CHAPTER 1: Personal Entrepreneurial Competencies

LESSON 1: Personal Entrepreneurial Competencies

Entrepreneurs are people with skills and capabilities to see and evaluate business opportunities. They are
individuals that can strategically identify products or services needed by the community and they have the capacity to
deliver these at the right time and at the right place.
Entrepreneurs are agents of economic change; they organize, manage and assume risks of a business. Some of
the good qualities of an entrepreneur are opportunity seeker, risk taker, goal setter, excellent planner, a confident problem
solver, hardworking, persistent, and a committed worker.
Entrepreneurship, on the other hand, is not just a simple business activity. It is a strategic process of innovation and
new venture creation. Basically, entrepreneurship is both an art and science of converting business ideas into marketable
products or services to improve the quality of living.
 What is Character
Character defines as the totality of a person's moral and mental qualities. Such qualities can be seen in many different
ways that characterize a person.
Character is something that is inside you which people see no matter how hard you hide it. Saying that someone has
―character means a lot; it is the biggest compliment a person can ever have from someone else.
Character is a combination of traits that show strong ethical principles and maturity in a person. Ethical principles are
standards for right or wrong behavior that a person values highly. Your true character will show whether people are
watching you or not. Character gives you the inner strength and courage to do the right thing all the time. This in truth
makes you confident that you are doing the right thing and that you are at peace with yourself no matter how hard the
situation will be.
Lesson 2 The Personal Entrepreneurial Competencies of an Entrepreneur
Entrepreneur is somewhat re-inventing yourself into the business world. You should start remaking something old
for entrepreneurial instead of waiting for an open-handed person to fund and help you set up your own business
undertaking. Sometimes you may fail, but most often you do well. You do not care about the coming stumbling block,
instead you treat this breakdown as a springboard to your goal. Can you do that? If you are prepared to the world of
business, you should possess the desirable characteristics of an entrepreneur. The following are the primary characteristics
of an entrepreneur which are classified according to its cluster.
 Achievement Cluster
1. Persistence. Differences in opinion and judgment. Your opponent can surely be a part of rejection on what you intend
to do for the success of your endeavor. As an entrepreneur, you must be firm, strong-willed, and stick to your own
belief.
2. Hardworking. If you are determined to run your own business, you must concentrate on your work either as a
producer or a seller. The success of your business depends on how much time and effort you will spend on it.
3. Opportunity Seeking. When a person gets hold of the chance to build or improve his chosen career, he will take this
opportunity with no second thoughts. He keeps on trying in order to achieve his ambition.
4. Coping with uncertainty. Once you choose to pursue your vision to be a significantly useful entrepreneur, you should
know how to handle unusual events which may happen in the business. These include problems in managing personnel
who may be tempted to steal funds or goods from the business, problems on delivery of goods and services, problems
on production because of unavailability of human and non-human resources needed to reach the expected output at a
given period of time, and other uncertainties that an entrepreneur may encounter. You must be patient in dealing with
this kind of uncertainty.
5. Coping with failure. “Learn from your mistakes‖ is what we always say. As an entrepreneur, you must learn how to
deal with those frustrations and loses and turn these into productive learning experiences.
6. Risk-taking. Risk sometimes cannot be anticipated. If accidents happen, you must accept these challenges and work
them out or set alternatives. Examples of these unavoidable circumstances are risk of typhoons, fires, earthquakes,
floods, and the obsolescence of product. These risks may result to loss of your business or bankruptcy. However,
whatever risk you may encounter, don‟t give up! Instead, reduce by getting insurances and taking alternative action like
converting unsold products into something trendy.

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  Planning Cluster
1. Goal-oriented. An entrepreneur is a futuristic. You must have an advanced preparation for the success of your
business. You must set a long-term goal for the activities need, an extensive preparation for the production process
that you need to acquire, human and non-human resources and procedures. Everything in your business will be set
clearly, organized, and planned depending on the goal you want to achieve.
2. Information seeking. The rapid development of our country today is immensely noticeable. You need to be globally
competitive in terms of learning new things, and the acquiring technologies which are essential in producing goods and
services. As an entrepreneur, you must be well-versed in all aspects of business schemes. Information can be sought
from skilled individuals who are directly engaged in the same ground of business.
3. Systematic planning and monitoring. This involves developing and using logical, step-by-step plans to reach goals,
evaluation alternatives, monitoring progress, and switching to alternative strategies for the goal you want to achieve.
4. Building for the future. Once a person enters in a line of business, you must understand that you are in a non stop
contract that an entrepreneur should understand. It may take several years to build up business income to a
reasonable standard. The goal for most successful business people is to build a secure job and income for themselves
which is based on their own ability.
5. Setting own standards. As an entrepreneur, you must always consider the satisfaction of customer in such a way
that qualitative product or service is ensured all the time.
 Power Cluster
1. Self-Confidence. You must have a strong faith in your ability despite the problems that you will encounter along the
way.
2. Demonstrating initiative. A successful entrepreneur takes initiative. You must put yourself in position where you are
personally responsible for failure of success of your business venture.
3. Persuasion and networking. These include the use of deliberate strategies to influence or persuade others and the
utilization of business and personal contacts to accomplish own objectives. These are characteristics you should
develop to succeed in your endeavor.
4. Responding to feedbacks. You must be concerned to know how well you are doing and keep track of your
performance. You must obtain useful feedback and advice from others.
5. Building on strengths. Successful business people base their work on strengths. Use your manual skills, knowledge
in creating products or services, knowledge in trading product/service, ability to make and use of network of contacts to
build your entrepreneurial venture.
Lesson 3. Developing My Character into Personal Entrepreneurial Competencies
You do not need to be a scientist, a professional, or a graduate in different courses to become an entrepreneur. As
long as you believe in yourself, have talent or skill, and possess‟ entrepreneurial characteristics, Yes! You can be one.
Your individual characteristics can be transformed into purposeful entrepreneurial pursuit. These include lifestyles or self-
scheme and attribute.
 Lifestyle can help an individual in shaping up his future entrepreneurial.
 Lifestyle can be turned into entrepreneurial depending on how you perceive clearly the importance of this in the
economy. Hobbies are part of lifestyle which can be turned into business venture.
For example, if you are fond of drawing cartoon characters, you can start a business by selling your cartoon pictures or
offering graphic service to the producer of animated films. A trivial personal activity like chatting with friends the whole day
may leak out into something functional like putting up an internet café.
Attribute may be classified into inherent characteristics, accidental characteristics, or characteristics by cause. These can
be also become changed into entrepreneurial activities.
 Inherent Characteristics. (Natural entrepreneur)
If your family belongs to the fields of designing like Craftsman, field marshal or inventor or a born entrepreneur in different
fields which will be leaned to the entrepreneurial style of endeavor, he can easily manage and handle his own business
productively and profitably.
 Accidental Characteristics (Entrepreneur by chance)
If you find yourself unemployed, has difficulty in finding job, it is the time for you to shift to another work- the
entrepreneurship. Once you have decided to be one entrepreneur, you must be totally turned yourself into entrepreneurial
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endeavor. You may become an entrepreneur by chance, but you will need to go on planning, preparation, time, effort, and
capital as much as possible or if you can recycle a used product into something creative and innovative product, you can
engage in the business venture.
 Characteristics by cause. (Acquired from friends)
Your friends convinced you to create something profit-making items. Because of ―pakikisama they took you out to variety
of items made by other entrepreneurs. With this, you and your friends created marketable items and started selling different
designs of your products. So, through friends you can venture a business.
Lesson 4. Practitioner as an Entrepreneur Versus A Natural Entrepreneur
Practitioner entrepreneurs are individuals who practice a learned profession and turned his profession into
entrepreneurial activity, while Natural entrepreneurs are those individuals with natural talent or gifted individuals in a
particular skill where they accidentally discover and need to be developed so that they can build his own business.
The table below shows the differences between a practitioner- entrepreneur and natural entrepreneur.
Practitioner Entrepreneur Natural Entrepreneur
1. Professional 1. Anybody can be
2. Educated individual 2. Skilled individual
3. Need to be trained in order to possess entrepreneurial 3. Possess entrepreneurial Characteristics
skills, knowledge, and attitude to become an 4. Can create new things
entrepreneur 5. Revive old one into something marketable
4. Has an area of expertise 6. Can create products from recycled and wasted
5. Limited scope in entrepreneurial activities materials
6. He/ She needs capital to start a business 7. Entrepreneur by nature
8. Can start a business even without capital

CHAPTER 2: Environment and Market

Lesson 1: Generating Ideas for Business
The process of developing and generating business idea is not a simple process. Some people just come with a
bunch of business ideas but are not really feasible. There are two problems that arise; first is the excessive generation of
ideas that can forever remain in the dreaming stage and the second is when they don„t have ideas and don„t want to
become entrepreneurs.
The most optimal way is to have a systematic approach in generating and selecting business idea that will be
transferred in real business. Here are some basic yet very important considerations that may be used to generate possible
ideas for business:
1. Examine existing goods and services. Are you satisfied with the product? What do other people who use the
product say about it? How can it be improved? There are many ways of improving a product from the way it is
made to the way it is packed and sold. You can also improve the materials used in crafting the product. In addition,
you can introduce new ways of using the product, making it more useful and adaptable to the customers many
needs. When you are improving the product or enhancing it, you are doing an innovation. You can also do an
invention by introducing an entirely new product to replace the old one.
Business ideas may also be generated by examining what goods and services are sold outside of the community.
Very often, these products are sold in a form that can still be enhanced or improved.
2. Examine the present and future needs. Look and listen to what the customers, institutions, and communities are
missing in terms of goods and services. Sometimes, these needs are already obvious and felt at the moment.
Other needs are not that obvious because they can only be felt in the future, in the event of certain developments in
the community. For example, an area will have its electrification facility in the next six months. Only by that time
will the entrepreneur could think of electrically-powered or generated business such as photo copier, computer
service, digital printing, etc.
3. Examine how the needs are being satisfied. Needs for the products and services are referred to as market
demand. To satisfy these needs is to supply the products and services that meet the demands of the market. The

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 term market refers to whoever will use or buy the products or services, and these may be people or institutions such
as other businesses, establishments, organizations, or government agencies.
There is a very good business opportunity when there is absolutely no supply to a pressing market demand.
Businesses or industries in the locality also have needs for goods and services. Their needs for raw materials,
maintenance, and other services such as selling and distribution are good sources of ideas for business.
4. Examine the available resources around you. Observe what materials or skills are available in abundance in
your area. A business can be started out of available raw materials by selling them in raw form and by processing
and manufacturing them into finished products. For example, in a copra-producing town, there will be many
coconut husks and shells available as ―waste products. These can be collected and made into coco rags or
doormat and charcoal bricks and sold profitably outside the community.
A group of people in your neighborhood may have some special skills that can be harnessed for business. For
example, women in the Mountain Province possess loom weaving skills that have been passed on from one
generation to another. Some communities there set up weaving businesses to produce blankets, decorative and
various souvenir items for sale to tourists and lowland communities.
Business ideas can come from your own skills. The work and experience you may have in agricultural arts,
industrial arts, home economics, and ICT classes will provide you with business opportunities to acquire the needed
skills which will give you extra income, should you decide to engage in income-generating activities. With your
skills, you may also tinker around with various things in your spare time. Many products were invented this way.
5. Read magazines, news articles, and other publications on new products and techniques or advances in
technology. You can pick up new business ideas from Newsweek, Reader„s Digest, Business Magazines, ―Go
Negosyo, KAB materials, and Small-Industry Journal. The Internet also serves as a library where you may browse
and surf on possible businesses. It will also guide you on how to put the right product in the right place, at the right
price, at the right time.
Once you have embarked on identifying business opportunities, you will eventually see that there are many
possibilities that are available for you. It is very unlikely that you will have enough resources to pursue all of them at
once.
You have to select the most promising one among hundreds of ideas. It will be good to do this in stages. In the
first stage, you screen your ideas to narrow them down to about few choices. In the next stage, trim down the
choices to two options. In the final stage, choose between the two and decide which business idea is worth
pursuing.
In screening your ideas, examine each one in terms of the following factors:
1. How much capital is needed to put up the business?
2. How big is the demand for the product? Do many people need this product and will continue to need it for a long
time?
3. How is the demand met? Who are processing the products to meet the needs (competition or demand)? How
much of the need is now being met (supply)?
4. Do you have the background and experiences needed to run this particular business?
5. Will the business be legal, not going against any existing or foreseeable government regulation?
6. Is the business in line with your interest and expertise?
Your answers to these questions will be helpful in screening which ones among your many ideas are worth
examining further and worth pursuing.
Branding
Branding is a marketing practice of creating name, symbol or designs that identifies and differentiates product or
services from the rest. It is also a promise to your customers. It tells them what they can expect from your product or service
and it differentiates your offerings from other competitors. Your brand is derived from who you are, who you want to be and
what people perceive you to be.
Branding is one of the most important aspects of any business. An effective brand strategy gives you a major edge
in increasingly competitive markets.
The features of a good product brand are as follows:
- Delivers the message clearly
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 - Confirms your credibility
- Connects your target prospects emotionally
- Motivates the buyer
- Concretizes user loyalty
Here are some simple tips to publicize your brand:
 Develop a tagline. Write a meaningful, unforgettable, and easy to remember statement that captures the essence
of your brand.
 Get a great logo. Create a logo suitable to your business and consistent with your tagline and place it everywhere.
 Write down your brand messaging. Select key messages you want to communicate about your brand.
 Be true to your brand. Deliver your brand promise.
 Be consistent. Be reliable and consistent every time.
Lesson 2: SWOT Analysis
In generating business idea, you should first identify what type of business is suited to your business idea. You should
analyze and scan the potential environment, study the marketing practices and strategies of your competitors, analyze the
strengths, weaknesses, opportunities, and the threats in your environment to ensure that the products or services you are
planning to offer will be patronized within the easy reach by your target consumers.
Bear in mind these simple rules for successful SWOT Analysis:
 Be realistic about the strengths and weaknesses of your business when conducting SWOT Analysis.
 SWOT Analysis should distinguish between where your business is today, and where it could be in the future.
 SWOT Analysis should always be specific. Avoid any grey area.
 Always apply SWOT Analysis in relation to your competition i.e. better than or worse than your competitions.
 Keep your SWOT Analysis short and simple. Avoid complexity and over analysis.
 SWOT Analysis is subjective.
Positive Factors Negative Factors
Internal Factors Strength Weaknesses
External Factors Opportunities Threats
Strategies:
 SW - Maximize on the strengths to overcome the internal weakness.
 OW - Capitalize on the opportunities to eliminate the internal weakness.
 ST - Maximize on your strengths to eliminate the external threats.
 OT - Take advantage of the available opportunities to eliminate the external threats.
CHAPTER 3: Legal Structure of a Business
Lesson 1: Types of Legal Ownership Structure
Ownership is defined as a legal relationship between a person and his possession. It is important to establish who the owner
or the owners are to be able to determine who the benefactors of the activities of the business are. Below are the four kinds of business
organizations based on ownership:
1. Sole Proprietorship – it denotes a single owner. It is the oldest and the simplest form of ownership.
 Advantages:
a. The owner is motivated to do his or her best since profits belong entirely to him or her.
b. There is simplicity in starting an enterprise, expanding, reorganizing, or discontinuing.
c. The owner has the freedom to do what is best since control of the business is entirely in his or her hands.
d. The owner relies solely on his or her resources, thus taking full accountability of responsibilities in the business.
 Disadvantages:
a. It generates low income. Most individual proprietors do not keep accounting records so they have no means of
determining whether they are losing or gaining.
b. The proprietor may have only a particular talent in some aspects of the business.
c. The risk of financial loss is borne solely by the proprietor.
d. The owner can rarely stay away from the enterprise so he or she has long and irregular working hours.
e. There is lack or provision for retirement benefits. The owner of the business finds it difficult to retire because there might
be no one to take over the business. The capitalization is limited to the resources of the owner.

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 2. Partnership – there is partnership when two or more people bind themselves to contribute money, property, or industry for a
common fund, with the intention of dividing the profit among themselves.
 Advantages:
a. A partnership is easy to organize.
b. More personal talents are available, thus resulting in a better management terms of planning, decision-making, and
implementation of plans.
c. Retention of profit is observed, with the partners getting all the profits of their business.
d. More capital and better conditions and facilities are available.
 Disadvantages:
a. Lack of stability. Partnership terminates in case of the death, withdrawal, or legally declared insanity of one of the
partners.
b. The sharing of managerial responsibilities may be a problem.
c. Management disagreements may happen. A partnership continues only if relationships between partners are cordial and
free from distrust and suspicion.
d. A general partner is responsible for all the debts of the business. A partner may have to pay from his personal funds or
properties for the unpaid obligation of the partnership. This is in addition to his capital contribution to the partnership.
3. Corporation – it is a legal personality distinct from the incorporation and shareholders. In its own name, the corporation may
enter into contracts, borrow money, own property, sue, and get sued. Various persons through the purchase of shares of
capital stock hold ownership. Shares are transferred without disrupting the continuity of the corporation.
 Advantages:
a. Management is specialized. A corporation can hire professional managers and specialists. It has the funds to develop its
human resources.
b. It is easy to raise capital. Through the stocks and shares of the public, greater capital can be accumulated.
c. There is limited liability. As a stockholder, an investor cannot lose more than the amount he invested through the
purchase of stocks.
d. The life of the corporation does not end with the withdrawal or death of key owners. It can exist for 50 years and is subject
to renewal.
 Disadvantages:
a. Corporations pay taxes not imposed on individuals and partnerships. They pay a percentage of their authorized capital
paid upon registration.
b. It is difficult and expensive to organize a corporation. The services of a lawyer and accountant are needed to prepare
legal and financial documents.
c. It is strictly supervised and regulated through government special reports, such as financial reports, which have to be
submitted regularly. A corporation has to comply with government law, regulations and policies.
CHAPTER 4: Assess Your Market and Make a Marketing Plan
First and foremost, your business needs customers. You should not start a business if you do not have customers
yet. They are the most important people for your business. If you do not provide what they want, at prices they are willing to
pay, and treat them with respect, customers will buy from someone else.
You will probably have to compete with other existing businesses that provide the same or similar services or
products. These businesses will be your competitors. You can learn something from each of your likely competitors to help
make your business more successful.
To operate a successful business you need to know and understand your customers and competitors. They are the
main actors in your market. To know your customers and competitors, ask question and get information from people who
may be your future customers and competitors. When you have collected the information, you can use it to prepare a
marketing plan based on the four P‟s:
 Product – the quality, packaging, size and other characteristics of products or services you are going to sell to your
customers.
 Price – what you are going to charge for the products and services you will sell to your customers.
 Place – where your business is going to be located and how you will distribute your product/service.
 Promotion – how you will inform your customers about your business and how you will attract them to buy your
products or services.

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The marketing plan is the most important part of your Business Plan. It will guide you in generating the sales and profit that
will make your business succeed.
Keep in mind the 2 C‟s of your market:
 Customers
 Competitors
And the 4 P‟s of your marketing plan:
 Product
 Price
 Place
 Promotion
CHAPTER 5: Pricing, Record Keeping, Costing, and Profit
The price you charge must convince your customers to buy your product or service and give you a profit. Customers will not
always buy the cheapest product. Sometimes they think that a cheap is of lower quality and they will prefer to buy a more expensive
product that they think has better quality. Also, once you set your price, it is very difficult change it. Therefore, you must study the
situation very well and take great care when setting the prices for the things you sell.
Another method of pricing is to add a “mark-up” to all the costs of making and selling a product while making sure your prices are
still competitive or close to the prices charged by your competitors.
All businesses have expenses and some of these would be money paid out for materials to produce the product, rent, seeds,
stationery, transportation and other items. You must manage these costs to make sure you earn a profit from your business.
All businesses must use a record book. All money paid out of the business should be written into the “Money Out” column and all
money coming into the business should be written into the “Money In” column. A running balance is kept in the “Balance” column.
A good record keeping system can be easily set-up in an ordinary record book or notebook which will enable you to calculate the
business Sales and Costs. From your Record Book, you must separate and calculate the following costs:
 Direct Costs are all costs that are necessary and directly related to the products or services your business makes or sells.
The items that are part of direct costs directly go into the product. These items are generally composed of materials that
become part of the product and the labor that is used directly to produce the product. You spend for these costs every time
and only when you produce the product. These items are consumed every time you produced a product. It is easy to calculate
how much you spend for these items for each product you produce.
 Indirect Costs are not directly related to one particular product or service. These are the general costs for running your
business and do not become a part of a specific product or business. Indirect costs are often called “overhead”. You spend for
these even if you are not producing or selling your products. Examples are rent, interest on loans, stationery, etc. It is difficult
to calculate how much “consume” of indirect costs for each product that you produce.
It is important to compute separately for these cost items so that you can think of ways to decrease costs and increase profit. Try
to reduce indirect costs first as these may not be necessary to produce or sell your product. To reduce direct costs, look for better
materials and suppliers or make your production methods more efficient by cutting down waste.
There is also a special Indirect Cost. It is called DEPRECIATION. It is applied only to property, equipment, furniture, and tools of
the business that are used but “not consumed” when producing a product. These items also last for a long time usually more than a
year. Recording and treating this as a cost allows you to “recover” the cost of buying this equipment. Another way of looking at
depreciation is that it allows you to set aside or “save” money that you will use later to replace your property, equipment, tools, and
furniture when these break down.
Finally, a good record-keeping system will help you compute profit and how much cash the business has. For a business to
operate and succeed you need both profit and cash.

CHAPTER 6: Make a Cash Flow Plan

Aside from keeping records of sales, costs, and profit, it is also important to be able to make a Cash Flow Plan. Remember
that a business always needs both profit and cash.
This means finding out when and how much money goes in and out of the business so that you can make sure that there will
be enough cash to cover all business expenses.
When making a cash flow plan it is necessary to estimate how much cash will be coming in from sales in the months ahead. It
is also necessary to estimate the costs of operating the business for each month.
It is important to keep family money separate from the business money. All money that is taken out of the business for
personal or family use must be written in the Record Book. If you do this, you will soon see from the totals at the end of each week or
month, if you are taking too much money out of the business and not leaving enough to pay business expenses.
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 Most importantly, the Cash Flow Plan will help you find out if when and how much cash you will need to keep your business
running. You may need to borrow money. Banks and other lenders will always want to see your Cash Flow Plan to see how you will
spend their money. If they see that their money goes to family expenses and not into your business, they may decide not to lend to
you.
CHAPTER 7: Calculate your Start-up Capital
When planning to start a new business, calculate the amount of money needed. This is your start-up capital. It includes money
to buy equipment and to pay for supplies, raw materials, wages and everything you need to start your business. It also includes what
you will pay for the place where you will do business. When you have calculated the start-up capital, you can then see if you can start
the business using only your own money, or if you need to borrow money from relatives, friends, or a bank.
When using your own money, do not put all your savings into business. The general rule is to invest only the amount that you
can afford to lose completely. Otherwise, you may not have anything left if the business fails.
When borrowing from friends and relatives, you should explain to them the risks of your business. Similarly, they should only
lend you what they can afford to lose completely.
Because of the risks in all businesses, it is important to be very careful and realistic in listing all the items and costs you will
incur when you start the business. At the same time, you must be conservative in projecting the sales that will help give you additional
cash while you are just starting your business.
You can estimate what start-up capital is required by computing the Direct Costs, the Indirect Costs, and the Equipment Costs
that you will need to spend so that you can start and operate your business for a period, say 1 or 2 months, without running out of cash.
Make sure you include only the most important and necessary costs in computing your start-up capital.
Too little start-up capital will cause the business to run out of cash too early or even before you find out if your sales can cover
your expenses and give you a profit. In other words, you will not give the business a chance to prove its profitability.
On the other hand, too much start-up capital can also make you careless. Because there is plenty of cash available, you may
not realize that you are actually not making enough sales and cash flow to make business viable.
To avoid being careless, do not make all your Start-up Capital easily available at the start of the business. Deposit it in bank
and get only the cash you need for your business‟ everyday costs.

CHAPTER 8: BUSINESS PLANNING

LESSON 1: Stages of Business Planning
Business planning is the process of setting up goals for a particular business endeavour and taking steps to
achieve these. Before plunging into any kind of business activity, an entrepreneur must give a lot of thought to the following
steps or procedure:
1. Establish your goals. Determine what you want to achieve in putting up the business in order to give direction to
your action.
2. Determine possible sources of your capital. A number of government agencies and private agencies provide loans
to would be entrepreneurs. To be able to avail of such loans, certain steps and procedures to be followed. Other
sources of capital are:
a. Short-term or long-term financing from banks and other financial institutions
b. Personal funds and property
c. Loans on investment in cash or in kind from family members.
3. Study your market. Producing the product is much easier than selling it to the consumers. It is therefore a very vital
step to conduct an extensive market survey before going into production; whether there is a demand for the
product, changes in design, required, extent of competition, demand supply gap, or potential share of the market.
4. Analyze your managerial skill. Who will manage the business? Are they knowledgeable and skilled? Do they know
how to handle records and transactions?

LESSON 2: Basic Managerial Concerns in Business

Management is the process by which people in the business make use of both human and material resources to
achieve the desired set of goals. It deals with human interrelationships with an objective of producing products or services
that provide for the needs and wants of people. Management involves five important functions. These are:
1. Planning. It is determining what is to be done or what business to put up.
2. Organizing. It is deciding on procedures or specific work necessary to achieve a plan, dividing it into jobs, and
arranging them into a structure that will support one another.
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 3. Staffing. It is choosing, employing, and encouraging qualified person to assist in the business operation and
providing them with the necessary training.
4. Directing. It is motivating and leading people in the business so that they can achieve the objectives by which the
project was conceived.it involves guiding people in the implementation of the plan through direct supervision,
orientation, and development programs.
5. Evaluating or controlling. It is assessing how well the plan is accomplished while activities are being performed.

LESSON 3: Parts of the Business Plan

Outline of a Business Plan
Name of Business:
Name of Owner/s:
Address of the Business Enterprise:
Telephone Number:
I. The Business
a. Description of Business
b. Product/Service
c. Location of Business
II. Marketing Plan
a. SWOT Analysis
b. Sources of Merchandise
c. Pricing
d. Competitors
e. Promotion
f. Channel of Distribution
III. Financial Plan
a. Start-up Capital
b. Cash Flow Projections
IV. Production Plan
a. Number or Volume of Intended Production
b. Production Space Available
c. Supply and Demand
d. Inventory Control
V. Organizational Plan
a. Goals and Objectives
b. Strategies
c. Type of Business Organization
d. Advantages and Disadvantages
e. Flow Chart of Duties and Responsibilities of Officers and Employers
VI. Management Plan
a. Goals and Objectives
b. Strategies
c. Business Policies for Costumers
d. Store Policies for Employees

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 Planning is a basic step in organizing an enterprise. It is thinking ahead of the objectives, marketing, production,
finance, and personal administration. It concerns where and what you want the business to be in the future.
Any individual who is planning to put a business enterprise will have to undergo several stages.
1. Project identification – this is when an individual decides on the kind of business he wants to go into and the line of
products/services that he wants to produce or offer.
2. Project formulation – this is when he firms up the decision to proceed with the business. He prepares either a
simple business plan or a more detailed project feasibility study to determine whether the proposed project is worth
pursuing or not from the point of view of commercial viability and technical feasibility.
3.
LESSON 3: Parts of the Business Plan
Outline of a Business Plan
Coverage Page: Name of Business
Name of Owner/s:
Address of the Business Enterprise:
Telephone Number:
VII. The Business
d. Description of Business
e. Product/Service
f. Location of Business
VIII. Marketing Plan
g. SWOT Analysis
h. Sources of Merchandise
i. Pricing
j. Competitors
k. Promotion
l. Channel of Distribution
IX. Financial Plan
c. Sources and Application of Findings
d. Capital Equipment List
e. Balance Sheet
f. Break-even Analysis
g. Income Statement
h. Cash Flow Projections
i. Historical Financial Reports for Existing Business
j. Supporting Documents
X. Production Plan
e. Number or Volume of Intended Production
f. Production Space Available
g. Supply and Demand
h. Inventory Control
XI. Organizational Plan
f. Goals and Objectives
g. Strategies
h. Type of Business Organization
i. Advantages and Disadvantages
j. Flow Chart of Duties and Responsibilities of Officers and Employers
XII. Management Plan
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 e. Goals and Objectives
f. Strategies
g. Business Policies for Costumers
h. Store Policies for Employees

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