My dear students, how are you? I hope that you are fine?

This
Entrepreneurship is designed for you to introduce the learners to the key
concepts and underlying principles of entrepreneurship while understanding
and developing the core competencies required of an entrepreneur. It also
seeks to uncover the innate entrepreneurial abilities of the learners and hone
their skills and good judgment in finding opportunities amidst crises and turn
them into profitable entrepreneurial venture.

In this Chapter, you are about to explore the topic that discuss the definition of
Business Plan, and the content of Business Plan.

Are you now ready? Let us now begin to explore in this chapter because at the
end of this chapter you are now bring new and innovative ideas to the
marketplace. Just relax and read this chapter with LOVE and interest. if you
meet some difficulties with this chapter, do not hesitate to ask your teacher to
unlock your difficulties. Just Relax and Enjoy

Explain the meaning of Business Plan

Differentiates the contents of Business Plan

For better understanding, some terms were defined for you.

Entrepreneurship – refers to the concept of developing and managing

a business venture in order to gain profit by taking several risks in the
corporate world.
Business plan- a formal written document containing business goals,
the methods on how these goals can be attained, and the time frame
with in which these goal need to be achieved.
Business Goal- describes what a company expects to accomplish over
a specific period of time.
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 Vision- describes the basic human emotion that a founder
Mission- is a short statement of why an organization exist, and
identifying the goal of its operation
Objective- is a goal or something to aim for.
Performance target- measured by specific target to metrics like clicks
or conversions for campaign or campaign group.
Let us measure your knowledge if it is still fresh…. So let us try this test if
how good you are.

Directions: Draw a on the space provided before each

number if the statement is true and if the statement
is false.
____ 1. The business plan must have a specific audience
in mind and what important questions do this
audience want answered.
2. A business concept contains the essence of the
enterprise in a concise but not powerful manner.
3. The business goals composed of the vision,
mission, objectives, key result areas, and
performance indicators of the enterprise.
4. The executive summary contains everything that
is relevant and important to the business
audience
5. The acronym of SPEET social, political,
economic, ecological, and technology.

Congratulation JOB well done my dear Entrepreneur

What Is A Business Plan For?

Entrepreneurs who plan to enter any business endeavour must have a

business plan on hand to guide them throughout the process. Different
business plans are prepared for different purposes. There are business
plans written prior to setting up an enterprise, which are similar to a
prefeasibility study and a feasibility study. Many new enterprises need to
convince prospective business investors about the soundness and potential
of their business. They need to convey the capabilities and competencies of
their owners and managers. They must also be able to 'sell' the proponent

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and the business proposition to this audience. These are situations when a
good business plan is needed.

Clearly, a business plan serves many masters. First, it serves the

entrepreneur who must set a navigational course. Second, it serves
investors and cautious financiers. And third, it serves the managers and
staff of the organization so that they will know the strategies and programs
of the enterprise.

The business plan must have a specific audience in mind and what
important questions do this audience want answered. In order to aid the
entrepreneur in getting his or her business plan organized, the following
format may be a good start:

1. Introduction
A. The Business Concept and the Business Model
B. The Business Goals: Vision, Mission, Objectives, and Performance
Targets
C. The Business Offering and Justification
II. Executive Summary
IIl. The Business Proponents: Organizers with their Capabilities and
Contributions
IV. The Target Customers and the Main Value Proposition to the Customer
V. The Market, Market Justification based on the Industry Dynamics and
the Macro
Environmental Factors Affecting the Opportunities and Threats in the
Market, the
Size, Potential and Realistic Share of the Market
VI. The Product and Service Offerings
VII. The Enterprise Strategy and Enterprise Delivery Systems: Business
Competitiveness
VIL. The Financial Forecasts and Expected Returns, Risks, and
Contingencies
IX. Environmental and Regulatory Compliance
X. The Capital Structure and Financial Offering: Returns and Benefits to
Investors,
Financiers, and Business Partners

1.2 CONTENTS OF THE BUSINESS PLAN

The Business Concept and the Business Model

A business concept contains the essence of the enterprise in a concise but
powerful manner. It stresses the value of the product offering to the target
customers who would most likely buy it.

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The product concept must then be translated into a business model. A
business model is a formula on how the enterprise exactly plans to make
money out of the business. There are areas of money making which the
business model must address:
1. How will the business raise revenues? What critical factors will
cause the revenues to materialize?
2. What will be the costs of the enterprise products and other cost
of doing business? How will these costs be managed to ensure
comfortable profits? What critical factors will drive the costs? How can these
factors be controlled?
3. What will be the major investments of the enterprise? Why will these
investments give the enterprise a competitive edge?
4 How will the enterprise finance the investments? How will the enterprise
fund its growth?

The Business Goals: Vision, Mission, Objectives, and Performance

Targets

The business goals show the future and long-term prospects of the
enterprise. It is composed of the vision, mission, objectives, key result areas,
and performance indicators of the enterprise.

To illustrate, let us examine the vision of Double Happiness. Double

Happiness is an eatery in a bus terminal. It has three outlets located at bus
terminals in Central Luzon.

Case Example 1: Double Happiness

The vision of Double Happiness is "to establish commanding presence and

market leadership as a food chain servicing major bus terminal in Central
Luzon within the next five years"

The Business Goals are communicated by articulating the basic purpose of

setting up the enterprise in a mission statement. Needless to say, all
business enterprises of established for the purpose of making money for its
investors.

For Double Happiness, its mission statement is "to provide quality food and
passenger convenience services that would generate sufficient profits for the
stockholders and improve the lives of its employees,"

The vision and the mission statements must then be translated into
measurable end results, more popularly called objectives.

Objectives must be more specific than the vision and mission statements.
They should be measurable, achievable, and time-bound.

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For Double Happiness, their stated objectives are:

1. to establish a strong market presence in Central Luzon;

2. to earn good financial returns for its owners;
3. to delight customers with high quality food and services; and
4. to make Double Happiness a happy and rewarding place to work in

Objectives Key Result Areas

1. To establish a strong market 1a. Number of food outlets in major
bus terminal in Luzon
1b. Sales volume attained
lc. Market share in Central Luzon

2. to earn good financial returns for 2a. Amount of net profits realized
its owners; for the next five years
returns for its owners
2b. Return on equity (ROE)
2c. Return on assets (ROA) or
return on investment (RO1)
2d. Return on sales (ROS)

3. to delight customers with high 3a. Growth in sales per outlet

quality food and services high quality food and
3b. Percentage of repeat customers
services
3c.Number of customer
commendations or complaints
3d. Awards and recognition given by
the community or the
government for excellent service
3e.Customer survey rating to
ascertain customers' degree of
Delight
4. to make Double Happiness a 4a.Compensation and benefits of
happy and rewarding place to managers and workers are
work in happy and rewarding place above
industry rates to work in
4b.Management and employee
turnover
4c.Number of job applicants
compared to other similar
establishments
In turn, the key result areas must be rendered into quantified performance,
measurements, otherwise called performance indicators. These performance
indicators or Pls serve as the aspirational scorecard of the enterprise
managers and the motivational results of the investors. However, the Pls
must actually be credible to the business audience in mind.

In the case of Double happiness, the performance indicators for each of the
key result areas are as follows:

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 Key Result Areas Performance Indicators
2014 2015 2020
(Now) (One Year Five year
Later) Later
1a. Number of food 3 3 20
outlets in major bus
terminal in Luzon
P 7 million P 13 million P 60 million
1b.Sales volume
attained
lc. Market share in 2% 3% 12%
Central Luzon
2a. Amount of net P1 million P2 million P10 million
profits realized for
the next five years
returns for its
owners 30% 40% 60%
2b. Return on equity
(ROE) 15% 20% 30%
2c. Return on assets
(ROA) or return on
investment (RO1) 14% 15% 16%
2d. Return on sales
(ROS)
3a. Growth in sales 20% 20% 20%
per outlet high
quality food and
3b. Percentage of 30% 40% 50%
repeat customers
services 4 out of 20 6 out of 20 10 out of 20
3c.Number of
customer
commendations or None One by Two by Central
complaints Bulacan Luzon
3d. Awards and Chamber
recognition given by
the community or
the government for 3.5 4.5
excellent service 4
3e.Customer survey (on a scale of 1 (on a scale of 1
rating to ascertain to 5) (on a scale of 1 to 5)
customers' degree of to 5)
Delight
4a.Compensation Same as 5% above 15% above
and benefits of Industry Industry Industry
managers and
workers are happy
and rewarding place
above industry rates 1 out of 10 per
to work in 3 out 10 per 2 out of 10 per year
4b.Management and year year
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employee turnover 30% more job
4c.Number of job 20% more job applicant
applicants compared 10% more job applicant
to other similar applicant
establishments

The Executive Summary

The executive summary contains everything that is relevant and

important to the business audience. It is a synthesis of the entire plan. It
must contain the major argumentations of the business proponent on why
the business will work and succeed. It should provide the business plan
audience all the arguments on why they should participate in the business
venture.

The executive summary should then introduce and highlight the good
qualities of:
1. The business proponents and their partners;
2. The enterprise organization and its capabilities;
3. The technology providers and their expertise and experience and
4. The suppliers and all the major service providers.

It should likewise describe the products/services of the enterprise,

their features and attributes, and why they are the right ones to deliver to
the customers.

Finally, the Executive Summary should present the capital structure

of the proposed business and show how this structure will respond to the
investment programs and financial forecasts of the enterprise.
However, the Executive Summary can only be written last in order to
capture the findings and insights of the other parts, but for presentation
purposes, it is placed in the first part of the business plan.

The Business Proponents

The third section of the business plan contains information about the
business proponents or stakeholders. There are four types of stakeholders:
1. Resource mobilizers and financial backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team

If the business plan readers are the resource providers, then they will want
to know who else are on board to share the burden of raising money to see
the whole thing through.
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 If the business plan readers are the technology providers, they will want to
know if there will be sufficient funds to pay for the technology.

If the business plans readers are the governance and top management team,
then they will want to know what strategies and performance indicators are
being proposed.

If the business plan readers are the implementing, operating, and support
teams, they will want to know what programs, activities, tasks, and
resources would be in place.

The Target Customers and the Main Value Proposition

The fourth section of the business plan is the Target Customers and
the Main Value Proposition.

Target Customers must be of sufficient size, sufficient paying capacity,

and
have sufficient interest to purchase the products being offered by the
enterprise. The Main value Proposition is the unique selling proposition of
the enterprise.

Market Demand and Supply, Industry Dynamics, and Macro

Environmental Factors

The fifth section of the business plan is the market demand and
supply, the industry dynamics, and the macro environmental forces
affecting the business of the enterprise.
It is normal for enterprises to actually expand their product offerings to
include the other segments of a bigger market. The business proponent
should examine all the opportunities in this bigger market in order to
determine what exactly influences this bigger market.
The business plan should estimate the total market supply and demand for
the product offerings of the enterprise. The business plan should then
determine the major critical factors that influence this market demand and
supply.

The business plan should discuss the relevant industry dynamics:

 Who are the competing enterprises in the industry and what are their
comparative advantages and disadvantages? What business models
and strategies are they employing?
 Who are the suppliers in the industry and what are their capabilities
and bargaining power?

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  What are the channels of distribution being used by the industry?
How effective are these channels?

Both the industry players and the market are affected by the macro
environment, which includes the social, political, economic, ecological, and
technological (SPEET) forces. The business plan should discuss the major
trends and changing patterns in the macro-environment, which would have
significant impacts on the relevant industry and the behavior of consumers.
 Social environment includes the demographics and cultural
dimensions that govern the relevant entrepreneurial behavior. The
structure, social status, and dynamics of the population at large, as
well as the people's beliefs, tastes, mores, customs, and traditions
dictate the major parameters of market behavior.
 Political environment defines the governance system of the country or
the local area of business. It includes all the laws, rules, and
regulations on allowable and disallowable business practices.
 Economic environment is mainly driven by supply and demand forces.
It is the same factor that drives the interest and foreign exchange
rates to fluctuate with the movement of the market forces.
 Ecological environment includes all natural resources and the
ecosystem that defines the habitat of man, animals, plants, and
minerals.
 Technological environment makes or breaks competing participants in
any industry. New scientific and technological discoveries often lead to
the launch and commercialization of new products with superior
attributes or to rendering the old ones obsolete.

Product/Service Offering: Description, Evolution, and Justification

The sixth section of the business plan is the product/service offerings

that should contain a description, evolution, and justification of the
product/service offerings.
The products/services must be described by highlighting the features and
attributes that would most appeal to the target customers. The business
plan should also prove that the products/services would be accepted and
carried by the distribution channels.

Enterprise Strategy and Enterprise Delivery System

The business plan should expound on the Enterprise Strategy (ES) by
mapping the competitive landscape and by situating the enterprise and its
competitors as to their strategies and chosen positioning.

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 The business plan should then show how the Enterprise Delivery
System (EDS) would enable the business to implement the Enterprise
Strategy.

Financial Forecasts: Expected Returns, Rlsks, and Contingencles

The eighth section of the business plan is the financial forecast
including the financial returns, the financial risks, and the financial
contingencies.

From the financial forecasts, the business plan should then calculate
the expected returns from the business. The important return calculations
are the following: (1) expected return on sales; (2) expected return on assets
or investments; and (3) expected return on stockholders' equity.

Environmental and Regulatory Compliance

The ninth part of the business plan is composed of the environmental
and regulatory compliance. The business plan must articulate the laws,
rules, and regulations governing the business, and the industry that the
enterprise is in. It should ascertain that all the necessary permits, licenses,
and authority to use
proprietary intellectual capital had either been secured or would definitely
be secured.

Capital Structure and Financial Offering: Returns and Benefits to

Investors, Financiers, and Partners

The tenth section of the business plan contains the capital structure
and financial offerings of the enterprise including some discussions on who
are the investors, the financiers, and the partners of the enterprise.
Finally, the business plan must appeal to its target audience. It must
highlight for them the main features of the business plan that they are
looking for.

Challenge 1: How does your business plan look like?

Direction: Prepare an initial outline on how you want your own business
plan to look like? This assumes that you have a business endeavor that you
would want to enter into.
Feel free to add contents to your initial outline. You may look the
pattern or format as stated in the third page.
You may have to answer the following questions.
 What will be the contents of each section?
 How extensive will each section be?

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  Which audience will you prioritize in terms of customizing the
contents of your business plan?

Directions: In a long bond paper or tablet paper, make your OWN Name of
business Plan then continue writing the initial outline using the name of your
Business Plan. In your extra page of bond paper write all the Strength,
Weakness Opportunity, and Threats in formulating a business plan (SWOTS).

Directions: Draw a if the statement is TRUE and if the

statement is FALSE. Write your answer on the space provided
1. Social environment includes the demographics and cultural
dimensions that govern the relevant entrepreneurial behavior
2. The business goals do not need the future and long-term prospects
of the enterprise
3. There are five types of stakeholders
4. The executive summary contains everything that is
relevant and important to the business audience
5. the Executive Summary should present the capital structure of the
proposed business.
6. The third section of the business plan Environmental and
Regulatory Compliance
7. Technological environment makes or breaks competing participants
in any industry.
8. The business plan must have a specific audience in mind and what
important questions do this audience want answered
9. A business concept contains the essence of the enterprise in a
concise but not powerful manner
10. A business plan will help you not to a achieve your goal or
objectives.

1. Review the topics discussed in this chapter for planning the

enterprise.

2. In your own point of view, what is Business Plan?

_____________________________________________________________________
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 Dr. Eduardo A. Morato, Jr. (2016) Entrepreneurship. Rex Book Store
Publishing.

Job well done! You accomplished the module chapter 1. As go continue your
entrepreneurial journey with the aid of this book, keep this outline handy and be
prepared to change and adjust the contents accordingly based on what you are
going to find out in the next challenges that await you.

You are really good!

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