Planning a Business EnterpriseA Finance Group Report by: RADIA, NizrenLU, MichaelREMOTIN, John BrandoENRIQUEZ, Renzo RayCHIONG, Averie CamilleGUADALQUIVER, VjsylDY, Elizabeth JoyTANGI-AN, KrichelRAMOS, Celine Amalia

Why Do We Plan?

Because of these two:HopeAmbition

SPUR MAN TO PROGRESS!

Making the Decision

Carefully chosen plannedorganizedprovided with fundsdirected

+ well-managed SUCCESSFUL BUSINESS!

In choosing a business, there could be two questions to be considered:

1. What needs and wants of the people have not yet provided for my business?

2. What needs and wants are currently being supplied but whose supply is still for from being adequate or satisfactory?

WE MUST ALSO CONSIDER THE PROSPECT OF MAKING A PROFIT!

The Needs of a Business1. It’s people could face risks and

to make sacrifices2. Courage and indomitable spirit3. Understanding of human

relations4. Financial Ability

What is Promotion? Simply refers to the method of

discovering opportunity and taking advantage of the opportunity for the use of existing resources such as funds, materials, talent and managerial ability.

Promotion divided into 3 major parts:

Discovery

Assembling

Financing

DiscoveryAppraising the outlook of the

business Questions to be considered:1. Is the proposed project possible?2. Is it feasible? 3. Can the new commodity be

produced and sold for a price which the consumer will be willing to pay?

a. Nature of the Industry In many cases, it is necessary to consider not

only the proposed business itself but also the existing demand for the products or services of the industry involved.

b. Government Regulations There is no question that, while it is an

accepted dictum that justice and sound policy forbid the government to encourage one industry to the detriment of another, nevertheless, government regulations which have become extended on many fronts at times have provided special advantages to particular industries although the regulation many adversely affect other industries.

C. Potential Market The amount for profitable operations in

any industry depends to a great extent upon the demand for the commodities and services which that industry produces and its capacity to produce them in amounts desired.

D. Cost and Availability of Materials Needed

Question to be considered: Is the source of supply of raw material (in the case of a manufacturing industry) adequate, certain, and not likely to be exhausted?

E. Proposed Location A major factor to consider when a

company is organized is that of determining a location for the business.

AssemblingConsists of making all preliminary

plans, entering into contracts, obtaining permits, licenses or franchises necessary to start the operation of the business, and other related matters.

a. Getting a LicenseAlthough there are individuals who

engage in business operations even before they have secured a license or permit for such purpose, it is a sound and wise policy first to obtain the license before embarking in the business.

b. Entering into ContractsSince any business enterprise must

have a fixed place of business, it must use a building, large ground, and the like. Shall the business enterprise enter into contract of lease with the owners of the building it will occupy with an option to purchase the same after a given number of years? Or shall it purchase it outright at the outset? How about the machines and equipment it will use? How shall they be procured, cash or installment?

Financing Consists in the raising, providing,

and managing of all the money, capital, or funds of any kind to be used in connection with the attainment of the functions and objectives of the business such as: for promotion, organization, and operations.

The Role of the PromoterHe does task of investigation and

study of the prospective business in a very haphazard manner.

His work includes also financial study and project profitability, business organization, engineering study, financial requirements, source of funds, and the like.

Types of Promoters

a. Professional Promoters- are engaged in discovering business opportunities and taking advantage of them by marshalling capital and managerial skills and ability for the purpose of deriving profits.

b. Side-line Promoters- are engaged in other lines of economic activities for their source of income.

c. Banking Promoters- In addition to their major functions, commercial banks may at times be observed to act as promoters for their client- customers.

d. Financial Promoters- Investment houses generally are engaged in the promotion of certain business ventures through the sale of securities.

e. Subdivision Promoters- This type of promoters specifically dedicate themselves to the task of developing new subdivisions in a particular region or community.

What is a Prospectus? A prospectus may be defined as

a well prepared, printed statement which gives out desired information of a proposed commercial or industrial undertaking and/ or describes a particular security offered for sale.