ENTREPRENEURSHIP

TLE 8
BUSINESS

 The term business refers to the organized efforts and activities of individuals to produce
and sell goods and service for profits

STEPS IN STARTING A BUSINESS

1. Generate possible ideas

2. Brainstorming
3. Planning
4. Implementation
5. Evaluation

MAJOR CAPITAL OF THE BUSINESS

F-Financial Capital (what)

I- Intellectual Capital (how)

S- Social capital (why)

H- Human Capital (who)

TYPES OF BUSINESS

SERVICE BUSINESS

 A service business is an enterprise composed of a professional or team of

experts that deliver work or aid in completing a task for the benefit of its
customers. Landscaping, dental work, and getting your taxes done are all
service-based businesses.
 Athletic trainer
 Housekeeping
 Business consultant
 Maintenance service
 Graphic design
 Financial advisor
 Academic tutor
 Auto mechanic
MERCHANDISING BUSINESS

 Merchandising business – this purchase products from other businesses or

manufacturers and sell them to customers.
 A merchandising business sells goods, also known as merchandise. Good
examples of merchandising businesses include retail clothing, grocery stores and
bookstores.
 Merchandising businesses that purchase finished goods have to buy the goods
and then mark up the merchandise before they sell it.

Examples:

 Grocery stores.
 Department stores.
 Distributors.
 Real estate dealers.
 Car dealers.

MANUFACTURING BUSINESS

 The term manufacturing refers to the processing of raw materials or parts into
finished goods through the use of tools, human labor, machinery, and chemical
processing. Manufacturing allows businesses to sell finished products at a higher
cost than the value of the raw materials used.

Examples:

 Ford Motor Company (Automotive technology production)

 General Electric (Power production)
 Boeing (Aviation and spacecraft production)
 General Motors Corporation (Automotive production)
 Michelin (Automotive/rubber production)
 Under Armour (Textile and clothing production)
 Apparel and Textiles
 Oil, Chemicals, and Plastics
 Gadgets, Computers, and Transportation
 Food Production
 Metal Manufacturing
HYBRID BUSINESS

 A hybrid business is a type of business operation that functions with the use of
multiple means of reaching clients
 Hybrid business is a type of companies that are classified in more than one type
of business

Examples

 Restaurants
 School
 Hospital
 Fast food chain

TYPES OF BUSINESS ACCORDING TO SIZE

It comes down to two things: revenue and number of employees.

Micro Business (home-based business) self-employed, or have no employees,

 Sari sari store

 Barber shop
 Tailoring

Small Business

 A small business is an independently owned and operated company that is

limited in size and in revenue depending on the industry.

Examples

 Health Care and Virtual Medicine

 Accommodation and Food Services
 Arts, Entertainment, and Crafts
 Personal Trainers (online)
 Site building and web design
 Local Auto Repairs.
 Secondhand (Online) Stores.
 Pet services.
Medium Business (Franchise Business or Private Companies)

Examples

 Health care and social assistance.

 Accommodation and food service.
 Retail trade.
 Construction.
 Professional, scientific and technical services

Large Business

 A large business is a business category with an above-average business size,

has large operations, and high economies of scale. They hire a lot of labor and
generate a lot of revenue with large resources, large companies have a higher
competitive capacity than small businesses

Examples

 Cotton industry
 Tea Industry,
 Jute Industry
 Cement Industry
 Paper Industry
 engineering industry
 Food processing,
 Information and electronic technology,
 Automobile Industry

TYPES OF BUSINESS ACCORDING TO SIZE

SOLE PROPRIETORSHIP

 The sole proprietorship is a type of business structure open to businesses run

and owned by one entrepreneur.
 A large advantage of the sole proprietorship structure is its ease. The sole
proprietorship structure does not require filing of articles of incorporation, regular
meetings, or election of a board. A sole proprietor also files taxes as personal
income.
 The other side of this process is the structure’s main disadvantage: there is no
separation between the entrepreneur and the business. This means the sole
  Proprietor is personally liable for business losses. Also, if the proprietor dies, the
business ceases to exist.

KEY TERMS

Entrepreneur: A person who organizes and operates a business venture and assumes
much of the associated risk.

Proprietor: An owner

PARTNERSHIP

 The partnership is a type of business structure open to businesses run and

owned by two or more entrepreneurs.
 A large advantage of the partnership structure is its ease, in terms of filing and
tax treatment. A general partnership can be started with no special formalities.
The partners are taxed individually on their share of the partnership’s profits.
 The structure’s main disadvantage is that partnership owners can be personally
liable for business losses. The partnership is not a separate entity from the
owners/entrepreneurs, unlike a corporation.
 Types of partnership beyond the general partnership have developed to mitigate
some of the disadvantages of the structure. Limited partnerships and limited
liability partnerships are two examples.

Difference between limited partnership and limited liability partnership

In a limited partnership, the limited partner is more like a silent partner that has invested
in the company. In a limited liability partnership, all partners of the company are allowed
to make management decisions for the company.

Key Terms

Partnership: An association of two or more people to conduct a business,

Liability: An obligation, debt or responsibility owed to someone.

CORPORATION

 Compared to sole proprietorships and partnerships, the corporation is more

complicated to found and maintain one of its disadvantages. The incorporator
must file articles of incorporation as well as hold an organizational meeting to
elect a board of directors.
 The structure also generally requires the maintenance of at least annual
reporting, including annual financial statements and other data.
 One of the most favorable advantages of the corporate structure is the protection
of personal assets of stockholders, directors, and officers. They are limited in
liability to the amount they have invested in the corporation.
 Also, because the corporation is an entity separate from its owners, ownership is
easily transferable. Similarly, the corporation does not cease to exist with the
death of shareholders, directors, or officers of the corporation.

KEY TERMS

Liability: An obligation, debt or responsibility owed to someone.

Incorporate: To form into a legal company.

COOPERATIVES

 A cooperative (also known as co-operative, co-op, or coop) is "an autonomous

association of persons united voluntarily to meet their common economic, social,
and cultural needs and aspirations through a jointly-owned enterprise"
 organizations managed by the people who work there (worker cooperatives)