INDUSTRY ANALYSIS

A business is just a small portion of an industry. It is an undertaking by a person, a group of partners, or stockholders who own a corporation.

An industry, on the other hand, is the aggregation of different businesses engaged in the same line of work. For example, Celine is a business firm that is part of the country’s shoe industry.

Factors That Affect a Business

• Competition – Who are the major businesses in the industry? Are they well-established or new entrants? What is their market share?
• Customers – Identifying the target market is essential. Who will buy the product? Consider income, age, gender, career, and lifestyle.
• Suppliers – Every retail business requires suppliers for raw materials, intermediate products, or finished goods.
• Substitutes – Substitutes are products that can replace another, satisfying the same need.

BUSINESS ORGANIZATION

1. Sole Proprietorship

- Owned by a single individual who is responsible for running the business.

- The owner has full control and keeps all profits but also bears all losses.

- Unlimited liability: personal assets may be used to pay debts.

2. Partnership

- Two or more people combine resources to operate a business for profit.

- A partnership agreement dictates profit distribution.

• General Partnership – All partners manage the business and have unlimited liability.
• Limited Partnership – Some partners only invest capital and are liable for debts to a limited extent.

3. Corporation

- A corporation is a legal entity separate from its owners (shareholders).

- Owners have limited liability, meaning they are not personally responsible for company debts.

- Corporations can exist for 50 years, renewable for another 50 years.

- Subject to heavy taxation.

4. Cooperative

- Organized by individuals with similar needs to provide goods/services or share resources.

- Members have equal voting rights, regardless of their share count.

- Surplus earnings are distributed to members based on their patronage.

CLASSIFICATION OF BUSINESSES BY SIZE

• Micro Business – Below ₱1,500,001
• Small Business – ₱1,500,001 - ₱15,000,000
• Medium Business – ₱15,000,001 - ₱60,000,000
• Large Business – Above ₱60,000,000

Business Registration Requirements

- Sole Proprietorship & Partnership – 100% Filipino-owned.

- Corporation – At least 60% of capital stocks must be Filipino-owned.

- Businesses can operate in sectors such as industry, services, tourism, and agri-business.