MODUL

SPECIAL TOPIC
IN E 20
MANAGEMENT:
FAMILY
BUSINESS
ENTERPRISE
 SMALL BUSINESS vv
MANAGEMENT AND
ENTREPRENEURSHIP
Entrepenuer is a person who establishes a
business by identifying a need or opportunity to
exploit, and takes on the responsibility and
financial risk for owning and operating a
business.

An entrepreneur can be described in terms of

what he or she is capable of doing and the
characteristics that he or she must have. Wishing to
be an entrepreneur one needs to know the
distinguishing features that set entrepreneurs apart
from other working individuals.

THE PERSONAL FEATURES OF AN ENTREPENEUR ARE

DESCRIBED AS FOLLOWS IN THE NEXT SLIDE.
IDENTIFIES
vv BUSINESS

OPPORTUNITIES
F
irst of all, an entrepreneur is someone who identifies business
opportunities in the environment where he or she lives.

 To identify – one must have an open mind about

opportunities that make money.
 One must continuously search for ideas on what people
want.
 If so, one decides if the individual will either create or
buy the product to sell it.
 As a entrepreneur, one needs to meet new people to identify
business opportunities.
 Enjoys interacting with people.
 Does not hesitate to approach a wide array of people.
 The business is about filling the gap of people’s needs.
MAKES PLANS
vv AND
DECISIONS
A fter selecting a business opportunity, an entrepreneur makes
plans and decisions to organize resources to set up one’s own
business. Here are the other tips.
 One must perform managerial functions of PLANNING,
ORGANIZING, COORDINATING, STAFFING,
MOTIVATING, and CONTROLLING one’s own business
enterprise.
 One must know how to arrange activities related to
recruiting staff, purchasing raw materials, setting up work
spaces for the administration office and the production
plant, linking up with financial sources, and complying
with business regulations.
 One must prepare an action plan which specifies, among
other aspects, the quality features of one’s own product or
service to entice customers.
INVEST TIME,
vv EFFORT,
AND MONEY
A n entrepreneur is a very busy person.
 One must know how to invest time, effort, and money to manage
the business.
 One can make vital decisions about various aspects of one’s
business enterprise.
 Decision-making is a regular function for the entrepreneur.
 One knows the weight of the pro’s and con’s of the things and
chooses the best alternative course of action.
 One must know how to manage time.
 Knows how to stick to plans and budgets, all while keeping an
open mind to adapt to new situations.
 Prepared for the contingencies and search for new opportunities.
 Must know how to coordinate the proper use of human, physical,
and financial resources of the enterprise
TAKES CALCULATED
vv

RISKS
An entrepreneur takes calculated risks, which
may pertain to financial and operational risks
of business.
 An entrepreneur must know that he or she is not in full
control over the behavior of other people or other
institutions of the business.

 One must be willing to bear the risks and uncertainties

of the business.

 One must assume the possible risks of the business.

 One is able to take calculated risks, can muster courage,

self-confidence, and prudence in their work.
INTRODUCESvv INNOVATION
AND CHANGE
A
n entrepreneur strives to succeed b being innovative, creative,
and open to change.
 One must learn to view things from new angles and
perspectives.
 Able to try out new approaches for implementing usual tasks
and activities.
 Will look for new resources to create better products and
services.
 Builds relationships and alliances with new business partners.
 Networks with associations and organizations to leverage
various kinds of support to his or her business.
 On difficult times, one can still continue to preserve the
positiveness.
 Can still remain resilient and adapts to change.
 Inspires and motivates its own staff to embrace new things.
EARNS PROFITS
vv AND
DEVELOPS SOCIETY
A
s fruits of labor and personal commitment, an
entrepreneur earns profits from the business
that he or she has set up.
 Though an entrepreneur is profit-oriented, one must also be
inspired in doing good for other people.
 One must aim in creating products or services that protect and
improve the well-being of the customer and the environment.

BY BEING SUCCESSFUL IN ONE’S OWN ECONOMIC

VENTURE, HE OR SHE STILL CONTRIBUTES TO THE
DEVELOPMENT OF THE SOCIETY.
 STARTINGvv UP YOUR
BUSINESS
I f one wants to start their own business enterprise, then the next presented
slides shows a diagram of the steps to start a business.

IDENTIFY AND SELECT PREPARE PRE- PREPARE A BUSINESS

A BUSINESS FEASIBILITY STUDIES PLAN
OPPORTUNITY

REGISTER YOUR DETERMINE LEGAL FINANCE YOUR

STRUCTURE FOR YOUR
BUSINESS BUSINESS
BUSINESS

EACH OF THESE STEPS WILL BE EXPLAINED DEEPLY IN THE NEXT SLIDES

IDENTIFY AND
vv SELECT A
BUSINESS OPPROTUNITY
T he first step is to identify potential business
opportunities in a systematic way.
 It is through DATA collection and FIELD observatons.
There are many opportunities in the world of business. One
must maintain an open mind to look for them. An
entrepreneur can sense a business opportunity faster than
other people. Time should be an ally and to get ahead of
others by spotting a potential business is a better way of doing
so.
 From there, one can select a project idea that is base on one’s
RESOURCES, SKILLS, PERSONAL PREFERENCE,
EXPERIENCE, PERSONAL VALUES, and FAMILY SUPPORT.
 PREPARE
vv A
BUSINESS PLAN
ABusiness plan – is a document that contains the
GOALS, PLANS,
RESOURCES of a business.
STRATEGIES, and
A
FEASIBILITY STUDY – is a study
evaluation of the proposed project in
terms of its overall economic sense.
 THE BUSINESS PLAN STARTS;
 An initial idea  It covers four aspects namely;
 Evolves into a business concept proposal 1. MARKETING
 Finally into a detailed analysis of the different 2. TECHNICAL
factors in the business to make it succeed. 3. PRODUCTION
4. ORGANIZATIONAL
 FOR A START-UP BUSINESS;
 Prepare a good business plan that consists the
pre-feasibility studies, called a FEASIBILTY
PLAN or a START-UP PLAN.
MARKETING
vv

ASPECT
T
hese involve market research to determine a
gap in market demand for the product or
service, determination of whether the gap is
sizable enough to make a project feasible, and
analysis of competitors, market shares, sales
volumes, and selling prices
 They identify the sources of sales revenue for the
business. They specify the appropriate marketing
mix and marketing strategies.

T
hese involve analysis on how to make the
TECHNICAL product or service, the sources and costs for
materials, quality features, and operating
OR
vv processes with costs.
 They specify the planned production capacity, the
PRODUCTION production process, and the required technology,
equipment, and machinery.
ASPECTS  Ensures quality management.
 Present variables of this aspect now includes
ECOLOGICAL IMPACTS.
FINANCIAL
vv

ASPECT
T
hese involve analysis of whether the project will
be financially viable by determining the sales
revenues, the costs and expenses in producing
the product or service, the means of financing,
and analysis of profitability of the venture.

 In addition to the income statement, they contain the

projected cash flows and the balance sheets

ORGANIZATI
vv T
hese identify the legal form of the business.
 They contain the organizational structure and
personnel requirements for the business.
ONAL  They specify the roles and responsibilities of
mangers and staff.
ASPECTS  They also identify the locations of the business
office, the manufacturing or production plant, and
sales outlets.
 FINCANCE YOUR
vv BUSINESS

O
ne can finance their small business using several and combined sources; one’s
money for example; along with one’s family, friends, and relatives;
borrowing from a bank; getting investors such as venture capitalists.

IT IS IMPROTANT TO PREPARE A S-W-O-T

(STRENGTHS, WEAKNESSES, THREATS, and OPPORTUNITIES)
analysis of these alternative sources of funds for your business
Register your Business

After deciding on the type of legal form for your

business, you have to register it with the appropriate
agency

DTI
BIR
Forms of Business
vv
and How to
Register
Legal Form of Business How and Where to Register

 Apply for a business name and registered at the DTI. Applicant must be at
least 18 years old
 Apply for TIN at the BIR
 Get a barangay clearance as requirement for mayor’s permit
Single Proprietorship  Get a mayor’s permit or license for your business
 (SSS) number for your business and for yourself as an employee or a self
employed individual. If you have workers who earn at least an income of
P4 000, they should also be registered with SSS. These may pertain to the
low-skilled workers such as utility staff, messengers, or domestic helpers.
Legal Form of Business How and Where to Register
 Register with (SEC), at least two members are required in a partnership
Partnership  Submit other documents same as in a sole proprietorship
 Get a mayor’s permit

 Certificate from SEC, 5 to 15 members

 Registration data sheet\
 Bank certificate of deposit for your paid up capital
 Articles of incorporation
 Undertaking to change name
 A treasures affidavit
Corporation  Your corporate by laws
 Endorsement/clearances from other government agencies
 Proof of remittance by foreign corporate subscribers and for a
corporation with foreign equity
 Application form F-100, for corporations with more than 40% foreign
equity
 SSS
Legal Form of Business How and Where to Register

 If you employ at least 5 workers, register your business with (DOLE)

 Secure SSS number for your business and for yourself as an employee or a
self –employed individual. Workers that earn at least an income of 4000
Corporation should also be registered with SSS
 Register your business with Page-IBIG Fund (Home Development Mutual
Fund), naming yourself and your workers as members of the fund
 Register your business with PhilHealth. Your workers should also be
members of PhilHealth

 Apply at the SEC

 Submit documents same as in partnership
Limited Liability  Get a mayor’s permit

 Register at the Cooperative Development Authority (CDA)

Cooperative  Get a mayor’s permit
Importance of Family Business
Enterprise

For an entrepreneur, profit alone is not the main motivation and

reward for success. An Entrepreneur finds fulfillment in
contributing to the development of the community where he/she
lives. Through his/her business enterprise, he/she able to generate
employment for other people. Can contribute to economic growth
for the country as well. As such, ,an entrepreneur accepts social
responsibility to society.
G ro wth of a Fam il y
1. A family member sets up a small business
E nt erfamily
A small prbusiness
i s e enterprise, usually starts from a modest shop
within the residence or backyard of the family member with
entrepreneurial spirit. Over the years, his/her resourcefulness,
determination, patience, self confidence, paid off. He/she continues to
develop customer relationship and earn higher profits. He/she expand
her production and scope of marketing activities. If he/she decided to get
married, his/her spouse joins in managing their own family business. As a
couple, they share authority and decision making in running the family
business. This setup is called the First-generation family businesss. The
owner who set up and built the family enterprise have full management
control over the family business
2. Children of the owners of the family enterprise join the
family
business
As children of the owners of the family enterprise grow and mature
into adults, they participate in the business. More member involved in
the family business, the business continue to expand. The owner may give
their children some authority and decision making during the initial
years. They usually also hire managers who are non-family members.
Gradually, the children of the owners more adept in learning the
intricacies of the business. At this point, the owner give managerial
positions to their children. Authority and decision making in the family
business are now gradually shared among the first-generation and second
generation family members. This setup, the first and second generation
family members shared management control over the family enterprise.
3. Children of the owners of the family enterprise assume
control over the family business

First generation owners of the family business eventually grow old.

Their children who finished academic degrees use their own skill to run
the business. Due to old age, the owner of the family business decide to
relinquish to their children the full management of the family enterprise.
This setup called the Second Generation Family Business. Children of
the owner have full management control over the family enterprise.
4. Second Generation Family Members Continue to
Build the Family Enterprise

The second-generation owners of the family business

become mature and start their own families, they
encourage their children to participate
In the management of the family business
5. Third Generation Family Members
assume control of the family business

When the second generation owners of the

family business become old themselves, they pass
on to their children the management of the family
business. This setup is called the Third Generation
Family Business
Family Business is a unique organizations because they
serve as family units and at the same time business units.
Family must maintain Family Harmony in dealing
everyday challenges of business operation. Conflict in
management may occur because of different in
personalities and educational background. As will as
conflict in decision making as family members share
authority and control over a certain aspect in the business.
 But in the end, family business succeed as they learn to adapt
change , develop effective management systems, and continue
embrace family values and maintain harmonious relationshis.
 Conflict in management may occur because of
different in personalities and educational
background. As will as conflict in decision making
as family members share authority and control
over a certain aspect in the business. It is evident
that a family business face many challenges for its
growth and survival
Small Business Enterprise Help
Developed the Philippine Economy

Micro, small, and medium enterprises are the backbone of

the Philippine economy as they comprise the majority of
economic establishment in the country.
 Based on 2014 statistics released by DTI, close to 947
000 establishments exist in the Philippines . 90% of it are
micro enterprises, % are macro enterprises and less that 1
% are medium enterprise. DTI figures state that micro,
small, and medium enterprises in the Philippines comprise
99.6 % of all existing establishments.
Philippines’ Magna Carta for Micro,
Small, and Medium Enterprises

1. Micro Enterprises- these are not more than

P3 000 000 in value of total assets
2. Small Enterprises- these are from P3 000 001
to P15 000 000 in value of total assets
3. Medium Enterprises- these are from P15 000
001 to P100 000 000 in value of total assets
E x a m p l e s o f S mvv a l l F a m i l y
Enterprises
Wholesale
Retail Outlets
Small Restaurants
Internet Shops
Dry Clean Services
Automotive Repair Shops
Agricultural Production Enterprises (poultry raising, hog
raising, vegetable production
Enactment of Specific Philippines
Laws
1. Magna Carta for Micro and
Medium Enterprises ( RA No. 6977)

Mandates the coordination among

different government agencies, in
providing support to all small and medium
enterprises (SMEs), which include, among
others, DTI , DA and DOST.
2. Go Negosyo Act (RA No. 10644)

Aims to established within every city

and municipality and facility to advise
entrepreneurs on their business. It
provides a one –stop-shop for
individuals who want to know more
about registering their business and the
various business opportunities that they
can tap
3. Barangay Micro Business Enterprise (BMBE) (RA
No. 9178)

Provide additional support to micro enterprises or those

not more than P3 Million in total value . Upon registration
with the local government unit, micro enterprises are
entitled to tax exemptions, access to credit, technology
transfer, exemption from coverage of the Minimum Wage
Law, and other government incentives.