BUSINESS AND ENTREPRENEUR

SHIP MODULEF O R

N A T I O N A L S E R V I C E P R O G R A MP R O G R A M K H I D M A T B A K T I N E G A R A ( P K B N )

INTRODUCTION TO ENTREPRENEURSHIP MODULECONTENTS

• Business and Entrepreneurship• Business Idea• Legal Processes• Research and Planning• Finances

METHOD

• Lecture• Sharing• Discussion• Group Discussion and

Presentation

INTRODUCTION TO BUSINESS AND ENTREPRENEURSHIP• What is entrepreneurship?• Why is Entrepreneurship Important?• Who are Entrepreneurs?• Why should you venture into entrepreneurship?

WHO WANTS TO

START UP A BUSINESS?

WHO WANTS TO BE RICH?

WHY DO YOU WANT

TO BE RICH?

HOW DO YOU

BECOME RICH?

WHO ARE THE

RICHEST PEOPLE IN THE

WORLD?

FORBES TOP 10 RICHEST PEOPLE (MAR 2016)No. Name Net worth 

(USD) Age Nationality Source(s) of wealth

1  Bill Gates $75.0 billion  60  United States Microsoft2  Amancio Ortega $67.0 billion  79  Spain Inditex3  Warren Buffett $60.8 billion  85  United States Berkshire Hatha

way4  Carlos Slim $50.0 billion  76  Mexico América Móvil, 

Grupo Carso5  Jeff Bezos $45.2 billion  53  United States Amazon.com6  Mark Zuckerber

g$44.6 billion  32  United States Facebook

7  Larry Ellison $43.6 billion  71  United States Oracle Corporation

8  Michael Bloomberg

$40.0 billion  74  United States Bloomberg L.P.9  Charles Koch $39.6 billion  80  United States Koch Industries9  David Koch $39.6 billion  75  United States Koch Industries

WHAT IS A BUSINESS?

WHY IS BUSINESS

IMPORTANT?

F O R T H E B U S I N E S S O W N E R ?F O R Y O U R S E L F A S A C O N S U M E R ?

F O R A C O U N T R Y ?

WHAT BUSINESS

CAN YOU OR DO YOU

WANT TO START?

WHY SHOULD YOU GO INTO

BUSINESS?

ENTREPRENEURSHIP VS

EMPLOYMENTD I S C U SS I O N

ENTREPRENEURSHIP VS EMPLOYMENT

ENTREPRENEURSHIP• You can create a Business• You are your own Boss• You set your own income• You set your own time

• Your are responsible for the whole business

• You may need to answer to customers needs

EMPLOYMENT• You have to find a Job• You have a Boss• Your Income is set• You have to follow the set time

• You are only responsible for your job or your department

• You need to answer to boss and job requirements

WHAT DO YOU WANT IN

LIFE?

HOW MUCH WOULD IT

COST?

WHEN CAN YOU ACHIEVE

THOSE THINGS?

WHY DO YOU WANT TO ACHIEVE THOSE

THINGS?

HOW CAN YOU MAKE

THE MONEY TO ACHIEVE

THOSE THINGS?

SMART OBJECTIVES•SPECIFIC•MEASUREABLE•ATTAINABLE•RELEVENT•TIMELY

FINDING A BUSINESS

IDEA

BUSINESS IDEAS

•Finding Business Ideas•What will make people give you money?

•Maslow’s Hierarchy of Needs•Brainstorm for your Business Ideas

WHAT IS THE PERFECT BUSINESS IDEA?

Passion

Make MoneySkill

WHAT ARE YOUR

PASSIONS, INTERESTS

AND SKILLS?

HOW CAN YOU MAKE

MONEY OFF YOUR

PASSION?

WHAT WILL MAKE PEOPLE

GIVE YOU MONEY?

N E E D S

MASLOW’S HIERARCHY OF NEEDS

Self-EsteemSocial

Safety and SecurityPhysiological

Self Actualization

BUSINESS START UP COSTS

• Understanding Costs–Startup Costs

• Assets Purchase• Start up Expenses

–Running Costs• Understanding Basic Financial Terms

UNDERSTANDING COSTS

•Startup Costs–Assets Purchase

• Fixed Assets• Current Assets

–Start up Expenses

• Running Costs–Fixed Costs–Variable Costs

31

EXAMPLE: START-UP FOR NASIK KATOK Assets ExpensesFixed AssetRice Cooker $100 Biz Reg (16/17) $35Stove $75 Business License $50Frying Pans $100 Rental $0Stand $200 Advertising $200Chair $30 Hiring $600Fridge $200Current AssetRice Grain $65Chicken $100Packing $5Plastic $5Total Assets

$880 Total Expenses $885

Total Start-up cost

$1,665

UNDERSTANDING BASIC FINANCIAL TERMS• Sales• Direct Cost of Goods/ Variable Costs• Gross Profit• Fixed Costs• Nett Profit

HOW MUCH MONEY DO

YOU NEED TO START UP

YOUR BUSINESS?

HOW ARE YOU GOING TO GET THE MONEY TO START UP

YOUR BUSINESS?

SOURCES OF FUNDING

• Owner Capital–Sole Owner–Partners

• Investors–Angel Investors–Venture Capitalists

• Bank Loans• Government Grants

WHAT ARE THE LEGAL PROCESSES INVOLVE IN STARTING

YOUR BUSINESS?

LEGAL PROCESS

• Business Registrations– Types– Advantages and Disadvantages– Applications Process

• Business Licenses– Business License Exemption– Business License Requirements– Special Licenses

• Know how and where to apply for business registration and licenses for Business

BUSINESS REGISTRATIONS

• Types– 16/17– Limited Companies– Cooperatives

• Advantages and Disadvantages• Applications Process

39

LEGAL STRUCTURESole-Proprietorship Partnership Company

Definition A business owned by one person A business firm/ organization of two or more business partners

A business form which is a legal entity separate and distinct from its shareholders and directors 

Owned by One person Generally between 2 to 20 partners. A partnership of more than 20 partners must incorporate

Private Company having 50 members Public Company having more than 50 members

Legal Status • Not a separate legal entity• Owner has unlimited liability • Can sue or be sued in individual’s

own name•  Can also be sued in business

names•  Owner personally liable for debts

and losses of business

• Not a separate legal entity•  Partners have unlimited liability•  Can sue or be sued in firm’s name•  Cannot own property in firm’s name•  Partner’s personally liable for partnership’s

debts and losses incurred by other partners

• A separate legal entity from its members and directors.

•  Members have limited liability•  Can sue or be sued in company’s name•  Can own property in company’s name•  Members not personally liable for debts and losses

of company•  

Registration requirement

• Age 18 years or above.•  Brunei Citizens and Permanent

Residents only.•  Undischarged bankrupt cannot

manage business without court or Official Receivers’ Approval

• Age 18 years or above.•  Brunei Citizens and Permanent Residents only.•  Undischarged bankrupt cannot manage

business without court or Official Receivers’ Approval

• Age 18 years or above•  Minimum of 2 directors. (if 2, At least one of the

directors shall be Ordinarily Resident in Brunei Darussalam)

•  Undischarged bankrupt cannot manage business without court or Official Receivers’ Approval

•  At least two shareholdersFormalities and

expensesQuick and easy to set up Easy to administer and manage Registration cost is minimal Less administrative duties to adhere to

Quick and easy to set up Easy to administer and manage Registration cost is minimal Less administrative duties to adhere to 

More costly to set up and maintain More formalities and formalities to comply with Annual Returns must be filed as Statutory Requirement of General Meetings, directors, share allotments, etc.

Set-up fee $35 ($5 for name application fee and $30 for the registration fee)

$35 ($5 for name application fee and $30 for the registration fee)

$315 ($5 for name reservation , $10 for extension of reservation [if applicable] and $300 for the incorporation fees) 

Continuity of the business

entity

Exists as long as the owner is alive and desires to continue the business

Exists subject to Partnership Agreement A company has perpetual succession until wound up or struck off 

Closing of the business

By owner – Cessation of business By partners – Cessation of business or dissolution of partnership

Winding up – Voluntarily by members, compulsorily by the High CourtStriking Off

KNOW HOW AND WHERE TO APPLY FOR BUSINESS REGISTRATION AND LICENSES FOR BUSINESS

•WWW.BUSINESS.GOV.BN•WWW.ROC.GOV.BN

BUSINESS LICENSES

• Business License Exemption• Business License Requirements• Special Licenses

DO NOT REQUIRE BUSINESS LICENSES

http://business.gov.bn/Shared%20Documents/pdf/Guidelines%20for%207%20types%20of%20businesses.pdf

HEALTH AND BEAUTY LICENSE1. Aerobik 2. Aromaterapi 3. Tukang gunting rambut 4. Melangsingkan badan 5. Kosmetik 6. Rawatan muka dan

badan

1. Gimnasium 2. Salun rambut 3. Merias kuku tangan dan

kaki 4. Urut 5. Refleksologi 6. Spa, termasuk kolam air

panas atau sejuk http://business.gov.bn/Health/Syarat%20dan%20Peraturan%20Mengendalikan%20Establismen%20Kecantikan%20dan%20Kesihatan.pdf

SPECIAL LICENSES AND APPROVAL

– Ministry Of Home Affairs• Concerts and competitions

– EIDPMO• Exposition, Bazaar

– Ministry of Development• construction activity

– Ministry of Culture Youth and Sports• Child care centres

– Customs and Excise• shipping

– Ministry of Primary Resources and tourism, • Tourism, Tour Guides, Homestay

– AiTi• info-communication

– Municipal board• management of private car parks.

– Ministry of Finance• Banks/Finance/Securities companies, Money

Changer /Remittance, Insurance, Auditors

– Department of Land Transport• Car Importers

– Attorney General Chambers• Legal Firm

– Ministry of Health

• private clinics

– Ministry of Education• Schools, private education

PRODUCT AND

SERVICES& MARKET RESEARCH

PRODUCT AND MARKET RESEARCH• Products and Services

– list down products and sales price• Market Research

– Customers - Market Size and Segmentation– Competition – indirect and direct– Market and Industry – PEST analysis– SWOT

PRODUCTS AND SERVICES

• List down products and sales price• Calculate Sales Forecast (Day/week/month)

• Calculate the direct Costs• Calculate gross profit per unit

MARKET RESEARCH

•Customers - Market Size and Segmentation•Competition – indirect and direct•Market and Industry – PEST analysis

–Political, Economical, Strength, Technology•SWOT

–Strength, Weakness, Opportunities and Strength

CUSTOMERS -

•Market Size and •Market Segmentation

COMPETITION –

•Types–Indirect–Direct

•Strengths and weaknesses

MARKET AND INDUSTRY – PEST ANALYSIS

•Political,•Economical,•Social•Technology

SWOT

•Strength, •Weakness, •Opportunities •Threats

53

SWOTInternal External

+Strengths

Opportunities

- Weakness Threats

MARKETING

MARKET STRATEGY

•Product•Price •Place•Promotion

56

Print

• Business Cards• Leaflets &

Posters• Letters and Mail• Merchandise

Mass Media

• Billboards• Newspaper• TV• Radio

Electronic

• E-mail• Social networks• Websites• Media sharing

networks

Personal

• Word of mouth• Referrals• Direct Selling• Exhibition

PROMOTION AND

ADVERTISING

MARKET STRATEGY

•Discuss –Marketing Channels–Marketing Cost month/year

ORGANIZATION

ORGANIZATION

• Organization Chart• Roles and Responsibilities

60

IDEAL ORGANIZATION CHART Managing

Director

Administration and Finance

Operations Marketing & Advertising

Research and

Development

Assistant Director

61

EXAMPLE - ORGANIZATION CHART

Owner Manager

Cook 1 Cook 2 Grill/Salai

62

EXAMPLE:ROLES AND RESPONSIBILITIES

Roles Responsibilities Qualifications

Salary

Manager

Manages Operations and marketing,

O level $800

Cook •Receives order•Prepares Food from cooking (rice, Chicken, sambal) to packaging•Receives Cash•Interacts with customers

Form 3 $300

Grill •Receives order•Prepares Food from grilling to packaging•Receives Cash

Form 3 $300

63

EXERCISE EXAMPLEManager

Ali$1,000

Sales and Marketing

Cik$200+commissio

n

ProductionEdward$500

Admin ClerkFatimah

$400

Assistant Manager

Bakar$750

Monthly Total: $2,850Yearly Total: $34,200

Total Annual TAP/SCP (8.5%): $2,907Sum Total: $37,107

OPERATIONS

OPERATIONS

• Input – Process – output• Running Costs•Action Timeline

66

BUSINESS PROCESS FLOW –PRODUCT

• Rice, Chicken, Ingredients

• Drinks• PackagingStocks

Purchase

• Nasi Katok

• Grill/Salai

• In Kitchen

Food preparatio

n • SMS• Call• Shop Front

Sales

Input Process

Output

67

BUSINESS PROCESS FLOW – SERVICES

• Marketing• Reception • Sales

Customer

• Booking• Service

Provision• Customer

Service

Services• Terminatio

n or Renewal or next level

• Referrals and testimonials

End of Service

Input Process

Output

FINANCIAL MANAGEMENT

FINANCIAL MANAGEMENT

• Sales Forecast• Profit and Loss• Cash Flow

FINANCIAL STRATEGY CONTENTSStart-up Costs

Sales Forecast

Profit and LossBreak-even analysis

PROFIT AND LOSS

•PROFIT = SALES – RUNNING COST

72

PROFIT AND LOSS FORECAST• Calculates the amount of money going in (from sales) and out (from

operations cost)• Factors

– Income from Sales of Goods or other items– Expenses from

• Direct Cost of Goods Expenses , Controllable and Fixed Costs

– Calculate• Gross Profit (Sales – Direct Cost) and Gross Margin• Net Profit (=Sales – Direct Costs – Fixed Costs)

73

PROFIT AND LOSS

• Profit or Loss = Sales – Var. Cost – Fixed Cost• Sales• Variable Cost

– Stocks Purchase• Fixed Costs

– Rental– Salary– Marketing– Bills (water, electric, gas)– Licenses– Other Costs

74

BREAK-EVEN ANALYSIS• What is the purpose?

– To see how many units need to be sold to make money.

• What you need to know?– Units Sold– Sales per unit– Cost per unit– Fixed Costs

• Formula: • Note:

– this is for a single product, for multiple products you may use average.

0 100 200 300$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Units Sold 0 100 200 300Fixed Costs $2,400 $2,400 $2,400 $2,400 Unit Sales 0 2000 4000 6000Unit Cost 0 500 1000 1500Fixed Costs + Variable Cost $2,400 $2,900 $3,400 $3,900

PriceCost Price SalesCosts Fixedsaleseven Break

75

EXAMPLE: NASIK KATOK

• Formula:• Sales Price: $1• Cost Price: $0.75• Fixed Cost:

– Salary + Rental + Utilities– $1,700 + $50 + $100 = $1,850

• Break even sales = 1,859/(1-0.75)• =$7,400

PriceCost Price SalesCosts Fixedsaleseven Break

0 100 200 300$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

TAKING ACTION

ACTION TIMELINE

• Set Activities - List down Steps• Set Deadlines - When do you need to do them?

78

EXAMPLE – ACTIVITY PLANMth Star

tEnd Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb

Setup• Research

and Planning

1 Mar 31 Mar

• Registration

31st Mar

• Funding 1 Apr 15 Apr • Rent/Set up place

16 Apr 16 May

• Purchase Assets

1 May 31st May

•Hire People 2 May • Stock

Purchase4 May

• Marketing 20 May

• Operations 30 June

WHAT YOU HAVE

LEARNED?

WHAT YOU HAVE LEARNED

• Business Ideas• Legal Process• Start up Costs• Products and Services• Market Research• Market Strategies

• Finances–Running Costs–Profit and Loss–Break Even Analysis

• Action Timeline

NOTES

http://smebrunei.wordpress.com/PKBN