Lesson 2: Putting up a Small Business

Putting up a Small Business

Multiple Choice

A business that is owned by only one person.

• Corporation

• Sole Proprietorship

• Partnership

• Cooperative

Multiple Choice

The management of this business is shared by two or more person.

• Corporation

• Sole Proprietorship

• Partnership

• Cooperative

Multiple Choice

A business owned by at least 15 individuals called members.

• Corporation

• Sole Proprietorship

• Partnership

• Cooperative

Multiple Choice

A business where owners are called shareholders.

• Corporation

• Sole Proprietorship

• Partnership

• Cooperative

Procedures in Putting up a Small Business

1. Decide whether or not to go into business.

It is a choice between wage employment which assures you of a steady monthly income and self-employment, which might require more time and resources and without any assurance of a regular monthly income.

2. Analyze strengths and weakness.

After deciding to become an entrepreneur, another important step to accomplish is knowing your strengths and weaknesses.

3. Select your product.

From long list of possibilities you can zero in on the final product line or service you want to produce or provide.

4. Conduct a market research

Producing the product is much easier than selling it to the consumers. Therefore, it is necessary to conduct an extensive market survey before going into production.

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> Who needs what you are offering.

​> Is there still a space for your product, or is the market already saturated?

> Is the market national or local?

> Who are your​ ideal customers?

>​ How much will you sell the product?

> How will you distribute the product to your consumers?​

5. Decide on your form of business ownership.

Whether a business is intended for big time or small time operaiton, it must follow a certain kind of organizational plan.

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Ownership: a legal relationship between a person and his/her possession.

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The type of ownership employed determines the sharing of profits, responsibility for debts, as well as legal and other activities. ​

6. Decide on the place where the business is to be located.

Consider the location of the business.

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> Market - ​consider proximity, size, buying power, and growth potential

> Materials - consider viability and quality of materials and supplier needed for production

> Transportation - consider proximity, availability, frequency and cost of material

> Power ​- consider availability, quantity, quality, and rates of fuel and water

> Site - consider zoning and local ordinances on air, water pollution, construction costs, lease terms, police and fire protection, and area for expansion.

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7. Choose the kind of Technology needed in the efficient operation of the business.

Knowing the process involved in the manufacture of the product will be most useful in determining the machinery and equipment to be installed.

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8. Decide on machinery and equipment.

After choosing the technology to be applied, the next step is to decide on the kind of machines and equipment needed in the manufacture of the product, the suppliers of materials needed, and the amount of money that will be spent for production.

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9. Make a business feasibility study.

The project feasibility study is an investigation to find out the viability of the project. ​

10. Determine possible sources of capital.

A number of government agencies provide loans to aspiring entrepreneurs.

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a. Personal funds and property

b. Loans or investment in cash or from family members

c. Suppliers credit and leasing arrangement

d. Short-term/long-term financing from banks and other financial institutions​

11. Determine possible source of power and water supply​

12. Procure and install machineries and other equipment

13. Determine the kind and number of manpower needed to run the machineries.

​14. Identify possible sources of raw materials.

15. Establish production set-up.

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16​. Market your products.