Chapter 6: Start-Up Operations, IBIG Fund), and other

Getting Started in the Business government agencies.

To be in the business means necessarily Major government institutions involved

doing it legally and the following tasks have in the business registration
to be undertaken:
a. Registration of the business name AGENCY FUNCTION ADDRESS
with the Department of Trade Department of Regulation of DTI Building,
and Industry, in the case of single Trade and trade names Makati Avenue
or sole proprietorship Industry Business name corner Sen. Gil
b. Registration of the Articles of (DTI) registration Puyat Avenue,
Incorporation and By-laws with the Makati City (for
Securities and Exchange thru
Commission, in the case of Regional/Provinc
partnerships or corporations ial branches of
c. Application of necessary permit at DTI)
the level of specific location (e.g Securities and Verification/ SEC Building,
village, subdivision, or barangay) Exchange reservation of Ortigas corner E.
d. Filing/application of Municipal or Commission corporate name Delos Santos
City permits where the base of (SEC) Registration of Avenue.
operation of the business (e.g incorporation Mandaluyong
Mayor’s permit, sanitary permit, Documents: City (or through
building permit as necessary) Articles of Regional offices
e. Compliance with certain specific Incorporation of SEC)
permits or clearances may have to Constitution of
be applied for with some specific By-laws
agencies of the government before Bureau of Receipts printing BIR Road,
local government agencies can Internal permit Diliman, Quezon
allow the full swing Revenue (BIR) Collection of City or (through
operationalization of the business taxes the Revenue
(e.g environmental clearance Regulation/ District Office
certificate) examination where the actual
f. Registration with the Bureau of Business business
Internal Revenue (BIR) for the records/books operation is
tax identification number (TIN) made)
and other requirements under Social Security Administration SSS Building,
internal revenue laws and rules. System (SSS) of social security East Avenue,
g. Printing of receipts/invoices of the for private Diliman Quezon
company (after having applied for sector, employees City
a permit to print receipts with the and self-
BIR) employed
h. Registration of the business individuals
organization with the Social
Security System (SSS),
Philippine Health Care
Corporation, Home Mutual
Development Fund, Inc. (Pag-
 Board of Registration of BOI Building,
Investments business under Makati Avenue
(BOI) Omnibus Makati City
Investment Code
(the business
organization
must first
register either
with DTI or
SEC)

Intellectual Regulation of DTI Building,

Property trade names Makati Avenue
Office (IPO) Registration of corner Sen. GilChoice of Business Name
invention Puyat Avenue Business name – refers to the registered
Trademarks, Makati City (orbusiness identity (or name) of the business
Trade Names, through organization.
Patents Regional.Provinc
ial branches of Money saving options at start-up
DTI) - Starting on a shoestring budget is
Department of Implementation DOLE Building, common to every entrepreneur
Labor and of labor laws Juan Luna St. venturing into a new business.
Employment Intramuros, a. Organize or register a small
(DOLE) Manila business group at minimum capital
Department of Implementation DENR Building, requirement required by law.
Environment of forestry and Visayas Avenue b. Use your home as an office or
and Natural environmental Diliman, Quezon explore sharing an office or shop
Resources laws (e.g City space with another company.
(DENR) environment c. Do some works like light
clearance carpentry, electrical, delivery jobs,
permits, or any forms of tasks within your
concessions) capability to do or deliver.
Department of Regulation and DECS Complex, d. Purchase used office equipment
Education, implementation University of and machinery, but be wise and
Culture and secondary Life laws/orders take extra precautions in doing so.
Sports (DECS) education sector or e. Use part-time specialists or skilled
elementary/Ortig workers.
as Center, Pasig f. Rather than hiring full-time and
City salaried personnel, begin sales
Commission Regulation/ DAP Building, efforts by hiring representatives or
on Higher registration of San Miguel agents.
Education higher/tertiary Avenue Ortigas g. Explore the concept of
(CHED) education laws Complex, Pasig subcontracting.
City h. If possible, make sure of family
labor and other resources within
your households.
i. Make use of free public relations
instead of paid advertising.
 j. Push your customers hard for
prompt payment.
k. Make full use of technology where
necessity for application demands.
The Instant Office
- Early teaching in doing business
looks at structured center approach,
where entrepreneurs have to be
concerned first about where to
establish an office and buying
those necessary provisions
including support staff normally
needed in doing business.
How to Raise Capital
- As a small businessman, you
should know that money can be
raised in various ways.
- First, money can come from your
own pocket.
- Next safest way is to borrow
money from close relatives and
friends.
External Sources of Capital
1. Pawnshops – You can get quick
cash by pawning your jewelry and
other valuables.
2. Credit cooperatives – these are
popular and easy source of credits
especially in the rural areas.
3. Money lenders – these are people
who lend quick money without
collateral, but charge exorbitant
interest rates. Also known as “five-
six” operators.
4. Lending investors – these are
business enterprises engaged in
money-lending operations.
5. Formal sources of credit – these
include banks, financial
institutions, as well as certain
government development agencies
and development-oriented, non-
government organizations.
Types of credit available from formal
lending institutions:
 Short-term loans
- Payable in one year or less
- These are normally self-
liquidating; used to buy raw
materials and supplies, labor
and other requirements that
will generate funds for the
business and in turn, be used
for paying back the loan.
- It may come in the form of a
revolving credit line – an
agreement by the bank to
extend a loan, not to exceed a
specific amount, whenever
needed by the client.
- Commercial banks are those
most commonly used sources
of short-term loans.
 Intermediate loans
- Intermediate loans or term
loans provide capital repayable
in one to three years.
- These are available from banks
and other financing
institutions.
- A term loan is backed by
collateral securities and is paid
back in installments over the
life of the loan agreement.
 Long-term loans
- These are loans extended to
enterprises assured to exist
over the long-term period of
the loans – up to 10 years.
- These are usually extended by
private and government banks.
Some lending schemes for
small entrepreneurs also
provide long-term loans,
including:
 Development Bank of
the Philippines’
Omnibus Financing
Program for
Entrepreneurs
 Development Bank of
the Philippines’
 Industrial Guarantee 4. The choice of banks must also be
and Loan Fund determined by the size and purpose
 Land Bank of the of the loan, as well as the size and
Philippines’ Easy status of the business.
Pondong Pang-asenso 5. In comparing banks, find out about
 Land Bank of the the following terms and conditions;
Philippines’ Easy a. Repayment period, including
Term loan for grace period
Exporters b. Interest rate and processing
 Philippine National charges
Bank’s Overseas c. Mode of release of funds
Contract Workers d. Mode of repayment
Livelihood Loan e. Collateral and equity
Program requirements
 Philippine National f. Other restrictions
Bank’s
Pangkabuhayan Loan Deciding where to locate
Program There are three crucial factors in the success
 Small Business of a business enterprise
Guarantee and 1. Location
Finance 2. Location
Corporation’s Small 3. Location
Enterprise Financing
Facility Important considerations in deciding where
 Technology and to locate:
Livelihood Resource 1. Raw materials – How close are
Center’s Agro you from the sources of raw
Industrial Technology materials? Are the raw materials
Transfer Program bulky and difficult to transport?
 Technology and 2. Customers – How close are you to
Livelihood Resource your target customers?
Center’s Export 3. Transportation facilities – If your
Industry raw materials and/or products are
Modernization heavy or bulky, examine the
Program availability and reliability of
 Technology and transportation facilities in the site.
Livelihood Resource 4. Labor – Can you employ people
Center’s Technology living in the vicinity?
Utilization Financing 5. Power and other utilities – are
Program light and water available?
6. Waste disposal facilities – Will
Some Guidelines in Borrowing there be a lot of waste by-products
1. First, evaluate yourself whether during processing?
you are in a good position to 7. Community – Are there rules,
borrow. regulations, and restrictions that
2. Estimate accurately the amount will affect businesses like yours?
you need to borrow. 8. The decision to own or rent – will
3. Choose the bank to borrow. you buy the site or rent it?

Equipping your business
- Before you start acquiring
machines and equipment for
your manufacturing or
service business, you
should first determine the
manufacturing methods to
use.
Acquiring machines and equipment
- The kind of machines and
equipment you need to
acquire will depend on the
level of technology you
have decided to use in your
manufacturing operations.
General purpose machines – are those
that have a wide range of capability in
their field.
Specialized purpose machines – have
evolved from general purpose machines.
Hiring and Training Personnel
- Before starting to hire
employees, it is important
to know your manpower
requirement first.
Recruiting Personnel
- Now, assuming that you
know exactly the type and
the number of people you
need to hire, as well as their
qualifications, you can go
ahead with the hiring
process.
 Place “Help Wanted”
advertisements in the
newspapers and/or
the radio.
 Display “Help
Wanted” signs
prominently outside
your factory or office
and in other public
places.
 Check with
placement units of
schools and personnel
offices of other
companies.
 Check with
employment
agencies.
 Ask employees,
customers, and
suppliers for people
they know who might
qualify.
Selecting Personnel
- There are various tools you
can use in order to choose the
best candidate for a certain
job. These tools include the ff:
 The application form
 The interview
 Written tests
 Practical tests
 Reference checks
 Medical examinations
Training Personnel
- Once you have hired a
person for employment, you
may still need to train him.
You must not overlook the
importance of training. You
cannot expect even an
experienced worker to do a
job exactly the way you
want it done.