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    DONT LOOK FOR JOBS,

    CREATE THEM !!!

    BE AN ENTREPRENEUR!

    By: HEGINIO A. BALDANO, CPA, MBA

    DTI Masbate

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    ENTREPRENEURSHIP

    (How to Start Your Business)

    By: HEGINIO A. BALDANO, CPA, MBA

    DTI Masbate

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    Entrepreneurship refers to theeconomic activity of a person who starts,manages, and assumes risk of a businessenterprise. The person who undertakes

    entrepreneurial activities is called anEntrepreneur.

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    an Entrepreneur identifies theECONOMIC NEED, considers offering aBUSINESS SOLUTION, proceeds to

    assemble the RESOURCES required,

    and assumes the RISK of eithersucceeding or failing.

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    an Entrepreneur is referred tothat very enterprising individual thatincreased productivity from a low level

    to a high level.

    Adding value through innovative andingenious means. Being an

    entrepreneur is not merely makingmoney out of any business. It is about

    creating VALUE.

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    Entrepreneurs exploreopportunities andcreateorganizations to make opportunitiesinto realities. The best entrepreneurs invent

    new ways to live, work, and achieve.

    Successful entrepreneurship blendsindependence and collaboration, vision andaction, the individual and the organization.Done right, it can be a great way to live.

    Source: From e-Web@ St. Louis University Missouri, USA

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    1. PRE-INVESTMENT EVALUATION

    1a. Rewards of being an Entrepreneur

    MAKE MONEY

    SELF

    SATISFACTION

    BE YOUROWN BOSS

    EXPRESS

    CREATIVITY

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    1b. Risks & Trials

    The Risk of Failure

    - Small business are prone to risks &possibility of failure;

    - Single bad decision can causebankruptcy;

    -1 out of 5 new businesses is doomed to fail(per UP-ISSI study) Unpredictable Business Conditions

    - in fast growing economy, small businessmay not respond to opportunities due tofinancial readiness

    - in slow economy, cash flow problem =dissi ation of resources

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    1b. Risks & Trials, contd.

    Long Hours of Hard Work-be ready to spend most of waking hours

    immersed in business

    -preoccupied in business at the expense

    of private & family time

    Unwanted Responsibilities

    - management responsibilities- social responsibilities (workers,community, customers, pay decent wages,pay taxes, compete fairly

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    1b. Personal Entrepreneurial Characteristics (PEC)

    POWERCLUSTER

    PLANNINGCLUSTER

    ACHIEVEMENTCLUSTER

    1. OpportunitySeeking

    2. Persistence

    3. Commitment to Work

    4. Risk taking

    5. Demand

    forEfficiency

    6. GoalSetting

    7. Information Seeking

    8. SystematicPlanningandMonitoring

    9. PersuasionandNetworking

    10. Self

    Confidence

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    Some practical procedures for setting up new business

    STEP 1

    STEP 2

    STEP 3

    Rethink Your Entire Business Idea.Remember: more than 2/3 of small businesses fail within 4 years.

    Consider buying someone elses

    business VS. starting a new one.

    Before opening your business, try

    working for someone operating

    similar business.

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    Practical Considerations And Skills

    Factors to considerandask yourself:

    Do you have enough time?How will the stress of starting a business affect your personal life?Can you deal with the financial uncertainty of not knowing your weekly

    take-home pay?Most importantly, can you get the necessary start-up capital to open your

    business, especially considering the large number of unexpected

    expenses

    you will face?

    Basic Skills required:

    know how to market, price, advertise, purchase, and distribute it. Youalso must negotiate for a lease, equipment, inventory, and services.

    Furthermore, you need to understand cash management, finance, law,

    tax, and insurance.

    In short, you must become an expert in business.

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    2. STEPS IN STARTING A BUSINESS

    SelfAnalysis

    Considerother

    Factors

    Product/Service ID

    WriteBusiness

    Plan

    SecureFinancing

    DetermineFinancial

    Requirements

    ChooseLocation

    SecureRegistration

    & Permits

    Hire &Train

    Personnel

    START

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    2a. Come-Up with Business Idea

    Factors to consider..

    INTERNAL FACTORS EXTERNALFACTORS

    Personal interest government support

    Knowledge/talent &assistance

    Training/work experience taxincentives

    Other considerations like

    financing

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    2b. Choosing the Line of Business

    ProductIndustries

    ProcessIndustries

    Sub ContractingIndustries

    ServiceIndustries

    Manufactured productsintended either for massmarket or individualcustomers demand.Examples are garments,toys, shoes, canned goods,(for mass market); precision

    instruments for industrialuse, made to order furniture(as specialized products)

    Performs one or two operations inthe in the total manufacturingprocess, not strictly speaking of amanufacturer but rather aprocess enterprise. Theactivities that can performed canbe initial operations on rawmaterials (milling,

    corrugating,sawing, or cutting ),final operations (fishing, assembly,packing, or binding), or skilled orprecision operations (embroidery,testing, woodcarving).

    Manufacture of productcomponents or parts forother bigger companies.Bigger companies find itfaster & cheaper to subcontract. Drawback is ifsmall company is totallydependent on one bigprincipal or contractingcompany

    Service enterprises includerepair and maintenance shops,printing & machine shops, foodcatering, Beauty parlors, dressand tailoring shops, recreationestabs. (like bowling alleys andbilliard halls), andentertainment enterprises (suchas theaters, disco and pubhouse). Retail & trading is oneof the most common type of

    service business

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    2b. How to prepare a Project Feasibility Study (PFS)

    Why prepare a PFS?

    Many companies prepare PFS in order to ascertain if the project, as

    initially designed, will have a good chance of making profit if

    implemented. It takes into consideration the environment in which

    the business will operate or is currently operating and the resources

    that will be put into the project.

    Resources (5 Ms)

    Manpower

    Machinery & Equipment

    Money

    Moment/Time

    Methods

    Basic Phases

    Marketing

    Finance

    Production

    Management

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    The following is the format of a project feasibility study in general

    I. INTRODUCTION

    II. SUMMARY OF THE PROJECT STUDY

    III. PROPONENT, MGT. & PERSONNEL

    IV. MARKET FEASIBILITY

    V. PRODUCTION

    VI. FINANCIAL FEASIBILITY

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    2b. How to Make a Business Plan

    What is a Business Plan?

    an operational plan that defines actions what to do as well ashow and when to do it. Many entrepreneurs use their

    business plan for the critical start-up and expansion so that

    they will stay both on target and within the budget. It consists

    of establishing goals for the business and completing the

    procedures to reach these goals.In developing the plan, you should first ask yourself this

    questions:

    1. WHAT WOULD I LIKE THE BUSINESS TO BECOME A YEARFROM NOW?

    2. WHAT CHANGES ARE TAKING PLACE IN THE BUSINESSAND HOW SHOULD I PREPARE FOR THEM?

    3. HOW CAN I ATTAIN MY GOALS?

    4. WHAT TIMETABLE SHOULD I FOLLOW IN ACCOMPLISHING

    MY PLANS?

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    Business Plan Format: Basic Steps to Follow

    1

    2

    3

    4

    State YourObjectives

    Describe

    YourBusiness

    DescribeYour

    Product orServices

    IdentifyYourPotential

    Markets

    IdentifyYourCompetitors

    Consider

    YourPricingPolicy

    DetermineYourMarketing

    Methods

    DetermineYour KeyPersonnel

    ID

    MaterialRqmt &SupplySource

    ID

    Equipment &Process toUsePrepareSales

    Forecast

    PrepareBudget

    Set YourPlan toWork

    5

    6

    7

    8

    9

    10

    11

    12

    13

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    3. ORGANIZING & FINANCING BUSINESS

    3a. Choosing Form of Business

    Form of Business

    Organization

    ADVANTAGES DISADVANTAGES

    SINGLEPROPRIETORSHIP

    -easy to set up

    -Decision left entirely to

    owner

    -demands owners personal time

    -growth limited to owners

    financial means

    PARTNERSHIP -relatively easy to set up

    -check & balancemaintained with twoparties around

    -any personal rift between partiesmay dissolve partnership

    -Equal profit sharing despiteunequal attention and time given

    by partners to business

    CORPORATION -maximum flexibility forgrowth