mgt104a- master setup

Master Set-upThe last step to start your own business

Perks of Running your own Business

• People work FOR YOU• Government works FOR YOU• Banks works FOR YOU

People work for YOU!

• When you are in business, people work for you rather than the other way around.

• The key is to treat and pay them well because they will be your extended arms.

• Trust is also important.

The Government works for YOU!

• A fair understanding of municipal/local government rules can help you take advantage of benefits and incentives.

• Certain expenses incurred while operating your business are legally deductible from your business income.

Banks works for YOU!

• Extend credit lines/ standby credit to legitimate businesses.

• Pre-approved credit cards used to pay for consumable business purchases.

Why businesses fail?

• Its easy to start a business however, it is hard to make it successful.

• Reasons for business failure:– Not willing to do a plan– Not ready to grow up (legally)– Not ready to draw out first blood (Effort and

own money)– Not able to hire first employee

MASTER SET-UP

Master Set-up• To master set up entails doing steps A-G:

Actual ProductBusiness Model/Set-upCustomer CountDo it Right, Do it LegalEquipmentEmployee, ExtrasFunding the BusinessGo Master Set-up

ACTUAL PRODUCTMaster Set-up

Actual Product

• Where should an actual product compete?– It should compete first in the customers mind. – Customers should see, smell feel and hold

the product before one decides if the product meets his/her needs.

Actual Product

Helpful hint: MIND>HEART>WALLETPeople buy products because of 2 reasons:

1. Solutions to their needs/problems2. Good/Happy Feeling

Satifaction not only on functional value but also emotional needs

Actual Product

To analyze your product if it can satisfy both functional and emotional needs, they should do:

“PROBING”

Actual Producct

PROBING: using the basic questions of

how?

HOHATHENHERE and;W

Actual Product

• Probing can help identify what elements or qualities in your product can satisfy both the functional and emotional needs of your consumers.

• A product can be made different by how it is able to satisfy or provoke different emotions

BUSINESS MODEL/SET-UPMaster Set-up

Business Model/ Set-up

Manufacturer: Manufacture/industrial or commercial products

Producer: Growing agricultural crops or livestock

Warehouse/Distributor: Involved with the storage or transfer of products from manufacturer to point of sale.

Business Model/ Set-up

Wholesaler/Traders: Involved in the bulk sales of products as agents of manufacturers/ producers

Retailer: Selling through its own shops where end users buy products. Exporter/Importer: Involved with the buying/selling of products to/from abroad

Business Model/ Set-up

Producer Warehouse Distributing/ Inventory

Wholesaler/Trader Retailer

IMPORTER

EXPORTER

SUPPORT SERVICES AFTER-SALES SERVICES

Business Model/Set-up

Model combinations DrawbacksCheap and Quick Not necessarily Good: look at

hidden costsCheap and Good Not necessarily Quick: may take

time to grow. Time and patience is needed here

Good and Quick This is not necessarily cheap. Needs high levels of capital investment to make this work.

Business Model/Set-up

A choice of a sustainable business model is dependent on:

– Time/Effort– Capital (Money)– Risk Appetite

Tip: once should be able to sleep even if you lose everything and still have the passion to fight or start again.

Business Model/Set-up

Possible business formats: • Small own name/brand of kiosk/store

format• Small franchised kiosk/store format• Start with family business and extend it by

using additional products• Family business and expand to other

branches

Business Model/Set-up

Possible business formats: • Tie up into existing businesses that has

synergy with your product.• Acquire an existing business that has a

similar products and adopt the product into its category.

CUSTOMER COUNTMaster Set-up

Customer Count

MARKET= CUSTOMERS• Macro scanning can be done but you

should not spend too much time on it because the window of opportunity is small.

Customer Count

1-2-3 steps in counting customers:– Determine the market profile (Demographic)– Identify Location (Geographic)– Look for the Applicable (Customer)

Generators

Customer Count

Count by asking others:– Who has been in there– Who are currently there– Who are in a position to be there

DO IT RIGHT- DO IT LEGALMaster Set-up

Do it Right- Do it Legal

Why do it legal?YOUR BUSINESS IS YOUR BABY!

In doing business, we do not want our business set-up to be illegitimate!

“BAWAL ANG KABIT” –SkyCable

Do it Right- Do it Legal

• Choosing the right name for the product is the most important business setup decision.

Do it Right- Do it Legal

Basic rules on selecting a name:• Short and simple• Easy to read and spell• Easy to pronounce• Suggestive Product Benefits• Something Unique• Desirable image

Do it Right- Do it Legal

Basic rules on selecting a name:• Short and simple• Easy to read and spell• Easy to pronounce• Suggestive Product Benefits• Something Unique• Desirable image

Do it Right- Do it Legal

Basic rules on selecting a name:• Choose at least three names to represent

your business.

Do it Right- Do it Legal

• In the Philippines there are 3 types of business establishments:– Single Proprietorship– Partnership and;– Corporation

Do it Right- Do it Legal

• There are four (4) agencies that one has to deal with to make their business legal:– Department of Trade and Industry– Barangay government– Local Government Units – Bureau of Internal Revenue

Single Proprietorship

• Simplest business form under which one can operate a business.

• Refers to a person who owns the business and is personally responsible for its debts

Single Proprietorship

• Legally, the business has no separate existence from its owner.

• Income and losses are taxed on the individual's personal income tax return.

Single ProprietorshipADVANTAGES DISADVANTAGES

Owners can establish a sole proprietorship instantly, easily and inexpensively.

Sole proprietorships carry little, if any, ongoing formalities.

A sole proprietor need not pay unemployment tax on himself or herself

Owners may freely mix business or personal assets.

Owners are subject to unlimited personal liability for the debts, losses and liabilities of the business.

Owners cannot raise capital by selling an interest in the business.

Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value.

Partnership

• A legal form of business operation between two or more individuals who share management and profits.

• Come in two varieties: general partnerships and limited partnerships.

Partnership• General partnership: the partners

manage the company and assume responsibility for the partnership's debts and other obligations.

• Limited partnership has both general and limited partners. The general partners own and operate the business and assume liability for the partnership, while the limited partners serve as investors only.

Corporations• Business operation that

declares the business as a separate, legal entity guided by a group of officers known as the board of directors.

• Has all the legal rights of an individual, except for the right to vote and certain other limitations.

Corporations• Incorporate your business

by filing articles of incorporation

• Elect officers such as a president, secretary and treasurer to conduct the day-to-day affairs of the corporate business.

Corporations• Corporations can

limit the liability of their shareholders.

EQUIPMENT, EMPLOYEE, EXTRAS

Master Set-up

Equipment, Employee, Extras

I-P-OInput, Processor, Output

Equipment, Employee, Extras

• Inputs: Money, Materials, Man (woman)• Processor: Machine, Methods, Man

(woman)• Output: Goods and/ Services

Equipment, Employee, Extras

Framework of IPOStep 1: Analyze customer needs and find out how these should be translated into the desired output product.

Step 2: INPUT: find out the raw materials that match or contribute to the specifications needed in the Output.

Equipment, Employee, Extras

Framework of IPOStep 3: PROCESSOR determine the following elements which lie at the heart of the framework and convert input to output.

– Process: internment, batch, continuous– Equipment: General, Purpose, – Manpower: Operator and Maintenance– Technology: Established or Innovation

Equipment, Employee, Extras

INPUT PROCESSOR OUTPUTRaw Materials Specifications

Technology Product Specifications of Finished Goods

Processed or raw Equipment Delivery Time (To Customer)

Quantity Production Process Quantity

Environmental Ambiance

2 3 1

FUNDING/FINANCING MY BUSINESS

Master Set-Up

Funding/Financing my Business

• The reason why many people with good business ideas cant go into business is because of one thing:

LACK OF MONEY

Funding/Financing my Business

• Often times people fall under several categories of having “no money”– No Money– Not Enough Money– Just Enough Money

Funding/Financing my Business

• If you have no money you can use:– Laway– Ikot – Pawis

Funding/Financing my Business

• If you have not enough money you can use:– The Make or Buy Technique.– Beg, Borrow then Buy– When buying:

• Lease to buy• Buy Deferred• Buy Instalment• Buy at Discount

Funding/Financing my Business

• If you have enough money you can:• OPM (Other People’s Money)

– This is only true if your product or market is already proven.

– Normally first likely source of income is yourself. dependent on:

» Cash on Hand» Savings» Assets» Retirement Funds.

Funding/Financing my Business

• If you have enough money you can:• OPM (Other People’s Money)

– Other sources of OPM:» Parents/ Close friends» Local Cooperative» Microfinance institutions» Loans from the government» Loan programs from government banks» Quasi government corporations

Funding/Financing my Business

“ Put little money where your mouth/mind is.”

Final Words to start your own business:

• INCOME-SAVINGS=Expenses• Setting up a business is not

an overnight decision• TIME, TALENT, TREASURE:

the real secret to a successful start up is the combination of these three things.

Thank you!