Lesson 7 Apeco 1s

Lesson Analyze Different Principles,
Tools, and Techniques in

7 Creating a Business
What I Need to Know

After going through this lesson, you are expected to:
identify principles in creating business;
discuss tools and techniques in making efficient business; and
analyze business principles, tools, and techniques in making efficient
business.
Business entities are important to country’s economic growth. It enables to create

goods and services, provide jobs for individuals to generate income and
accumulate wealth and generate revenue for the government which enables to
provide basic social services. Moreover, it produces goods and services that
individuals needs and wants.
Business to thrive and grow need to used tools and techniques to continuously
exist thus best practices and techniques need to be employed.
What is It
Principles, Tools, and Techniques in Creating a Business
In planning a business, a thorough study needs to be made from the creation of

business. Understanding how the business will operate and co-exists in the
business world thus one needs to study principle, tools and techniques in creating
business
Principles in Creating a Business
The principles of a business are the driving forces that make it successful.
Below the ten key principles to make a business a success:
1. Scalability- A business must be scalable for it to be successful. Scalability is
the capability of a company to sustain or improve its performance in terms of
profitability or efficiency when its sales volume increases.
2. Big Ideas- A business is no more effective than the idea upon which it is
built. Business creates its own plan to expand its economic growth.
3. Systems- A business is a system in which all parts contribute to the success
or failure of the whole. In this system, everything must work together from
employee to president; from equipment to resources.
4. Sustainability- A business must be dynamic- able to thrive through all
economic conditions, in all markets, providing meaningful highly differentiated
results to all of its customers. Such differentiation is the key to survival.
5.Growth- Growth is essential in business. Without continued growth,
operations will stagnate. This can result in lowered standards of quality for
products or services, decreased customer service, and poor employee morale.
6. Vision- A business must manifest the higher purpose upon which it was
seeded, the vision it was meant to exemplify, the mission it was intended to
fulfil.
7. Purpose- A business is the fruit of a Higher Aim in the mind of the person
who conceived it.
8. Autonomy- A business is not part of the owner's life, but is, in fact, its own
entity.
9. Profitability- A business is an economic entity, driving an economic reality,
creating an economic certainty for the communities in which it thrives.
10. Standards- A business creates a standard against which all businesses are
measured as either successful, or not.
So, there you have it, the ten principles upon which to conceive, grow, and
expand your business.
Tools in Evaluating a Business
It's the Holy Grail for small business owners – finding ways to make efficiency
savings in all aspects of their operations. The good news is there are plenty
of tools, tips and techniques available to help them make cost savings and
boost productivity. Here are 10 of them.
1. Use technology to speed up workflow- Businesses should be looking to
innovations in technology to solve day-to-day inconveniences and to
increasee efficiency.
2. Shorter meetings fuel efficiency- Hold a brief meeting standing up, every
morning, where each person explains what they are going to work on that
day to ensure everyone is on the right track and not wasting time on non-
urgent tasks.
3. Smart office space pays- Office space can involve a big outlay for SMEs,
but it is also an area where some smarter thinking can make a real difference.
4. Advertisement- Advertising keeps your business top of mind so consumers
think of it when they require or need a service or product.
5. Small changes, big savings--One way of improving efficiency is for business
owners to make small changes to the way they handle their company's
expenses.
6. Keep a firm grip on cash flow-"Cash is King not profit”. Ensure the right
management of your inflow and outflow of cash.
7. Stay connected on the move- The growing trend towards mobile and
flexible working means that employees are permanently connected and on
the go.
8. Use time more efficiently-Being more efficient is more about being than
doing. It's probably 90% mindset, (Allan, 2013). In addition, “The shorter the
amount of time you allow yourself, the more you will get done”.
9. Get the best deal on insurance- Businesses need insurance because it
helps cover the costs associated with property damage and liability claims.
10. Don't be lax with the legal
In the hectic process of starting up a business, the founders often put off
sorting out the legal matters until later, or not at all.
Since business is a commercial activity and its main purpose is profit, in the book
published by the Development Academy of the Philippines, how to prepare project
feasibility studies, it includes an industry analysis of the following important
factors.
COMPETITION AND COMPETITORS

Industry rivalry among companies of the same or related industry is an inevitable part
of the business world of any business size.Intense competition leads to reduced profit
potential for companies in the same industry. Businesses seek constantly competitive
advantage.
Competitive Advantage
➢ is what sets your business apart from your competition.
➢ highlights the benefits a customer receives when they do business with you.
➢ It could be your products, service, reputation, or even your location.
Different methods of competitive advantage which it can be done and are classified
into four categories:
c
1.Cost Leadership-an advantage occurs when business is able to offers same products
at a lower price.
2.Differentiation-Find attributes that is important and set them apart from their
competitors.
3.Defensive Strategies-used a defensive strategy to distance themselves from
competitors.
4.Alliances-advantage of seeking strategic alliance with other within related or within
businesses.
CUSTOMERS
Individuals or companies who desires to possess or make use of products and

services. They play a huge role in the success of your business. Customers likewise
can force down prices, demand higher quality or more service, and play competitors
off against each other—all at the expense of industry profits.
SUPPLIERS
Provide inputs that the firms in an industry need to create the goods and services
that they in turn sell to their buyers.Suppliers can exert bargaining power on
participants in an industry by raising prices or reducing the quality of purchased
goods and services.
A business may need one or more suppliers. It is important to develop suppliers

who are reliable in terms of quality of what they supply and their dependability in
coming up with the things you order from them. It is important to maintain good
relationships with one’s suppliers; they are the key to one’s continued access to
goods and to raw materials that will be needed for the business.
SUBSTITUTES
➢ Goods/services that can be used in place for another. These goods

may, even if partly, satisfy the same needs of a consumer such that
the consumer may use one for instead for another.
➢ substitute products or services limit the potential of an industry.
➢ margarine can be a substitute for butter. Likewise Coke for Pepsi
➢ But not everybody will be willing to switch brands because they have
developed a taste for a particular cola. This is why manufacturers try
to differentiate their products from their competitors so that the
customers will develop product loyalty from their brand.
.
References
Dinio and Villasis 2017: Applied Economics. Rex Bookstore, First Edition.
Leano, Roman D. 2016: Applied Economics for Senior High School. Mindshapers Co., Inc.
https://www.batimes.com/articles/8-tools-and-techniques-to-apply-to-strategic-analysis-and
planning.html
https://articles.bplans.com/know-your-industry-before-you-start-your-business/

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Lesson Analyze Different Principles,

Tools, and Techniques in

What I Need to Know

Business entities are important to country’s economic growth. It enables to create

In planning a business, a thorough study needs to be made from the creation of

COMPETITION AND COMPETITORS

Individuals or companies who desires to possess or make use of products and

A business may need one or more suppliers. It is important to develop suppliers

➢ Goods/services that can be used in place for another. These goods

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