NOTRE DAME OF SALAMAN COLLEGE INC.

Founded in 1965 by the Oblates

Owned by the Archdiocese of Cotabato
Managed by the Diocesan Clergy of Cotabato (DCC )
“Service for the Love of God through Mary”
(B.E.S.T)
Amare Est Service
STUDENT SELF DIRECTED LEARNING AND ASSESSMENT (SSDLA)

ENTREPRENEURSHIP
Topic / Lesson: Business Implementation (Week 13 -16)

Performance Standard: The learners demonstrate an understanding of key concept, underlying, principles, and core
competencies in Entrepreneurship.

Content Standard: The learners independently create / provide a quality and marketable product and / or service in
entrepreneurship as prescribed in the TESDA Training Regulation.

Most Essential Competencies:

 manifest understanding of starting and operating a simple business
 implement the business plan
 identify the reasons for keeping business records

Factors to Consider in Starting a Business

Starting a business is a positive decision on the part of entrepreneur to exploit entrepreneurial opportunities which are
important and a worthwhile endeavour. There are several other reasons, like financial stability, self-fulfilment, helps the
family, and provide employment to other, for an entrepreneur to have his/her own business. An entrepreneur has several
ways to start a new venture. The most frequently used forms by entrepreneurs are start-up, buying an existing business,
and franchising. A start-up enterprise is a company which is recently formed, where the founder establishes a completely
new business from scratch. Buying an existing business is acquiring either the shares of an existing company or all of the
assets of an existing enterprise. Franchising is when the “owner of the company that already has a successful product or
service, licenses its trademark, trade name, and methods of doing business to others in exchange for an initial franchise
fee and royalty payments.” Examples of these are Jollibee, Mang Inasal. Ricky Reyes Salon, 7-eleven, Mini Stop, and
Tapa King franchise. Given the forms of starting a business, there are many other important factors to consider before an
entrepreneur can actually begin the enterprise. These are following:

FOCUS AND DIRECTION. It is imperative to have a very good objective grasp of the business and where it will be
headed many years from the start of operation. It means that there should be a clear and documented vision-mission and
strategies to begin with. Start right by “beginning with the end in mind”.

SOURCES OF CAPITAL. There are different sources of capital that can be used depending on the needs to start the
venture. These can be from personal funds, family and friends, a retirement account, banks /financial institutions, a
government loan, and/or the stock market. Which of these sources will provide you the needed capital given your
financial constraints and credibility?

GOOD NETWORK. Building good relationships and working with other people could help start the business. Formal
networks like associations and professional groups, as well as informal networks, like childhood friends, family members,
and former classmates, can be drivers to build self-confidence and direction, providers of information that are not readily
accessible to others suppliers of raw materials, and serve as mentors/coaches.

LEGAL REQUIREMENTS. It is very important to know the laws and regulations that govern the type of business that
will be opened to avoid major problems that can arise if legal requirements are overlooked. Examples are the copyright
and patent laws, environment and sanitation regulations of the municipality, and labor laws. Do not go into an illegal
business where the consequences are greatly unfavorable. There are also businesses with restrictions which might give
you difficulties in operation, like mining and quarrying.

DEGREE OF RISK. Consider the degree of risk related to a specific business opportunity. It means the odds are great
in many aspects against starting the business like limited market, stiff competition, high cost of financing the business,
and few supply of needed labor.

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RESEARCH AND DEVELOPMENT. There should be a strong research and development that should be undertaken.
The government should provide adequate support to inventors, scientists and engineers and their new technologies to
commercialize their R&D products. The presence of new technology, science and knowledge transfer from universities
and public research centers to new and growing businesses, and the support for the creation of new technology-based
ventures, are good indicators to start a business in this area.

PERSONAL COMPETENCIES. The personal competencies like creativity, opportunity seeking, self-confidence,
persistence, commitment, and risk-taking, as well as technical background (e-g. accounting, personal computing) and
related experiences needed to run the particular business, are necessary to start running the business.

AVAILABILITY OF RESOURCES. Resources pertain to raw materials, human resources, and machineries/equipment.
Specifically, the raw materials that are indigenous to the community and available in certain quantities, like clay, sand,
abaca, and other natural fiber. Knowing where and how other entrepreneurs get their materials and where they source
them is also vital. Local people's specialized skills that may be tapped from and developed for commercial purposes. In
Laguna, for example, the availability of a group of people who are skilled in wood craft making. Modern
machineries/equipment, even locally manufactured, might be useful in upgrading or improving a traditional production
system or starting a new business altogether.

Types of Business Available to Entrepreneurs

In general, entrepreneurs can identify more ideas and opportunities from the types of businesses available to them in the
community and the country at large. There are a number of ways to classify enterprises which they can choose from:
According to size: The size of the enterprise is based on its total assets or number of employees who work for it. The
Department of Trade and Industry, through the Bureau of Small and Medium Enterprise Development (BSMED),
categorized them as micro, cottage, small, medium, and large enterprises, for purposes of rationalizing assistance and
incentives to these business enterprises. Description of each are as follows:

Micro Enterprise - It has an asset size not exceeding P50,000. It is usually a home-based enterprise, operating in
makeshift or temporary quarters. The owner heads the enterprise and employs from one to not more than 10 people to help
him/her. Examples of these are the self-employed vending food like taho, puto, or fishballs; those selling in the public
market; and those having sari-sari or rolling stores.

Cottage Enterprise - It has an asset of P250,000 but not exceeding P500,000. It is a home-based business which is often
managed and operated by the members of the family. Examples of these are the subcontractors of footwear like shoes and
slippers; and food manufacturers of peanut butter/coco jam or pastillas, as well as decorative products like
vases, candles, and lanterns.

Small Enterprise - It has an asset of P500,000 but not exceeding P2.5 million. It is owned by an individual or group and
has enough resources to continue operating. It employs from 10 to 20 people. Examples of these are groceries, bakeshops,
beauty salons, medical/dental clinics, toy makers, jeepney manufacturers, and travel/tour agencies.

Medium Enterprise - It has an asset of P5 million to less than P20 million and employs 100 or more workers. It is owned
by a single individual, business partners, or a corporation. It employs more than 20 to 100 people. These workers are more
skilled and possess technical expertise to run the business with machines/equipment and utilize various quality controls to
make the products. Examples of these are fine dining restaurants with branches, computer importer-dealers, garment
manufacturers, human resource providers, and private educational institutions.

Large Enterprise - It has an asset of P20 million or more. It is often owned and managed by a corporation. It is large in
scope of operation and number of products or services that it offers to the market. It employs 100 or more workers who
are hired on the basis of their expertise. Its Board of Directors is responsible for its governance and it has a Chief
Operating Officer to oversee the implementation of the directives of the Board. It operates in highly formalized but
complex systems of management. Examples of these are the big fast food chains, large department stores, big bookstores,
family-owned commercial banks and insurance companies.

Activity 1: Let’s Perform

1. Visit the website of the Department of Trade and Industry. Find out the latest statistics on the number of
businesses classified as micro, cottage, small, and medium enterprises. Find out also the distribution of these
enterprises by region in the Philippines. Write your answers on a long bond paper.

Writing the Business Plan

A business plan is a written document that describes in detail how a business is going to achieve its goals.

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of the writer except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.
Think outside the box

For additional inputs regarding writing the business plan, you may refer to your textbook on
pages 213-215.

(Note: Write the answers of your Activity 2 and Activity 3 on one whole sheet of paper.)

Activity 2. Let’s Analyze

1. Explain the meaning of business plan.

2. Discuss the goals of a business plan.

Activity 3: Let’s Perform

1. The business plan starts with the market idea. Use the table below to write your answers on a long bond paper.

Products / Services Description Target Market

(Generate about three products or (Describe each briefly.) (Identify to whom you intend to
services that you want to start a sell your products / services)
small business.)

2. The next step in a business plan is the production aspect. Choose product/service that you like the most to be your
future business. Research how you will produce it and the raw materials and equipment / machinery needed for its
production.

Production Process Raw Materials Equipment / Machiner

Bookkeeping

Bookkeeping is the science of recording history. It is the physical recordkeeping of someone's transactions as they relate
to assets, liabilities, income, and expenses (Stern,1993). Bookkeeping is an indispensable subset of accounting.

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of the writer except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.
Bookkeeping refers to the process of accumulating, organizing, storing, and accessing the financial information base of an
entity, which is needed for two basic purposes (dummies.com): (a) facilitating the day-to-day operations of the entity and
(b) preparing financial statements, tax returns, and internal reports to managers. Moreover, bookkeeping (also called
record-keeping) can be thought of as the financial information infrastructure of an entity. The financial information base
should be complete, accurate, and timely. Every record-keeping system needs quality controls built into it, which are
called internal controls. It differs from accounting in that bookkeeping includes less analysis ad advice. A small business
owner might call an accountant or attorney to learn whether it's better to buy or lease his copier and when to make the
down payment on his (partially deductible) car. But once the business owner cut the deal, he would call a bookkeeper to
keep track of his lease or interest payments (Stern, 1993). Keeping good records is very important to your business. Good
records will help you do the following:

1. Monitor the progress of your business

2. Prepare your financial statements
3. Identify sources of your income
4. Keep track of your deductible expenses
5. Keep track of your basis in property
6. Prepare your tax returns
7. Support items reported on your tax returns

The following are some of the types of records that should be kept:
1. Gross receipts are the income you receive from your business. You should keep supporting documents that show the
amounts and sources your gross receipts. Documents for gross receipts include the following
 Cash register tapes
 Deposit information (cash and credit sales)
 Receipt books
 Invoices
2. Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost
of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show
the amount paid and that the amount was or purchases. Documents for purchases include the following:
 Cancelled checks or other documents that identify payee, amount, and proof of payment/electronic funds
transferred
 Cash register tape receipts
 Credit card receipts and statements
 Invoices
3. Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should
show the amount paid and a description that shows the amount was for a business expense. Documents for expenses
include the following:
 Cancelled checks or other documents that identify payee, amount, and proof of payment/electronic funds
transferred
 Cash register tapes
 Account statements
 Credit card receipts and statements
 Invoices
 Petty cash slips for small cash payments
4. Travel, Transportation, Entertainment, and Gift Expenses. If you deduct travel, entertainment, gift or transportation
expenses, you must be able to prove (substantiate) certain elements of expenses. For additional information, refer to
Publication 463, Travel, Entertainment, Gift, and Car Expenses.

5. Assets are the property, such as machinery and furniture that you own and use in your business. You must keep records
to verify certain information about your business assets. You need records to compute the annual depreciation and the
gain or loss when you sell the assets. Documents for assets should show the following information:
 When and how you acquired the assets
 Purchase price
 Cost of any improvements
 Deductions taken for depreciation fires
 Deductions taken for casualty losses, such as losses resulting from storms
 How you used the asset
 When and how you disposed of the asset
 Selling price
 Expenses of sale
The following documents may show this information:

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of the writer except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.
  Purchase and sales invoices
 Real estate closing statements
 Cancelled checks or other documents that identify payee, amount, and proof of payment/electronic funds
transferred
6. Employment taxes. There are specific employment tax records you must keep. Keep all records of employment for at
least four years

The Function of Bookkeeping

Bookkeeping is the process of recording daily transactions in a consistent way and is a key component to building a strong
business foundation. A bookkeeper's territory is daily financial transactions, which include purchases, receipts, sales and
payments. Recording these items is usually done through a general ledger or journal (Martin, 2015). The tasks or the
functions of the bookkeeper consist of the following:
 Recording financial transactions
 Posting debits and credits
 Producing invoices
 Maintaining and balancing subsidiaries, general ledgers, and historical accounts
 Completing payroll

Double entry accounting is a recordkeeping system under which every transaction is recorded in at least two accounts.
There is no limit on the number of accounts that may be used in a transaction, but the minimum is two accounts. There are
two columns in each account, with debit entries on the left and credit entries on the right. In double entry accounting, the
total of all debit entries must match the total of all credit entries. When this happens, the transaction is said to be "in
balance." If the totals do not agree, the transaction is said to be "out of balance," and you will not be able to use the
resulting information to create financial statements.

A bookkeeper enters every transaction into a journal which is nothing more than a list of transactions. When a manual
system is used, the bookkeeper might enter all transactions into one journal, or might keep separate journals for different
activities, such as cash disbursements journal, an inventory journal, or a sales journal. A journal consisting of several
accounts, each of which can be arranged as a "T" with the left side of the "T" for debits and right side for credits. Any
transaction entered into the journal must have a debit (Dr) and an offsetting credit (Cr). Put as simply as possible, debits
are increases to asset and expense accounts and decreases to liability and equity accounts.

A bookkeeper using a manual system periodically copies journal transactions into a general ledger, called posting.
The general ledger is where all the accounting information collected is brought together. In a manual system, the general
ledger can have a separate page (or pages) for the different account categories used in the ledger the balance sheet and
income statement are then created from the general ledger.

Activity 3: Let’s Analyze

1. Discuss the importance of bookkeeping.
2. Discuss the tasks or functions of a bookkeeper.

Congratulations!!!

Something to Ponder

“It is always best to begin with the right product/services, the right place and the right time in starting a new
business”

Prepared by:

AILLEN GRACE A. DAYAG, LPT

MA. SOCCORRO B. CATALAN
JULIE B. OPIMO
ROSALIE M. BLANCA

No parts of this document may be reproduced, distributed in any form or by any means including photocopying or any electronic or mechanical methods without the prior written permission
of the writer except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.
 No parts of this document may be reproduced, distributed in any form or by any means including photocopying or any electronic or mechanical methods without the prior written permission
of the writer except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.