PHME MOD10 Final

To pay for increased coverage, the central government has

poured nearly $300 million in subsidies into PhilHealth
COMMUNITY PHARMACY since January 2013.
⬇
DEVELOPING COMPETITIVE In addition, it has doubled the 2013 budget for the
Department of Health, which oversees the program.
ADVANTAGES ⬇
However, PhilHealth will still need more money in order to
increase individual benefits. Currently, only about one third
THE DRUGSTORE MARKET of healthcare expenses are covered under the plan, and
almost no outpatient medications are eligible for
In the Philippines, foreign drug firms are the primary reimbursement.
players, accounting for approximately 75% of the ⬇
pharmaceutical market. Sanofi, GlaxoSmithKline The expansion of national coverage offers mixed
opportunities for foreign firms, which dominate the country’s
(GSK) and Novartis are some of the biggest foreign $4 billion pharmaceutical market.
drug firms in the Philippines. ⬇
Increased coverage should expand the number of Filipinos
Large domestic pharmaceutical firms include Natrapharm who are eligible for reimbursements, enhancing
opportunities for global drug companies.
, United Laboratories, Pascual Laboratories
⬇
and GV International. At the same time, the expansion of PhilHealth could also
increase the pressure on the central government to
Recently, the greatest gains made by domestic reduce reimbursement pricing further.
pharmaceutical firms have been in the generics market.
In the past, few Filipinos trusted generic pharmaceuticals.
Furthermore, doctors mostly prescribed branded drugs, in TWO COMMON DISEASES IN THE
part because of the incentives offered by major drug PHILIPPINES
companies.
PNEUMONIA
However, new legislation has made it mandatory for public ● In the Philippines, pneumonia is the principal cause
of vaccine-preventable death.
hospitals to use generic drugs.
● Among Filipinos aged 50 and older, studies have
shown that pneumonia is the foremost cause of
As these drugs are increasingly prescribed, Filipinos are illness as well as the fourth most common cause of
becoming more accepting of generics. death overall.

For both foreign and local manufacturers, the segment with ● In July 2011, the Philippine Food and Drug
the most rapid growth in the Philippines is the generics Administration (FDA) approved Pfizer’s Prevnar 13
vaccine (Pneumococcal conjugate vaccine) for use
market. Companies like Orient Europharma of Taiwan in adults over the age of 50. Prevnar 13 is both the
and Getz Pharma of Pakistan have been expanding first and only vaccine approved in the country that
their incountry operations. works to prevent pneumonia.

● Over 2013, Pfizer’s subsidiary has further increased

So has Sandoz, Novartis’ generic arm. To its fight against pneumococcal illnesses in the
compete with these generics, many foreign companies are Philippines by promoting an anti-pneumonia
significantly reducing the prices of their branded vaccination campaign, working with local partners.
pharmaceuticals, in some cases by up to 60%. Prevnar 13 is Pfizer’s best-selling pharmaceutical
product for pneumonia. The vaccine is currently
used in over 100 countries.

HEALTHCARE IN THE PHILIPPINES HEPATITIS B

● Hepatitis B has an especially high incidence rate in
At the end of June 2013, President Benigno Aquino III the Philippines, affecting almost 8 million Filipinos —
approximately 1 out of every 13 people. It is also the
signed the National Health Insurance Act of 2013, a law that
most common serious liver infection worldwide and
expands the national health insurance scheme, PhilHealth. one of the most challenging infectious diseases to
⬇ manage. It places people at high risk of death from
National healthcare coverage will now be available to all cirrhosis of the liver and liver cancer.
Filipinos. In fact, the Act includes provisions to prioritize the
needs of the disabled, elderly, women and children, ● The vaccine for hepatitis B is 95% effective in
underprivileged and sick. preventing an infection by the hepatitis B Virus and
⬇ its subsequent chronic consequences. In the
Philippines, the prevalence of hepatitis B can in part
Furthermore, free healthcare will be provided to indigents. be attributed to the inability of many patients to
⬇ afford the expensive treatments.
Currently, 80% of the Philippine’s 106 million people are
covered under PhilHealth, a percentage that has grown ● Pharmaceutical giant Roche Inc.’s Philippine
rapidly over the past decade. subsidiary partnered with the Hepatology Society
⬇ of the Philippines to launch a new program in July
2011 that assists hepatitis B patients in getting
The original bill establishing PhilHealth did not allow local treatment at reduced rates. Called the
governments to enroll patient groups until there was
“PEGASSIST Easy Access Plan,” the program
“reasonable access to adequate and acceptable health
helps patients receive peg-interferon alfa-2a
care services.” The 2013 law cancels that provision.
medication at a discount of up to 52%.
⬇
 ● Furthermore, patients can receive free access to Prepare for a Google AdWords Campaign
certain laboratory tests — which would otherwise be ➔ Google AdWords is a tried and tested marketing
extremely costly. In order to know if they qualify for method for small businesses, hailed as one of the
the program, hepatitis B patients can see their “most productive and quickest methods for bringing
gastroenterologist and also check with a financial huge traffic on the verge of converting.
assessment agency. ➔ Before starting a Google AdWords campaign, you
should sufficiently prepare for it by setting a proper
budget, finding the right keywords and creating
REGULATORY INFORMATION FOR landing pages that bear significance
PHARMACEUTICALS
● The FDA is the main body for Philippine Be Mindful of SEO
pharmaceutical regulations. The FDA handles the ➔ Search Engine Optimization (SEO) is the practice of
registration of processed foods, drugs, medical creating a website to help businesses rank higher
devices, in-vitro diagnostic reagents, cosmetics and on the search engines, which, in turn, brings more
household hazardous substances. potential customers to their site, eventually
● For companies that want to know whether their increasing conversion rates.
product falls under the food, drug, or cosmetic ➔ When designing a website or other online portal
category, they may apply for product classification. such as social media profiles, you should therefore
Application documents with sample and complete be mindful of SEO and the benefits incorporating
product information and proof of payment can be relevant keywords into online marketing portals is
submitted to the Policy, Planning, and Advocacy likely to bring to your business.
Division of the FDA.
Don’t Discount Email Marketing
➔ Email marketing has long been a simple,
HIGHLIGHTS OF MARKETING PRACTICES cost-effective way to drive revenue for small
businesses. Every time you add a new subscriber to
your email list, they are a potential paying customer
Set Attainable Goals and therefore time and effort should ideally be put
➔ Don’t start your marketing efforts without this tip. into developing email marketing campaigns.
Start by setting attainable goals. You must keep
your goals realistic. And make them something you Make Emails Mobile-Friendly
can stick to. But how do you set these attainable ➔ With a whopping 66% of emails now being opened
goals? Begin by determining your current position in on mobile devices, to optimize the success of email
the market. Then decide what you want to achieve. marketing campaigns, you will need to make your
emails mobile-friendly by using mobile responsive
Define Your Target Market templates that automatically adapt emails to mobile
➔ Consider this key ingredient to successful formats.
marketing. Ensure your campaigns reach your
target markets. Again begin prior to starting a Prioritize Content Marketing
marketing strategy. You need to have defined your ➔ Research shows that in 2016, 18% of marketers
target market. And consider the age, gender, said content marketing had the greatest commercial
interests, location, consumer habits and other impact on their business.
factors of your target customer. ➔ When planning different marketing strategies for
your small business, ensure they include the
Establish a Clear Brand Identity creation and sharing of quality, unique content
➔ Prepare yourself to communicate what your through the likes of blogs and social media posts.
business does. And also figure out how to
demonstrate what your brand stands for. Project a
clear identity. Because customers and prospective
customers must identify with your brand. Establish a
clear brand identity through the right name, logo,
Combine Online and Offline Marketing
colors and imagery. Do all of this before you start a Strategies
marketing campaign. ● Again, avoiding putting “all your eggs in one basket”
by concentrating solely on online or offline media.
Instead, combine online channels like blogs and
Have a Website social media with traditional, offline marketing
➔ We are now firmly entrenched in the digital era practices such as newspaper and radio advertising
where websites are the window to virtually any type to help extend your reach as far as possible
of business.

Use Facebook Advertising Share Your Knowledge

➔ With more than three million businesses advertising ● Don’t be afraid to use your expertise to your
on Facebook, this method of marketing is a practice commercial advantage by sharing your knowledge
no small business can afford to ignore. Facebook of your particular business or niche through the likes
advertising excels at target marketing, so you’ll need of YouTube tutorials, webinars, blogs and more.
to have defined your target market before setting up
Facebook advertising.
Promote Free Consultations
Use MoreThan One Channel ● Another effective marketing strategy for small
➔ Despite the importance of Facebook advertising, business owners is to promote free consultations of
when it comes to marketing avoid ‘putting your eggs your services that enable prospective customers to
in one basket.’ Instead use multiple channels, both effectively ‘try before they buy.’
online and offline, to extend the reach of your brand
to as many people as possible and to determine Network Online and Offline
which channels are most effective for your business. ● Attending networking sessions, both online on
portals like LinkedIn and offline by attending
networking sessions in person, is an effective
marketing practice for small business owners.
Join Local Business Groups ⬇
● One effective way to physically network and to Your sustainable competitive advantage can guide your
showcase your business is to join local business decision-making and provide you with direction and a sharp
groups where you’ll have the opportunity to meet focus.
like-minded people and share common business
stories and goals. If a new opportunity for the business doesn’t support your
sustainable competitive advantage, then you should
Send Out Surveys question whether to pursue that opportunity.
● Customer feedback is a powerful tool for small
⬇
business owners,as WordStream writes, “Look for
feedback, because the best companies are Is short-term growth that might erode your sustainable
constantly improving.” competitive advantage, more important than building a long-
term position of strength and stability?
Make Applications for Awards
● You might be a small business but that doesn’t This longer-term view and effective use of a sustainable
mean to say you can’t win a fantastic business competitive advantage can support a higher return on capital
award. Being an “award-winning business” can be invested in the business, even in the face of stiff
one of the most effective ways to boost your competition.
business’s credibility and success. ⬇
This position builds value in a business and can add a
Be Different and Stand Out premium to the sale price. That’s an advantage every
● It might sound obvious but in order to ensure your business owner wants.
small business gets noticed, you need to make
being different and standing out a key marketing
practice. Tips to ensure you stand out include taking
a controversial stand on industry trends and issues STRATEGIES OF DEVELOPING
and publishing striking content that nobody can COMPETITIVE ADVANTAGE
resist.
1. COST LEADERSHIP
In a cost leadership strategy, the objective is to become the
WAYS OF DEVELOPING A COMPETITIVE lowest-cost producer. This is achieved through large-scale
ADVANTAGE production where companies can exploit economies of scale

Five steps to developing a sustainable competitive If a company is able to utilize economies of scale and
advantage produce products at a cost lower than competitors, the
1. Understand the market and its segments. Look for company is then able to establish a selling price that is
those niches that aren’t well serviced by competitors unable to be replicated by companies.
and can be profitably targeted and sold to. 🢃
2. Develop an understanding of what customers really Therefore, a company adopting a cost leadership strategy
want and establish a value proposition that grabs would be able to reap profits due to its significant cost
their attention. advantage over its competitors.
3. Work out the key things that you need to do really
well to support and deliver the value proposition. For
example, service levels, quality, branding, pricing, et 2. DIFFERENTIATION
cetera.
4. Understand what your strengths and core In a differentiation strategy, a company’s products or
competencies are and how you can use these in services are differentiated from that of its competitors. This
innovative ways to provide value to your chosen can be done by delivering high-quality products or services
market. to customers or innovating products or services.
5. Design your business model to support and deliver 🢃
the value proposition. If a company is able to differentiate successfully, the
company would be able to set a premium price on its
products or services.
At the end of this process, you will have a very clearly
defined statement of:
❖ Who you will be selling to (customers and market 3. FOCUS
segments);
❖ Why they will buy from you and not your In a focus strategy, a company focuses its product or
competitors (the value proposition); and services towards a narrow-target market segment. This
❖ The key things you need to excel at to be able to strategy is successful if customers have different needs and
consistently deliver your value proposition. wants, and the company is able to successfully create
❖ Once you’ve found your sustainable competitive products/services that can cater to these customers.
advantage, you should use it in many ways, to the
business’ benefit. The focus strategy also has two variants;
❖ Using your sustainable competitive advantage in ● Cost-focus: Lowest-cost producer in a narrow
your sales and marketing makes it easier for your market segment
customers to understand why they should part with ● Differentiation-focus: Differentiated products /
their dollars and give them to you rather than your services in a narrow market segment
competitors.

SUMMARY
This, in turn, makes it easier for your staff to sell your The traditional healthcare system here in the
products or services and know their promises will be Philippines serves as guide to different marketers of
delivered. pharmaceutical industry
⬇ Continuous upgrading and innovation of different
They know the whole business is focused on making sure marketing practices gives edges to companies
the sustainable competitive advantage is protected and
Formulating competitive advantages makes your
capitalized upon.
companies ahead to others
PHME MOD 11 FINAL
4. PLACE
Considering the implications for distribution for digital
THE NEW P’S OF marketing. For some pharma-based organizations, location
PHARMACEUTICAL MARKETING might not be an issue, and for others, their location might
make or break the client relationship, therefore, assessing
your place in relation to the wider digital marketing plan is a
must.
- Trade channels and industry conferences
- Sales support
- Channel number
- Segmented channels.

5. PEOPLE
Who are the key people conducting the marketing activities
and are they capable of conducting those activities? Are
there skill gaps that need to be addressed? Every marketing
plan needs to look internally at its current capability to
determine whether the marketing plan can be achieved via
The 7Ps marketing mix is the combination of elements used
the organization’s current marketing resources.
by a business to enable it to meet the needs and
- Individuals on marketing activities
expectations of its customers. They combine to form the
- Individuals on customer contact
complete elements a marketing department need to review to
- Culture/image
promote the organization successfully
- Training and skills
- Remuneration

7P’s 6. PROCESS
A review of the internal processes that sit behind all of your
1. PRODUCT marketing activities. The organization might possess the
Find opportunities for modifying the core or extended internal skills, but the processes required for those skills to
product for digital environments. The online marketplace has come to life might not, therefore, it is essential to review and
created opportunities for pharma organizations to shape and set processes for tasks to be completed efficiently.
market their core products more effectively. - Customer focus (marketing orientation)
- Quality - Business -led
- Image/Branding - IT-support
- Features/Variants/Mix - Design features
- Support/Customer service - Research and development
- Use occasion
- Availability 7. PHYSICAL EVIDENCE
- Warranties How are customers reassured of the organization’s offering?
This is an opportunity to look at the website and supporting
2. PROMOTION channels and all of the (digital) touchpoints where the
Discovering new promotional and digital marketing customer might encounter your organization.
communication techniques online. The promotional - Sales/staff contact experience of brand
opportunities for pharma marketers is ever-growing and the - Product packaging
individual tactics that marketers can adopt grows alongside. - Online experience
It’s hugely important to know about the tactics you could
undertake, to assess which are most appropriate.
- Marketing communications SUMMARY
- Personal promotion Market place and environment is constantly changing,
- Sales promotion marketers adjust to it by controlling the sets of variables of
- PR marketing mix
- Branding
- Direct marketing Changes to one component of marketing mix affect the other
components
3. PRICE
Implications for setting prices in digital markets; new pricing
models and strategies that the digital environment offers for
pharma organizations. It’s useful to be aware of competitor
pricing as well as what your customers expect to pay to
shape your pricing strategy accordingly.
- Positioning
- Discounts
- Credit/Payment methods
- Free or value-added elements
PHME MOD12 FINAL
2. Coupons
● A coupon is a certificate that fetches buyers a
ADVERTISING PHARMACEUTICAL saving when they purchase a specified product.
MASS MARKETING Coupons are generally issued along with the
product. They entitle the holder to either a specified
saving on a product or a cash refund.
Advertising ● Coupons are designed:
● is the attempt to influence the buying behavior of a ❖ to introduce a new product
customers or clients with a persuasive selling ❖ to promote the sale of an established
message about products and/or services. product
❖ to sell a product in large sizes
❖ to stimulate customers to switch brands;
and
INTRODUCTION TO HEALTH CARE ❖ to encourage repeat sales.
ADVERTISING ● Coupons are used for consumer convenience
● Health care facilitates relationships among goods. They may be distributed door to door, by
hospitals and physicians as well as between mail or they may be inserted in packages.
medical centers and patients. Sometimes, coupons may be part of magazine or
● As with any type of marketing plan,health care newspaper advertisements.
utilizes a variety of advertising, branding and
promotional tactics to interact with the community,
build trust, display expertise and, ultimately, gain
3. Demonstration
new patients.
● Demonstration is required when products are
complex and of a technical nature. Customers
are educated as to how to make proper use of
the product.
Healthcare marketing ● Demonstration of products induces customers
● refers to the marketing strategies healthcare
to buy.
providers, insurers, suppliers and advocacy groups
use to attract new patients and increase awareness ● Demonstrations are provided free of cost.
of their healthcare business
4. Contests
● Contests are the promotion events that give
COMMON PROMOTIONAL TOOLS consumers the chance to win something such
as cash, trips or goods.
● Contests are conducted to attract new
customers.
● They introduce new products by asking the
prospects to state the reasons for the
purchase of the product.

1. Samples 5. Cash refund offer

● Samples are one of the most important tools of ● Cash refund offers are rebates allowed from
sales promotion. the price of the product. It is an offer to refund
● Samples are defined as offers to consumers of a part of the purchase price of a product to
small amount of a product for trial. Free samples are consumers who send a proof of purchase to the
given to consumers to generate their interest in the manufacturer.
product.
● Samples help consumers verify the quality of the
product.
● are delivered at the doors of consumers.
● They are also sent by mail or given to customers in
the retail store itself. Sometimes, samples are
attached to another product.
● Though sampling is effective, producing numerous
samples of a product is quite expensive. Moreover,
distributing samples to customers also involves
expenditure.
● Sampling is not justified in case of:
○ well established product
○ a product that is not superior in some way to
competing products
○ a product with a slow turnover
○ a product with a narrow margin of profit,
or
○ a highly fragile, perishable or bulky
product.
6. Premium STEPS TO AN EFFECTIVE
● Premium refers to goods offered either free or COMMUNICATION PLAN
at low cost as an incentive to buy a product.
● A premium may be inside the package, outside
it or received through mail.
1. Perform a situation analysis.
● Conduct an audit to evaluate where you
● The reusable package itself serves as a
currently stand in terms of communications.
premium.
You need to gather and analyze all relevant
● Premium is generally offered for consumer
information within your company
goods such as soap, toothpaste, etc. Premium
● To conduct your own communications audit,
may be of several kinds — direct premium,
you may need to do the following:
reusable container free in mail premium, a
○ Brainstorm with communication staff.
self-liquidating premium, trading stamps, etc.
○ Conduct surveys and focus groups.
● Direct premium can be inside the pack or
○ Talk to other departments in your
outside it.
company.
● A reusable container can be reused after the
product is reused.
● Free in mail premium means a premium item 2. Define your objectives.
will be sent by mail to consumers who present ● After you collect and evaluate all information,
proof of purchase to the manufacturer. define your overall communications objectives.
● A self-liquidating premium is the extra quantity What are the results you want to achieve?
offered at the normal price. ● What do you want to accomplish by
● Trading stamps are given by the seller to implementing this communication plan?
consumers.
● These are redeemable at the stamp redemption Your objectives should be SMART:
centers. ● Specific
● Measurable.
● Achievable.
7. Price off’ offer ● Realistic.
● Goods are sold at reduced prices during the
● Time-focused.
slump season. Reduction in prices stimulates
sale of goods.
3. Define your key audiences.
● You need to know to whom you are delivering
8. Consumer sweepstakes your messages.
● A sweepstakes calls for consumers to submit ● List all the key audiences of your organization.
their names for a draw. Names of consumers
are included in a list of prize winning contest. These may include the following:
The lots are drawn and the winners get prizes. ● Members/non-members.
● Clients.
9. Buy back allowances ● Related associations.
● Allowances are granted to buyers on the basis ● Educators.
of their previous purchases. In other words, buy ● Local government officials.
back allowances are given for new purchases, ● Media representatives.
based on the quantity of goods bought
previously. 4. Identify media channels.
● Plan to deliver your messages to your key
recipients through multiple media channels.
ORGANIZING THE STEPS IN DEVELOPING ● Decide which media channels would be the
AN EFFECTIVE COMMUNICATION AND most effective to get your message delivered to
THE COMMUNICATION CHANNELS your target audiences.

● When you want to introduce a new service or 5. Establish a timetable.

product or launch an initiative within your ● In order to achieve your communications
company, you’ll need to communicate this new objectives, you need to plan and time your
information to your target audiences.You need steps for the best results.
a communication plan. ● Based on your research and your resources,
● A communication plan is your road map for develop a solid timing strategy to execute the
getting your message delivered to your steps of your communication plan.
audience.
6. Evaluate the results.
● It’s an essential tool for ensuring your ● It’s always important to measure your results to
organization sends a clear, specific message understand whether you achieved your
with measurable results. objectives.
● Writing a communication plan can be ● If you aren’t satisfied with the results, make
time-consuming. necessary adjustments in order to perform
better next time
Your evaluation might take the form of the
following:
CRITICIZING QUALITIES OF
● Annual reports. ADVERTISING
● Monthly reports.
● Progress reports. 1. DEFINE THE PURPOSE OF COMPLEX OF
● Reports from other departments. MARKETING COMMUNICATIONS
2. IDENTIFY THEIR TARGET AUDIENCE
Developing a written communication plan will take 3. DETERMINE THE FEEDBACK
some effort – and it’s worth it. 4. SELECT AN APPEAL
5. CHOOSE THE TOOLS OF DISSEMINATION
↓ OF INFORMATION
A communication plan is your main tool for 6. SELECT THE PROPERTIES WHICH
successfully delivering your messages to your key CHARACTERIZE THE SOURCE OF
audiences in order to develop your mutually INFORMATION
beneficial relationships 7. COLLECT THE INFORMATION RECEIVED
THROUGH THE FEEDBACK
8. CALCULATE THE BUDGET.

7 FUNCTION OF ADVERTISING
SUMMARY
➢ Communicating Vital Information
➢ Persuading Consumers to Buy ➢ Healthcare advertising is a form of promotion
➢ Creating brand to other possible stakeholders
➢ Creating product demand ➢ Marketing communication mix also have
➢ Building a customer base different sets of controllable variables which
➢ Previewing new market trends may adjust depending on the environment
➢ Promotional tools are strategies to penetrate
the market
ASSESSING THE FUNCTIONS OF ➢ Communication plan will serve as road map
ADVERTISING for getting the message delivered to audience

● Companies various kinds of activities are

constantly engaged in promoting their products
or services, striving to achieve several
purposes:

- to inform prospective customers about the

goods, services, terms of sale;
- to convince the buyer to give preference to
these products, go shopping in these retail
establishments;
- to make the buyer to act to direct his behavior
to the fact that the market offers at the moment
and not to delay the purchase for the future; -
to form loyalty to this brand; - to stimulate
process of acquiring of goods and others
PHME MOD13 FINAL
and other public and private services that would not
otherwise be available.
CONCEPTS OF ENTREPRENEURSHIP
4.Standard of Living:
Entrepreneur ● Increase in the standard of living people in the
● a person who organizes and operates a business or community is yet another key goal of economic
businesses, taking on greater than normal financial development.
risks in order to do so, ● Entrepreneurs – play a key role in increasing
Entrepreneurship standard living in a community.
● pursuit of opportunity beyond resources controlled. ● They do this not just by creating jobs,but also by
Dividends developing and adopting innovations that lead to
improvements in the quality of life of their
● sum of money paid regularly (typically quarterly)
employees, customers,and other stakeholders in the
by a company to its shareholders out of its profits
community.
Appraisal
● For Example,automation that reduces production
● act of assessing something or someone
costs and enables faster production will make a
business unit more productive,while also providing
its customers with the same goods at lower prices.
DYNAMIC ROLE OF ENTREPRENEURSHIP
AND THE SMALL BUSINESS 5. Exports:
● Entrepreneurship plays an influential role in the ● Any growing business will eventually want to get
economic growth and standard of living of the started with exports to expand their business to
country. foreign markets.
● As a startup founder or small business owner, you ● This is an important ingredient of economic
may think that you are simply working hard to build development since it provides access to bigger
your own business and provide for yourself and your markets, and leads to currency inflows and access
family. to the latest cutting edge technologies and
● But you are actually doing a whole lot more for your processes being used in more developed foreign
local community, state, region, and the country as a markets
whole. ● Another key benefit is that this expansion that leads
to more stable business revenue during economic
downturns in the local economy
Top 7 important roles an entrepreneur
plays in the economic development of a 6. Community Development:
country ● Economic development doesn’t always translate
into community development.
1. Wealth Creation and Sharing: ● Community development requires infrastructure for
● By establishing the business entity, entrepreneurs education and training, healthcare, and other public
invest their own resources and attract capital (in the services.
form of debt, equity, etc.) from investors, lenders ○ For example, you need highly educated
and the public. and skilled workers in a community to
● This mobilizes public wealth and allows people to attract new businesses.
benefit from the success of entrepreneurs and ○ If there are educational institutions,
growing businesses. technical training schools and internship
● This kind of pooled capital that results in wealth opportunities, that will help build the pool of
creation and distribution is one of the basic educated and skilled workers.
imperatives and goals of economic development.

ORGANIZING AND MANAGING OF A SMALL

2. Create Jobs:
● Entrepreneurs are by nature and definition job BUSINESS
creators, as opposed to job seekers.
● The simple translation is that when you become an If you’re looking to grow your business and beyond, you
entrepreneur, there is one less job seeker in the need to get started in the right way.
economy, and then you provide employment for
multiple other job seekers. To get the massive growth you’re hoping for in the coming
● This kind of job creation by new and existing years, you should make sure your business is organized.
businesses is again one of the basic goals of
economic development. This is easier for a large business and a huge budget — and
hundreds (or thousands) of employees — plus plenty of time
to dedicate to staying organized.
3. Balanced Regional Development:
● Entrepreneurs setting up new businesses and
But how can you make sure your small business is in order
industrial units help with regional development by
when you’re strapped for cash and you only have a few
locating in less developed and backward areas.
employees?
● The growth of industries and business in these
areas leads to infrastructure improvements like
better roads and rail links, airports, stable electricity
and water supply, schools, hospitals, shopping malls
1. Manage your office space and 7. Improve your scheduling system
storage ● If you have frequent meetings, video chats, or
windows for others to schedule times to work with
● To get started, you need to make sure your physical
you, you need a way to manage those time blocks
surroundings are neat and organized.
effectively.
● This ensures that you’re able to perform at your
● Most people tend to use back-and forth emailing
highest level. In many ways, the organization of your
and calendar invites to schedule events like this.
entire company is determined by how organized
your desk is.
● To start with, make sure everything has a specific 8. Keep track of invoices and
place, even if that place is in a pile of papers on payments
your desk.
● Every small business needs to manage payments,
● Since paperwork tends to consume a lot of the time
invoicing, and billing.
and resources of most modern office workers, you
● This is a critical set of tasks that keeps the business
should consider storing this offsite.
alive, but it can be a struggle to keep everything
● This means you’ll spend less time managing your
organized.
documents, and you can be sure they’re safe and
protected better than you could do yourself.
9. Reduce your physical paper
2. Keep track of customer support storage
● Your loyal customers are the heart of your business. ● I mentioned earlier that paperwork is a huge
● While they take up a lot of your time and resources, frustration for many small business owners.
it’s time well spent to keep them happy and pleased ● You can reduce the amount of time you spend
with the services you have to offer. managing paperwork by first creating an
organization system for your workplace.
3. Plan your social media campaigns ● If you like, you can take your paper management
from an in-house task to something another
in advance company does for you
● If you’re running a social media marketing campaign ● If neither of those sounds like an appealing option,
on a budget, you need to reduce the time you’re all hope isn’t lost.
spending keeping things online. ● Start by organizing your stored documents in a
● Instead of wasting time publishing posts every few logical order
hours, you should schedule things beforehand.

4. Manage your expense receipts FINANCING AND CONTROLLING SMALL

● If you’ve been running your small business for any BUSINESS
length of time, you know how frustrating it can be to
manage all your expense reports. Every small business needs internal financial controls to
● They’re a hassle to track and record, but they need help ensure its money is properly managed.
⬇
to be managed so you can stay up to date with Without them, your business risks employee fraud, cash flow
taxes and ensure your finances are in order. shortages or even bankruptcy

5. Go paperless
● If you want to reduce the clutter and management HERE ARE 17 FINANCIAL CONTROLS
that are associated with all the papers you need to EVERY SMALL BUSINESS SHOULD HAVE
keep up with, it might be time to go paperless. IN PLACE.
● This means that, instead of keeping track of dozens
of files and folders all the time, you just reduce 1.Keep business and personal finances
everything to digital scans of the most important separate.
documents. ➔ Never commingle business and personal finances. If
you do make a loan to your business or take a loan
6. Improve your workspace for from your business, document it appropriately with a
promissory note specifying repayment terms.
increased productivity 2.Conduct background checks before hiring
● If you’re going to make progress with your business, ➔ This is especially important for employees whose
you need to create an environment that supports job duties involve finances, such as bookkeeping,
that vision. accounting, payroll or handling cash.
● There are a few proven techniques that can help 3.Create monthly cash flow projections.
you get more out of your workspace. ➔ If your actual cash flow falls short of projections,
● Believe it or not, by adding a few plants around your investigate to find out why.
office, you can increase productivity by 15% through 4.Review your business’s monthly bank
improved concentration. statements in detail.
● You’ll also get a boost by using a standing desk and ➔ Have bank statements sent directly to your personal
cleaning up your cables. email or home address.
● These techniques help you stay energized and
focused without the distractions that come from a
cluttered workplace.
5.Review all credit and debit card statements COMMON TYPES OF BUSINESS
for accuracy. OWNERSHIP
➔ Using payment cards for business expenses can
simplify accounting and tax preparation. Let’s take a look at the types of business ownership, along
➔ However, the more employees have company with some pros and cons, to help you figure out which one
credit cards, the greater the chance of fraud. best fits your ideal structure.
➔ Require employees to document all business
expenses with detailed receipts.
6.Set up inventory control systems.
1.Sole proprietorship
● A sole proprietorship occurs when someone does
➔ Inventory is often damaged, stolen or lost. Inspect
business activities but doesn’t register as another
and count incoming inventory to make sure orders
kind of business.
were filled accurately.
● There is no separate business entity, meaning there
➔ Designate who can sign for incoming inventory or
is no distinction between the business owner’s
release outgoing inventory. Conduct regular
personal and professional assets and liabilities.
inventory of products or materials.
● Sole proprietorships are simple, easy to start, and
7.Monitor point-of-sale transactions. one of the most common types of business
➔ Count cash in the cash drawer at the beginning and ownership.
end of each business day. ● They are a good option for someone starting a
➔ Use point-of-sale software that requires employees low-risk business on a trial basis.
to log in—tracking who is on the register at any ● Also, no additional taxation!
given time reduces the risk of theft. ● However, because there is no formal separation, the
8.Don't put one person in charge of petty cash. business owner will become personally liable for any
➔ Require a second employee to authorize all petty obligation the business might have.
cash transactions. Record all transactions, and
balance the petty cash once a week. 2.Partnership
9.Review all outgoing payments.
➔ Compare payments to invoices.
➔ Watch for duplicate invoices, new vendors or
multiple invoices from the same vendor in a short
time.
➔ Embezzling employees often use these tactics to
pay themselves.
10.Require vendors to submit detailed
invoices. ●
➔ Avoid vague language on invoices. ● Similar to sole proprietorships, a partnership is the
11.Sign checks yourself. simplest type of business ownership when two or
more people are involved.
➔ Require all outgoing checks and payments to be
● There are two kinds: limited partnerships and limited
signed or authorized by the business owner.
liability partnerships.
12.Review payroll before it goes out. ● This term liability is being thrown around quite a bit,
➔ Watch for any variations in the amount. Use direct so let’s define the types of liabilities we will be
deposit to reduce your risk of payroll fraud. looking at when
13.Delegate financial duties to multiple discussing business ownership:
employees. ➔ Liability: being responsible for something
➔ If one person is in charge of all your business by law
financials, such as bookkeeping,payments and ➔ Limited liability: a person’s liability is
payroll, it's easy for them to steal from your limited to a fixed sum, which usually reflects
business. their investment in the business
14. Check up on employees involved with your ➔ Unlimited liability: there is no limit to the
business finances. liability and the owners take full
responsibility for the companies’ debts.
➔ Require these employees to take annual vacations
● A limited partnership has one partner with unlimited
and have someone else handle their duties.
liability while everyone else involved has limited
Embezzlement is often discovered this way.
liability.
15.Monitor your use of debt. ● With limited liability, comes limited control.
➔ Your accountant can help you set a maximum ● Since being a partner with limited liability is less of a
debt-to-equity ratio and a minimum debt-to-cash risk, they get less say in decision-making processes.
flow ratio.
➔ Stay within these bounds to keep your business
from becoming overleveraged. ● A limited liability partnership has only one class of
16.Plan ahead for business financing. owners, meaning there is no partner with the risk,
➔ If you have a sudden cash flow crunch, or find an and power, of unlimited liability.
opportunity that requires a cash outlay, will you be ● A limited liability partnership shares the liability
prepared to handle it? Always have a couple of among the owners, protecting them from the
potential capital sources at the ready. mistakes of their partners.
17.Don't be predictable. ● Neither of these partnership types pays additional
➔ Put the element of surprise on your side when taxes.
watching for employee misconduct.
➔ Perform your financial reviews and audits at random
times.
3.Limited liability company S corporation
● Not to be confused with a limited liability ● An S corporation, or S corp, is a type of corporation
partnership, a limited liability company (LLC) that is meant to avoid the double taxation that hits
separates the owner’s personal and professional normal C corporations.
assets. Meaning if your business gets hit with a ● To become an S corp and avoid that taxation, you
lawsuit or goes bankrupt, your house, car, and file a special election. Once the business is officially
personal piggy bank are safe an S corp, it is no longer taxed on profits. Instead,
● Similar to sole proprietorships and partnerships, all profits, and losses, are passed on to the
LLCs do not pay additional federal income taxes or stockholders.
those associated with being a corporation. ● However, this is not possible everywhere. There are
● However, depending on their location, they might be certain states that tax above a certain limit and
subject to other state taxes some just tax them like a C corp.
● Becoming an S corp isn’t possible for everyone. If
● Also, LLCs fall under the category of you have more than 100 stakeholders and any
selfemployment, so those taxes fall on them as well. stakeholders that aren’t citizens of the United
● An LLC is a good choice for a business owner States, you are out of luck
willing to take a little bit of a bigger risk or one
looking to protect their personal assets.

B corporation
● Benefit corporations, or B corps, have missions
similar to non-profit organizations, but they are, in
fact, a for-profit corporation. Their stakeholders
have the goal of providing a public benefit, but they
4.. Corporations also want to see a profit
● Certain state governments also want to see that
● There are actually a few separate types of
public benefit; some require B corps to submit
corporations, and each one has something that
benefit reports that prove they are contributing to the
makes it a little different.
good of the public.
C corporation
● Even though they might have different purposes, B
S corporation
corps are not taxed differently form C corps.
B corporation
Close corporation
Non-profit corporation

C corporation
● A C corporation, or just a regular corporation, is its
own entity kept separate from its owners.
● This means they offer the most protection in terms Close corporation
of personal liability. ● A close corporation resembles the structure of a B
● Corporations have an advantage when it comes to corp. A lot of the rules associated with smaller
funding: stock. companies also apply to close corporations.
● A stock is a partial share in a company, so when ● With other types of corporations, anyone can own
people buy stock, they are essentially buying stock.
ownership and decisionmaking responsibilities. ● If there is stock available and they have the money,
● However, starting a corporation costs more than any it’s theirs.
other business structure. ● This is where close corporations differ: the stocks
● Not only are they legally required to do keep more are owned by people that are closely related to the
records and release more reports, but they also pay business.
income tax. ● Stockholders in close corporations benefit from
● In some cases, there is even double taxation - once liability protection while also being free of reporting
on profits, and then again on the dividends requirements and pressure from shareholders that
distributed to stockholders. don’t know much about the business.
● With so many different stakeholders contributing to
the same business, corporations become solid.

● If someone leaves, the business remains relatively

unaffected.
● A corporation is a good structure for a business
owner looking for a little more risk, good funding
options, and the prospect of eventually “going Nonprofit Corporation
public,” which means the company will eventually ● Nonprofit corporations work in charity, education,
sell stock to the public religion, literature, or science.
● Because they exist to serve the common good,
nonprofit corporations do not pay any state or
federal taxes on their income.
● To obtain this tax-exempt status, nonprofit
corporations must register with their state, follow
similar rules to standard C corporations, and all
money must go back into the organization.
● In other words, profits can’t be distributed to the
members of the organization.
This does not mean nonprofits do not pay their
employees
 3. Options for Development
- Advantages and disadvantages of the options
identified are assessed and preferred group of
options selected
- The needs and resources of the people who will live
in the project should form the basic criteria against
which the options should be measured.
- Feasible alternatives can be presented for political
Cooperative discussion.
● A cooperative is a private business owned and
operated by the same people that use its products 4.Detailed Development Proposals
and or services. The purpose of a cooperative is to - Should be planned in phases
fulfill the needs of the people running it. - Detailed designs for later phases should be left until
● The profits are distributed among the people they are about to be implemented
working within the cooperative, also known as - Will enable to incorporate any changes in demand
user-owners. and build on the experience from the first phase of
● There is typically an elected board that runs the development
cooperative, and members can buy shares to be a - Development of physical design, financial and
part of decision-making processes. administrative aspects in detail.

5.Implementation
- First phase to be implemented before detailed
design is carried out for all stages of a project

LAW SUPPORTING SMALL BUSINESS

ENTERPRISES
OPPORTUNITY ASSESSMENT
➢ MSMEs Defined Micro, small, and medium
enterprises (MSMEs)are defined as any business
activity/enterprise engaged in industry,
agri-business/services, whether single
proprietorship, cooperative, partnership, or
corporation whose total assets, inclusive of those
arising from loans but exclusive of the land on which
the particular business entities office, plant and
equipment are situated
➢ Recently, Republic Act No. 9178, otherwise
known as the Barangay Micro Business
Enterprise (BMBE) Act of 2002 has redefined the
PROJECT FORMULATION AND APPRAISAL categories.
➢ Hence, the present structure, by law, is as follows:
● Project Formulation The first step in formulating a By Asset Size
project is to define the broad outcomes that are ➢ Republic Act (RA9501): Magna Carta for Small
expected to be completed by the time the project Enterprises of 2008 a law to promote, support,
ends. strengthen and encourage the growth and
● These outcomes should be aspirational but also developments of MSMEs in partnerships with the
realistic. They should also be clear and concise. private sector.
➢ Banks be it private or government are mandated to
These are: increase their loan portfolios from 6 to 8 percent for
● Identification micro and small and maintain the 2 percent
● Preparation of project brief allocation for medium-sized companies.
● Appraisal ➢ The penalty for non-compliance is not below
● Technical P500,000. To avail of this financial assistance,
● Institutional these enterprises must be registered first with
● Economics appropriate government agencies (DTI, SEC,CDA,
● Financial LGUs).
● Implementation and monitoring
➢ RA No. 9178: Barangay Micro Business
● Evaluation
Enterprises Act of 2002. Provided a business
capital or assets do not exceed P3 million, a
registered enterprise is entitled to the following:
PREPARATION OF PROJECT AND (a) guaranteed registration approval within 15
working days
APPRAISAL (b) educed local taxes and fees
(c) exemptions from income tax and minimum
1.Feasibility study wage
- Whether the objectives of the project will be met or (d) availability of special financing and credit
not? guarantees windows
- Whether the project will be successful or not before ➢ under DTI’s SME Unified Lending Opportunities for
committing substantial funds to it? National Growth
2.Detailed studies ➢ (SULONG) program
- Parameters for which and within which, the project
will be designed.
- Research and Investigations required to understand
the problems and opportunities involved, both
existing and projected
 GOVERNMENT POLICY & TAXATION ○ P8,500 20% of the excess over P70,000 - 70,001
to 140,000 pesos
● The policy of taxation in the Philippines is governed ○ P22,500 25% of the excess over P140,000 -
chiefly by the Constitution of the Philippines and three 140,001 to 250,000 pesos
Republic Acts. ○ P50,000 30% of the excess over P250,000 -
○ Constitution: Article VI, Section 28 of the 250,001 to 500,000 pesos
Constitution states that "the rule of taxation shall be ○ P125,000 32% of the excess over P500,000 -
uniform and equitable" and that "Congress shall more than 500,000 pesos
evolve a progressive system of taxation".
○ National law: National Internal Revenue ● Most foreigners in the country are classified as
Code—enacted as Republic Act No. 8424 or the Tax resident aliens due to the duration of their stay and
Reform Act of 1997 and subsequent laws amending employment period in the Philippines.
it; the law was most recently amended by Republic ● Hence, as foreign residents, income received in the
Act No. 10963 or the Tax Reform for Acceleration country is treated in the same way as those of Filipino
and Inclusion Act; nationals.
○ Local laws: major sources of revenue for the local ● Foreign residents, for their part, will pay taxes
government units (LGUs) are the taxes collected by according to their passive income from Philippine
virtue of Republic Act No. 7160 or the Local sources (dividends, interest,royalties, annuities,
Government Code of 1991, and those sourced from wages,real estate profits, etc.).
the proceeds collected by virtue of a local ● Non-resident foreigners involved in a trade or business
ordinance. in the Philippines will also pay income tax at the same
● Taxes imposed at the national level are collected by the rates.
BIR, while those imposed at the local level (i.e., ● Moreover, a final tax is levied at a rate of 20% on
provincial, city, municipal, barangay) are collected by a dividends received by non-resident foreigners from
local treasurer's office. companies within the Philippines.
● When moving to the Philippines, especially if you are ● As regards to non-resident aliens who are not involved
going to work or set up a business there, you will in trade or business in the Philippines, they have to
probably have questions regarding the local tax system. pay taxes at a rate of 25% on gross income received in
● Indeed, as in most countries, you are likely to pay income the Philippines, unless these are plus-values received
tax, as well as other types of taxes in the Philippines from the sale of shares in a national company or from
● However, tax is deducted under several conditions and at real estate.
varied rates for different categories of foreigners. ● In this case, capital gains taxes will apply.
● It is best to inquire about these beforehand. ● Finally, foreigners employed by regional head offices of
multinational companies, offshore banking and oil
contractors have to pay a 15% tax based on their
GENERAL PRINCIPLES gross income

● Expatriates living in the Philippines who are not yet

citizens are considered resident aliens while foreigners OTHER TAXES
who do not live in the Philippines are considered as
non-resident aliens.
1. Value-added tax (VAT) is deducted at a rate of 12%
● If you're already a citizen but you are not living in the
in the Philippines.
country, you're a non-resident citizen
2. Corporate income tax is deducted at a rate of 30%
● Generally, the following principles apply in terms of
(domestic) or 35% (foreign) of a company's net
individual taxation in the Philippines:
income derived within (and without for domestic) the
○ Citizens living in the country are taxable on all
Philippines. However, preferential rates and
income derived from sources within and outside
exemptions apply.
the Philippines;
3. Preferential rates generally range from 2 % to 20%.
○ Non-resident aliens and non-resident citizens are
4. Regional company’s offices have to pay a 10% tax.
taxable only on their income within the
5. Property tax varies according to the location. In
Philippines;
general, it does not exceed 3% of the estimated
○ Philippine citizens working as an overseas
value.
contract worker (OFW) is only taxable from his
6. Tax on capital income is deducted at a rate of 6% on
income within the Philippines.
real estate, 5% on up to 100,000 pesos and 10% for
● In terms of businesses:
amounts in excess of 100,000 for capital gains from
○ Domestic corporations (created within the
the sale of shares not traded in the stock exchange.
Philippines) are taxable on all income within and
7. The tax on sale, barter or exchange of shares in the
outside the country; and
stock exchange is one-half of 1%.
○ Foreign corporations, whether engaged or not in
8. Inheritance and property tax are deducted at rates
trade or business in the Philippines, is taxable
ranging from 5% and 20%.
only on income derived from sources within the
9. Social security contributions by the employee usually
country.
vary from 36.30 to 581.3 pesos in 2018, depending
on salary scales.

TAX RATES
● Foreign residents are required to pay taxes on their net
taxable income at different rates ranging from 5% to
32% (this is standard for all taxable individuals).
● In their case, the employer deducts taxes at the
source.Thus, they do not have to go to the Tax Office.
● In short, tax rates in the Philippines vary from 0% to
32% depending on the amount of income:
○ 5% - 0 to 10,000 pesos
○ P500 10% of the excess over P10,000 - 10,001 to
30,000 pesos
○ P2,500 15% of the excess over P30,000 - 30,001
to 70,000 pesos