Organization and Management

Module 15
Basic Concepts of Small-Family Business
Business opportunities are waiting for those who have the courage to create and
innovate something new and useful to human being. As an entrepreneur, they have to
come up with a great ideas accompanied with a good business plan and strategies that
will lead them to achieve their goals which is to provide service, grow in the business
field and earn a profit.
As we face the challenges brought to us by the Covid-19 pandemic, a lot of
families who lose their jobs decided to start their own family business to provide their
basic needs. But starting a business takes a lot of time and effort. For small business,
the owners are responsible for managing all aspects of their company.
This module will provide you the necessary information and activities that will
help you understand the concept of having a family business.
After going through this module, you are expected to:
Explain the steps and importance of starting a family business
(ABM_AOM11-IIj-40)
Let’s discuss:
Try to look around your place and check the different businesses around you.
What did you notice? You’re right, family business. According to surveys, around 80%
of the most successful businesses in our country were owned and controlled by a
family. And to name some we have the: Ayala, Aboitiz, SM, Metrobank, Goldilocks,
Jollibee, Unilab, Mercury Drugstore, and so on.
Business gives the family not only income but they can also employ their family
members, they can work for themselves, they control the business and they have
something to pass down to the next generation. Family businesses play a major role in
our economy. They provide jobs and help our government through their business taxes.
As we face the Covid-19 pandemic, a lot of families lose their jobs. And to be able
to support their families, some of them decided to open their own business. What are
the other benefits of having a family owned business?
Benefits of having a Business with Family:
1. They work hard.
2. There is stability.
3. There is a greater sense of commitment and accountability.
4. There is comfort in working together.
5. Easier decision making.
6. Family members are flexible in terms of work positions.
7. Expands your network.
8. Reduced cost or expenses especially during economic downturns.
For large companies, they say that succession is a very crucial matter. The
succession plan of every generation will have a great effect that might lead to the rise or
fall of every family owned business. Succession planning is a process by which individuals
are scanned to pass on the leadership role within a company.
Businesses have to be registered in compliance to Philippine laws. Without
proper registration in authorized government agencies, the business cannot operate
legally. Registering gives credibility to the business on which they will earn the trust of
the customers including suppliers, their partners and stakeholders. Here are the simple
steps in starting a business.

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 Steps in Starting a Business:
1. Create a Business Plan
In starting a business, it’s important that you have a good business plan.
First thing to do is to formulate your business vision and mission, identify
your target market, understand the environment, the service or product
you will offer, marketing and sales activities, financial data or you may
conduct some market analysis and research before creating your business
plan. This will help you determine financial requirements and programs of
activities in advance.
2. Choose a Business Structure
Depending on the size and resources of your business, you have to decide
whether to set up a sole-proprietorship, partnership, corporation or
cooperative.
Single proprietorship – a business owned by one person only
Partnership – a business formed when two or more partners formally agree to
be joint owners of a business
Corporation – a business entity involving five or more persons owning it
Cooperative – a group enterprise made up of several traders, consumers, or
producers who are interested to produce or trade as a group
3. Register a Business Name
Get registered to your chosen business name according to the type of your
business to the following departments.

• Sole Proprietorship – Department of Trade and Industry(DTI)

• Partnership/Corporation– Securities and Exchange Commission(SEC)
• Cooperative – Cooperative Development Authority(CDA)
Let’s say you are starting a small business with a starting capital of
₱20,000. After choosing a business name, the first thing to do is to check
through the DTI website if your chosen business name is already used by
others. If your business name is available, then all you have to do is to fill
out a business name application form then submit to the nearest DTI office
and wait for your DTI Certificate of Registration before moving to the next
step.
4. Register with your Barangay
Go to your barangay office and fill out an application for a business permit. You
have to submit your DTI Certificate of Business Registration, proof of residence
and two valid IDs.
5. Register with the Mayor’s Office
Go to your municipal office and fill out an application and register as a sole
proprietor. You also need to submit your Barangay Clearance Certificate,
DTI Certificate of Business Registration, proof of residency and two valid
IDs.
6. Register with BIR
After securing the necessary local permits and business certificates, you
may now visit your regional district office and fill out a BIR form 1901 to
register your business. Don’t forget to bring with you your Mayor’s
Business Permit, Barangay Clearance Certificate, DTI Certificate of
Business Registration, proof of residency and valid IDs. They may instruct
you to wait for few working days before you can claim your BIR form 2303.
7. Open a Bank Account
To help you manage your finances, you may open a new business account
to separate business transactions from your personal ones.
8. Register with government-mandated sectors
It is mandated by law that all businesses must register and remit to
government institutions such as Social Security System (SSS), Bureau of
Internal Revenue (BIR), Philhealth, and Pag-Ibig Fund services.

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 After going through these steps, you are now ready to start your family business.
Your business plan do not end here, you have to continuously improve it to be able to
keep up with the trend of this fast changing world. Don’t expect to earn a big profit
instantly. Having a business needs hard-work, patience and perseverance.

Assessment 1
Direction: Read and understand the following situation below then answer what is
asked. Write your answer in a separate sheet of paper. (in 5 sentences each
question)
Scenario: You won the Super Lotto Jackpot worth ₱30,000,000. Your family decided to
open a business to avoid wasting the money.
1. If you were given the chance to choose, what business are you going to put up? Are
you going to let your family handle and work for your business? Why?
2. Summarize and discuss the whole process that you are going to undergo in starting
your business.
3. In your own opinion, are businesses stronger when family members are involved?
Justify your answer.
Assessment 2
MULTIPLE CHOICE: Direction: Read and understand each question carefully.
Write the letter of the best answer in a separate sheet of paper.
1. Andrei went to their barangay office to apply for barangay permit but he wasn’t
able to get one. He brings the following: 2 valid IDs and proof of residency. What
document does he lack?
A. Barangay Permit C. DTI Certificate of Registration
B. Birth Certificate D. Mayor’s Permit
2. Being the owner of a restaurant, Jessy needs to learn how to cook, be a cashier,
a service crew and a delivery boy. What characteristic of an entrepreneur does
he have?
A. Busy C. Overqualified
B. Flexible D. President

3. Where do business corporations go to register their business name?

A. Barangay C. Municipal
B. DTI D. SEC
4. What do you call the process of transferring leadership to the next generation?

A. Election C. Promotion
B. Inheritance D. Succession
5. What BIR form are you going to get in registering your business?
A. 103 C. 303
B. 203 D. 403
6. How many valid IDs do you need when applying for business permit?
A. 1 C. 3
B. 2 D. 4
7. Where the mission/vision of a certain business is stated?
A. Book C. DTI
B. Business Plan D. Permit
8. Andrei, Roshen and Cazzy decided to join their money to put up a small business.
What type of business structure they should register?
A. Cooperative C. Partnership
B. Corporation D. Sole-proprietorship

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 9. Why is it important to make a market survey?
A. Tells you how many and what type of people they are.
B. Tells you how much a customer will pay.
C. It tells you what a customer will buy.
D. All of the above

10. What will happen if a business was not registered?

A. They will be charged by the government for illegally operating a business.
B. They can have discounts from their supplier.
C. A lot of customer will the product.
D. All of the above.
11. If a business has employees, what government institution does he was mandated
to pay for his employees?
A. Bureau of Fire Protection C. Loan
B. Credit Card D. SSS
12. What will you do next after having your barangay permit?
A. Go to Barangay Office C. Go to DTI
B. Go to BIR D. Go to Municipal Office
13. How many percent of business were family-owned?
A. 60 % C. 85%
B. 80% D. 93%
14. Which department do cooperative business register their names?
A. BIR C. DTI
B. CDA D. SEC
15. What might be the disadvantage/s of having a family-owned business?
A. You can break the rules.
B. You work on your own.
C. You work comfortably.
D. Create conflict.

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