Information Sheet 3
Information Sheet 3
Information Sheet 3
ANTHONY COLLEGE
Module for Entrepreneurial
CALAPAN CITY, INC. Mind
MODULE DESCRIPTOR
This unit explains the Nature of Small Business. It includes Types of Small
Business, Characteristics of Small Business, Economic Importance of Small Business,
and Advantages and Disadvantages of Operating a small business.
NOMINAL DURATION
September 6-8 (3 hours)
LEARNING OUTCOMES
At the end of this module, you MUST be able to:
1. discuss the definition of small business;
2. cite and explain the different types of small business; and
3. explain the advantages and disadvantages of operating a small business.
LEARNING EXPERIENCES
Business size is one factor that does not prevent one from engaging in
entrepreneurship. Since only a small number of people have capital large enough to start
a large enterprise, the bigger number of people with minimal resources are forced to
operate on a small scale basis, if they decide on becoming entrepreneurs.
Since most new venture will be small business, it is expected that majority of the
efforts of those involved in the propagation of entrepreneurship will focus on small
business management.
The premise is that if small business is managed properly, their chances of
becoming large enterprises are increased. Since it is well-known that large enterprises
bring certain benefits to the economy, small business management is an activity worth
pursuing.
Service Business are those that provide service in one way or another. They may
be further classified into the following.
1. Business services- provide service to other business. Examples are accounting
firms, janitorial service firms, security service firms, collection agencies and the like.
2. Personal services- provide service to the person. Examples are tutoring service,
massage parlors, voice lesson, among others;
3. Repair services- provide repair services to owners of various machinery and
appliances. Examples are auto repair shops, watch repair shops, plumbing services and
others.
4. Entertainment and recreation- include movie houses, resorts, billiard pool
centers, and the like;
5. Hotel and motels; and
6. Education services- include Montessori Schools for children, high school,
correspondence schools among others
Wholesaling
It refers to the activities of person or establishments which sell to retailers and
other merchants, and or to industrial, institutional, commercial users, but who do not sell
ST. ANTHONY COLLEGE
Module for Entrepreneurial
CALAPAN CITY, INC. Mind
in large amounts to final consumers. Examples are soft drinks wholesalers in local areas,
dealers of supplies and office equipment and the like.
Retailing
It covers all activities involved in the sale of goods and/ or services to the final
consumers. The bulk of retailing activities are performed by small businesses. Examples
are retail drugstores, fast food shops, appliance stores and others.
An individual has various options to improve his economic lot. They are the
following:
1. be an employee;
2. be a professional;
3. be a small business operator(SBO).
An employee enjoys a fixed working schedule like 8:00 AM- 5:00 PM. The pay he
receives, however is limited and dependent on a large extent on industry norms and the
financial capability of the company.
A professional may generate higher income through the effective practice of his
profession. A physician, for example, may set his clinic in a specific area and proceeds
to treat patients for a fee. His income, however is limited by the number of patients he
attends to everyday as he cannot delegate his skills to others.
The first two options, however, can only be considered depending on certain
conditions. Finding a job is not an easy task. Entering a certain profession is also not an
easy task you must undergo long years of study and must pass an entrance requirement
like passing the board examination.
The last option is small business operation they keep long working hours and
absorbs whatever damages that happen as a result of his faulty decision making.
However, he has the opportunity to gain control over his own destiny, opportunity to reach
his full potential, opportunity to reap unlimited profits and opportunity to make contribution
to the society and receive recognition for his efforts.
1. uncertainty of income- it does not provide the assurance of an income, unlike getting
employment which offers fixed monthly salaries.
2. risk of losing your entire capital investment- Complete independence in making
decisions exposes the small business operator to the consequences of errors of
judgement which in some cases could wipe out his investment.
3. lower quality of life until the business gets established- as the small business operator
assembles the needed resources, starts actual production, and makes moves to attract
customers, income and profit are held in if they will ever be realized at all.
4. complete responsibility- The owner-operator will take the responsibility for whatever
happens to the business. He cannot pass the blame to anybody else.
5. having to serve undesirable customers- Even if the small business operator has
freedom in his actions, he is not completely free. He cannot choose his customers Even
if he dislikes a particular customer, he cannot just send him away or even ignore him.
6. paperwork and other chores- The small business operator is forced to do this tasks
himself.
ST. ANTHONY COLLEGE
Module for Entrepreneurial
CALAPAN CITY, INC. Mind
7. long hours and demanding work condition- It is a well -known fact that a small
business must maintain long working hours to keep the business going.