This document discusses organizing a business and provides information on various aspects involved, including: why people engage in business such as employment, profits, and personal satisfaction; entrepreneurship which involves supplying capital, organizing production, and bearing risk; business prospecting by scanning opportunities and choosing from alternatives; business promotion through discovering ideas, determining feasibility, and assembling resources; and the role of promoters in classifying and assembling needed resources while acting as temporary trustees.

1. Organizing
A Business

2. Organizing a Business
• Why Persons Engage in Business
• Entrepreneurship
• Business Prospecting
the Search for Business Opportunity
• Business Promotion
– Discovery
– Determination of Feasibility
• The Promote
-Assembling the Needed Resources
– Liability of Promoters

3. Most Common reasons for
Business Failures
1. Bad or Improper management
practices, including poor cost
controls and poor hiring practices;
2. Poorly focused and executed
marketing or inadequate
marketing;
3. Poor location;

4. Most Common reasons for
Business Failures
4. Failure to invest in new
products and efficient
technology;
5. Lack of adequate financing.

5. Why Persons
Engage in
Business
1. Provision of
employment to people;
2. Profits;
3. Service to the
community;
4. Personal satisfaction;
5. Means to earn a living;

6. Why Persons
Engage in
Business
6. Achievement of
power; and
7. Protection of one’s
self and family

7. Entrepreneurship

8. Entrepreneurship
2 Options to engage in Business
- To Buy an existing business
- To create a business that he will operate
Entrepreneur’s function:
- To supply the capital of a firm;
- To organize production by buying and
combining inputs;

9. Entrepreneurship
- To decide on the rate of output in the
light of his expectations about
demand; and
- To bear the risk involved in these
activities

10. Business Prospecting

11. Business Prospecting
• First, he should carefully scan the
environment for other possible openings;
• Second, he should prepare a list of
alternative business opportunities; and
• He should make his choice from the list.

12. Business Promotion
3 steps involved in business promotion
- Discovering the idea for a new business;
- Determining the feasibility of the idea; and
- Assembling the needed resources to start
a business.

13. DISCOVERY
• The identification of an idea for a new
business in the first step in business
promotion.
• The business promoter may also be
induced to consider certain product ideas
because of the availability of materials.

14. Determination of Feasibility
Aspects in Determining of Feasibility
• Management study includes
proponents, Personnel and Organization
• Marketing study;
• Production facilities and the product;

15. Determination of Feasibility
• Taxation and legal aspects
• Financing aspects;
• Profitability; and
• Social desirability

16. Management Study
• It is in this particular portion of tfeasibility
study where the following aspects are
determined:
• The appropriate form of organization;
• The internal structure of the organization;

17. Management Study
• The owners; and
• The staffing pattern of the
organization

18. Assembling the Needed
Resources
• Initial capital required;
• The essential properties;
• Processes;
• Personnel

19. Promoter
•The person responsible
for the formation of a
company.

20. The Promoter is motivated by any or
a combination of the following:
• The promoter’s fee;
• Shares of stock or bond in the new
business project;
• A management position in the new
business project;

21. • a new customer for his products or
services; and
• the desire to contribute to the
economic growth of the local
community

22. Classification of Promoters
• Professional promoters – they are those
whose main occupation in business
promotion;
• Side-line promoters – they are persons
who perform promotion activities
occasionally;

23. Classification of Promoters
• Banking promoters – they are banking
institutions which provide business
promotion services to their clients;
• Financial promoters – they insist of
investment houses engaged in a
promotion of certain business ventures
through the sale of securities; and

24. Classification of Promoters
• Subdivision promoters – they are
those engaged in development of
new subdivisions.

25. Liability of Promoters
• The promoter undertakes to pursue his
job with capacity of a temporary
trustee.
• He cannot legally bind the firm into
contracts and deeds unless approved
by the owners or the board of directors.

26. THANKYOU!