Sie sind auf Seite 1von 24

Advantages and Disadvantages of Small Scale Businesses among

Entrepreneurs in San Jose, Antique

A Research Paper

Presented to

Mr. Ramil A. Mondejar

St. Anthonys College

In Partial Fulfillment

of the Requirements

in Research 2

by

Alvior, CandydJulyn W.

Ella, Mary Joy N.

Fabila, Janine L.

Sebastian, Nikki P.

October 20, 2017


Chapter 1

The Problem and Its Background

Introduction

A small-scale enterprise is a business that employs a small number of


workers and does not have a high volume of sales. Such enterprises are
generally privately owned and operated sole proprietorships, corporations or
partnerships. The legal definition of a small-scale enterprise varies by industry
and country. (Gustafson, 2017)

Micro businesses in the Philippines can be defined according to the size of


assets, size of quality capital, and number of employees. A typical micro
business is a business that employs nine people or fewer with assets of P3
million and below.

In the Philippines, about 90 percent of all businesses are categorized as


micro businesses. These consist of enterprise engaged in industry, agribusiness
and or services, whether single proprietorship, cooperative, partnership or
corporation. Their total assets, inclusive of those arising from loans but exclusive
of the land on which the particular business entitys office, plant and equipment
are situated, have value of not more than P3 million.

Of all micro businesses, about 46 percent are involved in the wholesale,


retail and repair business; 27.6 percent are in the accommodations and food
service; 13.5 percent are in manufacturing; while 12.5 percent are engaged in
other service categories.
Background of the Study

The Magna Carta for Micro, Small and Medium Enterprises


(MSMEs)is a landmark legislation that defines the current national policy to
promote, support, strengthen, and encourage the growth and development of
MSMEs.

Enacted by the Philippine Congress in 1991 as RA 6977, amended by


Republic Act 9501 in 2008, the law is geared towards the development of the
Filipino entrepreneurial spirit by providing a business environment for MSMEs.

The full texts of RA 6997, RA 8289 and RA 9501 and its IRR, including the
revised rules and regulation governing the mandatory allocation of credit
resources provide ready reference for complete compilation of laws on the
Magna Carta for MSMEs.
Statement of the Problem

This study was conducted to find out the advantages and disadvantages of
small scale businesses among entrepreneurs in San Jose, Antique.

Specifically, this study was undertaken to seek answers to the following


problems:

1. What is Small Scale Business?


2. What is the purpose of Establishing a Small Scale Business?
3. What are the biggest problems to establish a Small Scale Business?
4. What are the Advantages and Disadvantages in Establishing a Small
Scale Business?
Significance of the Study

This research was undertaken to seek the advantages and disadvantages


of small scale businesses among entrepreneurs in San Jose, Antique.

Furthermore this study is conducted the benefit of the following:

The result of the study is to determine the advantages and disadvantages


of small scale businesses among entrepreneurs in San Jose, Antique.

Students.The result of this study will help for their researches.

Costumers.Will find the results useful so that they can choose whether to buy
their needs in a small scale business or in a big scale business by determining its
advantages and disadvantages

Future business owners. Will have an idea on what kind of business are they
going to put up in the future.

Future researchers with topics related to this study. The result of this study
will serve as a related literature needed to substantiate their own study.

Scope and Delimitation of the Study

This study has determined the advantages and disadvantages of small


scale businesses among entrepreneurs in San Jose, Antique. The study
population comprised of groups, individuals, businessmen, costumers and other
businesses focused on retailing and buy and sell dealing with small scale
businesses in San Jose, Antique.
Conceptual Framework

Figure 1.

Small Scale Businesses

Services Quality Organization

Performance

Advantages Disadvantages

The conceptual framework shows that the small scale businesses have
services, quality and organization that have performance that deals with the
advantages and disadvantages of small scale businesses.
Statement of the Hypothesis

This study has formulated the following hypothesis:

There is a significant difference in the advantages and disadvantages of


small scale businesses compared to the bigger scaled businesses in San Jose,
Antique.

Definition of Terms

The following terms were used in this study and were defined to help clarify
the statements contained therein:

Advantage is any trait, feature or aspect that gives an individual, entity or any
other thing is more favorable opportunity for success.

Disadvantageis a factor which makes someone or something less useful,


acceptable, or successful than other people or things.

Small scale is sometimes called a small business, a small-scale enterprise is a


business that employs a small number of workers and does not have a high
volume of sales. Such enterprises are generally prsivately owned and operated
sole proprietorships, corporations or partnerships.

Business is an organization or economic system where goods and services are


exchanged for one another or for money.

Entrepreneur is someone who exercises initiative by organizing a venture to


take benefit of an opportunity and, as the decision maker, decides what, how,
and how much of a good or service will be produced.

MSMEs is Micro- Small and Medium Enterprises (MSMEs) are small sized
entities, defined in terms of their size of investment.

Service is something that the public needs, such as transport, communications


facilities, hospitals, or energy supplies, which is provided in a planned and
organized way by the government or an official body.

Quality is brought about by strict and consistent commitment to certain


standards that achieve uniformity of a product in order to satisfy specific
customer or user requirements.

Organization is a social unit of people that is structured and managed to meet a


need or to pursue collective goals.
Performance is the accomplishment of a given task measured against preset
known standards of accuracy, completeness, cost, and speed.
Chapter 2

Review of Related Literature and Studies

This chapter presents the review of related literature and studies. The
researchers read various writings and researches that both locale and ferment
set up that have direct varying or relation to the present study.

Small scale businesses have a lot of advantages and disadvantages and


the purpose of this research is to help and guide small scale business owners
determining the factors that can affect their business. Operation is that part of
business organization that is responsible for producing goods and or services.
Goods are physical items that include raw materials, parts subassemblies such
as motherboards that go into computers, and final products such as call phones
and automobiles. Services are activities that provide some combination of time,
location, form, or psychological value. Examples of goods and services are found
all around you. Every book you read, every video you watch, every e-mail you
send, every telephone conversation you have, and every medical treatment yo
receive involves the operation function of one or more organizations. So does
everything you wear, eat, travel in, sit on, and access the Internet with. The
operations function in business can also be viewed from a move far-reaching
function has an impact on the ability of a nation to compete with other nations,
and on the nations economy.

The ideal situation for a business organization is to achieve a match of


supply and demand. Having excess supply or excess capacity is wasteful and
costly: having too little means lost opportunity and possible customer
dissatisfaction. The key functions on the supply side are operations and supply
chains, and sales and marketing on the demand side. While the operations
function is responsible for producing products and or delivery, it needs the
support and input from other areas of the organization.
A small business is usually privately owned, with limited sales and stock
volume and a small work force. It is either a partnership or owned solely by one
person. When starting a small business you should consider its strengths and
weaknesses.

One of the advantages of a small business is the relatively low startup


capital needed. Personal savings, small grants and loans from friends and family
are usually enough to start up a small venture. Small business grants are
available from the government, banks and microfinance institutions when you
provide a feasible business plan. As you acquire the capital, it would be wise to
familiarize yourself with the pros and cons of a small scale establishment to help
you prepare for future challenges.

A small establishment is easier to manage compared to a large operation.


This is because the dealings are usually local and small scale. The owner can
keep a hard copy of the transactions or invest in cheap software for record
keeping. Keeping track of inventory, cash flow and transactions is easily
manageable. However, it is advisable to hire a qualified accountant for a more
organized and effective financial record system. The business is also classified
as personal income. Therefore, you would not have to file two tax returns as is
the case for a corporate firm.

Perhaps the most prominent feature when determining merits and


demerits of a small venture is the ownership structure. A small business is owned
mostly by one person or several partners. Therefore, decisions can be
deliberated and implemented faster. Since it is personal investment, most
decisions are made with the best interests of the business at heart, therefore
more care is taken. Profits are solely the owner(s) and how they are to be utilized
remains entirely at the owner(s) discretion. The clients also enjoy a more
personal customer service as the employees are few and most of the
transactions are conducted on a first hand basis.
Another factor to consider when determining the pros and cons of a small
business is the exposure level. Small businesses lack prominent exposure and
authority. Many clients prefer to conduct their business with large established
firms rather than the smaller ones which are considered risky. Thus, competition
for market share with the already established firms is greatly skewed in their
favor especially if they are highly capitalized. Although marketing and
advertisement costs for a small business are usually high, gorilla marketing can
be utilized to gain leverage.

Since businesses are there to make profit, evaluating profit and loss is
vital when gauging the benefits and limitations of a small firm. When a sole
proprietorship encounters losses or defaults on loan repayments, the burden is
squarely on the shoulders of the owner. He/she is responsible for all the debts,
liabilities, shortcomings and losses encountered. Claims on the debts and loans
usually extend to personal belongings like house and furniture in order to cover
the debts. On the other hand, when gains are made the sole owner enjoys all the
profits.

Considering the above factors, keen attention should be paid to these


merits and demerits of a small establishment as they help when deciding the
form of business to start. (Retrieved July 14, 2017, from http://rinf.com/alt-
news/business-news/advantages-and-disadvantages-of-a-small-business/)

One of the main advantages of starting a small business is the personal


satisfaction you get from taking an idea from concept to reality, being your own
boss and using your talents to make your business thrive and grow. Working for
others can lead to frustration based on unfair managers or knowing you could do
better if given more authority. When comparing employee and entrepreneurial
situations that pay relatively the same amount, many people use personal
satisfaction as the deciding factor.

Running your own business often results in working long hours, seven
days each week. This occurs because small-business owners often dont have
enough money to hire enough people to share the workload or because the
entrepreneur is the expert and must handle many key responsibilities himself. If
you have a problem with delegating, its very easy to take on too much
responsibility at a small company. Consider your family and other personal
relationships and how the long hours and stress of starting a small business will
affect them and your health.

You are more likely to make millions of dollars working for yourself than for
someone else. Even if your goal is only a higher salary than youre currently
making, a small business offers you the chance to make an exponential leap in
your annual income, while working for someone else usually only comes with an
incremental annual pay raise. Even if you keep your current job, starting a part-
time business can help you move from a comfortable lifestyle to an affluent one.
Turning a hobby into a part-time business lets you write off business expenses
that might be enough to justify launching the business even if you dont make
much money.

No matter how hard you try to separate your personal assets from your
business, there is often considerable personal financial risk involved with starting
a small business. Even if you are not completely responsible for the liabilities of a
failed business, you might lose your personal investment and damage your
credit. If you use credit cards or take out a loan against your mortgage, the
damage can be severe. Meet with an accountant before you launch to determine
if you need to incorporate, which type of incorporation to choose, how to create
budget projections and what financial procedures to follow to minimize your
financial risk.

Starting a small business often requires a low cost of entry and first-year
overhead expenses, making it better able to compete with larger, established
businesses on price. The reverse can be true if the company starts with little
operating capital and immediately depends on sales to cover its operating costs,
requiring higher prices to stay in business. Sometimes, people are often curious
about and willing to try a new brand, while in other instances, new companies
can have a tough time cracking customer loyalty. (Retrieved July 14, 2017, from
http://smallbusiness.chron.com/advantages-disadvantages-small-businesses-
61057.html)

The Small Business Administration identifies a small business as one with


less than 500 employees for a manufacturing company -- although some types of
manufacturing firms may have up to 1,500 employees and still be considered a
small business. Other types of businesses such as retail or service have different
size thresholds to be classified as small. SMEs, or small- to medium-size
enterprises, have advantages that big companies don't. SMEs are the quick,
smart mammals among the behemoth big company dinosaurs.

Small and midsize companies have the ability to react quickly to changes
in the marketplace. There is no hierarchy in place that slows down the decision-
making process. If the business owner sees that there is an opportunity to
challenge a competitor, she can do it without obtaining approval from a board of
directors. Employee job descriptions can be flexible as well, allowing an
employee to branch out beyond his duties and improve his worth to the business.
Big companies often have cast-in-stone job descriptions that hinder an
employee's growth potential.

It is not uncommon for two people to work for the same big company for
years and never meet. Departments are separated on different floors and
buildings. Competition between departments for additional staffing and resources
encourages an "us against them" mentality. A smaller company encourages
team camaraderie. The owner recognizes that every employee is critical to the
success of the business. Cross training naturally happens as one employee
covers for another during vacations, illnesses and family leave.

SMEs often become actively involved in the community, because they


view themselves as members of the community and care about the people who
live there. Big companies are more independent of the community, especially if
it's a branch or division of the big company rather than the home office. Big
companies have little compunction about moving to another city if it makes sense
financially.

Every customer is important to an SME. Big companies don't have to rely


on repeat business from any individual customer and don't necessarily get to
know their customers as individuals. A competitive advantage for the SME is that
customer interaction with the management team takes place on a regular basis.
The business owner knows what her customers specifically want through their
emails, phone calls, reaction to her company's blog and social media platforms.
She then has the opportunity to fill the customers' needs with additional products,
a change in pricing or enhancements in customer service.

Large public companies have reporting requirements that SMEs don't


have. The financial statements must be audited as well. For example, the U.S.
Securities and Exchange Commission requires that public companies file
quarterly reports as well as annual reports. These are public documents. Private
SMEs do not have to report their revenues, expenses, income and debt to
anyone outside the business other than through tax forms they submit. This gives
the SME an advantage if it wants to attack a new market niche without giving
competitors prior knowledge of its strategy.

Several loan programs exist for SMEs that larger companies dont qualify
for. These are Small Business Administration-backed loans. The SME applies for
the loan through a local bank. The SBA guarantees the loan but doesn't directly
make the loan to the small business. (Retrieved July 14, 2017, from
http://yourbusiness.azcentral.com/advantages-smes-17194.html)

The U.S. Small Business Administration (SBA) reports that smaller


companies those with fewer than 500 employees, by the SBA definition (see
How Small Is a Small Business?) account for more than two-thirds of all the
new jobs created since the 1970s. Theyre also responsible for a lot of
innovation, as a slew of ultra-successful tech startups have proven in recent
years.

But in a number of respects, small businesses are at a distinct


disadvantage compared with their larger competitors. And thats why some argue
that government policies favorable to these firms are so important.

At some point, businesses need to raise outside capital if they want to


expand. If a large corporation plans to hire new workers or build a new factory, it
has the ability to sell bonds or issue stock to the public. But smaller organizations
dont have that flexibility.

Thats one of the reasons why small-scale operations tend to be so reliant


on bank loans. One of the goals of the SBA is to encourage banks to lend by
guaranteeing the value of loans made to these businesses. (See Expanding Your
Small Business With an SBA Loan and The 4 Best Websites for Small Business
Loans for more.)

One of the reasons big corporations have a leg up on smaller rivals is that
they benefit from economies of scale that is, the cost for each product or
service they deliver is lower.

Imagine trying to build just one table. Chances are, youd spend a lot of
money investing in tools and purchasing the raw materials and a good deal of
time getting the pieces to fit just right. But, almost invariably, building a second
table is cheaper than the first because you can buy all the materials at once and
depreciate the cost of the equipment. The third one? You guessed it cheaper
still. Youre developing efficiency.

Large businesses produce large quantities, whether its pieces of furniture


or electronics or bakery items. They are therefore able to keep the total expense
for each piece they manufacture very low.

Another way large corporations keep costs down is by negotiating for


lower prices. Take, for example, a big auto maker that has to buy steel in order to
make its cars and trucks. Because of the large volume the car maker is ordering,
the supplier has an incentive to lower its price per ton.

It would hard for a much smaller competitor to get the same deal; the steel
company simply doesnt have as much reason to bend its price. And if the firm is
paying more for raw materials, its receiving a slimmer profit on each car that it
sells.

The lack of purchasing power affects virtually every cost that a business
takes on, from telephone service to real estate. It particularly affects healthcare
costs, which represent one of the biggest expenditures for companies today. The
Small Business Health Options program, part of the Affordable Care Act, is trying
to provide a more level playing field by giving small firms more purchasing power
in the insurance market.

Every business owner knows that in order to excel, you need the best
workers available. But its much easier for big players to attract the high-level
employees because, in most cases, they can afford to pay them more.

What small businesses lack in compensation they can sometimes make


up for in non-financial perks, like the ability to move up the ladder more quickly.
Some also offer benefits like flex time and telecommuting opportunities in order
to woo employees who otherwise might want to chase a bigger paycheck
elsewhere. See 3 Ways to Attract Top Talent on a Budget and What Makes a
Great Workplace? for additional ideas.

The easiest way to get a sale is to make sure the customer already has
your brand in mind before they even start shopping. Thats often the case with
big corporations, which have the marketing muscle to advertise much more than
their smaller rivals.

A lot of the big-name companies have also been in business for decades
just think about McDonalds, IBM or Nike. That means theyve had years of
exposure in the marketplace.
Some people think that bigger companies take advantage of small
businesses, which are the underdogs. While that depiction might be a stretch,
smaller companies have a number of factors working against them that they may
have to overcome in order to be successful. (Retrieved July 14, 2017, from
http://www.investopedia.com/articles/personal-finance/111315/5-ways-small-
businesses-are-disadvantage.asp)

In most industries, a small business is defined as one that has fewer than
500 employees and makes less than $7 million in annual revenue, according to
the U.S. Small Business Administration. While small businesses often use local
community support and product specialization to attract customers, they can be
at a disadvantage against larger competitors.

Small companies don't typically have the name recognition of larger


businesses that gain exposure through more locations and promotional efforts.
Less visibility in the daily lives of people makes it more challenging for small
businesses to attract traffic. They have to work to develop a company image and
reputation from scratch, whereas a large chain enjoys an established reputation.

Budget constraints are a significant small business hurdle. Small


businesses don't have the funds to put into research and development, advanced
technology, marketing and promotions and high-end inventory. All of these
elements impact a company's ability to develop, acquire and offer a high quality
solution to customers. Small companies sometimes have ad budgets of $5,000 to
$10,000, which won't even get a television commercial produced in many cities.

Bargaining power inhibits a small company's ability to get a low cost basis
of resale products. Typically, large companies can negotiate volume discounts
and bulk pricing that reduce their cost per unit. A single store doesn't have the
same buying power as a company with hundreds of locations and economies of
scale.

Because of the bargaining power deficit and other cost structure


disadvantages, small businesses don't often compete on price against larger
competitors. They simply can't make enough money with a low price strategy and
must opt for differentiation in products or services. This increases the burden on
a small business to promote the strengths of its products and services, which can
place stress on its smaller budget. (Retrieved July 14, 2017, from
http://smallbusiness.chron.com/disadvantages-smallscaled-businesses-
60149.html)
Chapter 3

Research Methodology

This chapter presents the research method used, research locale,


description of the respondents, research instruments or tools used and the data
gathering procedures.

Research Method Used

This research utilized the quantitative research or statistical method.


Quantitative or statistical research is a research in which influential statistics is
utilized to determine the results of the study.

Research Locale

This study is undertaken in the areas of San Jose, Antique where the mall
scale businesses is located. This study is undertaken during the first semester
school year 2017-2018 at St. Anthonys College of San Angel, San Jose Antique.

Description of the Respondents

This study will have respondents which will benefit on this study. The
respondents will be described according to age and gender.

They are composed of 10 male and 10 female entrepreneurs.

Data Gathering Procedures

This research will conduct a survey to identify the advantages and


disadvantages of small scale businesses among entrepreneurs in San Jose,
Antique. First, the respondents will be provided a permit to allow us to have a
survey on the status of their business. Second, they will be orient about the study
and third, they will be provided a survey questionnaire to be answered through a
checklist.
Chapter 4

Results

This chapter presents the analysis and interpretation of the study on the
Advantages and Disadvantages of Small Scale Businesses among
Entrepreneurs in San Jose, Antique.

Descriptive Data Analysis

Advantages and Disadvantages of Small Scale Businesses among


Entrepreneurs in San Jose, Antique.

Table 1 presents the advantages and disadvantages of small scale businesses


according to age, sex and civil status.

Table 1

Advantages and Disadvantages of Small Scale Businesses among


Entrepreneurs in San Jose, Antique.

SEX NO. OF RESPONDENTS PERCENTAGE


Male 9 45%
Female 11 55%
Total 20 100%
Chapter 5

Summary, Conclusions, and Recommendations

This chapter has four parts: (1) Summary of the Problem, Method and
Findings; (2) Conclusions, and (3) Recommendations.

Summary of the Problem, Method, and Findings

This descriptive study primarily aimed at determining the advantages and


disadvantages of small scale businesses among entrepreneurs in San Jose,
Antique.

Specifically, this study sought answers to the following questions:

1. What is Small Scale Business?


2. What is the purpose of Establishing a Small Scale Business?
3. What are the biggest problems to establish a Small Scale Business?
4. What are the Advantages and Disadvantages in Establishing a Small
Scale Business?

The respondents of the study were the 20 entrepreneurs of small scale


businesses in San Jose, Antique.

Statistical tools employed were the rank, percentage and mean.

The findings of the study are as follows

1. Small scale businesses purpose is to help people be convenient.

2. Small scale businesses provide the daily needs of the people buy selling

products in cheaper prices.

3. Small scale businesses is easy to manage.


Conclusion

1. The advantage of small scale businesses is easy to manage.

2. The disadvantage of small scale business is there is competition between

entrepreneurs of small scale business.

3. Entrepreneurs encourage people buying their needs in small scaled

businesses.

Recommendations

Based on the conclusions that were posted the following recommendations

was made:

1. The entrepreneurs should improve their services to encourage purchasers.

2. The entrepreneurs should choose good quality of new products.

3. Small scale businesses should possess uniqueness from other businesses.


Acknowledgement

We the researchers would like to extend our gratitude to the following persons
who are in one way or another become part of the achievement of these
research paper:

The Entrepreneurs, for their cooperation and time in answering our survey
questionnaire.

The Parents, for their moral and financial support to their children for the
accomplishment of the research paper.

The Principal, Mrs. Marites I. Mejares, for signing and permitting us to


conduct survey to Grade 12 students.

The Research Adviser, Mr. Ramil Mondejar, for supervising and advising us
to make this research paper possible.

Das könnte Ihnen auch gefallen