Before anything else, one fact remains: the kind of business you get
into and the degree
of risk you are willing to take ultimately depends upon your
character and the financial goals. It is essential therefore that
from the start, you realize your risk taking capabilities, and
determine how much you want to earn from your business, and how soon
you plan to earn it.
After setting your business goals, the following tips on starting a
business may prove useful. These are borrowed from Prof. Andy
Ferreira, the Dean of the Asian Center for Entrepreneurship of the
Asian Institute of Management.
Tip 1. Look at what you enjoy doing. There may be a business
opportunity there.
Tip 2. Look at what irritates you. A product or service that
alleviates it may make money.
Tip 3. Look at what people around you are looking for. There maybe
enough volume to make money on.
Tip 4. Look for what gets out of stock often. There are unsatisfied
demands that can be served.
Tip 5. Look at what people do not need and are Willing to give away.
There may be someone willing to pay for it.
Tip 6. Look at what is making money now. Ask why There may be an
opportunity to do better.
Tip 7. Look around in your neighborhood. The opportunities may be
just outside your door.
Risk:
Risk is essentially a factor of your own perception. Your character,
knowledge of the business opportunity, and level of financial
literacy influences your perception of
risk and risk-taking. This is precisely the reason why some
entrepreneurs are having fun exploiting a business opportunity while
others find the same very risky, and vow not to even entertain the
idea.
If you are not a risk-taker type or have been traumatized by a bad
business experience (personal or someone else’s) your perception of
risk is likely to be higher than someone who is a risk-taker and
didn't have that experience.
If the business opportunity is something you are less familiar with,
the perceived risk is also bigger. The learning curve associated with
running the enterprise is more evident. Naturally, you could commit
mistakes and go through a good number of failures before you could
master--and profit from--the business. The risk factor is further
increased if you have a low level of financial literacy. If you are
averse with numbers, any business you go into will in fact be very
risky.
It might be very difficult to convince decidedly risk- averse
persons to go into business. If you are not naturally risk-averse,
increase your knowledge and familiarity with the business you are
planning to go into and its industry; and increase your level of
financial literacy. On the latter, you may read personal finance
books, or join organizations that develop their members’ financial
intelligence, and register in seminars on business planning and
financial management.
Another advice is not to put out your hard-earned savings until you
are comfortably familiar with the business opportunity and are able
to write a business plan or feasibility study. Familiarity with and
mastery of the business opportunity will enable you to see the
potential pitfalls. When you do a
business plan, you will be able to anticipate possible problem and
consciously provide for contingencies.
Doing business without a business plan is like tiptoeing on a bamboo
footbridge with blinders on
(that is, slippery and dangerous).
(Souce: Mind Your Own Business by Bronx Hebrona)
There are several types of business enterprises an investor can
choose
from in establishing operations in the Philippines.
Organized Under Philippine Laws
Sole Proprietorship
Sole Proprietorship is a business structure owned by an individual
who has hill control authority of its own and owns all the assets,
personally owes and answers all liabilities or suffers all losses
but enjoys all the profits to the exclusion of others.
A Sole Proprietorship must apply for a Business Name and be
registered with the Department of Trade and Industry - National
Capital Region (DTI-NCR).
In the provinces, application may be ified with the extension
offices of the DTI.
Parnertship
Under the Civil Code of the Philippines, a partnership is treated as
juridical person, having a separate legal personality from that of
its members. Partnerships may either be general partnerships, where
the partners have unlimited liability for the
debts and obligation of the partnership, or limited partnerships,
where one or more general partners have unlimited liability and the
limited partners have liability only up to the amount of theft
capital contributions. It consists of two (2) or more partners.
A partnership with more than three thousand pesos (P3,000.00)
capital must register with Securities and Exchange Commission
(SEC).
Corporation
Corporations are juridical persons established under the Corporation
Code and regulated by the SEC with a personality separate and
distinct from that of its stockholders. The liability of the
shareholders of a corporation is limited to the amount of their
share capital.
It consists of at least five (5) to fifteen (15) incorporators each
of whom must hold at least one share and must be registered with the
SEC. Minimum paid up capital: five thousand pesos (P5,000.00).
A corporation can either be stock or non-stock company regardless of
nationality. Such company, if 60% Filipino-
40% foreign-owned, is considered a Filipino corporation; If more
than 40% foreign-owned, it is considered a
domestic foreign-owned corporation.
• Stock Corporation
This is a corporation with capital stock divided into shares and
authorized to distribute to the holders of such shares dividends or
allotments of the surplus profits on the basis of the shares held.
• Non-stock Corporation
It is a corporation organized principally for public purposes such
as charitable, educational, cultural or similar purposes and does
not issue shares of stock to its members.
Branch Office
A Branch Office is a foreign corporation organized and existing
under foreign laws that
carries out business activities of the head office and derives
income from the host country. It is required to put
up a minimum paid up capital of US$200,000.00, which can be reduced
to US$100,000.000 if (a) activity involves advanced technology, (b)
company employs at least 50 direct employees. Registration with the
SEC is mandatory.
Representative Office
A Representative Office is foreign corporation organized and
existing under foreign laws. It does not derive income from the host
country and is fully subsidized by its head office, It deals
directly with clients of the parent company as it undertakes such
activities as information dissemination, acts as a communication
center and promote company products, as well as quality control of
products for export. It is required to have a minimum inward
remittance in the amount of US$30,000.00 annually to cover its
operating expenses and must be registered with SEC.
Under RA 8756, any multinational company may establish an RHQ or
ROHQ as long as they are existing under laws other than the
Philippines, with branches, affiliates and subsidiaries in the Asia
Pacific Region and other foreign markets.
Source: Department of Trade & Industry Philippines
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