CHAPTER 1 former mindset as an employee or student and start
EQUIPPING AND PREPARING YOURSELF TO
BE AN ENTREPRENEUR
Engaging yourself in a business, whether
small or big, requires thorough preparation in order
to succeed. But for every start, it should involve a
lot of analysis, checking, and sacrifices as well. It is
not a joke to decide that you want to be an
entrepreneur without carefully weighing the things
that you need and the risks involved with it. You
should be prepared physically and mentally for the
battle that you will be fighting. When you say
"engage", we have to know ourselves first and
know the business and the new role as an
entrepreneur that we are targeting to become. Most
current entrepreneurs do not invest time in getting
to know themselves and the business they want,
and at the end of the day, they fail and continue to
fail.
The Entrepreneur’s journey should be guided:
R- Renewed Mindset
E- Established entrepreneurial skills and knowledge
A- Anticipate and Assessment of possible risks
P- Plan strategically your future business
✔ R-Renewed Mindset
The first thing that you have to do is to make a
decision that you want to go in the direction of
being an entrepreneur.
To be an effective and sustainable entrepreneur
nowadays, it should start first with renewing the
"mindset". The person's current mindset through
the years has been influenced by so many factors,
such as lifestyle, upbringing, education, and life
experiences.
Whenever we say "renew," we have to wash away
all the wrong mindsets for "entrepreneurs" that we
acquired from all circumstances. The mindset that
"being an entrepreneur" is so easy to acquire
money and the job is so easy to manage. But in
reality, it will be difficult if we do not prepare
ourselves. If you are currently a full-time employee
or student, the most important thing that you have
to embrace is that you need to set aside your
to adapt and develop an "entrepreneur mindset" in
you.
Selling is the lifeblood of every business, and with
the word "sales," it should be incorporated into
your mindset that, as an entrepreneur, selling is an
activity that you will be doing every day. I mean,
every day, it is not a joke. Every day, we consider
selling and who we will sell our products or services
to. We do not get tired of finding the target market.
The mindset of selling should be instilled in the
person as well. Unlike being an employee, we do
not care too much about how we are going to meet
the sales goals of the organization because
someone will. But owning a business and being an
entrepreneur means thinking of ways to sell our
products and how to generate sales and income for
our business.
Most aspiring entrepreneurs are afraid of selling,
talking to people, and having a SALES and
SELLING mindset. We have to be prepared that
this is continuous work that we do as an
entrepreneur. We need to sell. We need to find our
customers.
An entrepreneur's mindset is very comprehensive
in a way that it should have a totally new mindset,
not one based on what you heard from a common
friend and just copy their way of thinking as an
entrepreneur. We have to be responsible
entrepreneurs.
Some of the wrong mindsets of upcoming and
existing entrepreneurs
1. Starting a business is easy.
2. Good and successful business can only be
possible with huge initial capital.
3. Planning is not necessary before opening a
business.
4. You don't need expertise or experience in
operating a business; strong courage is just
the key.
5. You can work at your full-time job and run
your business together.

In order to achieve a renewed mindset,
Learn
Learn new ideas and knowledge that we
don't know.
Relearn
From learning in the past that we almost
forgot, we can regain old ideas and knowledge
about business.
Unlearn
Unlearn trash business ideas and
knowledge that are unnecessary in achieving our
goals.
✓ E-Established entrepreneurial skills and
knowledge
Every entrepreneur should possess the
necessary skills and knowledge in order to be
effective in this field. If you have not established
your foundation first, you have to assess yourself
and make some improvements within yourself in
order to fit into the business.
A modern entrepreneur requires the following skills
before starting the operation of a business:
1. Creativity Skills
2. Selling Skills
3. Negotiation Skills
4. Analytical Skills
5. Persistence
6. Innovation
7. Adaptability
8. Risk
9. Communication
10. Attentive to details
Entrepreneurs should be knowledgeable in every
aspect of the business that they are entering. As
entrepreneurs, we should be willing to learn about
business functions. There is no such thing as doing
only one or several functions of a business. To be
able to survive, every entrepreneur should learn to
adapt and survive. Make an extra effort to learn all
aspects of the business. Take your time, study and
be observant. Enrich yourself with knowledge of the
functions of business by learning from other
entrepreneurs. Giving ample time to study the
nature of the functions of the business will make
the entrepreneur competent, which includes
production and operations, management,
marketing, and finance. These four functions are
interrelated with each other, and if you are
experiencing one problem in one area, it will
definitely affect the overall business.
✓ A- Anticipate and Assessment of Possible Risks
Being an entrepreneur requires thorough
preparation and planning before you engage
yourself in venturing into a business. It will not only
require in-depth checking and evaluation of your
entrepreneurial skills, but at the same time, make
further decisions on what business details that you
need to know in order to derive a sustainable and
successful business.
As we all know, whenever we take a decision like
opening a small business, it will involve risk. There
is a risk in entering into a business. You have to be
a risk taker when you decide to be an entrepreneur.
This word "RISK" might be intimidating for some,
but the risk involves a lot. For every entrepreneur,
he or she should expect that risk is something that
he or she should review. An entrepreneur should
know the extent of the coverage that he or she
needs to face, whether it be low, medium, or high
exposure risk.
In general, there are two classifications of risks
that you may encounter when deciding to enter
a business, namely: financial risk and non-financial
risk. By nature, every new entrepreneur is
considered a risk-averse individual, meaning they
try to avoid any possible risk as much as possible.
The lower the risk, the better.
➢ Financial risk is a risk that is related to
money matters in running a business. Any
possible losses that the business may
encounter if it decides to enter or continue
 the business are considered under this type.
It is very difficult to handle such risks
because they have major implications for
the business functions.
Example: Spending money for packaging
improvement by buying a machine that is not
essential and meets the specifications needed to
produce a more
➢ Non-financial risk is a risk that is related to
other factors that we consider in business,
such as time, effort, ideas, etc.
✓ P-Plan strategically your business
An effective entrepreneur should be making
a strategic plan for their respective business. It is
not just as simple as opening a business that you
want without planning at all for the upcoming years.
With the complex and competitive market
nowadays, every entrepreneur should not only look
at their short-term plans but should shift into long-
term plans by thinking of ways to sustain their
business, especially nowadays that there is a
pandemic.
For some, making a strategic plan might be
stressful and not a priority because it will take time
and be costly due to some items that need to be
accomplished and implemented. Some
entrepreneurs even have a strategic plan, but they
do not carefully implement it.
But strategic planning is definitely essential
because of the complexity of the market.
Entrepreneurs use tactics to achieve short-term
goals, whereas a strategic plan is used to achieve
long-term business goals. Tactics are usually
used for less than five years, or less, while a
strategic plan is for five years or more goals for
the business.
Whenever we "strategically plan" the business,
we can adapt the concept of what Fred David said
about the strategic management process (David,
2009). As per David, the strategic management
process usually starts with developing a mission
and vision for the business, then assessing the
external and internal environment and establishing
long-term objectives, generating strategies, and
implementing them. (David, 2009).
It should be clear to us what the mission and vision
of the business will be that we are establishing.
When we develop these, they should be aligned
with what we want to do with the operations of the
business. It is better to write these so that they will
serve as our guide and the entrepreneur will never
be lost.
Mission Statement
The "mission statement" of the business is
primarily the reason why the entrepreneur will open
the business. This is one of the most important
statements that you should know by heart and
mind. It is your statement that will sustain you until
the end. Without this statement, you are an
entrepreneur that is easily swayed by trends and
competition, and you do not have your own
direction.
Fred David cited in his book Strategic
Management: Cases and Concepts that every
mission statement should have the following
components (David, 2009) in order to be effective,
which the author totally agrees with because this
statement, whether written or not, will provide a
direction to you and can be one of the reasons the
customer chooses you over other competitors in
the market today.
David (2009) stated the following mission statement
components:
1. Customers
2. Products or services.
3. Markets
4. Technology
5. Concern for survival, growth and profitability
6. Philosophy
7. Self-Concept
8. Concern for Public Image
9. Concern for Employees
The above mentioned components of a mission
statement can be visible in your statement because
every customer of the business will have a grasp of
the purpose of your existence. Which means that
the statement should be constructed with some or
the majority of the components. The advantage of
this is that your statement will speak of what you
do. Definitely, when we construct these statements,
they should reflect the "reality" of what the
business is doing. We do not write or hold this
mission in our minds without "implementing it". If
we do not implement, we are just like any other
business floating in the water. A lot of
entrepreneurs just plan and make a mission
statement, but they never make it happen in their
respective operations.
There are five components of the mission
statement
The first component of the mission statement in the
above barbeque business is "product," which is
high-quality. The word "quality" should be true.
There should be a set of business standards for
quality. Entrepreneurs should define what quality
means to them. Is it the same expectation with our
current customers? "Quality" should be evident by
highlighting what makes your product high quality.
The second component of the mission statement is
the "customer," in which are the ones who will
potentially buy your product.
The third component, "market," states the area
where the business will be active to compete with
its competitors.
The fourth component is "Philosophy." It explains
the beliefs and values having the lowest price for
their products. This is effective for those who want
to gain a target market.
The fifth component is "self-concept," which is a
concept that is not common for businesses in the
same industry. It is a very unique concept that
every entrepreneur should always continue to look
at.
Vision Statement
The "vision statement" of the business, on the
other hand, is "how" we see our business in the
future, a few years from now. This is the picture or
the visualization of the business and what we see
will happen once it grows or matures.
Usually, a vision statement should be direct and
include a detailed description of the specific
timeline that you want to achieve in the future of
your business. It should describe how you want
your business to be in the next few years of
business. Be specific with the vision and this is the
goal of the business that needs to be accomplished
by using the right business strategies.
The above vision statement does not have any
required components in order to be effective, unlike
the mission statement with recommended
components. With a vision statement, the words or
phrases that you will include here should be
something that will answer the question, "what do
you want to achieve in the future?".
This question is even related to objectives or goals
that should follow these criteria, such as SMART.
This mnemonic acronym was originally used by
George T. Doran in the November 1981 issue of
Management Review, regarding "There's a
S.M.A.R.T. way to write management's goals and
objectives." Management Review, vol. 70, no. 11,
pp. 35- 36.
According to SMART (Doran, 1981), every
objective or goal should be:
S- Specific,
M- Measurable,
A- Achievable or Assignable
R- Relevant
T- Time bound
With the vision statement, anyone can relate to this
statement by setting their own business goals in the
future, fully guided by this acronym. Just a
reminder: when writing this statement, do not forget
to include the SMART acronym. In our example,
the year is "2025." We have to specify the exact
year because this will be the goal of the business
that needs to work on it. Do not put in any year in
which there is no certainty that our business will
take place. To be safe, you can put the year which
is more achievable, like at least 5 years from now,
to give ample time for the business to work on
these objectives or goals. Five (5) years will be a
realistic time frame.
The word "market leader" describes a very strong
market position that the business wanted to
achieve. When we say market leader, the business
is the top priority of the customers. Leadership in
the market indicates the ownership of the majority
of the market in that industry. The business is the
top choice in the minds of customers, offering a
product that is distinctively unique and above
everyone else. Usually, the market leaders are the
entrepreneurs who are innovative, unique, and
original. Our goal as a business is to not imitate
products or services, but to set a standard and use
the first mover advantage, which is the "business is
the first to offer that product or service."
Area of scope or location where we wanted to be
the market leader. These areas should be properly
reviewed and considered by studying if the area is
the right place for us to implement leadership. The
way that we can check if there is a need in these
areas is to conduct a market study or even
personally assess if the target customers are
present in these areas. If not, we have to change
the location and find the right area for our own
objectives.
Specific ways of reaching the market position
of the business. From time to time, if the
entrepreneur assesses the situation and finds that
the 500 delivery personnel are not effective, it can
be changed to a smaller or bigger number.
Gradual shift
The most effective and convenient way to
be successful as an entrepreneur is to gradually
shift from being an employee or student to being an
entrepreneur by committing part-time initially to the
business. Do not jump into the business and risk
everything by committing to full time. It is very
important to start slowly but surely. If we cannot
fully commit our time, effort, and financial
resources, we are not yet ready. Commit only a
percentage of what you are willing to risk.
We can sell or do our business during our spare
time after work or during weekends. Do not start a
FULL-TIME business while you are still working or
studying unless you are well prepared and have
excellent entrepreneurial skills. For the meantime,
commit a few hours or days first, then try to have a
feel of what is happening. That is the time when
you can decide in the future if you can manage it
already. You can do your business after office
hours on weekdays or during free time on
weekends. Never compromise your full-time job
with something that you are not sure of.
Begin your business with a small start-up capital
based on your current capacity, and be creative in
determining how to create a business.
Do not enter into a business if:
➢ You are only invited to have a business
because of greed or jealousy of someone
who is already successful in the business
field.
➢ If there is a "fad" in that business, they are
entering into a business that is very popular
this season and will eventually fade if the
market need for that business is not strong
enough. For example, the milk tea business
is very popular. Eventually, you open your
own business without any planning and just
open for the sake of opening a store.
Definitely, this store will not go far.
➢ You are not equipped to operate the
business. You do not have any knowledge
or experience in that industry.
➢ If you are enticed to get a franchise
business without studying the concept of
franchising, It is better to start a small
business with your own concept, which is
more manageable for you.
Recommended Business Decisions:
1. Small start-up company based on your
original concept.
2. Retail or wholesale distribution of a current
business product.
3. Avoid having a store with a high rental cost.
If you can do it at home, it's much better to
have minimal expenses.
CHAPTER 2
CHOOSING THE RIGHT BUSINESS FOR YOU
The right business for you does not have to be
based on what you feel is right for you or what
other people think is best for you. It is best to know
the business that is best for you according to the
required skills, money, and other factors. Venturing
into a business is not a one-size-fits-all where one
business may be good for you but not necessarily
good for them. Everyone has their own space and
place in the market.
Introvert: a personality trait that prefers to be alone
or within oneself.
Extrovert: an outgoing personality who enjoys
social interaction and meeting new people
. Ambiverts are a combination of both introverts and
Ambivert: a personality trait characterized by a mix
of introversion and extrovert tendencies.
The terms introverted, extrovert, and ambivert
above were coined by sociologists in Kimball
Young's Source Book for Social Psychology,
published in 1927.
Factors that make an empowered entrepreneur:
Empowered Entrepreneur = Renewed Mindset +
Entrepreneurial Skills + Aligned Experience +
Excess Money Funds + Committed Time +
Sustainable Business Idea
Excess Funds or Money = The amount or value of
business that is right for you
Introvert, extrovert, ambivert
The terms "introvert," "extrovert," and "ambivert,"
coined by sociologist Kimball Young, are extremely
helpful for any entrepreneur in determining how to
start a business. Knowing ourselves will be
essential for success. As entrepreneurs, we have to
be honest with ourselves and learn to discover our
strengths and weaknesses. Checking our
capabilities and limitations will help each of us build
a solid foundation.
Introverts are very good at details and are very
observant as well. They have these skills that
require planning and administration. It's best for
introverts to be assigned or work closely on
business planning, strategic planning,
management, and administration of human
resources (people).
Extroverts are very confident when it comes to
communicating with others, socializing with others,
and dealing with others, and they have very
creative ways of selling products or services.
Anything that involves building relationships with
customers and suppliers will best highlight their
skills.
extroverts. This combination will be beneficial to the
business because every business requires two
personalities to make effective decision-making.
Factors that make an empowered entrepreneur
The formula from the above guide theory shows
that an "empowered entrepreneur" should
include the following factors: a renewed mindset,
the necessary entrepreneurial skills, aligned
experience or exposure from doing the business,
excess money funds, committed time, and a
sustainable business idea. If one or a few factors
are missing, then it will be challenging for the
entrepreneur to survive.
Renewed Mindset: changing the way of thinking
from being an employee to an entrepreneur.
Prepare yourself for the expectations of being an
entrepreneur.
There is a need to renew the mindset from
being a dependent employee into an
interdependent entrepreneur.
Entrepreneurial Skills: These are the necessary
abilities that you need to have in order to succeed
as an entrepreneur.
There are 12 recommended entrepreneurial skills
that are necessary before you start a business and
to be equipped as an entrepreneur. The following
skills consist of:
1. Creative Thinker: This person has out-of-
the-box ideas and very unique concepts that
are very difficult to imitate by competitors.
Being creative also means the person is not
afraid to try new things, concepts, or
decisions that might be helpful to the
business.
2. Risk-taker: willing to accept the possibility
of failure and to accept the consequences of
any decisions made.
3. Innovative: willing to develop uncommon
products or services that will address the
needs and wants of the customers. These
are game changers in business.
4. Adaptable to change: the person can
easily adjust to different situations, no
matter what the effect on the business is.
Openness to the possibility of adjustment
should always be entertained by the person.
5. Multitasker: doing things at the same time
with tasks that are equally important to
complete.
6. Visionary: the ability to envision what the
business's future will look like. This is what
the person wanted to be for the business.
7. Observant: the ability to pay attention to
every detail and never miss out on
important details, and understand how to be
sensitive to what is going on in the industry.
8. Engaging Communicator: the ability to
speak by probing (asking questions
properly) and listening to people in order to
send a message. These two are important
because effective communication does not
have a single approach to communication.
You should be very slow at speaking and
very quick at listening to your customers.
9. Convincing Selling Capability: the ability
to close a deal, sell a product, and obtain a
repeat order. In a convincing sale, the seller
should be able to let her buyer understand
and make them believe that there is a need
to purchase a product without relying on the
seller's guts and charm alone as the basis
of purchase.
10. Analytical Thinker: the ability to be
systematic and organized in solving any
business issue and having it interpreted, as
well as to understand the effects of an
entrepreneur's decision on the overall
condition of the business.
11. People Person: the ability to engage and
connect with various types of people, as
well as lead and understand them.
12. Financial Literate: A person who is
financially healthy (less or no debts) and
wise in making money decisions. This
person knows how to prioritize savings and
investments and how to manage income
and expenses. The person is mature
enough to decide on what is important and
what is not.
Aligned Experience - This is the exposure and
events in your life that are related to or connected
to doing business, whether they are based on your
education, employment, or other factors.
 Determine the level of your competencies with
such factors.
There are four (4) factors affecting the
success of an entrepreneur, namely: your hobbies,
education, work experience, or family background
in business. You rated yourself with these factors,
and the one with the highest level will be the best
business that is aligned with your experience. This
will be helpful in determining which business you
should pursue. This only means that if you have a
hobby that you love, this will be the business that
will best suit you. The degree you earned will also
be useful in starting a variety of businesses. If you
have a culinary degree, then starting a food
business will be a priority. If you graduated from
accountancy, then a financial consultancy will be an
option. The broad exposure you have in your work
will be the starting point to starting a business
where you are good at. Lastly, when you inherit a
business from a family member, it will be easy, but
most of the time, they will not be aligned with what
you want.
Excess Money Funds: the extra money that you
are not using but are willing to risk losing. This will
serve as the capital needed for the business.
Excess funds or money= the amount or value of
business that is right for you.
If the total value of money is an indication that you
have a good starting point in your initial business. If
the total value is negative, which means your
expenses are greater than your income sources,
then you have to think twice if you will pursue going
into business.
Ideally, a business is formed from all the excess
money that you have, which means that this
amount is the allowable amount for exposure to
risk. Entering into a business is considered a risk in
itself, and it is not recommended to start a business
without a healthy financial condition. Do not place
revolving money or limited sources at risk for your
business because it will definitely collapse later on
because you are using personal sources of income
to support the business.
Committed Time: This is the number of days and
hours of your time and effort that you have
committed to doing business. This time is so
precious, which means that you will be spending
this time allotting your undivided attention to
business.
You cannot expect to get a better result if you both
commit to a full-time job and to one business full-
time. A lot of entrepreneurs try to do this, but
eventually fail. You have to decide if you will pursue
it full time or part time. Being full-time means that
all your time is devoted to the business. You are in
charge of everything. You are the sole decision-
maker here. You do not expect others to care about
your business, but solely rely on you. For part-time
entrepreneurs, online selling and reselling are
ideal for them.
Sustainable Business Idea: The concept of how
you want your business to be is referred to as a
"sustainable business idea." This is the source of
your business plan, which includes the details
about the overall operation of the business. It
includes the type of business, whether it is a
product or service, and the functions of your
business, such as management, production,
operation, marketing, and finance. All these
functions are all integrated and aligned with one
common idea. .When you study the market for the
business idea you have for your business, it will
either stay longer or sustain for a period of time.
The details on how to create an effective business
idea will be explained in succeeding chapters.
An "empowered entrepreneur" is someone who
has the authority, control, freedom, and power to
create, maintain, and sustain their business. With
an established business foundation, having
acceptable knowledge, skills, and attitudes to
succeed is a must.
Introvert, Extrovert, Ambivert
Working on the following business functions is
most productive for an introverted person:
Possible examples of activities that you will be best
suited for will be:

Management(Human Resources)
Creating or conceptualizing business
policies and rules for employees, Developing job
descriptions and specifications. Reviewing the need
for possible additional staff hiring.
Production and Operations
Examining the quality control of machines
and equipment; calculating the cost and pricing of
products or services and inventory management
Marketing
Brainstorming of business ideas, logos,
packaging, etc. Conducting a marketing plan,
market research, and feasibility studies. Finding the
target market.
Start to develop an "AMBIVERT" personality in
you. Every business should be adaptable to the
combination of both personalities, have an exact
balance of both skills, and use them for the
improvement and growth of the business.
Factors that make an empowered entrepreneur
After you have thoroughly assessed yourself, this is
the time that you have to commit and choose the
right business for you. In order to summarize the
factors that an entrepreneur should have and help
you decide what business will be the best fit for
you, the template below and the next chapter will
explain your options for what type of business you
may start. It is grouped according to your available
funds and committed time to the business.

Financial Follow the following steps below before starting

Bookkeeping and computation of
profitability of the business.
Working on the following business functions is
most productive for extroverts:
the your business, and assess yourself. Choose only
one business that suits you. You will be able to get
it by reaching out to Step 6 below.

Possible examples of activities that you will be best

suited for will be:

Management (Human Resources)

Training of staff for specific skills that
require engagement and interaction

Production and Operations:

Ensuring that the procedures are properly
implemented in the business store or business
display area is very helpful for extroverts.

Marketing
Overall, in charge of the selling of the
products and services, advertising and promotions
are very good areas for extroverts too. Negotiation
and arrangements with customers and suppliers.

Financial
In charge of the sales activities that will
improve the profitability of the business.
 CHAPTER 3
ESTABLISHING YOUR DESIRED BUSINESS

It is important that you put in extra time and effort to

learn about the desired business that you will be
pursuing. It is not enough to simply imitate a
business model from a friend or someone you
know; you must learn by doing it from the ground
up. A strong foundation is necessary to have a
sustainable business. Being strong means that, as
an entrepreneur, you have to learn all the functions
of the business, such as marketing, management,
production operations, and finance. You are a more
empowered entrepreneur if you plan and are
prepared to establish your business, even if it is just
a small one.

These functions of the business should be

meticulously created and executed by the
entrepreneur so that it will be easy for them to
manage the business. Before an entrepreneur
formally starts to operate, they should first prepare
the necessary things for the business. Let us check
the options that you may have.

The last step given in order for you to choose your

business is categorically classified into four major
groups, such as:

1. Small Excess money with part time hours

(A)
2. Small Excess money with full time hours (B)
3. Big excess money with part time hours(C)
 4. Big excess money with full time hours(D)
A small sole proprietorship is any small
business, whether online or not, that is fully
operational and complete with management,
production, marketing, and financial functions of the
business.

Rental businesses are those that involve allowing

their customers to borrow their properties, cars, or
other items for a fee.

Expansion, or adding another business, means

growing the business by having another type of
source of income by adding another business.

Franchising is a type of business that involves

using someone else's business brand name and
strategies as their own business and implementing
them.

Export is the type of business that sends and sells

products outside of the country (abroad). An import
is the type of business that involves receiving or
obtaining goods from other countries.
Retailing is a type of business that involves selling
products in retail or small quantities, such as
Foreign investment involves putting up business
pieces.
outside of the country by establishing a branch or
foreign operation abroad.
Wholesaling is a type of business that involves
selling products in bulk or large quantities.
Retailing, Wholesaling, Distributorships
Distributorship is a type of business that involves
If you decide to choose retail, wholesaling,
wholesale distribution of products to various
or distributorship, then these are the easiest types
businesses.
of businesses to operate, especially for those
upcoming entrepreneurs who do not need more
Teaching is a type of business that includes
time and money to spend. The exposure to risk is
providing information or imparting knowledge to an
less, unlike with operating a full-blown business
individual on a specific topic. Training is a type of
such as a sole proprietorship. You can still work as
business that includes developing specific skills or
an employee and then do business on the side.
abilities for an individual.

In terms of production and operation, there is no

Consulting is a type of business that involves
need to pay and invest in maintaining high costs for
consultation with someone who is considered an
machines, equipment, and inventories, nor is there
expert or well-experienced individual and getting an
a need to hire staff. You may do it on your own. For
idea or insights from them.
marketing purposes, the products you are
handling are basically finished products,
Investing money in existing businesses means
manufactured by other businesses or companies.
putting extra money into businesses that generate
You cannot change the product anymore. The
more sales in the hope that they will provide
income in the future.
product's features and benefits are primarily
created by the manufacturer.
Retailing is the type of business that focuses on a
wide variety of products, with a small quantity that
you will offer in the market. For example, if you sell
a finished product manufactured by another
company, such as chips, you may also have
cookies, perfume, and so on.
For wholesaling, unlike retail, the concentration is
on bigger quantities of items for a few different
products. In wholesale, you generally have a very
large stock of items per product.
A product distributorship is considered more
complex because it involves selling products
coming from the main suppliers coming from other
countries while your business serves as the main
distributor of the product in your local country. A
distributorship in the Philippines usually involves a
transaction with a foreign supplier distributor in the
Philippines of imported chocolate coming from
Taiwan. is
SUMMARY:
Teaching, training, and consulting
A business related to teaching, like a school or
center, is one of the most in demand nowadays, but
most of them are online, which means fewer
operating expenses. All you have to do is prepare
your skills and take advantage of this with the use
of technology. You could bill your customers on a
per-output or per-hour basis.
Training businesses require hiring or having a
pool of trainers who will create training modules or
programs for training that are relevant today. This
training may be offered by the business on an
hourly or per-day basis.
Consulting is an option for those who want to work
with companies or businesses to help them with
their operations by getting their ideas, expertise, or
even experience. It requires connection or
networking with the owners.
Invest money in existing businesses
For this option of business, it requires a
thorough analysis of an existing business that they
want to invest in. The existing business here is any
established business of your choice that is
operating and performing well in terms of sales.
When looking for an existing business, look for one
that has a strong brand, a good reputation, and is
regarded as a leader in the industry. Investing
money involves taking a risk by putting a certain
amount of money at risk by being an investor or
being a partner in the business,
Small Sole Proprietorship
Opening a small sole proprietorship
business is one of the most basic types of business
that a new entrepreneur can consider, because this
business is a full-blown business. Being a full-
blown business means that all of the functions are
being handled by the owner, such as marketing,
management, production, operations, and finance.
This type of business will give the new
entrepreneur hands-on experience of what a real
business looks like. It is considered challenging
because, as an entrepreneur, you have to be ready
to perform all the functions. It is a must to really
know the business details well.
Rental businessThis type of business is
considered an easy one because it only requires
one focus, which is the operation of renting an item
to your prospective customer. In order for you to do
this, you need to purchase an item so that you can
continue with this type of business. Renting
involves allowing your customer to use your item
for a specific price or value. Prices vary and change
depending on the type of item. An example of a
common rental business usually involves cars,
houses, equipment and machines, warehouses,
and other electrical equipment.
Expansion, or adding another business
For an existing business, if it is your goal to
earn more income, one way to do that is to find
another possible business, which is through
expansion and adding another business. Expansion
simply means widening the operations of your
business by putting more branches in different
locations. A good business plan should be made
first in order to make it more effective. Adding
another business may involve venturing into having
another business that is not related to the
entrepreneur's business. For example, if you are in
the food business, you can add a clothing business.
It is also better to try a strategy called "backward
integration," where the entrepreneur can have
another business by being a supplier or
manufacturer of the supplies that they need for the
business. Through it, the entrepreneur can also sell
it to other business owners as well.
Franchising
For this type of business, the entrepreneur
should be aware of several expenses attached to it,
which are the franchise fee and royalty fee.
Franchising might look easy to manage due to a
more stable management and business model,
unlike if you are starting your business from
scratch, where a lot of things have to be checked
and risks are involved. A lot of aspiring
entrepreneurs consider this a shortcut to success,
but unfortunately, the majority of them are not able
to make it due to a lack of knowledge about
franchising. It is very important to ask yourself if
you are willing to pay for the franchise fee and
royalty fee. The franchise fee, which is a fee to be
used for using the business model of the business,
which includes the brand, getting marketing
assistance, etc. Normally, for the majority of
franchise owners (franchisors), they set a one-time
franchise fee for their franchisees (entrepreneurs),
which is good. For some, they need to pay it every
year or in other terms, but it depends on the
franchise owner. On the other hand, the royalty
fee is a fee paid to the franchise owner (the
franchisor) depending on the percentage of the
total sales of the franchise. Some might charge a
franchise fee every month, every year, or
depending on the specified terms.
Export
In this type of business wherein the
entrepreneur sells the product outside of the
country, it is very important to understand that the
quality of the products should be above standards
and at least meet the international standards of the
chosen country where you will deal with your
business. It is very important to know the export
rules of the chosen country to avoid several
conflicts whenever you start a business. The
entrepreneur should ask the country for their own
specifications for their products.
Import
In this type of business, the entrepreneur
deals with getting products from outside the country
and selling them in the home country. It is very
important to understand the legality of the company
that they are dealing with. Imported goods must be
legally permitted to be sold in their home country.
Import quotas on the number of allowed products
are subject to approval by the government.
Foreign investment
It involves placing money in a business
outside of one's home country to support its
operations. This type of investment is not only
limited to financial investment but can include
human capital, machines, or infrastructure
investment by putting it there as their own
investment. Training people, putting up machines
and developing structures in a potential country will
make this investment possible. There is a huge
amount of funds or money needed for this type of
business. It is riskier than the usual type of
business.
Retailing, Wholesaling, Distributorships
If you are the type of person who does not want to
check a lot of items, it is preferred to focus on
wholesaling. But if you want excitement and
challenges with different types of products, then
retail is for you. You may expose yourself to
distributorship for those products that are
saleable in your country or those that have a strong
brand. It involves the familiarity of the supplier in
order to pursue this type of business.
The best products for retailing and wholesaling
are still related to food and consumer items such as
beauty products or anything related to beauty,
which will work well as a retail and wholesaling
business. It is better to start with a few items first as
a starting business, then later review the set of
products that are fast-moving products or best-
seller products. It is better not to focus on too many
items because it is a more effective and efficient
approach to do this.
For distributorship, it is best to concentrate on
international products that are very appealing to the
Filipino market. As of this time, with the landscape
of distributorship, Korean items are still the
dominant distributorship business, which is relevant
nowadays and still booming in the Philippines.
followed by Chinese and American items. For other
international products, if you still want to continue
doing business with this type of product, you should
first check if there is a strong need for those
products in the target area you will be choosing.
Good feasibility studies and business planning are
necessary in order to pursue other international
products not mentioned above. Food and non-food
distributorships are still the emerging types of
distributorships.
Teaching, training, and consulting
For example, if you graduated from a business
course, your business related to teaching can be a
school or center offering a short course or degree,
but due to the pandemic, it is best to establish an
online school or center offering different webinars
as well. The training center can offer online
webinars and workshops for all their customers.
Including key people whom you know can help you
in rendering services. In consulting, it is very
important that you have a lot of experience or
exposure in dealing with different businesses, as
this will give you more knowledge and insight that
you can use whenever you pursue getting clients to
render your consulting services. An example of this
is that, as an accountant, you can get clients from
big companies who are in need of your expertise in
terms of accounting, like the taxation concerns with
the BIR. You may have a scheduled consultation
with the company every week and charge them
based on your per-hour basis,
Opening a small school is great if it is aligned with
your course or background. If you already have a
degree in business, then a business school is the
best option to consider. Operating an online school
is one of the most convenient and cost-efficient
types of schools, and it is much easier to operate
than traditional schools. No high rental costs are
needed for your school rooms. All are converted to
online.
Training centers can be limited to certain in-
demand courses; the best ones are related to
corporate training or beneficial to companies, such
as training related to sales, leadership, customer
service, financial literacy, and bookkeeping. Other
training which is also good to start is cooking
training, computer or technical training, which is
very useful in everyday transactions of individuals
and businesses.
Consulting services are the type of business that
most professionals do as additional sources of
income or as their main business. It is better to
have a pool of professionals who have expertise in
a specific field than to offer consulting services.
Usually, consultancy services are charged on a
per-hour basis or per-project basis. Other
companies charge customers per day too. You can
calculate your consultation fee by determining how
much it will cost you to complete the project and
how many days and hours it will take you to
complete it. That is the basis of your charge.
Invest money in existing businesses
It is better to invest your hard-earned money in an
existing business with a strong brand, which means
that they are well known in the market. If you
cannot invest in a big business, you may start with
a small business within your area that is operating
and has sold a lot of its products or services. One
way to check is by their number of sales.
The first way of investing is through financial
means. For entrepreneurs with limited excess
money, you may initially invest in stocks or bonds
offered by top corporations in the Philippines.
These are the companies that are considered
"stable businesses". You may check the Philippine
Stock Exchange to invest in stocks, or go to your
bank to check available investment funds, or check
if there are some corporate bonds issued by
corporations.
Stocks are usually ownership interests in
companies where the investor (you) puts a certain
amount in and invests it in the company, later
getting income through dividends.
Bonds are issued by companies which represent
their borrowing of money from investors (you) and
you get paid interest later on once the bond
expires.
Some businesses usually allow other business
owners to invest money in their business for
the following reasons:
1. Existing business owners are in need of
additional capital to be used for buying their
supplies or ingredients.
2. To be used to buy equipment, machines, or
company vehicles.
3. Invested money is to be used for marketing
purposes for their business.
Secondly, invest your skills in the other
businesses. This is the type of investment where
you use your skills and knowledge to be used by
other businesses to their advantage. For example,
if you are good at computer editing, you can offer
your skills to the business to be used in their
marketing on social media sites like Facebook or
Instagram. Any skills that are acceptable to both
parties can be used as your investment in the
business. You may discuss this with other owners
of how many percentages will be the distribution
that you will get from this skill. In some instances,
both parties may agree that you can get a
percentage of income from the business, or the
business owner will just offer a one-time
investment. Then they will pay you a certain
amount commensurate with the skills you have
given, plus interest if needed.
Small sole proprietorship
Start-up entrepreneurs' starting point is that
they registered a business as a sole proprietorship,
which is the most basic form of business. It is
challenging because, being small, you do
everything. All the functions of business, such as
management, marketing, management, and
finance, are performed by the owner. The author
suggests that whenever you start your business,
you should really plan the nature of the business
that you will be pursuing. Do the recommended
guides presented in the next chapter and
conceptualize all the different functions so that
everything is in place.
With regards to the advantages of sole
proprietorship in terms of finances, you may apply
through DTI for your sole proprietorship as a
business under BMBE (Barangay Micro Business
Enterprise). To avail of such privileges as
exemptions from the minimum wage law and other
financial-related benefits that will be further
discussed in succeeding chapters related to
finances.
Rental businesses
Rental businesses only require the items
you need for rental. No need to maintain high costs
for holding or maintaining products or pay for rent.
Suggested rental businesses that can generate an
income include: apartment, house or condo rental,
vehicle rental, machine or equipment rental. Other
businesses use their unused spaces in their
business to be rented as a source of additional
income for them.

Expansion, or adding another business,
Expansion of business or adding a business
may be best if your first business is already
successful and stable. Do not expand or add
another business if you just feel that you just want
to have it due to competition and without knowing if
there is a need to have it in the area. The basis
includes: growth of customers and there is a need
to serve those additional customers; there is some
excess money or funds due to the increase in
income of the business which is coming from the
business sales. Another basis is that there is a
strong potential that your current business needs
additional products that will help it boost its
business performance. Expansion also requires a
feasibility study or business plan before you
proceed with this decision.
An example of expansion is adding a second
branch or office. If the main business is banana
cake, then you may add business in terms of
ingredients or supplies for baking.
Franchising
Expose yourself only to this type of
business if you feel that you do not have enough
time to conceptualize the business and just follow
and implement the established business model of
the franchise. If you decide to get one, look for an
established franchise with a strong brand and with
a low franchise fee as much as possible. Double
check the royalty fee being offered by the
franchisor because one of the problems being
faced by entrepreneurs who get a franchise is
having a high royalty fee and having difficulty
increasing their sales. The royalty fee is based on
the sales of the franchise, and the franchisor sets
the percentage of sales as the royalty fee.
For starters, an acceptable franchise is a franchise
that is related to small food carts or a franchise of a
small store. Getting a franchise for a well-known big
brand requires a lot of money, so it is better to get a
franchise with a lower franchise fee. The higher the
franchise fee, the longer the time of return on
investment.
Export
Businesses who are interested in exporting
products outside of the Philippines should have the
highest quality standards set for their products and
they should pass the required standards of the
international market. If the business can already do
export operations, the production operations of the
business should be checked meticulously.
Good items for export include food and non-food
products that are well known in the home country or
have a need in the foreign market. We can export
products that we have abundant resources for here
in the country, like, for example, if our country has
abundant plantations for coconut, then we can
export products and by-products related to it
because it will not be a problem in terms of scarcity.
Import
Import products that are limited in our
country and can help the consumers in our country
with their consumption. You need to have direct
contact with suppliers if you are going to pursue
importation of this. Take advantage of those
countries with high acceptance from the public.
Foreign investment
It is better to invest first financially or use human
capital (sending foreign employees outside the
country) as a starter, so that it will give you an idea
of how the business works in a certain country. Do
not invest in putting an actual operation or sites in a
foreign country initially. To avoid a lot of risks, it is
better to take the first two options first before you
proceed with putting up the actual operation.
Putting up a business outside or on sites is more
complicated and involves some checking of the
country's legal conditions.
CHAPTER 4
EMPOWERED BY SUSTAINABLE MARKETING
Generally, in marketing, as explained by McCarthy
(1960), the main focus should be on the following
areas: product, price, place, and promotion. Such
areas are also known as the "4 P's of marketing,"
which originated with E. Jerome McCarthy, an
American marketer. As an entrepreneur, this
particular area should be planned and executed
very well. Unfortunately, based on the observation
of the author and his consulting experience with
different micro, small, and medium-sized
enterprises (MSME) entrepreneurs, this area is the
most unplanned and underestimated by the
entrepreneurs. This is an area that causes them to
have major problems, such as low sales, or even
worse, causes them to fail and force them to close
their businesses.
It is better to start working on this area of the
business early enough to get it right the first time so
that it will not be difficult for the entrepreneur to
make some major improvements later on as the
business gets started. Every business should be
creative enough to think of these 4 P's that they
want to see in their business. The guide business
that the author will use in all the examples and
illustrations will be based on the cupcake business.
The name of the business that we will be using
here as an example for illustration is Haven
Cupcake and Pastries Shop, which offers a brand
called Heavenly Cupcakes, a vanilla cupcake with
pink frosting. The author used this name for
illustration purposes only.
Product
The first thing that every entrepreneur must
do is to create a product or service that they will be
selling to the market that they will be entering. Let
us begin with one main product or service, and then
you can apply the same strategy to your
subsequent products or services.
Brand, as defined by Philip Kotler (2016) in his
book Principles of Marketing, is a name, term, sign,
or design, or a combination of these, that identifies
the maker or seller of a product or service. A brand
is the unique identifier of entrepreneurs compared
to their competitors in the market, and this will show
or describe the actual product or service.
Brand name is the name, word, or term that
identifies the product that is usually created by the
owner or entrepreneur.
Symbol or logo is created and used as the
business representation by the entrepreneur
through letters, pictures, or shapes with
corresponding colors that best describe the
business.
Tagline is a catchy statement created and used by
a business to create strong brand awareness for
their customers.
Product or Service Features are the complete
description or characteristics of the product or
service, such as the size, color, design, weight,
unique quality, quantity, or anything that will
describe the product or service.
Product or Service Benefits are anything that you
will get from a product or service once you buy it.
This is based on the features of the product or
service.
Price
A set price is the set amount that the customer
needs to pay for the product or service that they get
from the entrepreneur or seller.
Costing is the detailed computation of the
expenses involved in manufacturing the product or
cost of doing the service.
Pricing is the activity of setting the final price of the
product or service after doing the costing.
Place
A place is considered the location where your
customer can find the product or service.
A target market is the sure set of customers that
every entrepreneur will be selling their products or
services to. It can be in the same location
mentioned above or in another location.
Promotion
Promotion is the set of activities undertaken by
entrepreneurs to promote a product or service and
make them well known to their customers by doing
sales promotion or advertising.
Advertising is an activity created by entrepreneurs
to promote products or services by using print, TV,
radio, face-to-face, and social media platforms to
sell or inform their customers about the specifics of
their offering.
Sales promotion is a promotional activity used by
entrepreneurs where the customer is convinced to
buy the product or services offered to them due to
the instruction given by the seller.
The author created various steps for you to
complete in order to properly guide you on what to
do in order.
Step 1: Think of a product or service together
with the brand, brand name, logo, tagline, and
product or service features and benefits.
Product or Service
Starting here, choosing the right product or service
to be offered in the market should be done first.
The first rule is to offer a product or service that
will help you generate sales and will stay longer
in the market. Check your target area or
location and look for those customers. Ask
them. Analyze if they have a need for what you
plan to offer on the market.
Having the wrong product will be a mess in your
business.
Based on the observation and experiences of the
author with the entrepreneurs, the following are the
usual actions of the entrepreneurs:
1. Some entrepreneurs only imitate existing
products, and do not create unique and
original concepts for their products or
services.
2. Entrepreneurs improve the existing products
or services only.
3. They sell products that are based on fads
(uso) or what is hot selling today.
4. They sell products or services that they
want the entrepreneur to sell.
If you create your products or services based on
the above actual actions, you will definitely not stay
in the industry for long. So it is better to create
your own product or service that has a unique
strong need in the market you are moving into.
Brand
Creating a strong product or service will initially
start by thinking of a brand. Brand represents the
image of your business. Because a brand is a
combination of a name, term, sign, or logo, it
should be easy to remember by the customers.
Brand name: As much as possible, the brand
name should be easy to remember and associated
with the business's product or service and its
customers. Never create a brand name that is too
confusing or too long. If you have a wide variety of
products or services for different target market
customers, it is best to create a sub-brand for them.
Symbol and Logo
Having a meaningful symbol, which is any shape,
figure, color, letters, or anything that is connected
or will make any representation of the business, will
be good. Business owners typically use this as an
effective way to show their customers their image.
It will show if the business is conservative or
aggressive through the use of shapes and strong
colors. It is better to know the mission and vision of
the business so that it is aligned with the business.
In strategic planning of the business, this can be
changed every five (5) years ideally, and it depends
on the owner's decision.
Entices the customer to buy due to the inclusion of
a statement or tagline from their business. It is
very important that the tagline matches what you
want to portray to your customers. The picture
should be something that is considered your "best
seller" or specialty to highlight your brand image.
If you do not like the picture of the actual cupcake,
you may use any symbol that will represent the
business.
For the brand name, for the main brand, this
symbol or logo should be used, but for your sub
brand you may use another logo, and you can do
that by changing or modifying the color of the
existing one or adding something from the existing
symbol or logo to differentiate it from the main
brand name.
The tagline should be concise and straight to the
point. English, Tagalog, or any language can be
used to make it more attractive to customers
whenever they hear it. Avoid long statements
because customers will easily get bored.
The use of rhyme words may be appealing to
customers, so you can think of words or phrases
that will best fit your product or services. Once they
hear this statement, it should be easy to
understand and to recall.
Product or Service Features
Features will highlight your product's or
service's advantage(s) over the competition.
As much as possible, the feature is something that
makes the product or service "unique".
Features can be unique if:
1. The business is the only one who is offering
that product or service to the market (first to
initiate).
2. It is very hard to imitate your competitors.
3. A creative idea
4. It is not replaceable by other brands or
businesses.
5. Original concept
As an entrepreneur, the features of the product or
services will be the guide that your business will
follow for the next few months or years after you
start operating. This should be properly researched
and match the customers that you will be serving. It
should correspond to what you do in marketing as
well as the actual product. There are some
entrepreneurs who failed to produce a good
product or service that is long-lasting because they
missed the uniqueness of its features.
Product or Service Benefits
This should be detailed when explaining to
the customers what advantage they will get from
the products or services that the business owners
will provide. If the customers do not get what they
deserve, then they will look for something else.
Step 2: Determine the cost of your product or
service and establish a price for it.
Price
Price is one of the most problematic parts of the
business that most entrepreneurs fail to address or
solve properly. A lot of entrepreneurs
underestimate the effect that this will have on their
business. Pricing and costing should be computed
the right way. There are some entrepreneurs who
set the price without properly doing the right cost,
and some who do the cost but do not set the price.
Then they may experience some losses or not
experience earnings from the business due to this
problem. Remember to compute first (costing) and
then set a strategy for pricing.
For costing
Every entrepreneur should know how to
differentiate between all costs. Costing varies with
the following cost terms related to products or
services you produce and those costs that are not
related to products or services but related to other
expenses by the business. Every entrepreneur
needs to compute the allocation of all the costs for
all their products or services. Do not forget to make
a detailed computation of these.
Learn how to identify the differences between
all costs.
Types of Costs:
This is a summary of the types of costs

PRODUCT OR SERVICE COST
Cost directly related to production or manufacturing
● Fixed Product or Service cost
● Variable Product or Service cost
OVERHEAD OR OPERATING COSTS OR
OTHER COSTS
Cost not directly related to production or
manufacturing
● Fixed Overhead Costs
● Variable Overhead Costs
1. Fixed costs or fixed product costs
(related to production or manufacturing of a
product or service) are expenses incurred in
producing a product or service that do not
change no matter how many products or
services are created by the business. These
costs need to be paid even if the business
does not have any production at all for a
certain day, month, or year.
Examples are: salary for the production staff paid
per day, week, or month,
Rental of warehouse space, manufacturing
equipment, or a vehicle
2. Variable costs or variable product costs
(related to production or manufacturing of a
product or service) are expenses in
producing a product or service that change
with the number of products or services
created by the business.
Examples: Ingredients for a cupcake, Payment for
the packaging box, Electricity used in machine,
Water used in production, Transportation cost
3. Overhead costs (not related to production
or manufacturing of products or services)
are expenses that can be fixed or variable
and are not used in the production of a
product or service. This type of expense can
be adjusted or changed from time to time if
needed, and the importance of this cost is
just secondary in terms of the priority for
your business to survive. The business can
survive without or with only a portion of
these costs.
Examples: display cabinet, postpaid plan for your
mobile phone.
Variable Cost
In the case of services, the items listed here
are those items needed by the business to render
the service. Instead of variable product cost, this
will be referred to as variable service cost, which
may include intangible items and can be calculated
in hours rather than pieces. This is more
challenging to compute due to the nature of the
computation in relation to time or other factors.
Here is an example of the variable service cost:
If the nature of your business is service, you need
to compute the following, which includes the Labor
per hour-minutes used in the service, machine or
equipment per hour- minutes used, raw materials
per hour-minutes used, vehicle per hour-minutes
used.
Fixed Cost
It is advisable to determine and identify how
much of your final product or service price is
allotted for fixed costs. In this way, the owner will
know if the costs are too high or too low. Being
aware of this will help the entrepreneur make some
necessary adjustments. Usually, for fixed costs,
you set a specific time frame for when you want the
cost to be recovered and paid. If you have
recovered the fixed cost already by including it in
your cost, it does not mean that you will stop
including it in your per unit cost, but you can still
continue adding it as you use the said cost for
production.
These are the typical expenses incurred by the
owner in our example of a previously purchased
business to be used for processing, manufacturing,
or rendering of products, with the fixed product cost
mentioned above. It includes machines, equipment,
or any tools related to production.
Usually, the owner purchases the said items initially
at the start of business operations. Some owners, if
they have a limited budget, tend to rent these
items. But if the owner will purchase these items,
the best way to set a specific fixed cost should be
computed and distributed for a specific number of
years.
For example, a cost can be distributed per item of
production according to the computed per-piece
cost. One of the mistakes of the owner-
entrepreneur is that they automatically include the
expense in the setting of the prices. That is why the
computed cost will be high for the prices of the
product or services.
An entrepreneur can use the following strategy
to determine how to use fixed product costs
(machines, equipment, or tools) in setting final
prices for products or services:
1. Calculate for the number of days, months, or
years that the cost will be equally distributed and
added to all items produced by the business.
Note: As an entrepreneur, you are the only one
who can set the time frame of how long you want to
recover the costs you paid for the fixed costs. The
higher the amount of the fixed product cost, the
longer the time that you can recover the amount
paid for it.
The lower the amount of the fixed product cost, the
shorter the time that you can recover the amount
paid for it.
Always convert the anticipated number of days or
months to the anticipated number of days.
2. Set a standard amount to be added to the
computation of the cost of the product or service.
The overhead fixed cost here is the cost incurred
by the business in using the telephone for
communication with their customers. It can be a
landline or a mobile phone, which is more
applicable for the business,
An overhead variable cost such as printer ink can
be a possible overhead for this type of business.
This is not directly related to the product.
For Pricing:
Price, as defined by the majority, is the sum or
amount of money or its equivalent for which
anything is bought, sold, or offered for sale. Pricing
strategies, on the other hand, are the methods
used by businesses to increase sales and
maximize profits by selling goods or services for a
fixed price (amount).
There are several pricing strategies that you can
choose from that will help set your price right. Here
are some strategies that are common to
entrepreneurs:
1. Cost-based pricing, or cost-plus pricing,
is the type of pricing in which we calculate
the overall production cost
2. Demand pricing is the type of pricing by
which products are sold at different prices
by retailers or wholesalers whose prices are
determined by demand. Both retail and
wholesale pricing are based on the initial
computation made using cost-based pricing,
followed by additional computation to arrive
at these retail and wholesale prices.
2.1 Wholesale Pricing: A
wholesaler gets a lower price when they buy
in large quantities.
FORMULA
Wholesale Price = Materials Cost +Labor Cost +
Other Cost +Tax if any + Profit Margin (Mark up)
Or
Wholesale Price = Fixed Cost +Variable Cost +
Overhead Costs+ Tax if any+ Profit Margin
(Mark up)
2.2 Retail Pricing: When retailers
buy in small quantities, they receive a
higher price.

FORMULA
Retail Price = Wholesale price x 2
3. Market Skimming Pricing is a pricing
strategy in which the owner sets a high
price for their product or service first, then
reduces the price in the future. This is used
whenever the owner wants to recover the
cost of their investment first.
4. Market Penetration Pricing is a pricing
strategy in which the owner sets a low price
for the product or service first, and then,
later in the future, the owner will increase
the price. The owner uses this in order to
penetrate or establish a target market for
their customers. In general, customers
usually find a cheaper price available in the
market.
5. Psychological Pricing is a pricing strategy
in which the owner is based on the idea that
people will often make purchases based on
emotion whenever they see the price
instead of using their own logic.
6. Value-based pricing is a pricing strategy in
which the owner focuses on the customer's
perception of the product or service.
7. Geographical pricing is the pricing
strategy of the owner by which the prices
are adjusted based on the location of the
customers. The owner may set a different
price in one area than in another.
Step 3: Find the right place in your chosen
location where you can sell your product.
Place
A product or service location is the location
where you sell the product or service and where the
target market customers are situated and actively
transacting transactions. If using the map of
Laguna, Philippines, then the owner should be able
to identify where specifically the products of the
business will get enough sales. Choosing the right
location should be matched to the target market or
customers. The owner should offer a different set of
products to each district that will match their current
needs and preferences.
Step 4: Adapt with an effective promotion to
reach out to customers.
Promotion
Promotion is the process by which your
customers learn about the products or services that
you provide in the market. Promotion can be done
by having an advertisement on TV, radio, and
online using social media such as Facebook,
Instagram, Youtube, and Tiktok. Conducting sales
promotions is another way by which the owner
encourages the customer to buy the product or
avail services and then get the incentives. Both are
beneficial to the customers so that the business will
have an increase in brand awareness and the
customers will be able to know the business more.
Example of Promotion:
a. Sales Promotion
When offering sales promotions such as
50%, 30% or 70%, you have to make a strategy to
offer this to products or services that are not fast
moving or not performing well.
Make a schedule for the day, week, or month
when you will offer the sale or discount to your
customers. This will encourage them to buy more
and to look forward to exciting offers soon.
Best-seller products offer an idea that your
business offers a product or even service that is
considered in demand in the market.
These products have a unique product offering or
something that is superb in quality or features.
b. Advertising
The new way of doing promotion involves
the use of the term "omni channel", where the
business should be available on multiple channels
such as online (website, social media, email, SMS,
and apps) and offline (retail store, call, face-to-
face).
Mobile marketing is being used to promote
products or services, or to offer products or
services for sale.
Online - creating a website to promote your
business.
Free web hosting examples:
InfinityFree, Wix, 000WebHost, Google Cloud
Hosting, AwardSpace, Freehostia, FreeHosting,
ByetHost, Hyper PHP, FreeWebHostingArea
Social Media - using Facebook (Page,
Marketplace, Messenger), Instagram, Tiktok and
Twitter, as well as Youtube Channel
Shopping Platforms - Lazada, Shopee
Call and Text use mobile and landline phones to
send messages to customers and to take phone
calls.
Email- sending advertisements or information to
customers. Retail Stores- use of in-store displays to
advertise or promote products or services.
Face to face- the use of flyers and posters
informing customers about the current promotion
and advertisement of the featured product or
services.
Here are some practical examples or methods that
a business owner can use to promote their product
or services.
1. Use of Cash Discounts, percentage sales,
or FREE Shipping
2. When selling your products, you should
respond to customers' initial text messages.
3. Create a follow-up text message
4. Provide and offer an answer to the inquiry
about the product.
Step 5: Create and design your product's or
service's packaging and labeling.
Labeling and packaging
The terms "labeling" and "packaging" are
usually used in product-based types of businesses,
but it does not entirely mean that services do not
use any of these. In services, the focus might be on
how to deliver the services fast and complete, but
there are some services that also offer products as
part of the operation that require proper packaging
and labeling. The same concept and tips can be
used for both businesses. Labeling has a
mandatory requirement set by the Food and Drugs
Administration (FDA) Philippines that will be
discussed in Chapter 9.
Packaging is the activity of every business that
involves enclosing food or non- food products in a
container in order to distribute them to the
customer. Packaging involves creating, designing,
and producing the container, wrapper, or any
material for a product.
As the business owner, you have several options
for packaging, and using the right packaging will
make your company more appealing to your target
customers.
Types of Packaging:
1. Tray: it can be made of plastic, styrofoam,
or paper. It can also come with a cover. It is
commonly used for meats, breads or other
food items.
2. Bags: this is the most common type of
packaging, which is made of plastic or
paper and is used for coffee, chips, cookies,
bread, or any food or non-food item. It
comes in different sizes, from small to large.
3. Boxes are made from carton paper of
different sizes, maybe colored or not. For
non-food items, this is also applicable for
shipping fragile items. The box is used to
protect the item from any damage.
4. Cans are usually made of metal and are
used for packing processed foods like
canned goods, fish, meat, and drinks, etc.
 This packaging preserves the product
longer.
5. Carton: This is made of paperboard and is
commonly used for cereal, cookies, and
other food products.
6. Flexible Packaging: This is the new way of
packaging food by having a resealable lock
or with caps.
7. Wrapper is the type of packaging that is
used for protecting individual foods or items.
The labeling for individual wrappers is
usually seen in the main packaging. This is
most common for candies and sweets.
8. Aseptic processing packaging is used for
foods that require longer preservation times.
Aseptic packages are made of a mixture of
paper, polyethylene, and aluminum and
contain a tight inside layer of polyethylene.
According to qrcode-tiger.com (2022), these are
ten product packaging trends that can be seen
on different products this year:
1. Technology-enabled solutions
2. Sustainable product driven packaging - less
cost packaging
3. Environmental-friendly product driven
packaging - packaging materials good for
environment
4. Story-driven food packaging trend
5. The minimalist food packaging trend
6. Customized packaging
7. Food packaging that drives offline e-
commerce to online
8. A food packaging design trend that can
collect feedback - Feedback QR code for
product review
9. Retro and Vintage packaging + modern
packaging
10. The anti-counterfeit packaging design trend
Labeling
It is readily available information to inform
the consumer about the product's contents, shelf
life, and traceability. Labeling is used to identify the
product, brand, describe the attributes and provide
promotion.
The labeling regulations set by the Food and Drugs
Administration Philippines are listed in Chapter 9
for your reference.
Parts of the Label
According to the Food and Drug
Administration (FDA) of the Philippines, any
product must comply with two basic parts, such as:
1. Principal Display Panel (PDP) or
Alternate Principal Display Panel
It is the portion of the package label
that is seen by the consumer.
It is also known as the Alternate
Principal Display Panel, the other surface of
the package that is suitable for PDP.
Rectangular container
Required information:
- Product Identity Name
- Net Content Declaration
Cylindrical Container
40% of the height of the container times the
circumference.
Other shaped container
40% of the total surface area excluding
tops, bottom, flanges of cans and shoulders and
necks of bottles and jars
If the container has an obvious PDP, that is, the top
of a triangular or rectangular package, the area
shall consist of the entire top surface.
2. Information Panel
This is the label panel to the right of
the Principal Display Panel (PDP). If this
panel is too small, the information panel is
immediately seen on the next right.
If a package has one or more PDPs,
the one closest to the right is used.
 If the top of the container is PDP, the
information panel is any panel adjacent to
PDP.
Required Information:
- Name and Address of Manufacturer,
packer, distributor
- Ingredients list
- Country of origin
- Nutrition facts
Product
Brand
- It is better to have one main brand for your
business and set up sub-brands for the
variety of your product lines. Limit the
number of sub-brands to a minimum.
- Avoid too many sub-brands for all your
products.
- Launch the sub brands every quarter, every
6 months, or every year so that you have
enough time for every brand so that it will be
strong and well known to customers.
Product Development Strategies Tips:
"A sustainable product or service has the ability to
profitably prolong its existence in the market by
focusing on the relevant customer needs, wants,
and demands and creating an impact and strong
market preference in favor of their products."
-Dr. Caesar Apolinar Ramirez Jr.-
Decisions on what type of product to produce?
1. Develop a totally new product and do not
imitate existing products.
"The product leader will always stay longer in the
competition and it is very difficult for the product
follower to sustain in the game."
- Dr.Caesar Apolinar Ramirez Jr
The main question for business owners is what
type of product they will offer to the market. Make a
unique product that will stand out from the
competition.
2. Match your product with your target
market.
"Assign a product or set of product lines in your
target area and never settle for just putting a wrong
product in your market."
- Dr.Caesar Apolinar Ramirez Jr
3. Effectively use the FOCUS strategy on your
best product line.
Trim down your product lines into a more profitable
and delightful experience with your customers.
Remove the non-performing products."
-Dr.Caesar Apolinar Ramirez Jr
4. Make an effort to specialize and not
generalize your product lines.
"Use the NICHE strategy to specialize products
that are considered the weaknesses of your
competitors."
- Dr.Caesar Apolinar Ramirez Jr
5. Develop a product based on your mission
and vision for your business.
"Review your mission and vision and align it with
the current situation in the market and develop a
product out of it."
-Dr.Caesar Apolinar Ramirez Jr
6. Create and offer a product with distinctively
UNIQUE and DEEP product features
"An effective deep product is those who work on
customer-centric products that are standout from
customer expectations. Deep products have a story
on their own and can sell on their own."
- Dr.Caesar Apolinar Ramirez Jr
How to make it unique? It should be non-
comparable. How to make it deep? It should
connect to the customer.
7. Apply a strategic MULTIBRANDING
approach to all performing products.

"Sustainable product development is finding or
opening a valued space in the current market."
-Dr.Caesar Apolinar Ramirez Jr
Pricing
In setting the price of the product or service,
it is necessary to compute the cost correctly and
set the price afterwards. Some entrepreneurs have
a bad habit of simply copying the price set by the
industry or their competitors without properly
computing or doing the cost.
Recommended Pricing Strategies for various
industries
❖ The best pricing strategy for small
business owners is a value-based pricing
strategy.
❖ Best construction business pricing
strategies are: cost-plus pricing, value-
based pricing, and psychological pricing.
❖ Best eCommerce business pricing
strategies: cost-plus pricing, psychological
pricing, and market penetration pricing.
❖ Best product pricing strategies are: cost-
plus pricing, psychological pricing, and
market skimming.
❖ Best service business pricing strategies:
value-based pricing, skimming, and cost-
plus pricing
CHAPTER 5
EMPOWERED BY AN EFFICIENT AND
EFFECTIVE PRODUCTION - OPERATION
A small entrepreneur's business production
and operation is considered one of the most
challenging functions of the business that needs to
be attended to and properly implemented. The
production and operation of the business involve
the handling of inventory, equipment, machines,
raw materials, standard processes used by the
business, etc. Based on the wide experience and
exposure of the author in mentoring and helping
MSME, the production operation is the most
underestimated function and gets a lot of problems
from the owners because of their lack of knowledge
and mismanagement.
The standard production quantity is related
to the previous chapter about cost and pricing. It is
necessary to establish a standard production
quantity for each unit of product manufactured or
service rendered by the company. With this set
standard, it will be easy for the business to
determine the number or quantity of raw materials
needed for the production. Whenever the business
does the ordering, they should set a specific
quantity per order with their supplier to ensure that
they will not run out of stock or overstock.
Every entrepreneur should plan ahead of
time to standardize all of the operations' processes.
All decisions made by the entrepreneur will have an
effect on other functions such as marketing and
financial. This chapter will give the entrepreneur a
guide on how to set such a standard that is
effective and efficient in the long run.
Products are the items that the entrepreneur
intends to produce through the business. The
product can be a single or multiple offerings,
depending on the market target of the business.
Services are non-tangible business offerings made
by an entrepreneur to his or her customers.
Standard Operating Procedures (SOP): These
are the acceptable step-by-step activities that a
business uses as a guide in manufacturing,
operating, or performing their business in order to
keep it effective and efficient at all times.
Inventory management is the process by which a
company manages the inflow and outflow of stocks
and keeps them in good condition in order to avoid
losses.
As per the Philippine Statistics Authority (2022),
here is the list of the top 18 industry sectors for
MSME 2021.
 1. Wholesale and retail trade; repair of motor
vehicles and motorcycles
2. Accommodation and food service activities
3. Manufacturing
4. Other service activities
5. Financial and insurance activities
6. Human health and social work activities
7. Professional, scientific and technical
services
8. Administrative and support service activities
9. Transportation and Storage
10. Real estate activities
11. Information and Communication
12. Education
13. Arts, entertainment and recreation
14. Agriculture, forestry and fishing
15. Construction
16. Water supply, sewerage, waste
management and remediation activities
17. Electricity, gas, steam and air-conditioning
supply
18. Mining and Quarrying
PRODUCT OR SERVICE DESCRIPTION
As a start-up entrepreneur, it is essential that you
decide what type of product or services you will be
offering to your target market. Do not open a
business if your main motivation is one of the
following: following a trend or fad, imitating other
successful businesses, or making more money.
A Product-Based Business
Focusing on a product-based business
necessitates more time and preparation in terms of
production and operation because it necessitates
more checking on the standard and quality
control of the product that you will be producing.
If the business has to create the product from
scratch, then it should ensure that it will match the
desired product features that you are aiming at.
Unless the product is from a franchise concept, the
operation is not much of a concern because the
product is already prepared and you just have to
implement it according to what is set by the
franchise owner.
Generally, in product-based businesses, you may
opt to choose between a food- based product or
a non-food-based product. Both are challenging
in terms of production because when you consider
producing these products, you have to consider the
raw materials, inventory, processes, quality control,
packaging, and labeling that are needed in order to
meet the industry standards.
Cupcake and food-based product businesses
(food-based product businesses) and perfume,
lotion, or soap businesses (non-food-based product
businesses) are examples of product-based
businesses.
The customer's criteria, product of any business:
sor factors that will convince them to purchase the
1. The product is unique, with a lot of features
and benefits
2. The product has high quality
3. The product will match the market's best
price offer.
4. The product's constant availability.
5. Different varieties of the product.
6. Excellent customer service.
7. Reliant after-sales service.
The author's experience with MSMEs, the most
common product-based businesses being set up, is
more focused on
 ➢ Food manufacturing (sweets, bread,
processed foods, condiments, coffee, etc.)
➢ Non-food manufacturing (handicrafts, soap,
lotions, perfume)
➢ Wholesale and retail trade (Sari-sari stores,
food retailers and distributors, specialty
product retailers)
➢ Other Services (Online Travel Business,
Delivery Service)
SERVICE-BASED BUSINESS
For service-based businesses, the role of
production-operations will be to ensure that the
services performed to the customers are correct,
perfect, complete, and based on the set standards
for the service provided according to the industry. It
is simpler than a product-based business because
you do not need to manage raw materials or
inventory, and you do not need to handle inventory
because all you have to do is conduct or render
services for your customer.
Examples of service-based businesses include:
laundry services, printing shops, consultancy
services, learning centers.
The customer's criteria, or factors that will convince
them to avail the services offered by any business,
are:
1. Service has a low processing or turnaround
time (delivery of service).
2. The service is complete.
3. Time spent waiting is limited.
4. The service should be perfect.
5. Excellent customer service.
6. Reliant after-sales service
Business Production Standards
For every business, efficient inputs and
processes should always be maintained. It is
advisable that before the start of the operation of
the business, there should be a standard protocol
for all the activities under production that
involve productivity, ordering of raw materials,
standard processes to produce the product service,
number of reorder unity, buffer or reserve stock,
delivery time, and other inventory standards used in
order to make the business in order. or
Raw Materials
When producing a product or service, it is
necessary to list down all the materials needed to
be used in production. Raw materials are the
ingredients, or items, used in the production of your
business. Prepare the required raw materials for
every production cycle of the business. If the
business needs to bake twice a week, there should
be a set of raw materials that can be used as a
guide by staff whenever they have to produce
cupcakes.
Productivity
As a start-up business, the entrepreneur
should know the value of productivity in order to
estimate the number of outputs that a business can
produce per day, week, or month. Productivity is
the ratio of the outputs produced to the inputs (raw
materials, any items) needed to produce them.
It can be computed by the following formula:
Productivity = Outputs (number of items or services
produced) / Inputs (materials, items used in
production)
The ratio and standard preparation of
ingredients can be used as a guide in production,
and it will be easier to determine their future orders
of raw materials or stocks. This information will also
be helpful in determining the possible income that
the business will receive if this is converted into
sales. It is advisable to have this ratio and standard
preparation and use it in the operation's production,
not only for the owner but also for the staff if the
business grows later on.
Process
This is the step-by-step procedure for the
production of the vanilla cupcake with pink frosting.
Target Sales of the business
The assumption of sales per day is 100
pieces of cupcake per day. With a total of 27
operating days, the target sales will be 2700-3000
per month.
Ordering of raw materials or ingredients and
delivery of raw materials
This is the exact schedule of days for
ordering raw materials from the supplier or
suppliers, as well as delivery on the same day the
following week. This is also called "replenishment
day." It is highly suggested not to limit the number
of suppliers to only one, but be sure to have an
alternative supplier that at least has two extra
suppliers to ensure that the production will not be
affected in the event that there are problems that
are encountered, such as running out of stock in
the warehouse. Having several suppliers as well
will give the entrepreneur the opportunity to get the
best price for the raw materials, which in turn will
yield more profit for the business. Having more
suppliers will give the owner the chance to get
more quantity discounts if they buy items in bulk.
"Required Initial Orders" the detailed number of
units needed in order to produce the cupcake with
a total of 300 pieces.
"Quantity" is the number of units to be order with
the supplier.
This final price includes the 30% markup based on
the total price, and there can be additional taxes if
any. This example of costing is based on cost-
based pricing computation, which means that
pricing is based on the actual cost of every raw
material and is properly distributed according to the
total number of produced units.
Operation Schedule
This is the weekly ordering, delivery, baking,
and operation schedule. Baking days are every
Monday and Thursday. Every Friday will be delivery
and ordering day. Regular operation days are from
Monday to Saturday. Sunday is closed.
Suppliers
A supplier is the business or company that
supplies or provides the raw materials or
ingredients to the business. This is considered the
source of raw materials. For every business,
there is a need to have a primary, secondary, or
tertiary supplier so that the operation's production
will not be affected and will be stopped. The
importance of having several suppliers is that it
enables the business to have alternative sources of
raw materials. As an owner, you can be able to
negotiate and get quantity discounts and even
negotiate with the suppliers to get the most
competitive prices for your raw materials. Normally,
the suppliers that are nearer the business or the
production area of the entrepreneurs have a lower
price offering compared to those suppliers in
faraway locations.
Inventory
Good inventory management uses a FIFO
method in dealing with their stocks or inventory in
the business. FIFO means first in, first out, and it
deals with managing the stocks by disposing of or
selling the stocks that are first in the business. So,
if you make or buy items, you must first remove
them so that you can manage them properly.
Expiration dates are essential in ensuring that FIFO
is being used in inventory management. By
checking on it regularly, it will also avoid some
inventory problems, such as overstock, which is the
surplus of items we cannot sell anymore.
Safety Stock or BufferThis term refers to
reserved stocks or items in production. It is very
important to have a buffer, reserve, or safety stock
because it will ensure that the operation of the
business is safe and will never experience any out
of stock or any stoppage in operation. This is
commonly known as "emergency stocks" as well.
The number of the reserve is computed based on
this formula:
Safety Stock = (Maximum Lead time x Maximum
daily Sale) - (Average Lead time x Average daily
Sale)
Maximum Lead time = this is the period where
maximum days that the supplier can deliver the
product since the day of ordering.
Maximum Daily Sale = this is the maximum
number of units sold in a day
Average Lead Time- this is the number of days it
takes, on average, from the time a business places
an order to the time the supplier delivers the stock.
Average daily sales = the average number of units
sold on a daily basis.
Sales Projection
In production operations, it is advisable for
the entrepreneur-owner to know how to do a sales
projection, which is an estimate or assumption of
the number of units to be sold for a specific period
of time. This sales projection or estimate will be
helpful to the business in determining the number
of units that it needs to order from suppliers. All of
the orders placed by the business with their
supplier will be dependent on the projections or
actual number of sales for that period of time.
The daily sales are based on the actual number of
units sold for the month of February.
Realistic value: the average sales value has been
rounded off to a.
The monthly sales are computed by multiplying
the actual sales by the number of days of
operation.
Average Daily Sales = Monthly Sales/Number of
days of operation
Yearly sales are computed by multiplying the
monthly sales by 12 months.
FORECASTING
Forecasting refers to the estimate,
projection, or prediction about the future value that
you are computing. Sales projections, whether for
sales or raw material ordering, are essential in
business and are usually done to determine the
required units for production and expected sales in
the future.
In forecasting, you may use different ways of
estimating the units, but the author chose only two
ways to make it easier for start-up entrepreneurs to
understand: namely, naive forecasting and moving
average forecasting.
a. Naive forecasting is done by simply
copying the previous value to be used as
your target value. This type of forecasting
can include both raw material ordering
forecasting and sales projections.
a. Moving average forecasting
This type of forecasting uses the averaging
of the values based on the specified amount of time
as the basis for the forecast.
This moving average forecasting will vary
depending on the choice of the owner of what to
use, whether they use the daily, monthly, or yearly
forecast. The number of days or months used in
forecasting will be set by the owner.
Building and Facilities
This is where we put the building or the
facilities used by the business, which serve as the
asset of the business.
List of Equipment
The equipment listed in this table is
necessary for efficient production, which will be fast
compared to manual production.
CHAPTER 6
EMPOWERED BY AN ORGANIZED
MANAGEMENT
The success of any business relies on the ability of
the entrepreneur to manage the business
effectively and efficiently. As a start-up
entrepreneur, it is necessary to plan your business
initially about the type of business organization that
you will be starting. Business management should
be done strategically for the long term and not for
the short term, so that business problems may be
avoided as much as possible. When an
entrepreneur starts a business, as much as
possible, thorough preparation should be made so
that potential problems are avoided.
● Business is a RISK and you must learn to
manage CALCULATED RISK.
● Preparation is the key, and entrepreneurial
skills are necessary.
● Business is not a one-size-fits-all.
● It is good for a start-up business to have
BUSINESS PLANNING.
Here are some of the most common problems
that are raised by MSMES during their
consultation with the author that the
entrepreneur should be aware of.
1. Low Sales
2. A lot of competitors
3. Weak Inventory systems and order
processing
4. Weak product or service offering
5. Numerous unnecessary expenses and
limited revenue sources
6. No clear plan and direction
7. No skills or knowledge in business
8. The wrong target market and location
9. There is no proper costing and pricing
10. Low productivity rate versus the actual goal
11. Low Brand Awareness and no branding
As per the Philippine Statistics Authority (2021),
businesses in the Philippines are classified into
micro, small, medium, and large businesses.
According to the data of the Philippines Statistics
Authority (2021), this is the guide that every
entrepreneur should use as their guide when
considering what type of business that really works
for them.
Size Employment By Asset Size
Micro 1-9 up to PHP
Employees 3,000,000
Small 10-99 PHP
Employees 3.000,000 -
PHP
15,000,000
Medium 100-199 PHP
Employees 15.000,001 -
PHP
100,000,000
Large 200 and above PHP
100,000,000
and above
Source: Philippine Statistics Authority, 2021
"There is no such thing as a risk-free business,
but you can have a risk-proof business and
calculate possible risk."
-Dr. Caesar Apolinar Ramirez Jr.
Sole Proprietorship is a type of business owned
by one individual. It is the easiest way to establish
where the owner is the only one who will get all the
income but getting all the risk as well as
disadvantage.
A Partnership is a type of business owned by two
or more owners. This type of business is where the
owners can put money, skills, or anything that the
partnership accepts as a form of ownership in the
business. The partners are entitled to the liabilities
of the partnership.
A corporation is a type of business owned by at
least two (2) or more but not more than fifteen (15)
shareholders. This type of business is more
complex than a corporation. The ownership interest
in a corporation is represented by stocks.
A cooperative is a type of business owned by at
least fifteen (15) members. A cooperative is owned
and formed by the members for the purpose of
having the same rights and equality.
Management Expertise or Technical Know-How
In our business example, which is the Haven
Cupcake and Pastries Shop, managing this food-
type business requires attention to details and
creativity in order to produce a cupcake product
that is unique to its target market.

Here is some of the required expertise and
technical know-how of the owner and even for
the staff:
1. Basic Cookery involves deep knowledge of
basic safe food preparation, food handling
and temperature, personal hygiene and
kitchen hygiene, menu planning and recipe
costing, cooking methods and techniques,
packing of food for storage, and labeling of
food. Basic cookery knowledge is very
important to owners in order to be familiar
with the proper method of cooking
preparation in the kitchen. The main
function of the business relies on the
operation of the kitchen, and all the
production of their cupcakes will be done
here. Failure to have this expertise will
make the business inefficient and ineffective
because it will only rely on day-to-day
encounters.
2. Baking entails understanding the basic
preparation of bread or cakes, as well as
the use of the proper ingredients and the
effects they will have on the product. Baking
is an exact science, and having this skill will
prevent any miscalculations and
assumptions about the right measurement
used in baking.
3. Baking or cake decorating is a specialized
skill that involves the creation of decorations
for bread and cakes. The learning of the
most effective style and visual presentation
that will make the customers patronize the
baked cupcake selections that we have in
the business.
4. Entrepreneurial Skills: As an
entrepreneur, it is essential to have strong
salesmanship skills and operations
management skills.
The salesmanship skills needed are prospecting,
target marketing, customer service and customer
relationship management, selling techniques, and
negotiation skills.
The operations management skills needed are
inventory management, purchasing, pricing, and
costing.
All of these can be developed through time, but it is
advisable that once you start the business, at least
you are prepared with the necessary expertise
needed for your chosen business. A food business
is a complicated type of business where a lot of
things are needed to make it successful. It is best
to start small but properly study well.
Training and Development
The business requires training and
development of the owner and future staff of the
business to ensure that the quality of the products
or service meet the standards of the industry. For
food business, it should pass the standard of the
Hazard Analysis Critical Control Point (HACCP),
Food and Drugs Authority (FDA) and other
applicable industry or government agencies in
charge of the quality. For service industries, it
should be checked and passed the standard by the
industry expert or government agencies in charge
as well.
As a suggestion, for sole proprietorship business
owners to attend necessary training before starting
operating the business so that the owner will be
equipped and guided how to do the actual activity
of the business. If the business has staff, it is better
to conduct training and development as much as
possible as needed, but ideally twice a year will do.
There is some training for businesses that requires
updates or follow-up, so the owner should be
attentive to these.
An Example of Possible Training for Food
Businesses:
1. Food Safety
2. Packaging and labeling
3. Food Handling
4. Trends in Cooking and Baking
An Example of Possible Training for Service
Businesses:
1. Customer Service Management.
2. Customer Relationship Management
3. Communication skills training
4. Customer Handling
Business Days and Hours
The business should set a business day
and hours that it will be open for operation. The
owner should be aware of what time and hours the
customers are there to consume the product or
avail the services. It is better for the owner to
initially assess, observe, and create a real-time
check of the target market and how the business
operates, then identify the days or hours that are
considered peak and non-peak days or hours.
An Example of Food Businesses' Operating
Days and Hours
Monday-CLOSED, due to non-peak hours.
Tuesday through Sunday, 9:00 a.m. to 5:00 p.m.
General Business Policy:
This includes the normal policies that are
set by the business, which are good for the
business. Possible good examples are the return
policy for damaged products and incorrect
products. For claiming customers, sales promotion
policies are in place. Every business should
cascade this information to their staff and their
customers so that no conflict will arise.
Example of Business Policies:
1. Return and Exchange Policy
2. Discount Policy
3. Wholesaling, Retailing, Distributorship
Policy
4. Customer Service Policy
5. Refund Policy
6. Loyalty program policy
7. Regularization Policy
8. Policy on Taking Leave
Manpower
As a start-up entrepreneur, the business
can be operated by the owner initially due to the
expenses that may be incurred if there were to be
additional staff. But if ever there is a need to get an
additional person or staff to help the business, it is
better to just get a third-party service or pay for it as
needed, rather than maintain it as a monthly
expense, which will make it difficult for the business
to pay for this expense.
Position or Function
It should be very clear with the business
about the main duties and responsibilities of the
person in charge of the business. For a one-man
business, all the functions of the business will be
dependent on the owner. If there is a staff member
that needs to be hired, the responsibilities should
be properly explained to the person.
Salaries
For MSME businesses, under Republic Act
9178, Barangay Micro Business Enterprise Act, one
of the advantages of micro businesses with an
asset of not more than PHP 3,000,000 exclusive of
the land is that they are exempted from the
Minimum Wage Law for their staff. This means that
the owner can set a wage or salary, even lower
than the minimum, and still be qualified to receive
basic government benefits such as social security
and healthcare benefits.
This is good for the microbusiness that is
thriving to continue their business and meet all
expenses. For those who do not have any staff or
employees, an allowance can be used by the
owner for himself.