Unit 11

Skills for Initializing a Business

Unit 11 Skills for Initializing a Business

Learning Outcomes
1) Understand the types/ forms of business
2) Know the skills needed to initial a business.

Unit 11 Skills for Initializing a Business

Unit 11 Skills for Initializing a Business

Forms of business ownership:

1) Sole Trader
2) Partnership
3) Private Limited Company (Sdn. Bhd.)
4) Public Limited Company (Bhd.)

Unit 11 Skills for Initializing a Business

Legal Structure of Business Organization
Sole Traders

Partnership

A business, one owner

provides the permanent
finance and, in return, he
retains full control of the
business and enjoys all the
profits

The relationships that

subsists between persons
carrying on a business in
common with a purpose to
make profit

Characteristics:
Single owner
Relatively small
Not separate entity
Unlimited liability

Characteristics:
Owned by 2-20 partners
Shared decision making
Not separate entity
Unlimited liability

Unit 11 Skills for Initializing a Business

Legal Structure of Business Organization
Control
MOA & AOA
Mim. Member
Mim. Auth.
Capital
Share issue
Account
Co. Secretary
Size

Private Limited
Company (Sdn Bhd.)
Often by original
owner
Needed
1
none
cannot advertise

Public Limited
Company (Bhd.)
By selected Board of
Directors
Needed.
2
$50,000

Open, on stock
exchange
may submit simplified strict requirement of
accounts
the format of account
does not have to be
must be qualified
qualified
usually small
large

Skills for Initializing a Business

Skill of recognizing resources
a) Capital
b) Raw material
c) Location
d) Business tools
e) Human resource

Skill of recognizing resources

a) capital
- entrepreneur must have sufficient funds to initiate and
run a business.
- the total funds needed is based on the size and kind of
business, and location.
- Sources of capital are personal funds, funds from family
and friends, retirement accounts, and banks.
- a working paper needs to be submitted in order to
obtain a loan from the bank.

Skill of recognizing resources

b) raw materials
- entrepreneur must looking for a good quality raw
materials with a reasonable price in order to produce
quality product or service that fulfil the customer
needs and requirements.
- the total stock of raw materials also need to be well
arrange to avoid out of stock or over stock.

Skill of recognizing resources

c) business location
- entrepreneurs must choose a strategic location for
the business.
- the selection of a location is influenced by factors
such as availability of capital, rental, competitors,
infrastructure, target market, and market size.

Skill of recognizing resources

d) business equipment
- basic equipment needed to run the operation of a
business and earn profit.

Skill of recognizing resources

e) human resource
- the total human resource needed is based on the
size and kind of business, and budget.
- the job description must be well written down in a
working paper as a guide to the workers regarding
their responsibilities.

Skill to Identify Networking

According to Holt (1992), networking is a relationship
bonding process with individual and organization to
produce something that beneficial and useful.

Type of networking:
Personal networking
Business networking
Public networking

Skill to Identify Networking

Importance of networking:
a) Get early information.
b) Reduce management process.
c) Facilitate product promotion & service.

Thank you

15