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why start a small business?
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Small Small BusinessBusiness
Mr. Rick C. Mr. Rick C. BaguhinBaguhinreporterreporter
Small Business
very small businessvery small business bigger small businessbigger small business
Owner = principal worker
Owner = principal worker
Owner directs work
Owner directs work
One or more assistants
One or more assistants
called Micro business
called Micro business
Definition of Small Business
The Magna Carta for Small Enterprises The Magna Carta for Small Enterprises R.A. 6977R.A. 6977
Any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant & equipment are situated, must have value falling under the following categories;
micro
cottage
small
medium
Less than P50,000
P50,001to
P500,00
P500,001to
P5,000,000
P5,000,001to
P20,000,000
In terms of capitalization
micro
cottage
small
medium
Five (5)Or
Less workers
6 to 9workers
10 – 99workers
100 – 199workers
In terms of employment size
Characteristics
SmallBusiness
SmallBusiness
privately owned
few or no layers of
management
insufficient resources
to dominate its field of business
Features of a Small Businesslow in capital but high in labor intensity
efficient in specialized skill or service
succeeds in small, isolated or overlooked markets
often operates in unstable markets
closer to the market place
owners are the workers
capital comes from the owner or small group
area of operation is small
size of the enterprise is small in relation to the industry
Personalized relationship w/Customers
and employees
Flexibility inmanagement
Government incentives
Simple record keeping
independence
Advantages
Advantages
The Difference
Small Business Big Enterprise
changebirths or deaths expansion or contraction
risk or reward calculationdone by owners employee - managers
economic powerlittle or none tremendous influence
Difficulty ofraising capital
Risk of failure
Limited management skills
Lack of opportunitiesfor employees
Disadvantages
Disadvantages
Its importance
Introduce
innovation !!!Introduce
innovation !!!
Provide competition
Provide competition
Fill needsof society &big business
Fill needsof society &big business
Creates
employmentCreates
employment
Revenues
of local
communitiesRevenues
of local
communities
Factors influencing Success or Failure
businesscycles
governmentregulation
accessto
capital
interest rates
inflation
SUCCESSor
FAILURE
Lack of experienceLack of experience
Lack of moneyLack of money
Poorly plannedexpansion
Poorly plannedexpansion
Poor creditpractices
Poor creditpractices
Mismanagement of inventory
Mismanagement of inventory
Wrong locationWrong locationBusiness Failure
Why small business fail?
reach to my
potentials
reach to my
potentials
im theBOSS im theBOSS
serviceto my society
serviceto my society
money, money,
money!!!
money, money,
money!!!
Benefits and Opportunities of Owning a Business
