CHAPTER 6:

INTRODUCTION TO BUSINESS
IMPLEMENTATION

After much seeking and screening of entrepreneurial opportunities , the

critical decision to seize one particular opportunity culminates in the
establishment of an enterprise.
A VERY CLEAR PURPOSE

The entrepreneur must be very clear about the purpose in

establishing the enterprise.

The personal purpose of the entrepreneur is his or her personal

mission . However, it may also well be the enterprise mission statement .
As time passes , the enterprise begins to have its own life and may have
a purpose separate from the mission of the entrepreneur.

The enterprise must state it’s mission statement clearly for:

• The sake of the customer’s being wooed;
• The investor who need to know what they are getting into
• The financiers evaluating the enterprise; and
• The government functionaries who must regulate the activities of industries and
businesses.
A VERY COMPELLING VISION

 The entrepreneur must establish an enterprise on

the basis of a very exciting business concept leading
to a grand vision.

 The entrepreneur must offer something new ,
something different that says, “ Take notice , I ‘m
arriving with a bang !” in the other words , the
entrepreneur must present a winning business
concept that manifests tremendous future
possibilities .
CASE EXAMPLE 7: THE JOLLIBEE BUSINESS CONCEPT

 When Jollibee decided to challenge the giant McDonald’s in the market it brought
the Filipino taste to hamburgers. For that matter, it introduced a lot of Filipino dishes
not traditionally sold in hamburgers joints. Jollibee observed in the market researches
that Filipino consumers smelled their burgers before eating them. The logic is
obvious: the nose can smell a thousand aromas while the tongue can only distinguish
four tastes (sweet , sour, salty , and bitter). Jollibee new that good taste is a function of
good smell. Their tag line “Langhap sarap” that roughly translates to “You can savor
its good taste from its great aroma ,”says it all. Jollibee also came up with a child-
friendly name and endearing mascot to accompany the name. strategically, Jollibee
decided to locate two or three outlets to “surround” McDonalds. The rest is history.
Jollibee came up with a differentiated business concept that won the hearts, minds
and wallets of Filipino consumers. Although a late comer in the industry compared to
McDonald’s and Tropical Hut, it definitely bested them all. However, even a good
business is not good enough in the long run. The entrepreneur must be able to see five
to ten years down the road. There the business might go. The entrepreneur must have
a compelling vision of the enterprise to “put fire in the belly” while pursuing that
impossible dream. Well, it should not really be impossible. That is just an exaggeration
to approximate that “big, bold, and audacious” goal that would obsess the
entrepreneur “like a maddened zealot”. For Jollibee, its initial vision might have been
to total number and out gone McDonald’s . Then, it might have been to totally blanket
the county. Next, it envision a global presence. The dream just kept getting bigger and
bolder. But that is what a compelling vision is all about.
Not by Any other Name

*The entrepreneur must choose a very fitting name for the

enterprise .
*A good name Identifies the company very well .
*The entrepreneur must think long and hard about the
name. thus, the company name must project its very
desire image.
A Company of Angels
 In livelihood undertaking o microenterprises , it is common for
entrepreneurs to embark on a business venture as a ”lone wolf”, not
needing the capital or expertise of others. At best, it maybe a “ mom
pop” affair .
 For small , medium , and large enterprises , the entrepreneur needs the
capital and the expertise , or both of others . The choice of business
partners are here is a very critical one .
 Thus, the entrepreneur must choose the “ company of angels “ ,
partners who well-meaning and like minded.
 Angel investors provide capital to entrepreneurs knowing that there
are risks involved.
 Angels also exert a lot of effort in choosing the correct partners. Angel
investors may come in the form of senior relatives , close friends, and
professional equity investors.
 Angel industrial partners are people who can contribute their expertise ,
experience , technology, contacts and good character that will enable
the enterprise to succeed.
 A very Good Business plan

The entrepreneur must flesh out, into more specific details , the information that a good business plan
contains . Likewise , it is important to know what the business plan’s purpose is : for whom it is being
written (target audience) , and what would be the coverage of the business plan (in terms of dept and
breadth)
The purpose of a business plan are:
1, entice partners , investors and bankers to fund a business venture
2, communicate what the enterprise is all about; what market it want to serve
3, show what financial returns it could muster.
The business plan should contain important information about the following :
*business itself
*the organizers;
*the management and technical people ;
*the financial structure
*its market potential ;
*its target market
*its projected sales ,expenses and profits ; and
*its probable risks.
The business plan should begin with the business concept and the vision for the enterprise in the next
Three to five years.
The business plan should proceed to an enumeration of
business objectives ,key result areas , and performance
indicators . An overall enterprise strategy should then be
articulated to show how performance indicators could be
attained
Next , the business plan should contain the executive summary of the following
;
1 the organizers and the key people behind the business and why these people
have the resources , talents , skills and technology to achieve success.
2 the market being targeted and why there is enough market potential to justify
the business;
3 the products or the service offered and why they are right for the market ;
4 how the business will be operated and organized , including all outsourcing
,subcontracting ,franchising and licensing agreements;
5 the investment capital required for the business and what exactly it would be
used for ;
6 the technology ,the technical expertise ,the equipment ,and materials
suppliers to be utilized ;
7, the capital structure (short and long term debt ,stockholder’s equity )
of the business;
8, the operating budget ,financial projection ( income statement ,
balance sheet , cash flow), and return on investment prospect ; and
9 the risk in the business and the contingency measured to counteract
them.
The business plan should then elaborate the contents of the executive
summary .
Organizing and Structuring the enterprise

 the business plan must be able to estimate the capital required by the
enterprise , the capital required would be dictated by the investment in
the assets of the enterprise .
1 the current asset, which are short lived asset .
2 long lived asset or fixed asset
3 the other asset .
The assets of the enterprise are financed by its liabilities ,these liabilities are
composed of ;
1 current liabilities such as supplier’s credit and other short term credit;
2 long term debt ;and
3 owner’s equity
The way the financial package is designed is called the CAPITAL STUCTURE
of the interprise

BUSINESS ORGANIZATION
SOLE PROPRIETORSHIP

 - the simplest and easiest enterprise to organized

- there is no distinction between the owner and the enterprise
-is mandated by the law to register the business with proper authorities , all the businesses in
whatever legal form , are required to secure a mayor’s permit or municipalities license before they
can operate the locality .

Before getting the permit , These are the clearances that must be obtained ;
• Baranggay clearance
• Fire safety clearance
• Certificate of electrical inspection
• Certificate of occupancy
• DTI Certificate
• Lease contract if space is leased
• Local clearance
The official receipts of the enterprise must also be register its business with the Bureau of
internal revenue ( BIR)
PARTNERSHIP

PARTNERSHIP
- If two person bind themselves into a contract to contribute money
,property ,and expertise in a common venture with the intention of
dividing the profits among themselves
- a partnership is vested with its own legal personality quite distinct
and separate form its individual members , thus , a partnership
venture can own its own assets . It can incur its own liabilities . It can
sue and it can get sued.
2 types of partnership

based on the liability of the partners ;

 General partnership – is composed of partners who are liable
individually and collectively to all those who have claims against them .
 Limited partnership - consist of partners who have limited liabilities
while others in the partnership have unlimited liabilities .

In order to form a partnership , a binding contract must be signed by all of

the partners . They should decide on a partnership name and craft their
articles of partnership . These articles of partnership must contain all the
operational requirements of the partnership
The partnership should obtain all the required government clearances ,
permits rand licenses . It should get ;
*a bank certificate of deposit on the money contributions of the partners ;
and
*the approval for its partnership name from the DTI
CORPORATION

 A corporation can be formed or incorporated by, at least five, or at

most 15 natural persons. According to Philippine law ,the majority of
the incorporators must be residents of the Philippines .
 The corporate form of business allows various combination funds to
be raised from financiers and investors. Thus, bigger business favor
the corporate form of business . This is due to its limited liability and
flexibility in financing terms obtained .
THERE ARE FOUR TYPES OF CORPORATIONS

1, STOCK CORPORATION
- The stock corporation issues capital stock divided into shares (or proportion of the
total capital ). Based on the submission of articles of incorporation to the securities
and exchange commission , the corporation is authorized to raise capital that has a
corresponding number of shares.
2, NON-STOCK NON-PROFIT CORPORATION .
- The non-stock corporation is organized to carry out a purpose or purposes other than
generating profits for investors .
3, CLOSE CORPORATION
- Has articles of incorporation that limit the ownership of issued stocks to at most 20
persons .there are strict restriction on the transfer of stock . The stocks cannot be
listed in any stock exchange nor can any public offering of shares be made .
4, CORPORATION SOLE
- Is a special form of corporation allowed by law , usually associated with
the clergy . The corporation sole is a trusteeship that is set up for the
purpose of administrating and managing the affairs ,property and
temporalities of a church or group of clergy .
 A MERRY BAND OF
MEN AND WOMAN
 After establishing the enterprise, the entrepreneur must
meticulously screen and hire men and women who foster the cause
and share the commitment of the enterprise. Good character and
competence must be the two major criteria for hiring the people.
 If the team is not fully equipped technically and managerially, the
small size of the organization should allow the people to learn fast;

 A. about customers
 B. about operations
 C. about competitions
 D. about financing needs
 E. about team work