TYPES OF BUSINESS

AVAILABLE TO
ENTREPRENEURS
According to size

• The size of the enterprise is based on the total

assets or number of employees who work for
it.
 FIVE TYPES OF
ENTERPRISES

(as categorized by the Department of Trade and Industry through

(BSMED) Bureau of Small and Medium Enterprise
Development.)
MICRO ENTERPRISE
• Asset size not exceeding P50,000
• Usually home-based enterprise, operating in makeshift or
temporary quarters.
• The owner heads the enterprise and employs from one to not
more than 10 people to help him/her.
COTTAGE ENTERPRISE
• An asset of P250,000 but not exceeding P500,000.
• Home-based business which is often manage and operated by
the members of the family.
SMALL ENTERPRISE
• An asset of P500,000 but not exceeding P2.5M.
• Owned by an individual or group and has enough resources to
continue operating.
• It employs from 10 to 20 people.
MEDIUM ENTERPRISE
• An asset of P 5M to less than P 20M.
• It is owned by a single individual, business partners, or a
corporation.
• Employs more than 20 to 100 people. These workers are
skilled and posses technical expertise to run business with
machines/equipment and utilizes various quality controls to
make the products.
LARGE ENTERPRISE
• An asset of P 20M or more.
• Often owned and manage by a corporation.
• It employs 100 or more workers who are hired on the basis of
their expertise.
• Its Board of Directors is responsible for its governance and it
has a Chief Operating Officer to oversee the implementation of
the directives of the Board.
• It operates in highly formalized but complex systems of
management.
ACCORDING TO FORMS
OF OWNERSHIP
SINGLE PROPRIETORSHIP is owned and usually
managed by one person. They register with the Department of
Trade and Industry.

ADVANTAGE DISADVANTAGE

• Easy to set up • Demanding on owner’s personal time

• Decision-making left entirely to owner
• Easy to dissolve
• Retention of all profits
• More flexibility
• Tax incentives and less government
regulation.
• Growth limited by owner’s financial
means
• Unlimited liability
• Lack of stability
• Limited access to credit
• Limited business skills and knowledge.
PARTNERSHIP is an association of two or more persons
who act as co-owners of a business. Money, property or
service to the business. They register with Securities and
Exchange Commission (SEC).

ADVANTAGE DISADVANTAGE

• Relatively easy to set up • Partnership may be endangered by

• Check and balance maintained with
two or more owners
• Availability of more capital and credit
• Retention of profits to fewer owners
conflicts between partners
• A decision made by one partner is
binding on all other partners
• Generally, liability for debts incurred is
unlimited
• Lack of stability
CORPORATION is an artificial being created by operation of law, having
the right of succession, and the powers, attributes and properties expressly
authorized by or incident to its existence. They register with Securities and
Exchange Commissions (SEC).

ADVANTAGE
• Risks and losses are shared with the
other shareholders.
• Maximum flexibility for growth
• Limited liability of individual
shareholders
• Greater room for professionalism in
management
• Easy to raise capital
• Assured of at least 50 years of
existence by law.
DISADVANTAGE
• Complicated setting-up process
• Individual stockholders may have
limited influence on management
• Tendency to institutionalize a
bureaucracy
• Strictly regulated and supervised by the
government.
COOPERATIVE is a duly registered association of persons, with a common bond of interest,
who have voluntarily joined together to achieve a lawful common social or economic end, making
equitable contribution to the capital required, and accepting a fair share of the risks and benefits
of the undertaking in accordance with the universally accepted principles of the cooperatives.
They register with the Cooperative Development Authority (CDA).

ADVANTAGE DISADVANTAGE

• Least likely to be dissolved • Shared control of the business

• Limited liability • Consensual decision making
• More people benefit from the
business
• Professional managers may be
employed by the members
 ACCORDING TO INDUSTRY
CLASSIFICATION

• There are many types of businesses based on the Philippine

Standard Industrial Classification (PSIC).
• They either produce goods or services.
GOODS
• Products that are processed from raw
materials that are consumable.
SERVICE
• activities which help are demanded by
consumers based on their needs and
wants.
Usually, starting entrepreneurs with limited capital
engaged in the retailing and trading business. These
industries are the following:
• Agriculture, forestry and fishing
• Mining and quarrying
• Manufacturing
• Electricity, gas , steam, and air-conditioning supply
• Water supply: sewerage, waste management, and remediation activities.
• Construction
• Wholesale and retail trade: repair of motor vehicles and motorcycles
• Transportation and storage
• Accommodation and food service activities
• Information and communication.
• Real estate activities
• Professional, scientific and technical activities
• Administrative and support service activities
• Arts, entertainment, and recreation
• Public administration and defense: compulsory social security
• Education
• Human health and social work activities