GE EM

• Strategic planning


  The systematic process of envisioning a desired future and translating this vision into broadly defined goals and objectives, which involves formulation of strategies and allocation of resources to achieve those objectives
• Competitive Advantage


  The aggregation of factors that differentiates a small business from its competitors and gives it a unique and superior position in the market
• Strategic plan


  A document used to communicate the organization's goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise
• Vision


  How the entrepreneur sees the company he/she is about to put up in the future. It represents what the entrepreneur dreams his business would become in the future
• Mission Statement


  The basic description of the fundamental nature, rationale, and direction of the firm. It establishes the purpose of the business which gives later a sense of direction
• Elements of a Mission Statement

  • The purpose of the business
  • The business the entrepreneurship is in
  • The values of the entrepreneurship
• SWOT Analysis


  An entrepreneurial tool used in assessing the firm's internal strengths and weaknesses and the opportunities and threats in the external environment
• Strength


  A skill, competence, valuable organizational resource or competitive capability, or an achievement that gives the firm a market advantage
• Weakness


  Something that the company lacks or does poorly or a condition that puts it at a disadvantage
• Opportunity


  The chance offered by the external environment to improve the firm's situation significantly
• Threat


  A challenge posed by an unfavorable trend or development in the external environment that might lead to the erosion of the entrepreneur's position
• Goals


  Broad and long-term attributes that the business seeks to accomplish. It defines the general accomplishment sought by the business
• Strategy (Courses of Action)

  A carefully designed plan which indicates how the entrepreneur will attempt to accomplish the goals with the resources available. It defines the means on how the vision, mission, goals and objectives will be attained
• Strategic Objectives


  The specific performance targets that the entrepreneurship hopes to accomplish. It states how the mission will be realized in a specific manner
• SMART +W Principle for Strategic Objectives

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Time-Bounded/Timely
  • Written Down
• Tactics


  The actual means used to achieve the specific targets or objectives
• Fundamental Strategies for Small Business

  • Flexibility strategy
  • Strategy of effectiveness as a higher priority
  • Strategy of starting simple
• Strategy Concerns for New Businesses

  • Acquiring an existing business
  • Organizing a new business
  • Buying a franchise
• Strategy Concerns for Old Businesses (Going Concerns)

  • Segment Markets
  • Efficient use of Research and Development
  • Think small-profits and specialization vs sales growth and diversification
• Importance of Preparing a Strategic Plan

  • it Allows organizations to be proactive rather than reactive
  • it Sets up a sense of direction
  • it Increases operational efficiency
  • it Helps to increase market share and profitability
  • it Can make a business more durable
• Peter F. Drucker: 'Whenever you see a successful business, someone once made a courageous decision.'
• Most important issues an entrepreneur should consider in choosing a form of ownership

  • Tax considerations
  • Liability exposure
  • Startup and future capital requirements
  • Control
• Proprietorship


  The state or right of owning a business or holding property
• Sole Proprietorship


  Business owned and operated by a single person. The entrepreneur serves as the initiator, administrator, capitalist and manager especially during the early stages.
• Advantages of Sole Proprietorship

  • Ease and cost of formations
  • Secrecy
  • Distribution and use of profits
  • Control of business
  • Minimum Taxation
• Disadvantages of Sole Proprietorship

  • Unlimited personal liability
  • Limited access to capital
  • Limited availability of skills and abilities
  • Limited life of the firm
• Partnership


  Legal association of 2 or more persons as co ownership of a business with the purpose of gaining a profit. Partners share the assets, liabilities and profits of the business according to the terms stipulated in the partnership agreement.
• Articles of Partnership


  A written agreement stipulating the terms of operating the partnership for the protection of each partner involved.
• Types of Partnership


  • General Partnership
  • Limited Partnership
• Types of Partners


  • General Partner
  • Limited Partner
  • Silent Partner
  • Dominant Partners (Dormant)
  • Capitalist Partners
  • Managing Partner
  • Industrial Partner
  • Secret Partner
  • Nominal Partners or Partner by Estoppel
  • Liquidating Partners
• Advantages of Partnership


  • Ease of formation
  • Pooling of knowledge and skills
  • More sources of capital
  • Tax advantage
• Disadvantages of Partnership


  • Unlimited liability of at least one partner
  • Limited life
  • Potential conflict between partners
  • Difficulty in dissolving the business
• Corporation


  An artificial being created by operation of law, having right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. Its owners are the stockholders.
• Advantages of Corporation


  • Limited liability
  • Ease of Expansion
  • Ease of Transferring Ownership
  • Relatively Long life
  • Greatest ability to hire specialized management
• Disadvantages of Corporation


  • More expensive and complicated to organize
  • Double taxation
  • More extensive government restrictions and reporting requirements
  • Employees lack personal identification and commitment
• Cooperative


  An autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.
• Principles of Cooperative (RA 9520, Art. 4)


  • Voluntary and Open Membership
  • Democratic Member Control
  • Autonomy and Independence
  • Education, Training and Information
  • Cooperation Among Cooperatives
  • Concern for Community
• Types of Cooperative


  • Credit Cooperative
  • Consumers Cooperative
  • Producers Cooperative
  • Marketing Cooperative
  • Service Cooperative
  • Multipurpose Cooperative
  • Advocacy Cooperative
  • Agrarian Reform Cooperative
  • Bank Cooperative
  • Dairy Cooperative
  • Education Cooperative
  • Electric Cooperative
  • Financial Service Cooperative
  • Fisherman Cooperative
  • Health Services Cooperative
  • Housing Cooperative
  • Insurance Cooperative
  • Transport Cooperative
  • Water Service Cooperative
  • Workers Cooperative
• Advantages and Disadvantages of Cooperative

  • Tax privileges or subsidies from the government
  • Direct benefits to its members and the entire community it serves
  • Inequality of profit distribution since distribution is according to the number of stocks
  • Lesser profit
• Tips on Choosing the Name of the Business

  • Easy to recall or remember
  • The name should be easy to pronounce
  • The name should be easy to spell
  • Must be related to the product