Uploaded by John Ryan Lecciones

Lesson 9

Different Principles, Tools, and
Techniques in Creating a
identify principles in creating business
discuss tools and techniques in making efficient business; and
analyze business principles, tools, and techniques in making efficient
Principles, Tools, and Techniques in Creating a
In planning a business, a thorough study needs to be made from the
creation of business. Understanding how the business will operate
and co-exists in the business world thus one needs to study principle,
tools and techniques in creating business.
Principles in Creating a Business
1. Scalability- A business must be scalable for it to be successful.
Scalability is the capability of a company to sustain or improve its
performance in terms of profitability or efficiency when its sales
volume increases.
2. Big Ideas- A business is no more effective than the idea upon which
it is built. Business creates its own plan to expand its economic
3. Systems- A business is a system in which all parts contribute to the
success or failure of the whole. In this system, everything must
work together from employee to president; from equipment to
4. Sustainability- A business must be dynamic- able to thrive through
all economic conditions, in all markets, providing meaningful highly
differentiated results to all of its customers. Such differentiation is
the key to survival.
5. Growth- Growth is essential in business. Without continued
growth, operations will stagnate. This can result in lowered
standards of quality for products or services, decreased customer
service, and poor employee morale.
6. Vision- A business must manifest the higher purpose upon which it
was seeded, the vision it was meant to exemplify, the mission it was
intended to fulfil.
7. Purpose- A business is the fruit of a Higher Aim in the mind of the
person who conceived it.
8. Autonomy- A business is not part of the owner's life, but is, in fact,
its own entity.
9. Profitability- A business is an economic entity, driving an economic
reality, creating an economic certainty for the communities in which
it thrives.
10. Standards - A small business creates a Standard against which all
small businesses are measured as either successful, or not. All
small businesses should aim to thrive beyond the standards that
formerly existed.
Tools in Evaluating a Business
1. Use technology to speed up workflow- Businesses should be
looking to innovations in technology to solve day-to-day
inconveniences and to increase efficiency.
2. Shorter meetings fuel efficiency- Hold a brief meeting standing up,
every morning, where each person explains what they are going to
work on that day to ensure everyone is on the right track and not
wasting time on non-urgent tasks.
3. Smart office space pays- Office space can involve a big outlay for
SMEs, but it is also an area where some smarter thinking can make
a real difference.
4. Advertisement- Advertising keeps your business top of mind so
consumers think of it when they require or need a service or
5. Small changes, big savings--One way of improving efficiency is for
business owners to make small changes to the way they handle
their company's expenses.
6. Keep a firm grip on cash flow-"Cash is King not profit”. Ensure the
right management of your inflow and outflow of cash.
7. Stay connected on the move- The growing trend towards mobile
and flexible working means that employees are permanently
connected and on the go.
8. Use time more efficiently- Being more efficient is more about being
than doing. It's probably 90% mindset, (Allan, 2013). In addition,
“The shorter the amount of time you allow yourself, the more you
will get done”.
9. Get the best deal on insurance- Businesses need insurance because
it helps cover the costs associated with property damage and
liability claims
10. Don't be lax with the legal - In the hectic process of starting up a
business, the founders often put off sorting out the legal matters
until later, or not at all.
Since business is a commercial activity and its main purpose is profit, in
the book published by the Development Academy of the Philippines,
how to prepare project feasibility studies, it includes an industry
analysis of the following important factors.
Industry rivalry among companies of the same or related industry is an
inevitable part of the business world of any business size. Intense
competition leads to reduced profit potential for companies in the
same industry. Businesses seek constantly competitive advantage.
Competitive Advantage
is what sets your business apart from your competition.
highlights the benefits a customer receives when they do business
with you.
It could be your products, service, reputation, or even your location.
Different methods of competitive advantage which it
can be done and are classified into four categories:
1. Cost Leadership-an advantage occurs when business is able to
offers same products at a lower price.
2. Differentiation-Find attributes that is important and set them apart
from their competitors.
3. Defensive Strategies-used a defensive strategy to distance
themselves from competitors.
4. Alliances-advantage of seeking strategic alliance with other within
related or within businesses.
Individuals or companies who desires to possess or make use of
products and services. They play a huge role in the success of your
business. Customers likewise can force down prices, demand higher
quality or more service, and play competitors off against each other—
all at the expense of industry profits.
Provide inputs that the firms in an industry need to create the goods
and services that they in turn sell to their buyers. Suppliers can exert
bargaining power on participants in an industry by raising prices or
reducing the quality of purchased goods and services.
A business may need one or more suppliers. It is important to
develop suppliers who are reliable in terms of quality of what they
supply and their dependability in coming up with the things you order
from them. It is important to maintain good relationships with one’s
suppliers; they are the key to one’s continued access to
Goods/services that can be used in place for another. These goods
may, even if partly, satisfy the same needs of a consumer such that
the consumer may use one for instead for another
substitute products or services limit the potential of an industry.
margarine can be a substitute for butter. Likewise Coke for Pepsi
But not everybody will be willing to switch brands because they have
developed a taste for a particular cola. This is why manufacturers try
to differentiate their products from their competitors so that the
customers will develop product loyalty from their brand.