Republic of the Philippines

DEPARTMENT OF EDUCATION
Region I
Schools Division of Pangasinan II
PANGANIBAN NATIONAL HIGH SCHOOL
Tayug

LEARNING MATERIAL
ENTREPRENEURSHIP
QUARTER 4, WEEK 5

MELC: Manifest understanding of starting and operating a simple business

K to 12 BEC CG: CS_EP11/12B-ENTREP-IVa-i-1

Prepared by:

RANDY S. GARCIA
SHS Teacher III

Content Evaluated by: Language Evaluated by:

AMALYN B. MACUSI CHRISTOPHER M. RABARA

Teacher III Teacher III
Reviewed by:

REBECCA C. CABIENTE JANET V. CABIENTE

Master Teacher I Principal II
General Instruction: Read and understand the lesson before you answer the activity sheets
that follow. Submit your answered activity sheets on time.

Lesson 5: STARTING AND OPERATING A SIMPLE BUSINESS

Starting a business entails understanding and dealing with many issues—legal,

financing, sales and marketing, intellectual property protection, liability protection, human
resources, and more. Starting a business involves many activities related to organizing the
organization, generating of an idea for the enterprise, researching the idea's potential for
success, and writing a business plan. Starting a business of any size requires an investment.
Regardless of the size of a business, it must be unique in order to succeed. Many large,
successful companies began as small organizations with a business idea that was significantly
different from anything else on the market (Encyclopedia.com 2019). The most frequently
used forms by entrepreneurs are startup, buying existing business and franchising.
Startup is a young company founded by one or more entrepreneurs to develop a
unique product or service and bring it to market. Buying existing business is acquiring either
the shares or all the assets of the existing company. Franchising is when the owner of the
company that already has a successful product or service, licenses its trademark, trade name,
and methods of doing business to others in exchange for an initial franchise fee and royalty
payments (Edralin 2019).
Consider these factors before you start a business to build an entrepreneurial mindset.
It is important to an entrepreneur to exploit the opportunity by starting a business on the right
path, with a solid foundation to enable to grow, succeed and become sustainable in the
business.

In starting a business, you must be clear about your purpose in establishing your own
business whether it is for profits or for feeding your family. You must also present a winning
business concept that manifest tremendous future possibilities or might say you may change
the world. You must also think of having an angel in your business. Look for partners that
can contribute their expertise, experience and good character that will enable your business to
succeed.

9 Indispensable Factors to Consider Before Starting a Business

1. A Business Idea

Every business starts with an idea – a super duper idea that actually works. If you want your
business to stand out, you will need to offer something that no one else has offered till date

That said not everyone can come up with a unique business idea. There might be hundreds of
businesses just like the one you are going to start. Yet you can make it better by answering
the following questions:
 What do I need to do to make this better?
 What is it that I can do better than what the other guys are doing?
 Will I be able to grab some market share in this category?
You may have a great business idea; but unless it solves someone’s problem it is not going to
work. So start by listening to frustrations – both of yours as well as others (your family
members, your neighbors, your friends, and your associates). Once you have understood
these, here is what you can do:

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  See what best you can do to address these frustrations.
 Identify the skills in you that will help you offer the right solution.
 Find out if you are actually passionate about offering that solution.

2. Knowledge or Expertise

Once you know what business you want to start, you will have to start gaining the required
knowledge and expertise to start that business.

This might take a lot of research and planning; but at the end all these efforts will ensure that
you have everything in place to get your business idea off the ground.

Having a business plan can be highly advantageous at this stage. It will tell you whether your
business has a place in the market and if the idea is worth or profitable enough to go ahead
with.

If you have the knowledge you can construct one, all by yourself. If not, you can always hire
a professional business consultant to do it for you.

Meanwhile you will have to continue with your research to keep your knowledge up-to-date.

3. Market or Demand

Once you are sure of starting your business, your next step would be to explore the market or
the demand for your product or service.

Start by answering the question, who are your customers. If you are selling your product or
service locally, you may have to assess the demand for it. In case you are taking up on an
international level, you may have to understand the rules and regulations of dealing
internationally.

A market survey should reveal all the details that you may need about the market for your
product or service. Basically you are looking for:

 The current size of the market (the approximate number of potential buyers)
 Its growth potential (whether it is likely to grow in size or contract)
 The market share that you can expect to take
 The buying habits of the target audience (and how to exploit them)
 The different segments of the market
 The kind of margins that you can expect from the market

Thankfully social media has made it possible to reach out to target audience, anywhere in the
world, without having to put in too much of efforts.

4. Start-up Costs

Estimating your start-up costs is one of the very important things to consider when starting a
new business. You will have to assess the total cost that is required to set up and run your
business successfully.

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If you are thinking of starting a manufacturing plant, your start-up costs could be very high.
You may have to think about the cost of the land or building, setting up the plant, buying the
equipment and machinery, investing in furniture and office equipment, and various other
things.

In case of a retail business, you may still need to think of the cost of the store as well as the
furniture required to decorate it. An office can be started with relatively lower cost since all
you may have to invest would be in furniture and office equipment.

Once your business is set up, you will have to think about the working capital needed to run
your business.

You will have to take into account the inventory that you need to maintain, the credit that you
can extend to your customers and the supplier’s credit that you can get.

In not all cases can you expect credit to be given by the suppliers, especially if you are a new
name in the market.

5. Capital and Finance

No business in this world can run without money. Depending on the type of business you are
starting and the initial costs that you will have to pay up for, you will know what kind of
capital you would need to start your business.

Whatever steps you take, to finance your business, you will have to make sure you have the
required funds to take you through the startup phase.

The financing pattern is one of the most important factors to consider before starting a
business. This generally includes the capital that you can introduce from your savings as well
as the funds that you can borrow.

Personal savings are what 77 percent of the small businesses rely upon while gathering their
initial funds. But you can’t really go over the board if you cannot fund your entire business.

Funds can be borrowed for business, either through short-term or long-term loans.
Nevertheless, you may have to keep in mind the terms and conditions of borrowing such
funds including the cost of borrowing, the rate of interest, the repayment terms, and the
security that is required. Approach a few banks and private lenders, get a few quotes, and
compare them to identify the most beneficial type of funding.

It would be ideal to go for long-term funds only if you have to purchase any fixed assets. For
working capital requirement short-term funds would be sufficient. This way you can make
sure they are paid back once your business starts progressing.

6. Competition

Unless you know who your competitors are and what they are doing, you will not be able to
survive in the market for long.

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If your product is a monopoly competition will not matter. Else, you will have to come up
with an excellent strategy to fill in the demand and supply gap.

Gaining a market share should be on top of your mind if you are about to start a business. If
there is a huge demand for your product, this shouldn’t be too difficult. If not you may have
to strengthen the position of your business to gain an entry into the competitive market.

Analyzing competition includes getting to know your competitors, figuring out how they
have positioned themselves, identifying their pricing and marketing strategies, and evaluating
their strengths and weaknesses.

Once you have all the information it is all about conveying your unique selling point to your
target audience. If you can do this well you will survive no matter how tough the competition
is.

7. Location

One of the most important things needed to start a business is a good location.

If yours is a retail business you will have to look for a well-populated area that is easily
accessible.

If it is a manufacturing unit you can choose a location that can let you save money on
electricity, water, taxes, and transportation. Look for a place where manpower is easily
available and raw materials can be sourced easily. You can even look for a location that can
get you rebates and subsidies from the government.

If yours is a niche product or a service, you may have to look for a single location where all
your competitors are. For instance, if it is a software company you want to start, you may
have to look for a software belt where all other software companies have set their shops.
Similarly, the ideal location for a gold vendor / jeweler would be a gold mart that has housed
many such shops.

Offices can be set up in any place that is accessible and offers good facilities such as parking
spaces, refreshments, transportation, and so on.

Make sure the location fits well within your budget and offers scope for expansion. An ideal
location would be one that complements your business in the best possible way.

8. Staff

Your staff members are the ones that can make or break your business.

Without efficient manpower no business can ever succeed. That said an efficient staffing
strategy needs to be in place if you want to reduce your staff replacement expenses.

You can hire a recruitment agency or use various recruitment tools to fill in your positions
with the right talent.

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There are also a number of websites that make it easy to find the exact kind of people you are
looking for. Signing up for a couple of these can make your job, both easy and cost-effective.

Apart from hiring the right staff there is also the training that you need to think of. This will
ensure your staff members will be in a better position to handle their responsibilities and meet
the expectations you have set for them.

Finally you will also need to think about paying their salaries and perks to keep them
motivated enough at work.

9. Technology

Technology is one thing you can never compromise on when it comes to starting a new
business in today’s world.

Whether it is office equipment, plant and machinery, or the software required to monitor your
business, you will have to make sure it helps your business to perform well in the long-run.

Here are a few steps you can follow, while choosing the right technology for your business:

 Assess the requirements of your business

 Make sure the technology you choose helps in making things run smoothly
 Consider leasing technological equipment if you want to stay up-to-date
 Always have a backup plan
 Make sure you have the required support for installing, upgrading, and
troubleshooting the technology that you choose
 Invest in training so that you can make maximum use of the technology

Steps to Start a Business

Starting a business involves planning, making key financial decisions and compel a
series of legal activities. Here are the steps that might guide you in starting your business:

1. Conduct Market Research – Gathering information about existing business and potential
customers may help you to tell if there is an opportunity and may find you a competitive
advantage for your business.

2. Write your Business Plan – Your business plan is the foundation of your business. It is
your roadmap on how to structure, run and grow your new business. Your convincing power
to attract investor to your business.

3. Fund your business – Look for sources of funds.

4. Pick your Business Location – Finding business location is one of your important
decisions to make.

5. Choose a Business Structure – Identify whether your business is micro or large, single
proprietorship or partnership, it will give impact your business registration requirements and
your personal liability.

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6. Choose your Business Name – Make sure your business name is unique and not being used
by someone else.

7. Register your Business- Make your business legal to protect your brand.

8. Apply Licenses and Business Permit – Make your business legally operated and
compliant.

9. Advertise your Business – You may use traditional advertising such as television ads, radio
ads, and newspaper your ads and the easiest way now is using social media platforms such as
Facebook, Youtube, Instagram and the like.

10. Build your Team – Look for staff that will contribute to the success of your business.

REFERENCES:

A. Book

De Guzman, Ines A. 2016. The Young Entrepreneur. Golden Cronica Publishing,

Inc. Quezon City

B. Online Sources

https://www.academia.edu/45032285/ENTREPRENEURSHIP_12_Q4

https://www.architecturaldigest.com/story/how-to-start-a-small-design-business

https://smallbusiness.chron.com/entrepreneurship-start-operate-small-business-
2441.html

https://www.litmusbranding.com/blog/indispensable-factors-to-consider-before-
starting-a-business/

https://smallbusiness.chron.com/step-by-step-procedures-starting-small-business-
943.html

https://www.oberlo.com/blog/how-to-start-a-business

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Name: __________________________________________________ Date: _____________

Grade-Section: ___________________________________________ Score: ____________

Quarter 4-ENTREPRENEURSHIP

Worksheet No. 5
Title of the Activity #1: WORD SUPPLY

Most Essential Learning Competency: Manifest understanding of starting and operating

a simple business

K to 12 BEC CG: CS_EP11/12B-ENTREP-IVa-i-1

Directions: Supply the blank with correct word or phrase to make each
statement correct. Choose your answer inside the boxes.

Meaning partnership logo Loans

connotation corporation platforms Feedback
associations taxes savings Funds

1-3. In choosing a business name, consider its __________________,

____________________, and any potentially negative ____________________
with it.

4-6. As a small-business owner, you have the option of being a sole

proprietorship, a _____________________, a limited liability company (LLC),
or a ___________________________ - and the business type that you choose
influences how you file your _______________________, among other factors.

7-8. Work with the expert to create a __________________________ and a

visual language that will be used consistently on all forms of communication
(email, letterhead, business cards), marketing materials, online outlets, and
social media _________________________.

9-10. Many small businesses require significant start-up costs, so many

entrepreneurs will tap their personal _________________________. If further
funding is needed, they can resort to ____________________________.

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Name: __________________________________________________ Date: _____________

Grade-Section: ___________________________________________ Score: ____________

Quarter 4-ENTREPRENEURSHIP

Worksheet No. 5
Title of the Activity #2: TRULSE

Most Essential Learning Competency: Manifest understanding of starting and operating

a simple business

K to 12 BEC CG: CS_EP11/12B-ENTREP-IVa-i-1

Directions: Read each statement carefully. Write TRUE if the statement is

correct, FALSE if otherwise.

1. Start your own small business only if you are truly passionate about
what you are doing.
2. When starting your own business, focus on what you do best and
call in support from trusted others to help with the other tasks.
3. When learning how to start a business, it helps to know about some
tried-and-tested business models.
4. When it comes down to deciding if you’re ready to start a business,
it’s more about timing than mindset.
5. Typically entrepreneurs with small businesses opt to establish a
corporation rather than an LLC because it offers greater flexibility
in management, plus fewer structured bookkeeping requirements
and reporting obligations for taxes.

6. The hardest customer to sell to is the one you already have—

satisfied clientele can also help promote your business.
7. To figure out what type of business you want to start, create a list of
things you’re passionate about.
8. Starting a business involves planning, making financial decisions,
doing market research, and acquiring knowledge in areas you never
thought you would learn about before.
9. Self-financing is the most common way of funding a small business.
10. You’ll have the best chance of succeeding as an entrepreneur if you
do what you do best and find people you trust to help do the rest.

Name: __________________________________________________ Date: _____________

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Grade-Section: ___________________________________________ Score: ____________

Quarter 4-ENTREPRENEURSHIP

Worksheet No. 5
Title of the Activity #3: UNDERLINE ME

Most Essential Learning Competency: Manifest understanding of starting and operating

a simple business

K to 12 BEC CG: CS_EP11/12B-ENTREP-IVa-i-1

Direction: Underline the appropriate word or phrase inside the parenthesis to

make each statement correct.

1-2. Negative feedback can be just as constructive as (positive, negative) reinforcement. Use
this opportunity to build a strong foundation that will help you kick-start your (small, big)
business.

3. A market (survey, strategy) should reveal all the details that you may need about the
market for your product or service.
4. In starting a business, you must be clear about your (purpose, decision) in establishing
your own business whether it is for profits or for feeding your family
5. Starting a business involves many activities related to organizing the organization,
generating of an idea for the enterprise, researching the idea's potential for success, and
writing a business (operation, plan).

6. No business in this world can run (with, without) money.

7. Whatever steps you take, to finance your business, you will have to make sure you have
the required (ideas, funds) to take you through the startup phase.

8. Look for a place where (machine, manpower) is easily available and raw materials can be
sourced easily.

9. Whether it is office equipment, plant and machinery, or the software required to monitor
your business, you will have to make sure it helps your business to perform well in the
(short-run, long-run).

10. Offices can be set up in any place that is accessible and offers good (location, facilities)
such as parking spaces, refreshments, transportation, and so on.

Answer Key:

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Activity #1.

1. meaning 4. partnership 7. logo 10. loans

2. connotation 5. corporation 8. platforms
3. associations 6. taxes 9. savings

Activity #2.

TRUE 1. FALSE 6.
TRUE 2. TRUE 7.
TRUE 3. TRUE 8.
FALSE 4. TRUE 9.
FALSE 5. TRUE 10.

Activity #3.

1. Positive 6. Without
2. Small 7. funds
3. Survey 8. manpower
4. Purpose 9. Long-run
5. Plan 10. facilities

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