Performance Objective Enabling Objective

1. Define business enterprise

2. Explain basic enterprise skills
Identify the nature of a 3. Identify and state the characteristics of the
business enterprise NATURE OF A
SMEs
4. Identify the contributions of SMEs towards
BUSINESS ENTERPRISE
economic development
TYPES OF BUSINESS
OWNERSHIPENTERPRISE
 An enterprise is a term in the commercial world used to describe a project or
venture undertaken for gain.
 It is often used with the word "business" as in "business enterprise’.

ENTREPRENEURSHIP
Process + capacity + willingness =
Develop, organize and manage a business venture along with any of
its risks in order to make a profit

ENTREPRENEUR
An individual who, rather than working as an employee, founds and runs a small
business, assuming all the risks and rewards of the venture.
 Overall Concept
 Enterprise involves using your initiative to identify some need and then
taking the steps to satisfy that need.
 It involves taking financial and personal risk.
 Successful enterprises are rewarded with profit.
GENERAL SKILLS THAT ARE NEEDED IN ORDER
TO ESTABLISH OWN BUSINESS

Skill Why needed

Research & Primarily required to help you find information on your target market, customers, competitors and suppliers
and make sense of it.
Analysis
Communication Required for communicating with partners, funders, staff, customers, colleagues and other stakeholders.
Have lots of ideas to evaluate the needs, estimate what would be required in terms of time, resources and
Idea generation & skills to realise them, and to analyse whether this would generate sufficient value in return for the
creative thinking expenditure of time and resources required.
Needed to build awareness for your product or service but also to develop relationships with people who
Networking have knowledge, expertise or connections that you need to win agreement and/or to get things done.
Need basic understanding of forecasting, budgeting, balance sheets, cash flows and Profit & Loss
statements.
Financial literacy This is also a valuable skill when working within an organisation, e.g. to understand the financial
consequences of actions or to make the business case for change.
Providing vision and direction, inspiring others to work with you towards that vision and enabling them to
Leadership do so.
This is about the ability to manage time (your own and others’), people, processes and resources.
Management Human and operational resources are usually scarce so being able to use them to good effect is a valuable
skill.
 ENTERPRENEURIAL SKILLS THAT ARE NEEDED IN
ORDER TO ESTABLISH OWN BUSINESS

Skill Enterprise
Human
Persuading investors to give you capital in order to set up your business.
Relations
Time The entrepreneur draws up a schedule to ensure the shop is decorated,
Management stocked and ready in time for its opening.
Planning The entrepreneur does a business plan and cash flow forecast.
Risk The entrepreneur takes out public liability insurance because members
Management of the public will be on her premises.
Decision Making The entrepreneur decides to be sole trader/partner/private limited co.
Reality The entrepreneur drops an idea that she has realised is not working, e.g.
Perception stocking an unpopular product, dropping an ineffective ad campaign.
 Importance of enterprise in business
It is essential, it sets the business up in the first place.
Enterprise leads to the creation of wealth. Profits and wages earned as a result of enterprise
lead to more spending, hence creating more job opportunities.
Tax intake to the government increases, leading to more grants to help more businesses.
 
Importance of enterprise in community
Creates jobs leading to a higher standard of living in the community.
Knock on effect for local businesses, as local people spend more money in their shops,
pubs, hotels etc.
It creates a new breed of entrepreneurs. People see others who are successful and are
inspired by this.
The government receives taxes. Less in being paid out on social welfare meaning more is
available for local amenities.
Infrastructure improves. New houses and roads are built as an area prospers.
 
 SMALL MEDIUM ENTERPRISES (SMEs)

A business that maintains revenues or a number of employees below a

certain standard.
Every country has its own definition of what is considered a small and
medium-sized enterprise
SME in Brunei are those enterprises that have fixed assets not
exceeding BND 5 million and /or have a maximum of 100 employees
In the European Union, a small-sized enterprise is a company with
fewer than 50 employees, while a medium-sized enterprise is one with
fewer than 250 employees.
Canada defines an SME as any business establishment with 0 to 499
employees and less than $50 million in gross revenues.
China’s definition of SME varies by industry; but basically the staff
headcount are between 200-2000 and Revenues between 100m to 2b.
  CATEGORIES OF SMEs

Characteristics Micro Enterprise Small Enterprise Medium Enterprise

No. of Employees 0-4 5 - 50 51 - 100
Shop/office next to
Place of businesses At home Separate location
home or nearby

Owner’s financing Owner’s financing

Informal and formal Informal and formal
Financial Resources Personal financing
Resources such as Resources such as
bank loan bank loan

Proper accounting
Accounting System Cash book Basic Accounting
records
Local market with
Market Size Local Market Local & National
some expansion
Legal Status Registered Registered Registered
 BRUNEI’S SMEs

The government has recognised the strategic role that small and medium
enterprises (SME) play in the overall economic growth of the country
The Brunei government expects that the SMEs will continue to play a key
role in the country's economic development in this new millennium
SMEs have also been identified as the major players in the industrial
development in Brunei Darussalam and have the potential in contributing
towards the diversification of the economy 
The development of small and medium enterprises will be enhanced through
provision of financial and infrastructure assistance, entrepreneurship training,
industrial incentive, technology improvement and other services and facilities
Hence, the government has been encouraging economic diversification
through business services, financial services, hospitality and tourism,
transport/logistics, agro food and halal industries
In Brunei, 98% of registered companies are considered to be small and
medium enterprise (SMEs).
 Distribution of SMEs in Brunei
2.23% 1.63%

52.3%
43.8%

micro small medium large

 Contributions of SMEs towards economic development

SMEs are socially and economically important - they represent 99% of

an estimated 23 million enterprises in the EU and provide around 75
million jobs representing two-thirds of all employment.
SMEs contribute up to 80% of employment in some industrial sectors,
such as textiles, construction or furniture.
Contribution of approximately 40% of GDP
 Importance
For developing and transitional economies (particularly in Asia), SME has a
function to become a key component of wider economic development and
lessening of poverty
SME can also acts as a major and sustainable generator of employment and
income
SME can also serve as a useful bridge between the informal economy of
family enterprise and the formalized corporate sector.
SME may also be a source of foreign exchange earnings.
Size of SME sector in an economy appear to be positively associated with
Gross Domestic Product (GDP) per capita growth in many countries.
SME creates job opportunities, which is a key dimension of the development
process of a country.
 Importance
If SMEs handle and process locally available raw materials, this lessens the
weight and volume of the original raw materials to be imported and makes it
cheaper to produce. Sawn and pre-processed wood may be an example.
SMEs promote competition where entrepreneurs can compete and provide
quality products and this could prevent the emergence of the evils of
monopoly.
Brunei imports a variety of goods, some of which maybe produced within the
country. The development of SMEs may help the process of import
substitution.
Large firms may be able to get supply of components at a cheaper price from
the SMEs.
The sub-contracts given to SMEs by large firms may reduce their production
costs.
  
ROLE OF SMEs IN THE ECONOMY

Employment creation – the forming of this enterprise may

increase an opportunity of creating more jobs because it is
generally more labour intensive
SMEs in Brunei Darussalam constitute 98% of all business
establishments and 92% if total employment in the private
sector
It is estimated 33% are in manufacturing and construction
sector, 59% in the service sector including 27% in trading
and wholesale activities, while the rest are in the primary
sector
  
SUPPORT FOR BRUNEI SMEs

DARE – Darussalam Enterprise

Entrepreneurial Development Centre, Ministry of Industry and Primary
Resources.
The Brunei Economic Development Board
The iCentre
The Youth Development Centre, the Ministry of Culture, Youth and
Sports.
Shell LiveWIRE Brunei
Others: Chambers of Commerce, Young Entrepreneurs Association,
BAG – Network and Asia Inc