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Entrepreneurship 12 > Topic 3 - Starting a Business in the Philippines > Flashcards

Topic 3 - Starting a Business in the Philippines Flashcards

1
Q

Ability to develop something original, particularly an idea or a representation of an idea, with an element of aesthetic flair

A

creativity

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2
Q

change that add value to an existing product or service

A

Innovation

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3
Q

Truly novel product, service, or process that, though based on ideas and products that have come come before, represents a leap, a creatiom truly novel and different.

A

Invention

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4
Q

What are the five stages of creativity?

A

Preparation
Incubation
Insight
Evaluation
Elaboration

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5
Q

Involves investing a chosen field of interest, opening your mind, and becoming immersed in material, mindset, and meaning.

A

Preparation

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6
Q

Refers to giving yourself, and your subconscious mind in particular, time to incorporate what you learned and practiced in the preparation stage

can take short or long time

A

Incubation

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7
Q

“illumination” a term for the “aha!” moment — when solution to a creative problem suddenly becomes readily accessible to you conscious mind.

A

Insight

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8
Q

purposeful examination of ideas

A

Evaluation

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9
Q

actual production

Release of a “minimum viable product” — function well enough that you can begin to market it while still elaborating on it in an iterative development process.

A

elaboration

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10
Q

defined as the change that adds value to an existing product or service

A

innovation

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11
Q

The concept of pain point was developed to____

A

to describe a feeling of dissatisfaction among customers

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12
Q

a persistent recurring problem that frequently inconveniences or annoys customers

A

Pain point

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13
Q

key point about innovation is that it is a response to both changes ________ and changes from ________ (Peter Drucker).

A

Within markets, outside markets

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14
Q

Two types of sources of innovative opportunity

A

Internally focused
Externally focused

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15
Q

Seven Sources for Innovative Opportunity (Drucker, 1985 as cited in Kuratko, 2016)

A

The unexpected
Incongruities
(Innovation bsed on) Process need
Industry and Market Structures
Demographics
Changes im Perception, Mood, and Meaning
New knowledge

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16
Q

Unforeseen circumstances that may come as hindrance

• Unexpected failure (penicillin)
• Unexpected success
• Outside events (COVID-19 pandemic)

A

The unexpected

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17
Q

a difference exists between expectation and reality

A

Incongruities

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18
Q

process gaps or bottlenecks where an answer is required

A

Process need

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19
Q

changes caused by consumer attitudes, advancements in technology, etc.

A

Industry and Market Structures

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20
Q

age, status, race, sex

A

demographics

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21
Q

uniqueness of every individual creates a differentiation of the offered good and services

A

Changes in Perception, Mood, and Meaning

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22
Q

Both scientific and non-scientific (knowledge-based concepts)

A

New knowledge

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23
Q

Types of innovation

A

Incremental innovatiom
Pioneering innovation
Disruptive innovation
Social innovation

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24
Q

truly novel product, service, or process that, though based on ideas and products that have come before, represents a leap, a creation truly novel and different

A

inventions

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25
Q

a process or a device which has never been made before

A

Developing invention

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26
Q

Known and the “unknown”

A

Sources

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27
Q

different sources of the “known”

A
  1. Education/Research
  2. Experience/skill
  3. Family(business/tradition)
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28
Q

Source of the “unknown” (outside of our education, skills, experience)

A
  1. Information from friends
  2. Brainstorming (friends,work, schoolmates,family)
  3. Tips information from various sources (socialmedia,articles, magazines, government plans - CLUP/CDP, seminars/conferences).
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29
Q

creates significant value for customers and offers significant profit potential to the entrepreneur (Jeffrey Timmons, 2004 as cited in Harvard Business Review, Entrepreneur’s Handbook, 2018).

A

Entrepreneurial opportunity

30
Q

it can also be said that there exists an entrepreneurial opportunity when a gap exists between supply (amount and characteristics of the product produced) and demand (consumers’ desire for the product).

A

Entrepreneurial opportunity

31
Q

Key Aspects of Evaluating opportunity

A
  1. Competencies
  2. Competition
  3. Sustainability
  4. Profitability
  5. Financing
32
Q

Questions under competencies

A

• Do I have substantial knowledge and skills?
• Do I know someone who has advanced knowledge and skill who I can trust to be a partner or employee?
• Do I have connections inside the industry who can help me?

33
Q

Questions under competition

A

• How many competitors are there in the area? in the industry?
• What are their strengths and weaknesses?
• How are you going to be different?

34
Q

Factors in evaluating sustainability

A

• Threat of new entrants
• Threat of substitute/s
• Bargaining power of supplier
• Short lived trend/fad

35
Q

Factors in evaluating profitability

A

• Net income
• net profit margin
• break-even point
• payback period
• return of investment

36
Q

Factors in evaluating financing

A

• Compute for capital requirement
• check if this can be funded by your
savings

37
Q

What should be a first step or priority in evaluating profitability and financing?

A

establish the price and the demand forecast using your target market segment

38
Q

Contributing factors of a successful opportunity recognition

A

Prior knowledge of markets and customer problems

Entrepreneurial alertness

Networks

39
Q

where do we gain prior knowledge of markets and customer problems?

A

Education
Experience

40
Q

Two types of experiences

A

personal experiences
work experience

41
Q

Pathways to New Ventures

A

Creating the New Venture
Acquiring an Existing Venture
Joining a Family Business
Obtaining a Franchise

42
Q

Legal Forms of Business Ownership

A

• Sole Proprietorship
• Partnership
• Corporation
• Cooperatives

43
Q

A business that is owned by one person. Simplest form of business ownership and the easiest to start.

A

Sole proprietorship

44
Q

The most popular form of business ownership

A

Sole proprietorship

45
Q

What kind of business form is this?

no special forms required

ends when proprietor dies or leaves business

unlimited liability

minimal legal requirements

full control of managements and operations

not a separate taxable entity; taxes are paid through owner’s personal tax returns

funding mostly derived from owner

A

sole proprietorship

46
Q

Advantages of sole proprietorship

A

ease of formation
greater control and flexibility
no separate tax return
profit is taxed as personal income to owner
business losses can offset personal income

47
Q

Disadvanatge of sole proprietorship

A

Unlimited liability
Potential difficulty in borrowing money

48
Q

A voluntary association of two or more persons to act as co owners of a business profit

Less common form of ownership that sole proprietorship or corporation

no legal limit on the maximum number or partners

Large accounting, law, and advertising partnerships have multiple partners

usually a pooling of special talents or the results of a sole proprietor taking on a partner

A

partnership

49
Q

What kind of business ownership is this?

partnership agreement is recommended

ends upon death or withdrawal of a partner unless otherwise provided for in partnership agreement

unlimited liability

minimal legal requirements

roles specified in partnership agreement; partners generally have equal voice

not a separate taxable entity; taxes paid through owner’s tax return

Funding raised through partner contributions

A

partnership

50
Q

a business co-owned by 2 or more general partners; default arrangement; simplest to form; made up of general partners

A

general partnerships

51
Q

a person who has full or shared responsibility for running the business; they have unlimited liability

A

general partners

52
Q

A business co-owned by at least one general partner and one limited partner.

A

limited partnerships

53
Q

Limited liability (only liable for the amount they invested in business). Do not operate business, they provide the capital.

A

Limited partners

54
Q

Advantages of partnerships

A

More owners to contribute capital and effort
Shared managerial and financial responsibility
Utilize complementary skills
Easy to form
Business losses can offset personal income
Profit taxed as personal income of the partners

55
Q

Disadvantages of partnerships

A

Must share control — and profits
Need the right partner
Differences in opinion on company’s direction
Unlimited liability (general partners only)

56
Q

What constitutes a partnership agreement?

A

capital contributions
responsibilities of each partner
decision-making process
shares of profits or losses
departure of partners
addition of partners

57
Q

Is a legal entity, separate from its owners. Owned by stockholders.

A

Corporations

58
Q

What kind of business ownership is this?

Incorporation must be filled with state and federal agencies

Separate entity; existence not dependent on owners, founders; ownership transfered easily

Owners are not personally liable for debts of corporation

Must have board of directors, corporate officers, annual meeting, and annual reporting

Shareholders elect board of directors, which provides strategic management or corporation; board appoints senior managment

Not a separate taxable entity; taxes are filed through owner’s personal tax return

Capital is raises through sale of stock and debt issue

A

Corporations

59
Q

What are the special elements of a corporation?

A

Stock
Stockholder/Shareholder
Dividend
Board of Directors
Closed (private) corporation
Open (public) corporation

60
Q

The shares of ownership of a corporation

A

stock

61
Q

2 types of stocks

A

Common stock (voting privileges)
Preferred stock (no voting rights, dividends paid first)

62
Q

A person who owns a share or shares of a corporation’s stock

A

stockholder/shareholder

63
Q

A portion of the corporation’s profit (earnings) that is distributed to stockholders

A

Dividend

64
Q

The governing body of the corporation, elected by stockholders and appointed corporate officers

A

board of directors

65
Q

A corporation whose stock is owned by relatively few people and is not sold to the general public

A

closed (private) corporation

66
Q

A corporation whose stock is bought and sold on security exchanges and can be purchased by any individual

A

open (public) corporation

67
Q

Advantages of corporations

A

limited liability
extended life and ownership transfer
raising capital
tax benefits

68
Q

Disadvantages of corporations

A

reporting requirements
can be difficult and costly to form
corporations have their own special taxes
double taxation

69
Q

It is when corporations pay a tax on their profit; stockholders who receive a divided also have to pay a tax

A

double taxation

70
Q

a corporation with a single stockholder, who must be a natural person, trust, or an estate.

A

one person corporation (OPC)

71
Q

Where is OPC institutionalized or written?i

A

Title XIII (Special Corporations) of Republic Act No. 11232, also known as the “Revised Corporation Code”

72
Q

an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of risks and benefits of the undertaking in accordance with the universally accepted cooperative principles.

A

cooperative

Entrepreneurship 12 (4 decks)

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