T.L.E.

BUSINESS 1 YEAR; 3 TERM REVIEWER

ST RD

An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area. Economics is the social science that analyzes the production, distribution, and consumption of goodsand services. The term economics comes from the Ancient Greek (oikonomia, "management of a household, administration") from (oikos, "house") + (nomos, "custom" or "law"), hence "rules of the house(hold)".[1] Political economy was the earlier name for the subject, but economists in the latter 19th century suggested 'economics' as a shorter term for 'economic science' that also avoided a narrow political-interest connotation and as similar in form to 'mathematics', 'ethics', and so forth. Economic development generally refers to the sustained, concerted actions of policymakers andcommunities that promote the standard of living and economic health of a specific area. Such actions can involve multiple areas including development of human capital, critical infrastructure, regionalcompetitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives. Economic development differs from economic growth. Whereas economic development is apolicy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. Consequently, as economist Amartya Sen points out: economic growth is one aspect of the process of economic development.

Economy in General
Economy
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consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area.

Economics
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is the social science that and consumption of goods and services.

analyzes

the production, distribution,

Economic Development
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generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area.

Economic Growth
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is a phenomenon of market productivity and rise in GDP.

Entrepreneurship capacity for innovation, investment and expansion in new markets, products and techniques.

Encouraging Entrepreneurship

Government Programs for Entrepreneurs Magna Carta for Small Enterprises (R.A. 6977) Micro-Enterprise Development Program Kalakalan 20 Tulong sa Tao Competency-Based Economies through Formation of Entrepreneurship (CEFE) Magna Carta for Small Enterprises It is an act to promote, develop and assist small-and medium-scale enterprises (SMEs) through the creation of a Small and Medium Enterprise Development (SMED) Council. Micro-Enterprise Development Program This program supports the continuous implementation of poverty alleviation measures for the poorer sector of the population. Kalakalan 20 This program is intended for countryside and barangay business enterprises (CBBE). Have 20 employees or less Asset of P500 or P5, 000 Tulong sa Tao This program provides credit for micro entrepreneurs, generates employment opportunities and raises the income level in the rural areas. Competency-Based Economies through Formation of Entrepreneurship (CEFE) This is a small enterprise promotion and entrepreneurship training model developed by the German Agency for Technical Cooperation. Categories of Programs: For Micro-enterprises Tulong sa Tao MEDP (Micro-Enterprise Development Program) HIRAM (Helping Individuals Reach Their Aspirations Through MicroCredit) Loan Fund for Relending and Investment Credit For Small and Medium Enterprises Small and Medium Enterprise Credit (SMEC) Jeepney Loans for Transport Cooperatives Program SSS-GSIS Special Financing Program Countrywide Industrialization Fund For Exporters Export Industry Modernization Program Export Development Financing Program Italian tied Export Bangue Paribas (UK) Commercial Line of Credit For Guarantee Small Business Guarantee and Finance Corporation-Guarantee Facility Guarantee for Agricultural Investment (GAIN-GFSME) Guarantee Opportunities for Light Industries (GOLD-GFSME) BAP Credit Guarantee Program For Agriculture Tilapia Financing Program (except Prawn) TLRC Window 2 Small Farmers Lending Cattle Financing for Cooperatives

 Agricultural Loan Fund (ALF)

POLICIES AFFECTIING THE ECONOMY

1. Fiscal Policy refers to the use of taxes for government expenditures. Government

expenditures include spending on goods and services like purchasing of tanks and ammunition, construction of roads and dams, and allocation of the salaries of government officials, among other things.
2. Monetary Policy refers to a governments management of the money, credit, and

banking system of a country. Money is defined as a common medium of exchange or method of payment. 3. International Economic Policy Two Categories: a. Trade Policy consisting of tariffs, quotas, and other devices that restrict or encourage imports and exports. b. Exchange Market Management countrys international trade influenced by the exchange rate, which is the price of its own currency versus those of other nations.

Other Support Needed from the Government

1. Peace and Order The government is responsible for maintaining peace and order in the country where threats of coups, salvaging and kidnapping are dealt with in order not to cause scare entrepreneurs as well as foreign investors. 2. Tax Incentives The government grants tax incentives to small business enterprises to encourage more people to build their own business. 3. Infrastructure Development The government takes the responsibility for building highways, bridges, and other infrastructure and transportation and market facilities in remote areas. 4. Efficient Public Administration Government agencies serve as conduits of economic growth. 5. Political Stability Changes in government policies and leadership can also trigger corresponding modifications in the business environment.

Environmental Analysis
Environmental Scanning Is the process by which the problems and needs of the community are recognized. It involves observing, identifying and evaluating trends, patterns, and events crucial to setting up a business.

How can environmental scanning help the entrepreneur? 1. Helps to identify the kind of business that answers real problems or needs in the community. 2. Improves business plans and prevents the premature discontinuing of a venture. 3. Informs and redirects long-term decisions.

4. Helps the entrepreneur clarify what he/ she wants to explore and to focus on relevant ideas that create an impact on his business. Opportunities = Problems + Needs + Future trends External Forces in Environmental Scanning 1. Economic Forces 2. Social, Cultural, Demographic, and Environmental Forces 3. Political, Governmental, and Legal Forces 4. Technological Forces 5. Competitive Forces Factors to consider when scanning for business opportunities 1. The needs of the community 2. Markets 3. Capital 4. Skills and Interests 5. Supply of raw materials 6. Manpower 7. Technology How to perform environmental scanning: 1. Gather pertinent information about the five environmental forces. 2. Interpret and evaluate the information gathered. 3. Identify the most important opportunities available and the threats to your business. 4. Identify and prioritize the critical success factors for the items identified in number 3.

Leadership Qualities
Leader is someone who serves as the guide for his followers. 1. He must have a vision. 2. His integrity should be unquestionable 3. He must be willing to communicate 4. He must be decisive 5. He must be knowledgeable 6. Has credibility ( trustworthiness, competence, and conviction)

Successful Filipino Entrepreneurs

Manuel B. Villar Jr. - One of the youngest billionaires. - From the Manilas working class district, Tondo - In just two decades, he has become Southeast Asias biggest homebuilder - entrepreneurship is an art Henry Sy Sr.

In 1936, 12 yrs. Old, arrived in Manila from China At 19 years old he decided to stay and try his luck in the city Start with a shoes he bought from American businessmen as his main merchandise He managed a shoe store co-owned with friends With his savings, he traveled to Boston and New York to look into the prospects of the shoe business First store names are Plaza, Paris, and Park Avenue Later, he decided to just call the stores Shoemart or SM Expanded from shoes to clothes, accessories, and houseware because he wanted to make shopping a family affair Each of us is given by God equal time 24 hours a day. It is up to us if we want to use this time and how we want to use it

Opportunity it is a chance or possibility for an event to occur. An opportunity is created when any of the following is present: A process that can be ore efficiently performed or a product that needs to be improved A new service or product A specific market whose needs or wants are not fully satisfied

The Business Idea

Ideation is the first action required of an entrepreneur. Factors to consider in coming up with a business idea: 1. Internal Considerations Personal interests, knowledge/ talents, skills, training/ work experience, other personal considerations 2. External Considerations Government support/ assistance programs like financing and tax incentives Industry growth prospects Sectors to be considered: 1. Process Industries 2. Merchandising Industries 3. Service Industries

Parts of a Business Plan

I. Summary It is a general description of the company/ business.

Cover Sheet include your company name, owners name(s), business or postal address, phone and fax number. Business Description describe your business history if there is any, highlighting your personal achievements and your business accomplishments. The purpose of your business plan specify if you are seeking lending assistance or you merely wish to attract potential investors in your business.

Detailed products/ service description explain why your product/ service is better than what is in the market by giving sufficient information on your competitive advantage. Describe five or six critical factors that will make a difference in your success. Market potential provide a list of your present and potential customers and describe your market potential. Financial Picture Describe your financial forecasts and explain how they were determined

General Description of the Company II. The Business

1. Marketing Plan Understand your market

a. Potential market b. Sales c. Competitive analysis d. Names of competitors e. Rationalization of the projects market feasibility f. Marketing Strategy

2. Product/ Service Description describe your product/ service in simple terms. 3. Organizational Plan describe the structure and composition of your project team.

a. Legal Structure b. Management team c. Resume

4. Operations Plan describe how you plan to operate your business.

a. Manufacturing or Service Operations b. Location and Facilities c. Equipment d. Raw Materials and Suppliers e. Staffing analysis 5. Financial Plan a. Operating Profit and Loss Statements b. Cash Flow Statements c. Balance Sheets d. Financial Analysis e. Breakeven Analysis

f.

Assumptions made in forecast

6. Future Plans is important when starting a new business venture or expanding an

existing one. a. A start-up plan b. A three-year plan 7. Other Considerations a. Table of Contents b. Addendum of Supporting Documents c. Presentation

Business Plan Outline

1. Cover Sheet 2. Statement of purpose 3. Table of Contents I. The Business A. B. C. D. E. F. G. Description of Business Marketing Competition Operating procedures Personnel Business insurance Financial data

II. Financial Data A. B. C. D. E. F. Loan applications Capital equipment and supply list Balance sheet Breakeven analysis Pro-forma income projections Three-year summary Details by month, first year Details by quarters, second and third years Assumptions upon which projections were based Pro-forma cash flow (Follow guidelines under E)

III. Supporting Documents Tax returns of principals for the last three years Personal financial statement

In the case of a franchise, a copy of the franchise contract and all supporting documents provided by the franchiser Copy of proposed lease or purchase agreement for building space Copy of licenses or other legal documents Copy of resumes of all principals Copies of letters of intent from suppliers

The Achievement Cluster

Opportunity Seeking o o Looks for new business opportunities Seizes opportunities to obtain financing, equipment, land, work, space, or assistance

Persistence o o o Takes repeated or different actions to overcome an obstacle Makes some personal sacrifice or exerts extra effort to complete a job Sticks with ones own judgment in the face of opposition or initial setbacks

Commitment to Work o o o Accepts full responsibility for problems that may arise Pitches in at work if necessary or does the job himself to get the job done Expresses a concern to satisfy the needs of the customer

Risk Taking o o Takes what he or she perceives to be moderate risks States a preference for situations that involves moderate risks

Demand for Efficient and Quality o o Acts to meet or exceed existing standards of excellence or improves on past performance (quality) Strives to do things better and faster at minimal costs (efficiency)

The Planning Cluster

Goal-Setting

Sets specific short-term, measurable, attainable, reliable, and time-bound objectives Sets clear long-term objectives

Information Seeking o o o Personally seeks information about clients, suppliers, and competitors Consults experts on business or technical matters Uses contacts or information networks to obtain useful information

Systematic Planning and Monitoring o o o Develops a plan using a logical, step-by-step approach to reach goals Evaluates alternatives Monitors progress and employ alternative strategies when necessary

The Power Cluster

Persuasion and Networking o o Uses deliberate strategies to influence or persuade others Uses business and personal contacts to accomplish objectives

Self-Confidence o o Has strong belief in ones self and abilities Expresses confidence in ones own ability to complete a difficult task or meet a challenge

The Entrepreneur
Rewards and Trials of Entrepreneurship Perks of being an entrepreneur: 1. 2. 3. 4. More earnings Being a boss Sense of satisfaction and fulfillment Expression of creativity

Creative Process Steps:

1. Background or knowledge accumulation (fields, joining professional groups, exhibits,

attending seminars, and traveling to different places) 2. Incubation process (engaging in exercises, sports activities, solving puzzles, etc.) 3. The idea experience (baking a cake, taking a shower or reading a magazine) 4. Evaluation and implementation (careful planning, sharing ideas with others, and seeking advice from other people)

Incubati Knowledge accumulation Creative process Ide as

Trials of Entrepreneurship -

Evaluation Facing unpredictable business Implementation conditions

Rendering long hours of hard work Facing unwanted but necessary responsibilities

and

The Fear of Failure, The Hope of Success Fears for entrepreneurs: a. Fear for the acceptability of the products or services b. Fear for an efficient management c. Fear of losing their investments d. Fear of competition Characteristics of an Entrepreneur PECs (Personal Entrepreneurial Characteristics) The Achievement Cluster Opportunity-seeking Persistence Commitment to work Risk-taking Demand for efficient and quality The Planning Cluster Goal-setting Information-seeking Systematic planning and monitoring The Power Cluster Persuasion and networking Self-confidence The Nature of Business Planning Business Planning is a process which any business has to undergo. - It essentially means setting goals and objectives and taking steps to realize them. Planning is a process of preparing for the future. Can prepare him to deal with unexpected problems or any eventuality if alternative strategies are considered.

What is Business Plan? Business plan represents the road map a business follows. It clearly states the chance of success of a business and how an entrepreneur intends to proceed. What to do how to do it When to do it, and

Planning tells you

What to expect in the future

Why write a Business Plan? A business plan is prepared as a necessary part of raising capital from potential investors, bankers, and other creditors. A good business plan helps entrepreneurs make good business decisions. A business plan serves as a measure of the progress of any business.

Tips in Preparing a Good Business Plan: Be prepared to spend considerable time completing your plan. Divide the project into small parts and organize your thoughts Make the business plan concise. Keep in mind the target audience of your proposal your creditors. Avoid highly technical descriptions of your products, processes, and operations. Update your plan Be realistic in your analysis. Identify any business risks involved. Be factual

Steps in Business Planning 1. 2. 3. 4. 5. 6. Assess your interests, skills, and resources Analyze your possible market Prepare a marketing plan Prepare a production plan Prepare a financial plan Prepare an organization plan

What are the features of a sound business plan? -

The business plan must be clear and direct to the point The business plan must be objective The business plan must be organized The business plan must be consistent The business plan must be complete The SWOT Analysis It is an effective tool to determine where ones business stands. SWOT means STRENGTH, WEAKNESSES, OPPORTUNITIES, and THREATS It helps the entrepreneur correct weaknesses, capitalize on strengths, and seize the opportunities available. It evaluates the SWOT to the marketability of a particular product or service. It is a tool used for decision-making regarding matters pertaining to marketing, financing, production, and management.

Components:

Internal Factors:
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External Factors: - Opportunities - Threats

Strengths Weaknesses

Strengths are the internal characteristics and behaviors within the individual or the firm that make it possible for him/ her to achieve set goals.

Weaknesses are the internal characteristics and behavior that prevent an individual or firm from meeting its goals.

Opportunities are external aids you can exploit to attain your goals.

Threats are things or events that you need to prepare for so as not to affect your plans adversely.