Entrepreneurship) (1).pptx for grade 12 students

entrepreneurship

1. Small Business is Beautiful

2. The title of his chapter is patterned after the book Small Is Beautiful by E.F. Schumacher. In this book, he argued that in poor or developing countries small projects are much better than big projects. Schumacher defended his recommendation by stating the advantages of a small project in every village compared with a few big projects scattered throughout the country.

3. In the same manner, small business is better than big business, especially in a poor country. The poor masses cannot start with a big business. Obviously, their business opportunities are found in micro and small businesses. Although small business has its shortcomings or disadvantages, it is most relevant to poor developing economies like the Philippines.

4. This chapter explains the definition of small business, the characteristics of small business, and the differences between small and big business. Furthermore, the advantages and disadvantages of small business are discussed. Also, the contributions of small business to the economy are presented.

5. Small Business Defined Business is defined as an organized effort of individuals to produce and sell goods and services in order to satisfy the needs of society. The primary objective of business is to acquire profit. The individual who takes the risks in organizing and operating a business the entrepreneur as mentioned earlier. To organize a business the entrepreneur must combine four types of productive resources: human, financial, material and informational.

6. What then is a small business? There are two kinds of small business. The very small business where the owner is the principal worker, and the employees one or more assistants. This is the micro business. The other one is the bigger small business where the owner mainly directs the work of the employees. This is not the only definition of small business. There are many others. However, these are the common characteristics of small business:

7. 1. It is privately owned. 2. It has few or no layers of management. 3. Generally, it has insufficient resources to dominate its field business.

8. Features of a Small Business A small business is low in capital but high in labor intensity. Most small businesses do not have sufficient financial resources. So they cannot purchase big machines or modern equipment. What is only possible for them to do is to use labor instead of machine in their business operations. These are usually in retailing and service industries.

9. 2. A small business is efficient in specialized skill or service. It can well produce goods or services that are designed to the particular needs of an individual or a few clients. For instance, repair works on cars and appliances require individualized service. Also, tailors, barbers, real estate agents, and others provide services that require specialized knowledge for specific needs.

10. 3. A small business succeeds in small, isolated or overlooked markets. In rural communities where markets are small due to the few residents, a small business is viable. For example, sari-sari stores, tailoring shops, small restaurants, and grocery stores are profitable enterprises. Clearly, giant corporations cannot survive in small towns where demand is limited.

11. 4. A small business often operates in unstable markets. Big corporations are careful in their investments. To be sure or safe in their business ventures, they conduct market or feasibility studies to determine viability. This is actually the standard procedure in putting up a business which involves huge resources in terms of money, machines and materials. Such feasibility studies do not apply in most small businesses. With little capital, they are not afraid to experiment or test the market. They can easily respond to changing economic conditions. If these are not favorable, they can quickly get out. Unlike big corporations, they have big buildings or large factories. It is not easy for them to retreat from business without suffering from huge losses.

12. 5. A small business is closer to the market place. Not a few small businesses conduct their operations right inside the market place. Being closer to the buyers, compared with corporations, they get first-hand information about consumer tastes and preferences. Such advantage enables the small business to respond quickly to the needs of consumers. It is not possible for big business to act as quickly to satisfy new demand.

13. 6. Generally, the owner of small businesses are also the managers. Most of our small enterprises in the Philippines are like these. The owner-manager employs his wife and children. If the business grows, the owner hires more employees, usually relatives and townmates.

14. 7. Capital comes from the owner or small group. in our country, a small business is usually financed by the family through to its own savings and/or loans. If ever the business is funded by a small group, it comes from relatives and close friends. 8. The area of operation is small. This means the business is community-based. The owner and the employees live in the community where the enterprise is located. 9. The size of the enterprise is small in relation to the industry. For example, the shoe industry is a large one. But there are very many stores of shoes. Clearly, one shoe store cannot dominate in the market for shoes. In the case of big businesses, there are only few enterprises like the bear industry, OPEC, car manufacturers, etc.

15. Differences between Big and Small Enterprises Small business as a group change through a cycle of births and deaths. In the case of big enterprises, change is through expansion or contraction. Small business risk or reward estimate is done by the individual owner who either gets profit or loss, while in large corporation , the risk or reward calculation is done by employee-managers. Such judgement has no direct stake in the livelihood of the managers. However, in the case of small business, the loss can ruin the livelihood of the owner and his family.

16. 3. Small business has little or no economic power. On the other hand, big business has tremendous influence on the economy, including the political sector. For example, the transnational corporations control our global economy. In many poor countries, transnational or multinational corporations can have their men elected to top government positions. They have enormous funds to influence the results of the election in their favor. 4. Small business serves market which big business does not like to serve or cannot serve effectively.

17. The end.