Republic of the Philippines

Sorsogon State College

SORSOGON CITY CAMPUS
Sorsogon City

EC 4A – Opportunity Seeking 1
BS Entrep – 2A / BS Entrep – 2B

Schedule Week 3 and 4 (September 28 – 30; October 1 – 2 and 5 – 9, 2020)

Lesson No. Module 2

Steps in Starting a Business

Introduction From our previous module, we were equipped with the background about business. In
Module 2, we will be given inputs on the steps in starting a business. Therefore, you must
brace yourselves with the idea in mind on what kind or type of business you want to
pursue. This module will help you understand what to do in putting up an enterprise.

Learning After finishing this Module, the BS Entrepreneurship students will be able to:
Objectives 1. Learn and apply the steps in starting a business
2. Have bird’s eye views on how to become studentpreneurs for now, and real
entrepreneurs in the future
3. Conceptualize their own businesses (i.e., giving business names, etc.)

Pre-test 1. What business would you want to run for now as studentpreneurs? How about in
the future as real entrepreneurs?
2. Do you have any idea on what you’re going to do before starting a business?

Key 8 Golden Rules for Starting a Small Business in the Philippines

Concepts
To start a business, would-be entrepreneur needs to be goal-oriented, patient,
hardworking, and knowledgeable. But it doesn’t mean that these four are what they need
to prosper, because it takes more than that to succeed in business. A person must
possess more entrepreneurial qualities aside from what have mentioned above. That
would-be entrepreneur must be a person with a heart.

As what most of the entrepreneurs say, it is true that there’s no definite formula for
success. However, there are certain rules to live by. In this connection, the following are
the eight golden rules on how to start a small business as posted by Moneymax. These
will actually guide you through this tough yet rewarding journey in entrepreneurship.

1. Create a New Market or Benchmark

 Image from https://strategicmanagementinsight.com/tools/benchmarking.html.

Innovation is the key! There are two choices to decide what business you want to put up.
These are as follows:

Your first option is to think for something that is not yet present in the marketplace.
Basically, your business will standout if that idea can satisfy the needs of your target
market or can provide them a solution.

Your second option is to benchmark successful businesses. Just observe what they’re
doing right and create something greater. Serve them as your models in deciding the kind
of business you are to pursue. In other words, do not “copy and paste”.

2. Validate your Small Business Idea

Image from https://www.startuptalks.in/low-investment-business-ideas/.

Truly, every individual think and believes that their business idea will be a big hit. But,
how are you sure that it has the potential to succeed?
Well, the first thing that you must do is to conduct market research before starting a small
business. R-E-S-E-A-R-C-H! Discover if the product or service you’re considering to sell
is the need and want of your prospects and whether they would be willing to pay for it or
not. You may also take in to account to check if other businesses in your area are offering
the same product or service and study the competition is like. After doing these, you may
now proceed to the next step.

3. Plan Your Business Finances

Image from https://www.nationaltraining.edu.au/5-careers-can-diploma-accounting/

Capital is needed in starting a business. This money will be needed in purchasing

equipment, tools, supplies, and materials, as well as to cover ongoing expenses as you
start running your business.

The key here is to list down all the necessary things that will be needed in your business.
Thus, group them into two categories as follows:

The first category is called, one-time startup costs that includes market research,
branding, licenses and permits, initial inventory, grand opening event, and the like.

The second category is ongoing costs which comprises of rent, marketing, employee
salaries, taxes, etcetera.

Aside from the above, please note that it’s still important to have backup funds for you will
need this in sustaining your business. Prepare yourself that it will take time your business
to be known. Moreover, it’s but normal to encounter some losses along the way. Thus,
backup fund is very much necessary.

4. Pick the Right People

Image from http://www.yahwehresources.co.za/recruitment-methodology/

Now, as your business grows, you will surely need staff to help you accommodate your
present and prospect customers, suppliers, and other people involved in it. Therefore,
choose the right people, instead. They must be talented, hardworking, accommodating,
optimistic, goal-oriented, and trustworthy. Your employees will be your greatest assets,
hence you have to take care and nurture them, as well. This is proven true by Richard
Branson who is an English business magnate, investor, author, and philanthropist. He
said, “Take care of your employees and they will take care of your business. It’s as simple
as that. Loyal employees are assets --- not liabilities!”

Meanwhile, before hiring employees, you need first to identify the positions to fill and the
core skills, competencies, and responsibility for each to guide you through screening
applicants and hiring the right ones. In hiring, you may take the words of Robert Kuok, a
Malaysian business magnate and investor: “When I hire people, I look for great attitude. I
don’t look for MBA or PhD degree”. It simply means that in choosing the right people in
your business, you must check first the attitude of the applicants before their degree.

But, if you’ll run your small business yourself, you still need a support system which
include your family and friends, a trusted mentor, or a fellow entrepreneur who can provide
you with advice and motivation during the ups and downs of managing your startup. This
only proves the old adage which says, “No one is an island.” Therefore, find time to tap
them because they may surely help you one way or another.

5. Choose the Best Name for Your Small Business

 Image from https://www.webalive.com.au/things-to-consider-before-you-pick-a-name-
for-your-business/.

It is easy yet difficult to pick a name for your business. See to it that you do not only
describe what you have to offer but more importantly, it will also have an easy recall
among consumers.

Come up with at least three potential names for your business. In choosing for the right
business name, you may take note of these tips from WebAlive: (1) Be descriptive but not
to general or vague; (2) Use related words in a creative way; (3) Keep it simple; (4) Don’t
copy your competitors; (5) Avoid using your own name; (6) Choose a name that’s
scalable; and (7) Make sure you have a related domain.

Next is to verify your business name is trademarked or already used by another business.
Once you’re done with the verification process, you may now register it with the
Department of Trade and Industry (DTI) if you’re a sole proprietor.

6. Apply for Licenses and Permits

Image from https://duluthmn.gov/city-clerk/.

After registering your business with the DTI, you need to get the following permits from
the local government where you plan to build your business:

✓ Barangay clearance – barangay hall

✓ Mayor’s permit / Business permit – municipal or city hall
✓ Tax Identification Number and other BIR registration documents – BIR
✓ SSC, PhilHealth, and Pag-IBIG registration – as an employer and for new
employees
✓ Special permits – depending on the nature of your business (for example:
for food business –Food and Drug Administration (FDA); for financial
institutions like pawnshops, remittance centers, banks, and the like –
Bangko Sentral ng Pilipinas (BSP)

7. Take Advantage of Social Media and Free Website Builders

Image from https://ceemiagency.com/from-local-to-global-your-best-business-website/.

Nowadays, it is but normal to become flexible in business trends. Since almost all
businesses (big or small) are using any social media platforms in promoting their
enterprise, you, too, may do the same. This is one way to contend with your current and
future competitors. By adopting such strategy, you may cut down on your marketing costs
by tapping social networks and free website builders such as Wix and Shopify to promote
your small business. Study carefully where your target clients are. So, if you find out that
they are frequently on a particular social networking site, you need to build your presence
there in order to be known.
 8. Be Resilient

Image from https://www.rifemagazine.co.uk/2015/04/why-is-it-important-to-be-resilient/.

Running a business is not always on top. There will always be a downfall. Since this is
the reality, be prepared on this. You’ll certainly face several bumps along the way. But
since you have the perseverance to pursue your dream, then do not be discouraged.
Instead, have the courage to get back on your feet after any challenge that may come
your way. Good luck!

References 8 Golden Rules for Starting a Small Business in the Philippines by Moneymax posted on
May 29, 2019 and updated on January 7, 2020,
https://www.moneymax.ph/personal-finance/articles/starting-small-business,
retrieved on August 27, 2020.

Business Registration Steps --- The Easy Way by Business Startup posted on March 25,
2020, https://businessdiary.com.ph/3634/business-registration-steps-the-easy-
way/, retrieved on August 27, 2020.

SERDEF (Small Enterprises Research and Development Foundation), Windows to

Entrepreneurship: A Teaching Guide, pp. 187 – 188.

Prepared by

Name : LED L. DESPUIG-ENCINARES

Position/Rank : Associate Professor III
Institution : Sorsogon State College
Sorsogon City Campus
Institution’s Address : Magsaysay Street, Sorsogon City