Module 2

for

Business Ethics & Social Responsibility

Second Semester
School Year 2020-2021

___________________________________
Learner’s Name:

___________________________________
Parent’s/Guardian’s Signature

Teacher: James Enoveno

Contact Number: 09552747135
 The Purpose of Business
(Days 1 & 2) or (Days 1 to 4)
MEMORY VERSE:

Matthew 7:7-12
“Your eye is the lamp of your body. When your eye is healthy, your whole body is full of light,
but when it is bad, your body is full of darkness.”

Enabling Outcomes: (MELC)

Based on the curriculum guide (CG), the student should be able to:
 Distinguish between the subjective reasons for putting up a business and the objective
purpose of the business enterprise
 Discuss some subjective reasons for establishing a business enterprise

Concepts (Generalization)
The Purpose of Business

The purpose of a business is to offer value (through products and/or services) to customers, who pay for
the value with cash or equivalents. Minimally, the money received should fund the costs of operating the
business as well as provide for the life needs of the proprietor.

Any money in excess of these needs of funding and salary—”margin” or “profit”—may be used to
reinvest in the business; to be invested for future needs and security; and/or to be used for philanthropy
and the environment.
The real purpose of a business is NOT to create profits. Because a business cannot exist outside of society
and must satisfy a specific need in order to stay in business, it has to create or add additional value to the
community or individuals. That’s why the real purpose of a business is to create customers.

When you start a business, you're putting your financial well-being at stake and your family's well-being,
too, if they depend on you. So, if you're ready to turn starting a business "someday" into "today," you
need solid reasons.

Some subjective reasons for putting up a Business

You Have Time to Invest
If you think having your own business means 40-hour workweeks and more time to relax, think again.
The majority of business owners log in more than the standard 40 hours per week and need to work even
more in the first year. Long hours may not be necessary if you have another source of income coming in,
but if you're going all-in on a new venture, you need to prepare yourself.

As entrepreneur Gary Vaynerchuk says at Inc., in your first year, you should be at "code red" until you
start turning a profit. This means 18-hours every day if necessary. The reason most companies go out of
business in their first two years, he says, is because "they don't realize how hard it is, and how all-in you
have to be."

If working hard is your idea of having fun, this is a great reason to start a business.

You Have Some Money to Start

If your business idea doesn't require money to start, it's unlikely it will make any money. All businesses
require money, even if it's just for a website or some business cards. Most businesses have equipment
costs, licensing or registration costs and insurance needs.

If you have the money yourself, that's ideal. If you don't, you have to find someone to finance your
business. Don't ask your parents – that's cheating. Put your business plan together and look into the
guaranteed small business loans offered through the Small Business Administration.

You Have Expertise in Your Market

Unfortunately, having a great idea for a new business is never enough by itself. The world is swimming
with great ideas. Before you can put an idea to the test, you need some expertise in your market. If you
already have a background in the market you want to enter, you're likely more than halfway there already.
If not, investing time and energy in market research can help you prepare.

If you already have experience and a network in your business market, you can start finding customers
before you even launch.
You Have Business Skills

Mario Peshev, CEO of DevriX and SME digital consultant, lists 10 skills in Forbes that all entrepreneurs
should have:

 Curiosity
 Time management
 Efficiency
 Resilience
 Communication
 Networking
 Finance
 Branding
 Sales

If you are lacking in any of these areas, find people who can fill in those gaps for you – at least until you
can learn them yourself. Of course, there's nothing wrong with learning as you go, provided you can learn
fast and can afford to fall on your face a few times.

If you have all 10 of these business skills, your friends and family are probably wondering why you
haven't launched your own company already.

You're Ready to Take a Risk

The hard truth is that most new small businesses fail. Out of 100 new businesses, 80 remain after the first
year, according to the U.S. Small Business Administration. After five years, only half remain, and after
10 years, only a third are still in business.

The Objective purpose of Business

Your business objectives are the results you hope to achieve as you run and grow your business. As an
entrepreneur, you are concerned with every aspect of your business and need to have clear goals in mind
for your company if you are to stay on track. Having a comprehensive list of business objectives creates
the guidelines that become the foundation for your business planning.
10 Most Important Business Objectives

1. Getting and Staying Profitable

Maintaining profitability means making sure that revenue stays ahead of the costs of doing business.
Focus on controlling costs in both production and operations while maintaining the profit margin on
products sold.

2. Productivity of People and Resources

Employee training, equipment maintenance and new equipment purchases all go into company
productivity. Your objective should be to provide all of the resources your employees need to remain as
productive as possible.

3. Excellent Customer Service

Good customer service helps you retain clients and generate repeat revenue. Keeping your customers
happy should be a primary objective of your organization.

4. Employee Attraction and Retention

Employee turnover costs you money in lost productivity and the costs associated with recruiting, which
include employment advertising and paying placement agencies. Maintaining a productive and positive
employee environment improves retention.

5. Mission-driven Core Values

Your company mission statement is a description of the core values of your company. It is a summary
of the beliefs your company holds in regard to customer interaction, responsibility to the community
and employee satisfaction. The company's core values become the objectives necessary to create a
positive corporate culture.
6. Sustainable Growth

Growth is planned based on historical data and future projections. Growth requires the careful use of
company resources such as finances and personnel.

7. Maintaining a Healthy Cash Flow

Even a company with good cash flow needs financing contacts in the event that capital is needed to
expand the organization. Maintaining your ability to finance operations means that you can prepare for
long-term projects and address short-term needs such as payroll and accounts payable.

8. Dealing with Change

Change management is the process of preparing your organization for growth and creating processes
that effectively deal with a developing marketplace. The objective of change management is to create a
dynamic organization that is prepared to meet the challenges of your industry.

9. Reaching the Right Customers

Marketing is more than creating advertising and getting customer input on product changes. It is
understanding consumer buying trends, being able to anticipate product distribution needs and
developing business partnerships that help your organization to improve market share.

10. Staying Ahead of the Competition

A comprehensive analysis of the activities of the competition should be an ongoing business objective
for your organization. Understanding where your products rank in the marketplace helps you to better
determine how to improve your standing among consumers and improve your revenue.
 Be Active (Exercises/Activities)
Are you convinced that the main purpose of business is to gain profit or to respond to the needs and
wants of the society? Defend your answer.
 Ignite (Evaluation)
Prepare a table similar to the following. The purpose of this to be able to find out similarities and differences
of some business owners. Though this activity may not be conclusive, analyzing the data you have gathered
will still give you firsthand information on how different people got into their chosen business.

Business Reason for Putting Up Business Objective

Name Owner The Business
 IFL (Integration of Faith & Learning)
Deuteronomy 8:18 – “But remember the Lord your God, for it is he who gives you the ability to
produce wealth.” (NIV)

References:
https://www.google.com/search?
q=The+Objective+purpose+of+Business&hl=fil&sxsrf=ALeKk016vuWjK0RgM_VqJW4ph0hLmNOCow:1607493665883&so
urce=lnms&tbm=isch&sa=X&ved=2ahUKEwixv7vHnMDtAhXLBKYKHdS2BpYQ_AUoAXoECBAQAw&biw=1360&bih=657