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    Starting Your Business: Dr. Carlos L. Manapat

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    JuliaMarieDucut
    Starting a business requires identifying a viable business idea to fill an existing need, obtaining initial capital through loans or savings, and selecting an appropriate location that is accessible but affordable. After establishing operations, business owners must understand costs like fixed expenses, variable costs, and depreciation to properly set prices and monitor profits and losses. Ongoing management requires setting production quotas, limiting overtime to maximize output, and eventually expanding or diversifying before making an orderly exit from the business.

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    Starting Your Business: Dr. Carlos L. Manapat

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    JuliaMarieDucut
    14 views28 pages
    Starting a business requires identifying a viable business idea to fill an existing need, obtaining initial capital through loans or savings, and selecting an appropriate location that is accessible but affordable. After establishing operations, business owners must understand costs like fixed expenses, variable costs, and depreciation to properly set prices and monitor profits and losses. Ongoing management requires setting production quotas, limiting overtime to maximize output, and eventually expanding or diversifying before making an orderly exit from the business.

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    Starting a business requires identifying a viable business idea to fill an existing need, obtaining initial capital through loans or savings, and selecting an appropriate location that is accessible but affordable. After establishing operations, business owners must understand costs like fixed expenses, variable costs, and depreciation to properly set prices and monitor profits and losses. Ongoing management requires setting production quotas, limiting overtime to maximize output, and eventually expanding or diversifying before making an orderly exit from the business.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    14 views28 pages

    Starting Your Business: Dr. Carlos L. Manapat

    Uploaded by

    JuliaMarieDucut
    Starting a business requires identifying a viable business idea to fill an existing need, obtaining initial capital through loans or savings, and selecting an appropriate location that is accessible but affordable. After establishing operations, business owners must understand costs like fixed expenses, variable costs, and depreciation to properly set prices and monitor profits and losses. Ongoing management requires setting production quotas, limiting overtime to maximize output, and eventually expanding or diversifying before making an orderly exit from the business.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 28

    Starting your business

    Dr. Carlos L. Manapat


    • A. Identifying the type of business
    There are many practical ways in identifying
    what kind of a business will likely to succeed.
    One is if there is an existing need for the service
    or merchandise.
    • B. Getting the initial capitalization
    Is it easy to get a business loan?
    • No, it is not easy because of the requirements.
    – Business licenses, Financial statements, bank
    statements, and collateral
    • Although a personal loan is easy to get the
    only problem with this is you are not sure
    whether it will succeed or not. And if it
    doesn’t work; then you may not be able to get
    another crack in getting into another business.
    A back-to-back loan
    • You can get a loan from your cooperative
    provided you have a savings deposit,
    • If your only option is to get a personal loan
    from a bank; then choose a bank which is less
    stringent like a bank that offers less interest
    rate, flexi-terms, no collateral, and does not
    require a post dated checks (PDCs).
    • C. Selecting the place for business
    A “good place for business” is defined as a
    market place with a lot of buyers or consumers
    or a place which is easy to access like a terminal
    or some sort where ordinary people pass by
    using it as an entrée to transfer from one place
    to another.
    • The only problem with a good location is the
    cost of it.
    • The size of the store is also essential in
    selecting one. Size should be appropriate to
    the kind of business venture that you have
    and there should be enough space for
    expansion in the long run.
    • I do not recommend “tiendas” or “tindahan”
    where informal selling is being done.
    • D. Direct operations and management of the
    business
    Step 4 relates to the operations and
    management of the business. If your business is
    into manufacturing; it is appropriate that the
    owner knows something about the product. One
    should know the materials used, how the
    product was produce, and how to pack and sell
    them.
    • There should a specific trade secret on how
    you produce a good or a service. It is your
    leverage compared with other suppliers. This
    trade secret maybe your own recipe of a
    spillover from other suppliers but with a
    different flavor or it is totally original.
    • E. Getting profits and or losses
    Step 5 is getting profits and losses. The truth
    of the matter is all businesses pass through
    getting losses first before profits. And there are
    no exceptions to the rule even the simplest
    business of a small store using your house will
    still get losses before you even get small profits.
    Types of business according to ownership

    A. Sole or single proprietorship


    B. Partnership
    C. Corporation
    • Some tips in having your own business
    It is essential that a business owner knows
    something about financial standing of his/her
    business for control and monitoring. Getting
    cash everyday from your daily operations does
    not necessarily mean that the financial condition
    of your business is sound.
    • Identify all costs including opportunity cost. In
    starting your business, you should not only think
    of revenue and profit, you also try to identify
    costs. There are 2 major types of costs namely
    variable costs and fixed costs. Fixed costs
    include rent, depreciation cost, machinery and
    equipment, etc. Variable costs include labor
    cost, telephone, light, and water expense, and
    cost materials and ingredients in making goods.
    • After knowing your costs; let us now compute
    for your revenue which is the price of your
    merchandise multiplied by quantity output.
    As mentioned earlier, you can set a target
    Price or Quantity for you to achieve a specific
    profit.
    • If business is capital intensive then it is
    imperative for the owner to compute for
    depreciation cost which is a 10%-20%
    depletion of said equipment. It goes that if
    the value of equipment is reduced by 20%, it
    follows that the minimum net earnings of such
    business should be greater than or equal to
    depreciation cost.
    • If your business is the type where labor cost is very
    expensive; then it is best to maximize the output
    of each laborer by setting them a quota. Do not
    let them work without any quota for there is a
    strong possibility that they are producing goods
    below par. Do not let your employees do over
    time because you pay more while they are already
    slowing down. Why pay more to get less work?
    Get additional part time workers to fill-in the job.
    • People ask me if it is a good idea for the owners
    to operate their businesses on a full time basis.
    My answer is if there is no opportunity cost
    then it is an excellent idea to do so. But if you
    are still working on a full time basis then you
    need to compare the advantages and
    disadvantages of letting go of your old job and
    replacing it with your new business.
    • Do not buy an old business from a friend or
    from anybody because they won’t tell you
    about hidden problems in operating such. It’s
    just like buying a brand new car; you need not
    worry on the first few years of driving it
    because it will serve you perfectly. Buying a
    2nd hand unit is more affordable but the
    maintenance cost is quite expensive. You
    might not be able to operate efficiently.
    • Do not accept a proposal of being a limited
    partner for your absence in the operation of
    the business is detrimental to the information
    that you need to know like is the business
    doing well or is the business near its end?
    • Diversification is done after reaching
    expansion.
    • Lastly a graceful exist is not so bad after expansion
    and diversification because all of the proceeds will
    be diverted to purchase a new business.
    Remember that if you can no longer compete with
    bigger businesses; then its best for you to shutdown
    the facility and sell whatever is left. What remain of
    your assets turned into cash are enough for you to
    begin another business. And a new business with a
    new twist will always be better than the old one.

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