Principles, Tools, and
Techniques
Objectives:
1. Identify the princ iples and tools in creating a
business;
2.Explain the four ways to form a business;
3.Distinguish between Small, Medium, and Large
Scale Businesses
4.Apply SWOT analysis as a tool in creating a
business opportunity
🠶A business is just a small portion of an industry. It
is an undertaking by a person or a group of
persons who are partners, or stockholders who
own a juridical entity known as a corporation. Its
main objective is to earn profit for the owners.
An industry, on the order hand, is the
aggregation of the different businesses
engaged in the same line of undertaking.
🠶For example, Celine has a business firm that is
part of the country’s shoe industry
🠶For a person but up a business, it is
essential that essential that an industry
analysis first be made. Commonly used is
a system known as the SWOT analysis,
which list the strengths, weaknesses,
opportunities, And threats that the
business faces.
BUSINESS ORGANIZATION
1. Sole Proprietorship
🠶This is generally the simplest way to set up a
business. A sole proprietorship is owned by a
single individual who is singly responsible for
running the business. The sole proprietor enjoys
exclusive control and decisions-making as well
as gets all the profits earned but he also
shoulders all losses and has unlimited liability
which means payment of his loans will extent to
his personal assets.
2. Partnership
🠶A partnership is an agreement in which
two or more persons combine their
resource In business with a view of making
profit. A partnership agreement is draw up
and profits are divided among the
partners a c c ording to the terms of
agreement. There are two types of
partnership:
🠶 A partnership is an agreement in which two or more persons combine their
resource In business with a view of making profit. A partnership agreement
is draw up and profits are divided among the partners according to the
terms of agreement. There are two types of partnership:
A. The general partnership. All owners share the management of the business
and each is personally responsible for a must assume the consequences of
the actions of the order partners. All general partners have unlimited liability
which means loan payments will extent to their personal property.
B. The limited partnerships. Some members are general partners who control
and manage the business and may be entitled to a greater share of the
profit while others partners are limited and contribute only capital, take no
part in control or management, and are liable for debts to a specific extent
only.
3. Corporation
🠶A corporation is a legal entity that is separate
from its owners the shareholders. No is personally
liable for the debts, obligations, or acts the
corporation. Directors and officers can bear
liability for their involvement with the
corporation. Then legal entity of the corporation
gives it an individual identity of its own.
Corporations normally can exist for a life of 50
years, which is renewable for another 50 years.
Owners have limited liabilities.
4. Cooperative
🠶A cooperative is an entity organized by people
with similar needs to provide themselves with
goods or services or to jointly use available
resources to improve their income
🠶Cooperative members have an equal say in
decision-making with one vote per member
regardless of number of shares held, there is
open and voluntary membership and surplus
earning is returned to the members according
to the amount of their patronage.
SMALL, MEDIUM,AND LARGE SCALE
BUSINESS
🠶 It is also important to study the classification of businesses as to the size based
on the worth of the business assets. In the Philippines, total assets for micro
business are worth below $ 1,500,001. For the small business, total assets are
from $1,500,001 to $ 15,000,000.Medium business has total assets from $
15,000,001 to $ 60,000,000.Any business with assets in excess of $ 60,000,000 is
considered large scale.
🠶 For any form of business organization, the business must be registered with the
appropriate government agencies. In the case of sole proprietorships and
partnership,100% must be owned and capitalized by Filipinos. For corporations,
at least 60% of the outstanding capital stocks must be owned by Filipinos
citizens. Business activity conducted may be within major sectors of industry,
services, practice of profession, or operation of tourism- related business and
agri-business