PRELIMS
EM
SECOND SEMESTER
NATURE OF PHILIPPINE BUSINESS
ENTERPRISE
Three Approaches to Valuing a Business
• Market Share Approach - this approach
relies on the determination of the portion
of the market the business is catering to.
• Total Asset Approach - This approach
focuses on a company’ s net asset value
(NAV), or the fair-market value of its total
assets minus its total liabilities.
Example: Owner’ s Equity = • Risk of losing your entire capital
Assets/Liabilities
• Income Approach - is predicted on the
idea that a business’ s true value in its
liability to produce wealth in the future.
What are micro-small-medium enterprises?
• MSME’
s - is defined as any business
activity or enterprise engaged in industry,
agri-business or services.
MSME classification
Economic Importance of Micro-Small-Medium
Enterprise
• They help reduce poverty by creating jobs
for the country’
s growing labor force.
• They stimulate economic development in
rural areas.
• They serve as valuable partners to large
enterprises as suppliers and providers of
support services.
• They serve as breeding ground for new
entrepreneurs and large corporations.
Forms of Services Business
MT
2A
Advantages of operating a small business
• Opportunity to gain control over his own
destiny.
• Opportunity to reach his full potential.
• Opportunity to reap unlimited profits.
• Opportunity to make a contribution to
society and receive recognition for his
efforts.
Disadvantages of operating a small business
• Uncertainty of Income
investment
• Lower quality of life until the business gets
established.
• Complete responsibility
• Having to serve undesirable customers.
• Paperwork’ s and other chores
• Long hours and demanding work
condition
TYPES OF BUSINESSES ACCORDING TO
THEIR ACTIVITIES
PRODUCTION
- these are businesses that are involved in
production of raw materials that is
needed by manufacturing firms in
producing their products.
MANUFACTURING
- these are businesses involved in the
conversion of raw materials into
products that may either be for
customers.
SERVICE
- these are businesses whose activities lies
in providing intangible goods to
consumers.
• Professional services
NRCC 1
 PRELIMS
EM
SECOND SEMESTER
MT
2A

• Personal services
• Business Services
• Repair Services
• Accommodation services
• Entertainment/Recreation services
• Educational services
• Communication
• Transportation

CONSTRUCTION
- these are businesses who generally
provide services as their input but their
output becomes tangible.

MERCHANDISING
- there are businesses whose main activity
is to purchase and resell finished
products or simply those intended for
final consumption.

Merchandising may be done by:

• Selling of products by bulk
• selling of final products to final consumers
• selling product that are not physically
present but can be viewed online know as
online merchandising.

NRCC 2