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Starting and Organizing the Enterprise. Starting and Organizing the Enterprise. Identifying Business Opportunities. Before Starting your Own Business. Does the idea fire your motivation and is it adequate enough to keep you going for next one to two years? - PowerPoint PPT Presentation
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Starting and Organizing the
Enterprise
Starting and Organizing the Enterprise
IDENTIFYING BUSINESS OPPORTUNITIESBefore Starting your Own
BusinessDoes the idea fire your motivation and is it adequate enough to keep you going for next one to two years?Is it a viable business proposition in your area?Does it match the needs of your clientele, local or otherwise?Check it out with basic market researchTest it out in the marketConsult with expertsLook out for competition in the fieldIs it a sunrise industry?Evaluate your business opportunityProject conceptualization
Starting and Organizing the Enterprise
IDENTIFYING BUSINESS OPPORTUNITIESA Model of Opportunity Recognition Process
Education Prior knowledge of markets and
customer problems
Networks
Experience
Work experiences
Personal experiences
Entrepreneurial alertness
Outcome: Successful opportunity recognition
Starting and Organizing the Enterprise
IDENTIFYING BUSINESS OPPORTUNITIES
Factors or Resources to be Evaluated MarketsIndividual interestsCapitalSkillsSuppliers of inputsManpowerTechnology
Starting and Organizing the Enterprise
IDENTIFYING BUSINESS OPPORTUNITIESSWOT Analysis
S - strengthsW - weaknessesO - opportunitiesT - threats
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Planning
It is thinking ahead of objectives, strategies, financing, production, marketing, profit prospects, and growth responsibilities.
However, business planning should be realistic.
Business planning involves the attainment of goals, and the way to accomplish such goals.
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Planning
Principles of Planning
Planning must be realistic. Planning must be based on felt needs. Planning must be flexible. Planning must start with simple projects
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Stages of Business Planning
Unplanned stage. At the start of the business, the owner-manager is busy looking for funds, customers, materials and equipment. He has no time for planning. His entire attention is devoted to the daily operations of his business in his intense desire to survive.
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Stages of Business Planning
Budgeting-System stage. Eventually, the owner-manager realizes the need to develop and use a budgeting system. Estimated incomes from sales and expected expenditures are made. This is done to facilitate the orderly functions of the growing enterprise.
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Stages of Business Planning
Annual planning stage. The owner-manager drafts an annual plan. He can use either the top-down planning or the bottom-up planning. In top-down approach, the owner-manager provides the goals and let the employees comply with them. In case the bottom-up approach, he encourages his employees to participate in planning the goals and strategies of the enterprise. The first approach in planning is autocratic while the other one is democratic.
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Stages of Business Planning
Strategic planning stage. As the business enterprise becomes bigger, a long-range planning is needed. This is a three-or five-year plan. Such plan has flexibility to be able to adjust to changing conditions. An executive of the Xerox Corporation claims that some of their plans are being revised every day of the year. At this stage, planning develops into a more strategic character.
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
Criteria Of Effective PlanningThe plan should state clearly its objectives. The plan should provide measures for a satisfactory accomplishment of the objectives in terms of quantity, quality, time and cost. The plan should state the policies which should guide the people in attaining the objectives.The plan should indicate what department or unit will be involved in accomplishing the objectives. The plan should indicate the time which should be allowed for each activity. The plan should specify the required resources and their corresponding costs.The plan should designate the officers who will be held accountable for the accomplishment of the objectives.
Starting and Organizing the Enterprise
PLANNING THE ENTERPRISE
STEPS IN BUSINESS PLANNING
Evaluate your personal resources and interests, and the resources of the community.
Analyze your market.Choose a proper business location.Prepare a financial plan.Prepare a production plan.Prepare an organizational plan.Prepare a management plan.
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISEOrganization
An organization is a group of two or more persons who work together to attain a common set of goals.
Organizing is a process of combining and coordinating resources and activities in order to accomplish efficiently and effectively certain objectives.
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
FORMS OF BUSINESS ORGANIZATION1. Single Proprietorship
This is a form of business organization that is owned and usually managed by one person. It is the oldest and simplest form of business ownership. It is also the easiest to start.
AdvantagesEase and low cost of formation and dissolution.Retention of all profits.Independence and flexibility.Tax advantage and less government regulation.
DisadvantageUnlimited liability.Lack of stability.Limited access to credit.Limited business skills and knowledge.
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
FORMS OF BUSINESS ORGANIZATION 2. Partnership
It is an association of two or more persons who act as co-owners of a business. Each partner contributes money, property or service to their organization. There are two types of partners: general partners and limited partners. The liability of a general partner extends up to his personal properties while a limited partner is only liable to the extent of his contribution to business. In our country, we have also the capitalist partner and industrial partner. The former contributes money while the latter provides service or management.
ADVANTAGESEasy to organize.Availability of more capital and credit.Retention of profits.Better business skills and knowledge.
DISADVANTAGESUnlimited liability.Lack of stability.Management disagreement.Idle investment.
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
FORMS OF BUSINESS ORGANIZATION 3. CORPORATION
It is an artificial being created by operation of law, having right of succession, and the powers, attributes and properties expressedly authorized by law or incident to its existence. The shares or certificates of ownership of a corporation are called stocks. The owners of stocks are called stockholders or shareholders. There are two types of corporations: private or close corporation and open corporation. The first one is owned by a few individuals, usually relatives and friends. The other one is owned by any individual who buys shares of stock which are openly traded in the stock markets.
ADVANTAGESLimited liability.Easy to raise capital.Perpetual life.Specialized management.
DISADVANTAGESDifficult to organize.Strictly regulated and supervised by the government.Some corporations are socially irresponsible.Formal and impersonal employer-employee relationship.
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
DESIGNING BUSINESS ORGANIZATIONOrganizational Structure
Formal system of task and reporting relationships showing how workers use resources.
Formal way employee responsibilities are assigned
Organization Hierarchy of authoritySpecific rules and regulations for workStandardized trainingDivision of work
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
DESIGNING BUSINESS ORGANIZATION
Organizational designThe process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
DESIGNING BUSINESS ORGANIZATIONFactors Affecting Organizational Structure
Organizational environment
StrategyTechnologyHuman Resources
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
DESIGNING BUSINESS ORGANIZATION
10-22
The way an organization’s structure works depends on the choices managers make about:
1. How to group tasks into individual jobs
2. How to group jobs into functions and divisions
3. How to allocate authority and coordinate functions and divisions
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
DESIGNING BUSINESS ORGANIZATION
10-23
Keys To Organization
Clear line of authority and responsibilityResponsibility coupled with authorityReport to one supervisorAccountability moves upwardDelegate authority to the lowest practical levelLine personnel separated from staff personnelSimple yet flexible structure
Starting and Organizing the Enterprise
ORGANIZING AND SETTING THE ENTERPRISE
DESIGNING BUSINESS ORGANIZATION
10-24
Four Options For Departmentalization
1. Functional: arrange according to function such as production, marketing, research2. Product: divide according to type of product sold3. Geographic: divide according to region4. Customer: divide according to the relationship with the customer such as wholesale, retail or direct sale
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STRENGTHS OF A PRODUCT OR SERVICE
cheap and abundant raw materials
sufficient funds availability of technology presence of skilled
workers management and
technical expertise of the entrepreneur
good quality or service ease of production
WEAKNESSES OF A PRODUCT OR SERVICE
high price poor quality/service weak management lack of skilled workers irregular supply unattractive design high costs of production
OPPORTUNITIES OF A PRODUCT OR SERVICE
big demand for the product or service
favorable government policy or support
scarcity of the product or service
poor quality of existing product
absence of product or service
possibilities of good profits
THREATS shortage of raw
materials at a given time entry of many
competitors increasing costs of
production expectation of
unfavorable government laws, such as taxes
deteriorating peace and order
emergence of unfair demands of workers through labor union activities
SWOT ANALYSIS