Entrepreneurship:

A Catalyst in Nation Building

 Chapter 5:
Introduction to Business
Implementation
 Learning Objective

• To learn how to implement the

rigorous steps taken in preparing for
entrepreneurship to be able to start
setting up the enterprise
 Purpose of Stating the
Mission Statement Clearly
• for the sake of the customers being wooed;
• for the investors who need to know what they are
getting into;
• for the financiers evaluating the enterprise; and
• for the government functionaries who must
regulate the activities of industries and businesses
 A Very Compelling Vision

 The entrepreneur must establish an enterprise on

the basis of a very exciting business concept
leading to a grand vision.

 The entrepreneur must offer something new,

something appealing, something different.

 The entrepreneur must present a winning

business concept that manifests tremendous
future possibilities.
 Not by Any Other Name

 A good name identifies the company very well,

and communicates what the company is all about
and what its products are all about.

 The company name must project its very desired

image.
 Purposes of a Business Plan
1. Entice partners, investors, and bankers to fund a
business venture.

2. Communicate what the enterprise is all about,

what market it wants to serve.

3. Show what financial returns it could muster.

 Important Information That a
Business Plan Should Contain
• the business itself
• the organizers
• the management and technical people
• the financial structure
• its market potential
• its target market
• its projected sales, expenses, and profits
• its probable risks
The business plan should contain an
executive summary of the following:
The business plan should contain an
executive summary of the following:
4. How the business will be operated and organized,
including all outsourcing, subcontracting,
franchising, and licensing agreements
5. The investment capital required for the business
and what exactly it would be used for
6. The technology, the technical expertise, the
equipment, and materials suppliers to be utilized
The business plan should contain an
executive summary of the following:
7. The capital structure (short and long term debt,
stockholders’ equity) of the business
8. The operating budget, financial projections (income
statement, balance sheet, cash flow), and return on
investment prospects
9. The risks in the business and the contingency
measures to counteract them
 Assets of an Enterprise
1. The current assets, which are short-lived assets.
They are composed of cash, inventory, accounts
receivables, and other current assets.
2. The long-lived or fixed assets. They are composed
of property, plant, and equipment.
3. The other assets. They are composed of
organizational and pre-operating expenses.
 Liabilities of an Enterprise

1. Current liabilities such as suppliers’ credit and

other short-term credit
2. Long term debt
3. Owner’s equity
Forms of Business Organization
• Sole Proprietorship

• Partnership

• Corporation
 Sole Proprietorship
 The simplest and easiest enterprise to organize

 The owner or entrepreneur has sole control

over the enterprise, thus, reaps all the profits
and, also, all the losses.

 There is no distinction between the owner and

the enterprise, meaning, the entrepreneur is
personally answerable and obligated to fulfill all
the terms and conditions of any business
contract that he or she enters into.
 Partnership
 Two or more persons binding themselves into a
contract to contribute money, property, and
expertise in a common venture with the
intention of dividing the profits among
themselves
 Can own its own assets, can incur its own
liabilities, and can sue and get sued
 A minimum of two persons can constitute a
partnership, but there is no limit to the number
of persons in a partnership
 The decision of one partner is binding to all the
other partners
Types of Partnership Based on the
Liability of the Partners
 A general partnership is composed of partners
who are liable individually and collectively to all
those who have claims against them. Claimants
can run after all the personal assets of all the
partners.
 A limited partnership consists of partners who
have limited liabilities while others in the
partnership have unlimited liabilities.
 Corporation
 Has a separate legal personality quite distinct
from the investors who contributed money to
the enterprise Can own its own assets, can
incur its own liabilities, and can sue and get
sued
 Can be formed or incorporated by, at least five,
or at most 15 natural persons
 Once the corporation is established, there is no
limit to the number of natural or juridical
persons who can invest in the corporation.
 Types of Corporation
1. Stock Corporation

2. Non-Stock Non-Profit Corporation

3. Close Corporation

4. Corporation Sole