Republic of the Philippines EASTERN VISAYAS STATE UNIVERSITY TANAUAN CAMPUS Tanauan, Leyte

Summary Report In Basic Finance 323

SUBMITTED BY: John Kenneth M. Celada Student SUBMITTED TO: Ms. Raquel Diaz Instructor

Organizing a Business

The activities undertaken in the organization stage are more sophisticated and may take a year or several years before actual operations begin. The most common reasons for business failures include the FF. 1. Bad or improper management practices, including poor cost controls and poor hiring practices; 2. Poorly focused and executed marketing or inadequate marketing; 3. Poor location; 4. Failure to invest in new products and efficient technology; 5. Lack of adequate financing. Why persons engage in business? A skilled person who cannot get employment would be forced to engage in business just to maintain his skill, hoping that someday it would be more useful. Which are derrived from such undertaking. These values include the ff. 1. 2. 3. 4. 5. 6. 7. Provision of employment to people; Profits; Service to the community; Personal satisfaction; Means to earn a living; Achievement of power; Protection of ones self and family;

Entrepreneurship The person who chooses option two will be referred to as an entrepreneur. The entrepreneurs function are: 1. 2. 3. 4. To supply the capital of the firm; To organize production by buying and combining inputs; To decide on the rate of output in the light of his expectations about demand; To bear the risk involved in these activities;

Business prospecting Individual has finally decided to go into business, it will not be wise for him to grab the first opportunity that comes along. First, he should carefully scan the environment for other possible openings.

The search for business opportunities A person searching for a suitable business opportunity should learn the ways of a talent scout or a salesman looking for a prospect. The talent scout, aware of the requirements of the market whether radio,television, recording, or the movies goes arround searching. Business opportunities come in several formes. They could be a result of any of the ff. 1. 2. 3. 4. 5. 6. 7. 8. Increasing demand for basic commodities due to an increase in population; Rising prices (or costs) of existing products like construction materials; Relaxation of government policies like the lifting of import restrictions; The development of new service concept like the issuance and delivery of passports through courier service; The development of a new product concept like the engine that runs on water; The increasing demand for specialized services like manpower export services, health and fitness services, management consultancy, and skills training; The increasing requirements of the wholesale and retail industry; Many others.

Business promotion Refers to discovery and exploration of a business opportunity with the purpose of converting it into a going concern. The three steps involved in business promotion are the ff. 1. Discovering the idea for a new business; 2. Determining the feasibility of the idea; 3. Assembling the needed resources to start the business. Determination of feasibility The feasibility is a detailed investigation and analysis of a proposed business venture to determine its viability. According to the need, the study must contain some or all of the following aspects. 1. 2. 3. 4. 5. 6. 7. Management study including proponents, personnel, and organization; Marketing study; Production facilities and the product; Taxation and legal aspects; Financing aspects; Profitability; Social desirability.

Management study It is in this particular portion of the feasibility study where the following aspects are determined: 1. 2. 3. 4. The appropriate form of organization; The internal structure of the organization; The owners; The staffing pattern of the organization.

Marketing study. this portion should provide the following information: 1. 2. 3. 4. 5. The future total demand for the product; The competitive situation of the product in the industry; As estimated annual sales volume; Future selling prices The marketing program.

Technical study. In this particular aspect of the feasibility study, the following requirements should be determined: 1. 2. 3. 4. 5. 6. The manufacturing process select, if applicable; The rated capacity of the plant; The design of the machinery; The location and lay-out of the plant; The specifications of the structures; The requirements for operation.

Taxation study. The tax burden applicable to the project should be shown in this portion of the feasibility study. An important factor that must be considered is that the design of the project must be such that the tax burden is legally minimized. Financing study. the source of financing for the project is discussed in this portion. Particular attention is given to selecting the most attractive financing scheme using factors of cost and availability. Profitability. The rate of return using various approaches is shown in this particular aspect of the feasibility study. Social Desirability. This particular aspect is optional. It should provide a description of the social returns applicable to the project. It should present the benefits that will be afforded by the project to the community. Examples are reduction of prices and provision of employment.