1. The Nature of Small Business
Chapter II

2. Sam Walton – Wal-Mart

3. Richard W. Sears - SEARS

4. Ray Kroc – McDonald’s

5. Michael Dell – Dell Inc.

6. Andrew Grove – Intel

7. Bill Gates - Microsoft

8. Small Business Two Approaches: Market Share Total Assets
Small business may be defined as one which is independently owned and operated and which is not dominant in its field of operation
Total Assets
Small business may be defined under the total assets approach as one having total assets that fall within a certain bracket.
Magna Carta for Small Enterprises (R.A. 6977)

9. Businesses according to SIZE
Business (Size)
Public Enterprises
Private Enterprises
Micro Business
Cottage Business
Small Business
Medium Business
Large Business

10. Types of Small Business
Small Manufacturing Business
Involved in the conversion of raw materials into products needed by society.
EX: bakeries, tricycle sidecar assembly shops, bagoong manufacturers, restaurants

11. Types of Small Business
Small Service Business
Business Services – accounting firms, janitorial services, security services
Personal Services – massage parlor, voice lessons, tutoring services
Repair Services – auto repair shops, watch repair shops, plumbing services
Entertainment and recreation – movie houses, resorts, billiards
Hotels and motels
Educational services

12. Wholesaling
It refers to activities of persons or establishments which sell to retailers and other merchants, and/ or to industrial, institutional, and commercial users, but who do not sell in large amounts to final consumers.

13. Retailing
- covers all activities involved in the sale of goods and or services to the final consumers

14. General Construction Firms
-- are engaged in construction of buildings

15. Characteristics of Small Business
Independent Management – owner is also a manager
Small Capital Requirement
Mostly Local Operation

16. Economic Importance of Small Business
Provide economic opportunities for entrepreneurs
Provide products and services to consumers (production)
Supply products and services to other businesses
Distribute products and services of other businesses
Support the government i.e. taxes
Provide employment

17. Economic Importance of Small Business
economic opportunities for entrepreneurs
products and services to consumers
provides
support the government i.e. taxes
employment
supplies
products and services to and for other businesses
Small Business
distributes

18. Advantages of Operating a Small Business
Opportunity to gain control over his own destiny
Opportunity to reach his full potential
Opportunity to reap unlimited profits
Opportunity to make a contribution to society and receive recognition for his efforts

19. Disadvantages of Operating a Small Business
Uncertainty of income
Risk of losing your entire capital investment
Lower quality of life until the business gets established
Complete responsibility
Having to serve undesirable customers
Paperwork and other chores
Long hours and demanding work conditions

20. Characteristics of Small Business
FACTOR
SBO
Employment
1. Income
uncertain
certain
2. Capital Investment
risk of losing
none required
3. Quality of Life
low until business gets established
consistent at certain level
Responsibility:
a) control over destiny
present
absent
b) reach full potential
c) reap unlimited profits
d) contribution to society and receive recognition
limited