EMILIO AGUINALDO COLLEGE

Congressional East Avenue, Burol Main

City of Dasmariñas, Cavite

SENIOR HIGH SCHOOL DEPARTMENT

ENTREPRENEURSHIP

4th QUARTER / 2018-2019

Name:________________________________ Teacher: MR. JOHN EDUARD A. GRAJO
Section: G11 ___________________________ LESSON NUMBER 11

BUSINESS OPERATION

 It is everything that happens within an organization to keep it operating and earning money.
 It helps the company founders understand the systems, equipment, people, and process.
 It vary as to business type, industry, size, vision, mission, goals and objectives.

Business Operation Elements

1. Process
 A sequence of interdependent and linked procedures which, at every stage, consume one or
more resources to convert inputs into outputs.
 It is important because it impacts productivity and efficiency of the company.
 Business operations process should be documented by the department so the that operation
managers can study them.

2. Staffing
 The selection and training of individuals for specific job functions, and charging them with the
associated responsibilities.
 Staffing depends on the process made.
 Who needs to do the work in the process?
 How many of them are needed?
 Small Business need few people.
3. Location
 Named geographical place that provides permanent facilities for movement of goods or is
designated for a stated purpose.
 Location is more important to certain types of business.
 A Solopreneur consultant
 A Mechanic
 A Tutor
4. Equipment or Technology
 Tangible property that is used in the operations of a business.
 The technology or equipment needed for optimum business operations will often have
an impact on location:
Ex. Pet groomer who provides home service.
Carpet Cleaning Business

BUSINESS OPERATION ANALYSIS

 Conduct periodic assessment and business operations analysis.

 Comparisons with competitors’ benchmark and best practices can help a company assure that
business operations are maximized.

CONSOLIDATING RECURRING INCOME

Recurring Income
– It is to implement a sustained delivery of goods and services to the customer to make a profit.

Revenue
– The fund directly acquired by the business in exchange for the goods and services it delivers.
  The cost of developing producing and delivering the goods and services.
 Greater revenues than expenses is profitable.
 Generating recurring revenue is not the focus of operations management.
 Relationship between cost of goods sold and revenue derived from their sale.

TYPES OF RECURRING INCOME

1. Long term sales contract

 Monthly to yearly based contracts for a service and/or product.
Ex. Mobile phone contracts/plans
2. Multiple revenue streams
 Different sources of business income that support each other.
Ex. Selling printers and toners

INCREASING THE VALUE OF THE BUSINESS

The more profitable a business the more valuable it is. Profitability is measured on the following basis:
1. Business returns - Income generated from the amount of assets employed in the
business operations.
2. Business margin - Income generated for the amount of revenue it realizes.

METHODS OF INCREASING VALUE

 Expand Market
Offer product or service to a wider group of an existing market or to a target
demographic, psychographic, or geographic.

 Develop Brand
A recognized, and developed brand. Done through research, design
and marketing of company’s brand name, logo and tagline.

MANAGEMENT SYSTEMS
 Show Growth Potential
Create a business that has potential to be efficiently and effectively expanded.
 Maintain Intangible Assets
Protect elements that add value to the business, through patenting,
copyrighting, and trade marketing.
 Protect and Maintain Physical Assets
Regular maintenance and insuring of physical assets. It helps protect the
overall value.

FUNDAMENTAL MANAGEMENT IMPERATIVES

(THE THREE IMPERATIVES ARE RELATED FROM EACH OTHER)
1. The more recurring income an asset generates the more valuable it becomes
 The product that sell at the highest volumes and prices are usually considered to be
the most valuable products in a business product portfolio.
 Product Portfolio – collection of all the products or service offered by the company.

2. The more valuable a product becomes the more recurring income it generates.
 A valuable product established a loyal base of customers that are sure to keep
purchasing the company’s product.
 Luxury car can be leased out at a higher rate.
 Coca-Cola company built an exceptional brand and loyalty among customers.

3. The intrinsic value and income generating potential of an asset cannot be realized
without a way to secure it.
 An asset will become worthless unless process and equipment are developed and
employed.
Example: Petroleum Deposits

Reference:

Entrepreneurship, Unlimited Books Library Services and Publishing Inc.,Marife Agustin-Acierto.:pages