Business Implementation
Before you proceed, let us first recall our previous lesson.
Profit is the amount you gain after selling your product. In computing your profit,
you just simply follow this formula:
Sales - Cost of Goods Sold = Gross Profit
The gross profit represents the difference between net sales and cost of sales.
Variable costs are those things that change based on the amount of product
being made and are incurred as a direct result of producing the product.
Variable costs include:
1. Materials used
2. Direct labor
3. Packaging
4. Freight
5. Plant supervisor salaries
6. Utilities for a plant or a warehouse
7. Depreciation expense on production equipment
8. Machinery
Fixed costs generally are more static in nature. They include:
1. Office expenses such as supplies, utilities, a telephone for the office, etc.
2. Salaries and wages of office staff, salespeople, officers and owners
3. Payroll taxes and employee benefits
4. Advertising, promotional and other sales expenses
5. Insurance
6. Auto expenses for salespeople
7. Professional fees
8. Rent
Guidelines for successful business plan implementation:
1. Objectives- the entrepreneur should have a clear idea on what is his purpose of
putting up his enterprise.
2. Tasks- this means that the entrepreneur must know what the tasks are he has to
perform in order that his objectives will be realized.
3. Time allocation- This means that the entrepreneur should have a timetable or a
schedule to follow every task, so that it will be accomplish on time and realize his
objective.
4. Progress- This means that the entrepreneur should monitor the development of the
tasks and the accomplishment of the objective.
In Operating a business, the entrepreneur should first consult professional for
advices, like accountants or consultants from small enterprises. In your case, you can
consult your teacher in entrepreneurship or anyone you think that could help you.
The following are the basic requirements to start a business in the Philippines:
Securities and Exchange Commission (SEC) Registration-for partnership
or Corporation
Department of Trade and Industry (DTI) Registration- for your business
Trade name
Mayor’s Business Permit- for getting the license to operate in the city or
municipality and payment of your local business taxes.
Bureau of Internal Revenue (BIR) Registration - for getting TIN, official
receipts and invoices, registering your books of accounts and paying your national
Internal revenue taxes
SSS, PhilHealth, and Pag-Ibig Fund registration- for registering yourself or
company as an employer and for remitting your employees’ contribution together
with your employer’s share.
Other steps to follow before operating a Business are as follows:
1. Set up an accounting system or hire an accountant. Knowing how the business
is doing financially is important for planning and survival.
2. Advertise the business. No one will buy the products or services if customers do
not know that the company exists. You can make use of the social media.
3. Secure insurance for the business. Liability insurance protects the business in the
event of litigation. Consider life and disability insurance, health insurance and fire
insurance when you are leasing an office or storefront.
Keeping Business Records
Good record keeping can help protect the business, measure the performance
and maximize profit. Records are the source documents, both physical and electronic,
that specify transaction dates and amounts, legal agreements and private customer and
business details.
Developing system to log, store and dispose of records can benefit the business. A
systematic recording allows you to;
A. Plan and work more efficiently
B. Meet legal and tax requirements
C. Measure profit and performance
D. Protect your rights, and
E. Manage potential risks
