Business Formation and Management: Key Concepts
Company Concept
An organization formed by people whose actions are coordinated and implemented harmoniously, utilizing materials, tools, machinery, money, or any other factor in order to achieve a pre-defined objective.
- Comes from the word “undertake”
- Start something
- Begin a series of activities aimed at a specific and predetermined goal.
Company Classification
- a) Extractive
- b) Manufacturing
- c) Commercial
- d) Industrial
- e) Services
Small Enterprise
- a) Slow growth.
- b) Staff: The manager can instruct on production, sales, finance, and other technical matters.
- c) Supplies: The volume of transactions could constitute an economic advantage by implementing an appropriate purchasing plan.
- d) Marketing: Usually comprises the local market.
- e) Production: Machinery is elementary, and manufacturing systems are somewhat artisanal.
- f) Capital: The company and capital are almost always individually owned.
Medium-Sized Enterprise
- a) Growth: Higher than small businesses and, in some cases, superior to that of large businesses.
- b) Staff: There is delegation of authority and expertise.
- c) Supply: Requires an adequate organizational structure to anticipate and schedule procurement needs.
- d) Marketing: Includes not only the local market but also the regional and sometimes national markets.
- e) Production: Has a high degree of mechanization and automation.
- f) Capital: Can be individually owned or a partnership.
Incubators
Reasons for Starting a Business
The idea of starting a business is presented basically for two reasons:
- A certain product or service does not exist in the market, or established companies fail to meet demand.
- Economic benefits to owners in the form of profits.
Activities Prior to the Emergence of a Company
- Company’s Line of Business
- Area where it will operate economically and geographically
- Existing and potential market needs
- Form of amount and value of transactions
- Needs, requirements, and specifications of the facilities and equipment
- Distribution channels to use
- Skilled personnel required and sources of recruitment
- Systems and working methods
Required marketing studies, engineering, and business promotion.
It is desirable that the study is performed by a management consulting firm.
The effectiveness of the study determines the success or failure of the new company.
It also represents the first investment.
Requirements to Legalize a Business
- Registration in the Public Registry of the Secretariat of Industry and Commerce
- Registration in the General Directorate imposed by the Secretary of Finance.
- Registration in the General Directorate of the Federal Taxpayer Registry.
- Registration in the General Directorate of Industrial Property
- Comply with the requirements of the Social Security Administration (SS)
- Registration in the Treasury or Revenue Collection.
- Notice to the Secretariat of Labor and Social Welfare.
Legal Forms of Incorporation
Under Mexican law, for an organization or society to exist, it is necessary:
- a) That it is not entirely transitory
- b) That it has a common legal purpose
- c) The common goal can be: non-economic (Civil Association), primarily economic (Civil Society), or profit-driven (Commercial Company)
Commercial Companies
- a) General Partnership
- b) Limited Partnership
- c) Limited Liability Company
- d) Limited Liability Company
- e) Joint-Stock Company
- f) Cooperative Society
Management and Organization
- a) The progress of scientific research
- b) Rapid population growth.
- c) Complexity of organizations / Man has developed techniques, systems, methods, and procedures.
- d) Implement administration.
- e) Administration is happening on all levels
- f) Any administration should be based on the existence of a social group
- g) The management of any enterprise involves a series of activities
- h) Implement the administrative process.