to poor or developing
economies like the Philippines.
This chapter explains the small business, the characteristics of small business,
and the differences between small and big business. Furthermore, the advantages and
disadvantage of small business is discussed. Also, the contributions of small business
to the economy are Represented.
III. SPECIFIC OBJECTIVES:
At the end of the topic session the students are expected to:
Cognitive:
1. Define small business.
2. Identify the feature of small business.
3. Discuss the differences between big and small businesses.
4. Describe advantages and disadvantages of small business.
5. Identify the reason why small business fails.
6. Determine the economic contributions of a small business.

Affective:

1. Listen attentively to the class discussions.

2. Participate actively in class discussions.
3. Appreciate individual’s opinion and definition of the different term.

Psychomotor:

1. Respond to class discussion actively.

2. Display full understanding to class activities.

IV. PREPARATION OF THE LESSON

Unlocking of Difficulties
1. Business
2. Capital
3. Enterprise
4. Flexibility
5. Employment
V. REVIEW OF THE PAST LESSONS
Define entrepreneur by filling up the sets of words.

entrepreneur

VI. LESSON PROPER

Small Business Defined
Business is defines as an organized effort of individuals to produce and sell
goods and services in order to satisfy the needs of the society. The primary objectives
of business is to acquire profit. The individual who takes the risk in organizing and
operating business is the entrepreneur as mentioned earlier. To organized the
business entrepreneurs should combines the four types of resources: human, financial
material and informational. What then is a small business? There are two kind of small
business. The very small business where the owner is the principal worker, and he
employs one or more assistants. This is a micro business. The other one is the bigger
small business where the owner mainly directs the work of the employees. This is not
the only definition of small business. There are many others. However, these are the
common characteristics of small business:
1. It is privately owned
2. It has few or no layers of management
3. Generally, it has insufficient resources to dominate its field of business.
The Magna Carta for small enterprises (R.A. 6977) defines small and medium
enterprises as any 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’s office, plant and equipment are situated, must have value
falling under the following categories:
Micro : less than – P50.000 Small : P500,001 – P5,000,000
Cottage:P50,001 - P500,000 Medium : P5,000,001 – P20,000,000
ACTIVITY 1: Define small business and describe its characteristics.

small
business

characteristics of
small business
Features of a Small Business
1. A small business is low in capital but high in labor intensity.- Most small business do
not have sufficient financial resources. So they cannot purchase big machines or
modern equipment. What is only possible for them to do is to use labor instead of
machines in their business operations. These are usually in retailing and service
industries.
2. A small business is efficient in specialized skill or services. - It can will produced
goods or services that are designed to the particular needs of an individual or a few
clients. For instance, repair works on cars and appliances require individualized
service. Also, tailors, barbers, real state agents, and other provide services that require
specialized knowledge for specific needs.
3. A small business succeeds in small, isolated or over looked markets.- In rural
communities where markets are small due to the few residents, a small business is
visible. For example, sari-sari stores, tailoring shops, small restaurants, and grocery
stores are profitable enterprises. Clearly, giant corporations cannot survive in small
towns where demand is limited.
4. A small business often operates in unstable markets.- Big corporation are careful in
their investments. To be sure in their business ventures, they conduct market or
feasibility studies to determine viability.
5. A small business is closer to markets place. - Not a few small business conducts their
operations right inside the market place
6. Generally, the owner of small business are also the managers. – Most of our small
business in the Philippines are like these. The owner –manager employs his wife and
children. If the business grows, the owner hires more employees, usually relatives and
town mates.
7. Capital comes from the owner or small group. – In our country, a small business is
usually financed by the family through its own savings or loans. if ever the business is
funded by a small group, it comes from the relative or close friends.
8. The area of operation is small. – This means that the business is community based.
The owner and the employees live in the community where the enterprise is located.
9. The size of the enterprise is small in relation to the industry. – For example, the shoe
industry is large one. But there are very many stores of shoes. Clearly, one shoe store
cannot dominate the market for shoes.

ACTIVITY 2: Identify the feature of small business.

 Differences between Big and Small Business

1.Small business as a group change through a cycle of births and deaths. In the
case of big enterprises, change is through expansion or contraction
2. Small business risk or reward estimate is done by the individual owner who either
gets profit or loss, white in large corporation, the risk or reward calculation in done by
employee-managers. Such judgment has no direct states in the livelihood of the
managers. However, in the case of small business, the loss can ruin the livelihood of
the owner and his family.
3.Small business has little or no economic power. On the other hand, big business
has tremendous influence on the economy, including the political sector. For
example, the transnational corporation controls our global economy.
4. Small business serves markets which big business does not like to serve or cannot
serve effectively.

ACTIVITY 3: Discuss the differences between big and small businesses.

SMALL BIG
BUSINESS BUSINESS

Advantages of Small Business

1.Personalized relationships with consumers and employees. Retailer and shop

owners deals with their costumers on personalized services. The owners know many
of their customers by name. the small business owners are involved in social , cultural
 and political affairs in the community. Such personalized service or relationships with
customers are big economic advantages which big corporations do not have.
2. Flexibility in Management.ADVANTAGES
The owner beingDISADVANTAGES
the boss and the manager, he can
easily introduces changes in his product or services, experiment on the strategies, or
change store hours to fit market conditions. Furthermore, small business owners are
quick to learn changes in the needs and interests of their costumers, and also the
activities of their competitors.
3. Government Incentives. The national government has been promoting the
organization of small enterprises. It extends both financial and technical
assistants, particularly production and marketing, to small entrepreneurs.
4. Simple record keeping. Small enterprises require few and simple sets of records.
They may consists only of a cash receipt journal which record all sales, and a cash
disbursement journal which records all expenses and payments.
5. Independence. Small business owners are the masters of their own destinies. They
are not employees. They make their own decisions. They do not apply for vacation or
sick leaves. They do not worry about being late, absent or laid off. To many
individuals, this is the kind of life they enjoy

Disadvantages of Small Business

1.Difficulty of raising capital. Without financial assistance from the government a small
business has limited ability to obtained funds from others. Initially, it is the owner who
provides capital for his business.
2. Risk of Failure. A small business does not have enough financial resources to survive bad
economic conditions. Its inability to absorb losses and unforeseen events forces the owner to
get of business.
3. Limited Management Skills. Owners of small business generally lack management
skills. They have no formal education or training in marketing and management. They just
manage their enterprises through intuitions or practical business techniques. In the case of
big corporations, professional managers are hired to do the job.
4. Lack of opportunities for employees. Most of the employees of the small business are
sales staff. Only very few of them become supervisors. In the Philippines, small enterprises
are family owned. Those who are holding managerial supervisory positions belong to the
family or relatives in most cases.

ACTIVITY 4: Describe advantages and disadvantages of small business.

Why Small Business Fail
- Lack of experience
- Lack of money
- Wrong location
- Mismanagement of inventory
- poor credit practices
- poorly planned expansions
- Unsound or too little analysis in choosing the business
Economic Contributions of Small Business
Statistics on economic conditions favorably contributed by small businesses are based
on U.S settings. There no available data on the specific economic contributions of
small business in the Philippines. Nevertheless, it is obvious that in our country, micro
and small enterprises are numerous and rampant. Market vendors, sari-sari
stores, groceries, bakeries, restaurants, repair shops, and many other dominate in our
communities.
They introduced innovations
inventions and innovations are key factor in economic development . These are
responsible in reducing time, labor and cost of production. Based on the U.S
study, small firms produce about four times as many innovations as medium sized
firms, and about 24 times as many as the largest firms. More than 50 percent of the
major technological advances come from individual small companies. Here are
example of innovation contributed by small individual enterprises:
- ball point pen - penicillin
- FM radio - Xerox
- instant camera - zipper
- disposable razor - paper clip
ACTIVITY 5: Identify the reason why small business fails.

ACTIVITY 6: Determine the economic contributions of a small business.

VII. EVALUATION: Answer the following questions:
1. What is the point of Small Business is Beautiful?
2. Micro business is suitable for our masses. Why?
3. What are the common characteristics of a small business?
4. Define small and medium enterprise based on the Magna Carta for Small
Enterprise.
5. Why is that small business is more effective than big business is small or
isolated markets?
6. Explain two or three causes of small business failure.
7. Why are small enterprise important?

VIII. ANSWER KEY:

ACTIVITY 1: Define small business and describe its characteristics.

It is more relevant to
poor or developing
economics like the
Philippines.
Organized efforts of
individuals tp produce
It is risky but profitable
and sell goods in order
business in the society.
to satisy the needs of
society.

small
business

It has few or no
layers of
management
It has insufficient
It is privately resources to
owned dominates its
field of business.

characteristics of
small business
 ACTIVITY 2: Identify the feature of small business.

1. A small business is low in capital but high in labor intensity

2. A small business is efficient in specialized skill or services.
3. A small business succeeds in small, isolated or over looked markets
4. A small business often operates in unstable markets
5. A small business is closer to markets place.
6. Generally, the owner of small business are also the managers.
7. Capital comes from the owner or small group
8. The area of operation is small.
9. The size of the enterprise is small in relation to the industry.

ACTIVITY 3: Discuss the differences between big and small businesses.

SMALL BIG
BUSINESS BUSINESS
group change change is through
through a cycle of expansion or
birth and deaths contraction

the risk or reward the risk or reward

estimate is done is done by
by the indiviual employee-
owner managers

it has trmendous
no economic
influence on the
power
economy

it does not like to

it serves markets serve or cannot
serve effectively

ACTIVITY 4: Describe advantages and disadvantages

ADVANTAGES DISADVANTAGES
of small business.

. Lack of
Independence opportunities for
employees.

Limited
Simple record
Management
keeping.
Skills

Government
Risk of Failure
Incentives

Flexibility in Difficulty of raising

Management. capital.

Personalized
relationships with
consumers and
employees
ACTIVITY 5: Identify the reason why small business fails.
1. Lack of experience
2. Lack of money
3. Wrong location
4. Mismanagement of inventory
5. poor credit practices
6. poorly planned expansions
7. Unsound or too little analysis in choosing the business

ACTIVITY 6: Determine the economic contributions of a small business.

Statistics on economic conditions favorably contributed by small businesses are based
on U.S settings. There no available data on the specific economic contributions of small business
in the Philippines. Nevertheless, it is obvious that in our country, micro and small enterprises
are numerous and rampant. Market vendors, sari-sari stores, groceries, bakeries, restaurants,
repair shops, and many other dominate in our communities.

EVALUATION: Answer the following questions:

1. What is the point of Small Business is Beautiful?

Small is business is beautiful because it stated that in the poor or developing
countries small projects are much better than big projects.

2. Micro business is suitable for our masses. Why?

In micro business it is the owner is the principal worker and he employes one
or more assistants.

3. What are the common characteristics of a small business?

a. It is privately owned
b. It has few or no layers of management
c. It has insufficient resources to dominates its field of business

4. Define small and medium enterprise based on the Magna Carta for Small
Enterprise.
It is any business activity or enterprise engaged in industry, agribusiness
and or services, whether single proprietorship, cooperative, partnership
or corporations.

5. Why is that small business is more effective than big business is small or
isolated markets?

6. Explain two or three causes of small business failure.

7. Why are small enterprise important?

IX. SUMMARY:
 Schumacher proposed the adoption of intermediate technology for less developed
countries. Such technology is between primitive technology and modern
technology. It applies local labor, local material and local management and
production methods.
 Business is an organized effort of individuals for the production of goods and
services in order to make profit. To organized a business, the entrepreneur must
combine four resource: human, financial, material and informational.
 There are two kind of small business. One is the micro business. The owner is the
principal worker, together with one or two assistants. The other one is the bigger
small business in which the owner directs the functions of his employees.
 The feature of a small business are: small capital, efficient in specialized service,
effective in small and isolated markets, closer to market place, owners are usually
the managers, small area of operation., etc.
 Differences between small and big entreprises are: change in small business as a
group is through births and deaths while change in big business is through
contraction and expansion, small business has little or no economic power while big
business has tremendous economic influence in the community, to serve or cannot
serve effectively; and the responsibility of risk or rewards are belongs to the owner
of small business whicke in big business such responsibility is assumed by employee-
managers. However, incase of losses, the man It has insufficient resources to
dominates its field of business managers risk only their employment.
 The advantages of a small business are: personalized relationship with customers
and employees, flexibility in management, government incentives, simple record-
keeping, and independence.
 The disadvantage of a small business are: difficulty in raising capital, risk of failure,
limited management skill, and lack of opportunities for employees.
 Small businesses fail because of lack of money, lack of experience, wrong location,
poor credit practices, mismanagement of inventories, etc.
 Economic contributions of small business are introduce innovation, create
employment, provide competition, and fill needs of society and big businesses.

X. REFERENCES: ENTREPRENEURSHIP BY FAJARDO Pages 67-72