Small business

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Small Business
Business
✗ Is defined as an organized effort of individuals
to produce and sells good and services in
order to satisfy the needs of society.
✗ Its primary objective is to acquire profit.
✗ To organize a business the entrepreneur must
combine four types of productive resources:
 Human
 Financial
 Material
 Informational
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Common Characteristic of small Business:

✗ It is privately owned.
✗ It has few or no layers of management.
✗ Generally, it has insufficient resources to
dominate its field of business.

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Features of a small business
1. A small business is low in capital but high in
labor intensity.
2. A small business is efficient in specialized
skill or service.
3. A small business succeeds in small, isolated
or overlooked markets.
4. A small business often operates in unstable
markets.
5. A small is closer to market place.
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Features of a small business
6. Generally, the owner of small businesses are
also the managers.
7. Capital comes from the owner or small group.
8. The area of operation is small.
9. The size of the enterprise is small in relation
to the industry.

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Advantages of the small business
1. Personalized relationships with customers
and employees.
2. Flexibility in management.
3. Government incentives.
4. Simple record keeping.
5. Independence.

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Disadvantages of small business
1. Difficulty of raising capital
2. Risk of failure
3. Limited management skills
4. Lack of opportunities for employees.

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Economic contribution of small businesses
✗ They introduce innovation.
✗ They create employment.
✗ They provide competition.
✗ They fill needs of society and big businesses.

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MSMEs Defined:
✗ Micro, small, and medium enterprises (MSMEs)
are defined as any business activity/enterprise
engaged in industry, agri-business/services,
whether single proprietorship, cooperative,
partnership, or corporation whose total assets,
inclusive of those arising from loans but
exclusive of the land on which the particular
business entity's office, plant and equipment are
situated, must have value falling under the
following categories:
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✗ B. By Asset Size*
Micro: Up to P3,000,000
Small: P3,000,001 - P15,000,000
Medium: P15,000,001 - P100,000,000
Large: above P100,000,000

✗ Alternatively, MSMEs may also be categorized

based on the number of employees:
Micro: 1 - 9 employees
Small: 10 -- 99 employees
Medium: 100 -- 199 employees
Large: More than 200 employee

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Types of Micro, Small and
Medium Enterprise
1. MICROBUSINESS - is a type of small business, often
unregistered, having five or fewer employees and requiring
seed capital of not more than 3 million.
✗ Balut/Penoy Bedling ✗ Business Plan and Feasibility
✗ Banana, Camote anf Turon stand Study Preparation Services
✗ Barbecue stand ✗ Duplicating stand
✗ Burger stand ✗ Lugawan
✗ Carwash ✗ Notarial services
✗ Cellphone repair and accessories ✗ Pizza stand
✗ Fishball cart ✗ Plumbing services
✗ Fruits and Vegetable stand ✗ Scrap buy and sell
✗ Kakanin stand ✗ Shoe shine and repair
✗ T.V, electric fan repair ✗ Siomai in cart
✗ Vulcanizing shop ✗ T-shirt printing
✗ Sari-sari store ✗ Turo-turo
✗ Upholstery ✗ Tutorial services
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2. SMALL and MEDIUM BUSINESS ENTERPRISE - - is a
type of business having an employees of 10-199 and
requiring seed capital of not more than 100 million.

Types of SMBE
1. Manufacturing- – involved in the conversion of raw
materials into products needed by society.

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Examples of manufacturing
✗ Food processing ✗ Purified water station
✗ Bags and accessories ✗ Sash and Decor works
manufacturing ✗ Soap making
✗ Footwear manufacturing ✗ Toy Manufacturing
✗ Furniture factory
✗ Garment factory
✗ Handicraft industries
✗ Jewelry manufacturing

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Types of sMBE
2. Service Business – providing various types of labor
services in a wide variety of business sectors.
Types of Service Business
a. Business service – those that provide services to
other businesses.
Ex. accounting firms, janitorial services, security
service, collection agencies. Printing press, cargo
forwarding, trucking, trade promotions,
merchandising business, security agency
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Types of smbe

Types of Service Business

b. Personal service – those that provide
service to the person.
Ex. Tutorial, massage parlor, spa, beauty
parlor, voice lesson, school bus, Skin clinic,
dental clinic, medical services, funeral
parlor, flower arrangement

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Types of smbe
Types of Service Business
c. Repair Services – provide repair services
to owner of various machinery and
appliances.
Ex. Auto repair, watch repair, plumbing
services, airconditioner repair

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Types of smbe
Types of Service Business
d. Entertainment and Recreation – movie
houses, arcade games, internet café, Resorts,
billiard, talent recruitment agency.
e. .Hospitality – hotels, motels, event planning,
catering, travel and tour
f. .Education services – Pre school, Grade
school, High school, colleges

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Types of smbe
3. Trading Business – The business of buying and
selling commodities.
Ex. Auto supply, Boutique, fish dealership, Cell
phone dealership, electrical store, grocery store,
Hardware store, furniture store, gasoline station,
gravel and sand, LPG dealership, Magazine Store,
meat and poultry dealership, medical supply, real
estate, pharmacy, rice dealership.

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Types of smbe
4. Rentals – a piece of property available for renting.
Ex. Apartment rental, billiard center, computer rental,
warehousing
5. Agri and Aqua business - various businesses involved in
food production, including farming and contract farming,
seed supply, agrichemicals, farm machinery, wholesale and
distribution, processing, marketing, and retail sales.
Ex. Broiler production, cattle fattening, dog breeding, poultry
raising, hog raising, Honey bee production, quail raising,
tilapia raising, raising live stock, growing of agricultural
plants and crops, agriculture and aqua culture.
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Thanks!

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