Business Management and

Application in Architecture 1
First Trimester, A.Y. 2022-2023
Your Guide to Starting a
Small Enterprise
DTI’s SME Roving Academy
By Ar. Queenee B. Manaog, UAP
  Starting a Small Enterprise
 Where do you start?
 Assessing your business ideas

Outline of
Discussion
Starting a Small
Enterprise
Your Guide to Starting a Small Enterprise
Starting a
Small What is a Small Business?
Enterprise
 After working overseas for 10 years, Orly Villa
decided to start a business of breeding ornamental
plants in September 2004. He bought the 500 square
meter lot adjacent to his house in Los Banos in Laguna
province, south of Manila. The garden is one of four
gardens that lie along the stretch of the highway. A small
Starting a signboard, “Ricky’s Garden,” stands directly in front.
Small Three men help him prepare the soil, plant, transfer
seedlings, water the plants, and do other garden
Enterprise maintenance tasks. Part of their job includes putting up
trellises when needed, keeping the bags of fertilizer,
garden soil, sawdust, compost, and other materials,
taking care of the tools, and assisting buyers.
 Orly holds office inside a bahay kubo that stands
in the middle of the garden. A permit from the town
mayor hangs in one of the walls. He uses notebooks to
list down the money that come in from buyers and the
money that he spends for the seedlings, fertilizers,
plastic bags, and other materials, including the salaries
Starting a of the three helpers.
Small
Enterprise
 We can see from the illustration that Orly is a small businessman.
Being the owner of the business, he alone decided, and continues to
decide for the business.
 It was he who thought of putting up the business; chose the type
of business – ornamental plant breeding – and form – single
proprietorship (organization aspect);
Starting a  amount of money to put in and keep notebooks (financial aspect);
Small  system of breeding the plants and maintaining the garden,
including choosing suppliers of the materials, number of sacks to
Enterprise keep in stock, tools and equipment to use, etc. (production or
technical aspect);
 where to set up the business, how to attract buyers, how much he
will charge, etc. (marketing aspect);
 and whom to hire, what they do, their number, and their pay
(organization aspect).
 Broadly speaking, a small business is one wherein most functions of
a business enterprise – production, marketing, finance, and
management – are essentially organized around the owner-
manager who makes most of the major decisions and runs the day-
Starting a to-day affairs of the enterprise.
Small The small business owner has very few or no specialized staff or
Enterprise managers helping him in marketing, production, finance, and
personnel management decisions. Rather, he tries to do most of
these tasks himself.
 Characteristics commonly associated with a small business:
 single proprietorships and family-based operation,
 single product line or very limited product range, usually light
consumer products (for example, food, beverage, and clothing),
 small-volume production,
 limited markets, usually local,
Starting a
 labor-intensive production methods,
Small  few employees, other than family members, many on part-time
Enterprise basis,
 “patriarchal” management style where employees are often
treated as extended family members,
 low level use of technology, and
 marginal capital assets, mainly sourced from the owner-manager’s
savings and those of the immediate household members.
 The government defines a small business based on how much the
business owns (asset size) and the number of people that work for it
(employment) for purposes of rationalizing assistance and incentives to
business enterprises.

Starting a In terms of asset size, a small enterprise has capital assets between P3

Small million to P15 million.

Enterprise In terms of employment, a small business employs from 10 to 99

workers.

Below the level of asset size and employment mentioned, you have a
micro enterprise. Above such level, you have a medium or large-scale
business.
 Micro, small and medium-scale businesses are categorized as small.
Some micro enterprises grow into small, then from small into
medium, and so on.
This is one of the reasons why the government has made
distinctions among them so that its support services and incentives
Starting a can be focused according to the needs of enterprises, which
apparently tend to differ depending on the size category of the
Small business.
Enterprise Just like any other business, small businesses are found in
manufacturing (for example, food processing or garment making),
services (auto repair or internet café), agribusiness (farming or
fishing), or trading (grocery store, buy-and-sell).
 Strengths of a Small Business:
 Allows people to think creatively at work and find fulfillment from
its results.
 Products and services has personal touch.
 Allows skilled artisan to practice their traditional craft.
Starting a  Uses materials and methods that are friendly to the natural
Small environment constantly in danger of being polluted or depleted of
its resources.
Enterprise
 Small-scale producers are able to make use of raw materials and
by-products in limited volume which otherwise would have been
disposed of as waste in large-scale factories.
 Because authority is centralized around the owner-manager,
decision-making is fast.
 Strengths of a Small Business:
 In times of rapid changes in market demand and preferences,
small-scale production units can more readily modify their
manufacturing set-up to make a changeover or to diversify to
other products or product variants.
 The patriarchal, often informal management style, practiced in
Starting a many small firms, gives employees a sense of belonging.
Small  In seasons of economic crisis, like recession and inflation, small
enterprises are often better able to make adjustments in their
Enterprise production, personnel and other systems.
 Small-scale enterprises are the beneficiaries of various incentives
and support services from government.
 Weaknesses of a Small Business:
 Because of limited capacity, small enterprises cannot avail of
economies of scale not only in production but also in procuring
raw materials.
 Other production-related problems include: machine breakdowns,
lack of technical know-how, quality control problems, and
Starting a obsolete technology.
Small  In finance, many small businesses fail or falter because of a basic
lack of a realistic and workable business and financial plan.
Enterprise  Many entrepreneurs do not know how to generate funds from
within their operations.
 Lack of capital remains a major problem for most small
enterprises in spite of numerous policies and programs designed
to provide them with more credit.
 Weaknesses of a Small Business:
 In management, control and administration of the firm is
centralized in the hands of the owner-manager.
 Few management staff results in the owner-manager being too
engrossed in day-to- day operations of the company at the
expense of long-term planning.
Starting a  Other management problems facing small businesses include:
Small inadequate system of internal administration; poor and
inadequate record keeping; unsystematic recruitment and
Enterprise selection of workers; and unscientific decision-making.
Starting a
Do you have what it takes to
Small
Enterprise succeed in business?
 The Entrepreneur
 The most important person in the business.
 Takes the key role in controlling and administering the firm in all
its aspects and functions.
 The one who takes most of the risks (as when he loses his shirt
Starting a and faces scorn) and receives most of the rewards (as when he
gets rich and reaps recognition).
Small  Sometimes described as someone who allocates and manages the
Enterprise factors of production, bears risks, innovates, and makes major
decisions.
 The Role of an Entrepreneur
 The entrepreneur plans, organizes, and puts together all the
resources required to start a new enterprise and to run and
operate it on a sustained basis.
 The entrepreneur takes risks – not just in the way gamblers and
speculators do – but rather in terms of putting resources together
Starting a in order to realize business objectives.
Small  The entrepreneur innovates.

Enterprise  In the process of starting, running and growing their business,

small entrepreneurs help build the nation.
 Bring about employment.
 Improve the quality of life.
 Contribute to a wider distribution of income.
 Utilize resources for national productivity.
 Generate social benefits through government.
 Personal Characteristics of an Entrepreneur
 Opportunity seekers
 Persistent
 Committed to work
 Risk-takers
Starting a  Demanding in terms of quality and efficiency
Small  Goal setters
Enterprise  Information seekers
 Good in planning and monitoring
 Persuasive and good in networking
 Confident
 Creative.
 Incentives of Small Enterprises
Small enterprise promotion and development has, in fact, attained
the status of a national movement, participated in by more than 50
government agencies each of which offers support services to the
small businessman.
The private sector has also joined the ”small is beautiful”
Starting a bandwagon – including industry chambers, trade associations,
schools and universities, civic and non-government organizations,
Small and church-based groups.
Enterprise
 Incentives of Small Enterprises
 Finance
Government banks like the Development Bank of the Philippines
(DBP), Land Bank of the Philippines (LBP), Small Business
Corporation (SBCorp), Quedan and Rural Credit Corporation,
Philippine Export-Import Bank, and the National Livelihood
Starting a Support Fund, have agreed in 2003 to simplify and standardize
lending procedures, lower interest rates, and facilitate loan releases
Small to small enterprises under a unified scheme called SULONG.
Enterprise For micro enterprises, countless micro finance institutions now
proliferating throughout the country are doing a good job of
providing small but quick and no-hassle loans that require no
collateral. They provide an alternative to the so-called “five-six”
lenders, who are actually loan sharks.
 Incentives of Small Enterprises
 Marketing
The DTI, through its various agencies, provide marketing support to
small enterprises by means of:
 exposure in local and international trade fairs, expositions, trade
Starting a missions to various countries-trading partners, and other trade
events through the Center for International Trade Expositions and
Small Missions (CITEM),

Enterprise  provision of domestic trade database, including local suppliers

courtesy of the Bureau of Domestic Trade (BDT), and
 provision of export trade database and consultation services by
the Bureau of Export Trade Promotion (BETP) and the Bureau of
International Trade Relations (BITR).
 Incentives of Small Enterprises
 Training and Human Resource Development
The DTI, in cooperation with local government units and local industry
associations, has set up SME Centers nationwide manned by business
counselors who are trained to assist entrepreneurs in their finance,
marketing, technology, and training needs.

Starting a In terms of formal training, entrepreneurs may check out the following
services in SME Centers:
Small  Skills and other production-related training – from the Cottage
Industry Technology Center (CITC) and the Technical Education and
Enterprise Skills Development Authority (TESDA).
 Entrepreneurship, managerial training, including business
improvement – from the UP Institute for Small-Scale Industries (UP
ISSI) and small business extension institutes of other schools and
universities.
 Export marketing training – from the Philippine Trade Training Center
(PTTC).
 Incentives of Small Enterprises
 Product Development and Technology Assistance
For assistance in product design and development, the agency to
approach is the Product Development and Design Center of the
Philippines (PDDCP).
For packaging design, testing and analysis, it is the Packaging
Starting a Research and Development Center (PRDC).

Small On the other hand, the Department of Science and Technology

(DOST) has a number of research and development institutes that
Enterprise undertake R & D for new products and product innovations.
 The Industrial Technology Development Institute (ITDI)
 Technology Application and Promotion Institute (TAPI), the Metals
Industry Research and Development Centre (MIRDC)
 Philippine Textile Research Institute (PTRI)
 Forest Products Research and Development Institute (FPRDI)
 Incentives of Small Enterprises
 Other Incentives
Other than government support services, there are still other
factors that make the country a viable site for business. According to
an annual corporate survey, these include:

Starting a  labor availability, quality and reliability

 market potential, size and quality
Small
 positive attitude of Filipino workers
Enterprise  literacy of workers
 low cost environment, including labor cost
 quality and quantity of middle management and technical people.
 Disincentives of Small Enterprises
 Oil crisis
 Investment crisis
 Closing Down/Downsizing
 Corruption
Starting a  Bureaucratic red tape
Small  Poor infrastructure
Enterprise  Peace and order and security problems
 Political instability
 Local market size, growth and access.
Thank you!