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I. Objectives
At the end of the lesson the students should be able to:
● Define entrepreneurship and entrepreneur;
● Describe the characteristics of an entrepreneur;
● Classify businesses according to type, business models, and
strategies; and
● Observe laws, regulations, and standards for businesses.
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Introduction
Businesses can be classified according
to their type, business model, or business
strategy. The types of businesses can be
based on different considerations, such
as asset size and ownership.
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Businesses can also be classified according to their business
model and strategy. A business model can be defined as how a
company earns money from its products or services. In
contrast, a business strategy refers to the activities a business
undertakes to achieve its goals.
In this lesson, you will learn the various types of businesses and
common business models and strategies.
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The types of businesses based on asset size vary
depending on their number of employees, and the total value of
assets. There are four (4) different types of businesses
according to asset size. These are:
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2. One-Person Corporation (OPC)
This type of business is a
corporation with only one stockholder. OPC
is introduced through the Republic Act No.
11232 or the Revised Corporation Code of
the Philippines.
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4. Cooperative
According to the Cooperative
Development Authority (CDA), a cooperative is
an “autonomous and duly registered association
of persons” who have a common bond of
interest and have voluntarily gathered to reach
their social, economic and cultural needs and
aspirations.
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4. Cooperative
They achieve this through their respective equitable
contributions to the required capital, and their support of their
products and services; as well as their acceptance of the risks and
benefits of their participation in the coop, in line with the
universally accepted cooperative principles.
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5. Corporation
This type of business is established and operated by a
maximum of 15 individuals who conduct a business as a single
entity for the benefit of the entire business organization.
Corporations can be classified as either stock or non-stock. Stock
corporations are business organizations that offer percentages of
company ownership to individuals or groups called shareholders or
stockholders, while all other corporations are non-stock.
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Stock corporations are business
organizations that offer percentages of
company ownership to individuals or groups
called shareholders or stockholders, while all
other corporations are non-stock.
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Product
It focused on selling physical items that have value to
customers creates products or services at the lowest possible cost
while retaining high quality and sells as many units as possible at
the price that is as high as the customers are willing to pay for
examples include baked goods or home-cooked meals business,
dress shops, and furniture shops
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Lease or Rental
It acquires assets and allows customers to use them for a
definite amount of time and at an agreed price relies on ensuring
that customers will return the rented item on the agreed period and
with no or minimal damage examples of items commonly offered
for lease are houses, business spaces, cars, gowns and dresses.
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Service
It provides services that customers usually cannot do due
to limited resources or capabilities must be able to provide high
quality service consistently for a price that is as high as the
customers are willing to pay for examples are repair shops,
catering businesses, and hairdressing shops
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Insurance
Transfers the effect of an anticipated risk from the
customer to the insurance provider for an agreed amount called
premium must be able to accurately calculate the risk and collect
higher premiums for risks that are more likely to happen
almost anything can be insured from their houses, cars, health,
and life.
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Shared Assets
It acquires equipment or facilities that customers can use
for a fee must earn enough to maintain the assets, acquire new
ones for replacement or improvement, and have as many
customers use the asset while maintaining quality customer
service common examples are coworking spaces, computer
shops, and self-service laundry shops.
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Reselling
Purchases items in bulk and sells them to customers at a
profit must have access to quality products that can be bought in
bulk at a low price. Common examples of reselling business are
grocery stores, clothing stores, and appliance stores.
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Subscription
Asks customers to regularly pay a specific amount in
exchange for products or services allows enterprises to earn a
steady amount of income, and to predict future earnings
enterprises with subscription-type business models are magazine
or newspaper businesses, video streaming platforms, and gyms.
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Agency/Promotion
Sells products or services offered by another enterprise in
exchange for a commission for connecting the customer with the
seller relies on an entrepreneur’s selling, negotiation, and
intrapersonal communication skills commonly applied in real
estate enterprises.
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When determining the business model for your business,
you must give importance to the value your product or service
offers and if that value is appropriate to the price that you set for
your product or service.
You must also remember that an effective business model
allows you to sell your product or service at a price that is fair for
your customers, and would sustain the successful operation of
your business.
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References
● Business model canvas explained. Enterprising Oxford. (n.d.).
Retrieved July 15, 2022, from https://eship.ox.ac.uk/business-model-
canvas-explained/
● Cooperative Development Authority. (n.d.). Frequently Asked Questions.
Cooperative Development Authority. https://cda.gov.ph/frequently-
asked-questions/
● eCommerce, D. T. I. (n.d.). Understanding e-commerce in the
Philippines. DTI. Retrieved July 19, 2022, from
https://ecommerce.dti.gov.ph/madali/thebasics.html
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References
● Rice University - OpenStax. (n.d.). 11.2 designing the business model -
entrepreneurship. OpenStax. Retrieved July 15, 2022,
from https://openstax.org/books/entrepreneurship/pages/11-2-
designing-the-business-model
● Black, S., Gardner, D. G., Pierce, J. L., & Steers, R. (2019, February 27).
Business model canvas. Organizational Behavior. Retrieved July 15,
2022,
from https://opentextbc.ca/organizationalbehavioropenstax/chapter/
business-model-canvas/#ch19tab01
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References
● Entrepreneurship - enterprises by business size - OECD data. The OECD.
(n.d.). Retrieved July 14, 2022,
from https://data.oecd.org/entrepreneur/enterprises-by-business-size.htm
● Healy, P. (2016, May 26). 8 types of business models & the value they deliver.
Business Insights Blog. Retrieved July 15, 2022, from
https://online.hbs.edu/blog/post/types-of-business-models
● Kolesnikova, O. (2022, April 14). Council post: Five growth strategies for
small-business owners. Forbes. Retrieved July 19, 2022,
from https://www.forbes.com/sites/forbesbusinesscouncil/2021/04/19/five
-growth-strategies-for-small-business-owners/?sh=3f5d744b7a4a
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References
● micro, small and Medium Enterprises (msmes): Republic act no. 6977,
as amended " Philippine e-legal forum. Philippine e-Legal Forum.
Retrieved July 14, 2022, from https://pnl-law.com/blog/magna-carta-
for-micro-small-and-medium-enterprises-msmes-republic-act-no-
6977-as-amended/
● What type of business entity is right for me? DTI Negosyo Center.
(n.d.). Retrieved July 27, 2022,
from https://dtinegosyocenter.online/what-type-business-entity-
right-me
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References
● Pamaos & Labao Law Firm (P&L Law). (2020, May 1). Magna carta for
Yelp for Business. (2021, October 12). 11 business growth strategies
for small business owners. Yelp for Business. Retrieved July 19,
2022, from https://business.yelp.com/grow/business-growth-
strategies-small-business-owners/
