Entrepreneurship

Quarter 1– Module 3:
Developing A Business Plan
 6. This is the financial statement that reports a
company’s assets, liabilities, and owner’s
equity within a given period.
7. This financial statement shows the flow of
cash (inflow and outflow).
8. This financial statement shows you how
profitable your business within a given period.
9. These are the materials cost needed in
production of goods like fabric and machine.
10. The term used when we deduct expense from
gross profit.

Lesson
Developing a Business
3 Plan
Entrepreneurs who decided to enter any business ventures must have
business plan on their hand to guide them throughout the process. Business plan
is written prior to setting up an enterprise.

Entrepreneurs must plan their business carefully because the success of the
business depends on it. Different business plans are prepared for different motives.
Business plans do not serve only one master. First, it serves the entrepreneur who
must set the guiding system of the business. Second, it serves the investors and
conscious financiers. Lastly, it serves the managers and staff in the organization so
that they will be knowledgeable about the process.

What’s In

Let us see if you still remember our last lesson. Write your answers in your
notebook. Write only the letter that corresponds to your answer.

1. Which of the following refers to a formal written document which consists of

business goals, the steps or ways on how to attain the goals, and the time frame
needed to achieve these goals?

a. Business Opportunity c. Feasibility Study

 In this module, you will make your own business plan. First, think of a
business you wanted to have and/or can sustain the needs of your community. After
you decide the kind of business you want to establish, you are now ready to write a
business plan.

I. EXECUTIVE SUMMARY

Based on the discussion from the last module; this is the last part to be
accomplished because it will summarize all the information and data gathered from
Parts II-V of the business plan.

What are the information needed?

 Description of the proposed business and business model

 Description of the market opportunity to capture, or market problem the
business solves
 Reasons why this is an attractive business opportunity
 Key distinctions or differentiators of the business versus competitors
 Overview of the sales, marketing, and operations strategy and plan
 Description of the executive plan and timeline
 Overview of projected financials containing revenues, costs, profits, and
assumptions

II. MANAGEMENT AND ORGANIZATION

What are the information needed?

 Company Name, Logo and Address

 Vision and Mission Statements
 Key Personnel
 Workforce and Support Personnel
 Organizational Chart
 Ownership, Capitalization, Compensation and incentives
 External Management Support

III. PRODUCT/SERVICE PLAN

What are the information needed?

 Purpose of the product/ service

 Product’s unique features
 Material requirements and sources of supply
 Equipment that will be used to manufacture the product/ render the service
 Production/ Service Process and Controls
 Distribution logistics
 Regulatory and other compliance issues

IV. MARKET PLAN

What are the information needed?

 Market Analysis which includes demand and supply vis-à-vis competitors

 Marketing and Sales Strategies
 Product/Service Characteristics or features
 Pricing Policy
 Sales Projections

V. FINANCIAL PLAN

What are the information needed?

 Start-up costs requirements

 Financial projections
 Breakeven analysis
 Budget
 BUSINESS PLAN
VIA’S FASHIONABLE
FACE MASK

I. EXECUTIVE SUMMARY

Via’s Fashionable Face Mask will offer unique, fashionable, and has good
quality face masks that will accommodate the needs of the people nowadays due to
COVID-19 in Bataan. Historical data show that there is an increasing demand for
face masks among the towns of Bataan. However, the existing 5 big competitors are
not able to meet such demand resulting to a big gap. This means that there is a big
unmet demand of the market in face masks. Our goal is to fill something to meet
the desired demand. One of our primary strategies is to offer customers variety of
options for choosing their own face masks. Fashionable face masks will be offered
in various colors and designs to give customers options. Customized face masks will
also be offered to some institutions like schools and offices. Our business will be
initially operating as a home-based enterprise and will use social media platforms
(like Facebook or Instagram) to advertise the colors and ready-made designs of the
face masks. Customers may have the options to pick up the products or have it
delivered at their convenience. Via’s Fashionable Face Mask has several unique and
competitive designs that will be used to its advantage to penetrate market.
 Initial capitalization for the business is Php 27,000 good for one-month
expense. Expected revenue for 1 year is Php 290,280 while total cost for goods sold
amounted to Php 158,580, while the total cost of goods sold amounted to Php
158,580.

Notes:
*Capitalization is based on the start-up summary total qty. per month table.
*Revenue is based on the total peso in year 1 in sales projection table.
*The data for cost of goods sold can be seen at projected income statement table.

II. MANAGEMENT AND ORGANIZATION

A. Company Name: Via’s Fashionable Face Mask

B. Logo:
C. Address: #5380 Zamora St. Brgy. Poblacion, Mariveles, Bataan
D. Vision Statement: Via’s Fashionable Face Mask will be the leading provider
of unique, fashionable, and high-quality face masks that will accommodate
the needs of the people in Bataan.
E. Mission Statement: Via’s Fashionable Face Mask is a socially responsible
enterprise providing high-quality, unique, and reasonably priced fashionable
face masks which caters health needs of the people in Bataan.
F. Key Personnel: Owner/Manager
G. Work Force and Support Personnel: Sewer, helper
H. Organizational Chart:
 Duties and Responsibilities:

1. Owner/ Manager – He/she oversees and manages the business. He/she

is responsible and accountable for every decision or action for the
business.
2. Advisory Council – They advise the owner in managerial aspects. They
must be knowledgeable on how the business runs. This position is on
call only.
3. Sewer – He/ She creates and makes the product.

I. Ownership: Sole Proprietorship

J. Capitalization: Php 27,000

K. Compensation and Incentives:

Employees’ Salaries:

Advisory Council – P500 (monthly consultation)

Sewer – P6,850 monthly (P10 x 685 pcs.) (weekend work)

Incentives:

13th month pay

Cash bonus

L. External Management Support: Parents

III. PRODUCT PLAN

A. Purpose of the Product

Via’s Fashionable Face Mask will offer the residents of Bataan, a unique, good
quality and variety of options for choosing their own face masks. There are different
colors to choose from. We can cater schools if ever they decide to have color coding
per grade level. For offices, we can provide customized face mask like printing the
name of the company or any designs they want.

B. Products Unique Features

Via’s Fashionable Face Mask shows its unique features. The first is the wide
variety of colors that customers can choose from. They can freely select the color
they want. The second is the printed designs of face mask. This is best for some
teenagers who are fashionable.
 Below are the samples of face masks:

C. Material and Equipment Requirements and Sources of Supply

The material requirements and their sources are as follows:

MATERIALS SOURCES
Neoprene Fabric Fabric store in City of Balanga, Bataan
Sewing Machine Sewing supplies in City of Balanga,
Bataan
Sewing supplies and tools Sewing supplies in City of Balanga,
Bataan
Plastic for packaging Plastic store in City of Balanga, Bataan
Table 1 (Material requirements and their sources)

D. Production Process and Controls that will be used to manufacture the

product

Below is the process on how to make a face mask:

1. Create a pattern.
a. Draw patterns in different size (Small, Medium, Large and Extra Large).
b. Cut the pattern.
2. Transfer the pattern to the fabric, and then cut it.
3. Sew the cut cloth.
4. Trim the excess thread.
5. Pack the face mask in a clean plastic bag.
6. Add label. Print in small square paper the name and logo of the business.
Indicate also the sizes.

Neoprene mask is best used as a material for washable face mask. Neoprene
(also polychloroprene) is a family of synthetic rubbers that are produced by
polymerization of chloroprene (Wikipedia). This fabric is water resistant that can
protect us from the virus.

E. Distribution Logistics

Via’s Fashionable Face Mask initially operates as a home-based enterprise

and uses social media platforms like Facebook and Instagram to advertise the colors
and designs of the washable face masks. Customers may choose if they will pick-up
the item or it will be delivered at their convenience. For delivery, there should be
handling fee (Bataan area only) and shipping fee (outside Bataan). Fees will be
shouldered by the buyer. For bulk orders, (minimum of 100pcs.) free shipping fee
or handling fee is applied. Due to the crisis today, the washable face masks will not
be displayed in bazaars or school fairs.

F. Regulatory and Other Compliance Issues

Via’s Fashionable Face Mask will be registered as a single proprietorship type

of business to the Department of Trade and Industry (DTI). A barangay clearance
will also be secured before applying for a mayor’s permit to operate as a home-based
business micro enterprise. The Bureau of Internal Revenue (BIR) registration will
also be done after getting all the necessary registration documents and permits from
DTI, barangay, and mayor’s office.

IV. MARKET PLAN

A. Market Analysis which includes demand and supply vis-à-vis competitors

Historical
Total Supply: Previous 5 years Face mask sold by Total
Data
Demand the competitors per year Supply
(5years)
A B C D E
YEAR 1 15,834 1,114 500 2,065 950 1,962 6,591
YEAR 2 18,605 1,306 600 2,530 1,300 2,035 7,771
YEAR 3 23,400 1,438 700 3,000 1,400 2,480 9,018
YEAR 4 25,600 2,100 800 3,113 1,500 2,951 10,464
YEAR 5 100,000 8,350 1,200 11,580 2,100 8,635 31,865
Table 2 (Market Analysis)
The table above shows that there is an increasing demand for washable face masks among the
residents of Bataan. However, the existing big five competitors in Bataan cannot sustain the
needed demand resulting to a big gap. This shows that there is a big unmet demand of the
market in washable face masks.
B. Marketing and Sales Projection

Marketing Strategy

A competitive and encouraging campaign will aim to increase the visibility for
Via’s Fashionable Face Mask. This will focus on the customer’s desire to choose
colorful and printed washable face mask. Via’s Fashionable Face Mask will use
different channels to communicate this message.

a. Social Media – During this time of crisis, posting in social media is the
best way to communicate with other people. Via’s Fashionable Face Mask will be
active in social media like Facebook and Instagram to showcase and advertise the
product. This will be used in every transaction.

b. Online Resellers - Via’s Fashionable Face Mask will try to reach out people
in social media who are reselling products. As we have seen, it has a big potential
to widen the market. A linkage will be established so that they become aware of the
washable face mask.

C. Sales Strategy

Customers are always after their convenience. Via’s Fashionable Face Mask
sales strategy will assure that ordering and buying face mask is very easy, exiting,
and a great experience. In order to do this, the enterprise will create a website and
a Facebook page where customers can use to order and buy face mask at their
convenience. New designs will be uploaded from time to time to notify customers.
Electronic payment like bank-to-bank transfer and other remittance centers to
promote cashless transaction.

With these sales strategies, the company develops the customer’s excitement
to order and convenience to pay at their own pace.

D. Product Characteristics or Feature

Via’s Fashionable Face Mask has several competitive features that will be used
to its advantage to achieve market penetration.

 Variety of colors – Customers will be offered 20 different colors of face mask

to choose from. Colors are divided into 2; pastel and dark colors. Pastel colors
include light colors such as yellow, pink, white, and others while dark colors
consist of black, navy blue, army green and so on.
 Variety of prints – Customers will be offered with different designs. The
printed designs are also divided into two; for men and for women. These
 printed designs are best for teenagers and for the adults who always follow
the trends.
 Affordability – Because of the crisis today, many of us have limited income but
the urgent need of wearing face mask is also a must. It is favorable for the
customers to have access to inexpensive yet high-quality washable face
masks.

E. Pricing Policy

Via’s Fashionable Face Mask will adopt the differing price based on the size
and the design policy. As such, below is the pricing scheme that will be adopted:

Retail Price:
Size of Face Masks Price (Peso)
Small (fits to kids 3-7 yrs. old) 35
Medium (fits to teens 8-14 yrs. old) 40
Large (15 yrs. old above) 45
Extra Large (oversized) 50
Table 2.1 (Pricing Scheme-Retail Price)

Reseller Price:
Size of Face Masks Price (Peso)
Small (fits to kids 3-7 yrs. old) 31
Medium (fits to teens 8-14 yrs. old) 34
Large (15 yrs. old above) 37
Extra Large (oversized) 40
Table 2.2 (Pricing Scheme-Reseller Price)

F. Sales Projections

Table 2.3 (Sales Projections)

(Note: In sales projections, from the word itself projections, meaning, you are just
anticipating possible sales or income for 5 years. You can do this by the help of
information gathered from other competitors offering the same products. But again,
during this time of crisis, just use the resources you have.)
Notes:
*Qty./month means Quantity per Month.
*For year 1 computation of qty.:
Qty per month multiply 12 (no. of months in 1 year)
=150 x 12 = 1800
Formula used:
(Qty for Year 1 multiply the given percentage) plus Qty. for Year 1 = Qty. for Year 2
= (1800 x .10) +1800
=180 + 1800
= 1980 Qty. for Year 2
*For peso computation:
Qty. for Year = Qty. multiply by reseller price
=1800 x 31
=55,800 Price for year 1
*Do the same steps for Quantity Year 3-5.
*The increase of qty. per year from years 2-5, is 10%

G. Market Analysis Summary

The demand for washable face masks in Bataan has shown steady increase
over the last 5 years. Because of the current crisis, face masks are very in demand
for all ages. To increase market penetration, Via’s Fashionable Face Mask will offer
variety of colors and printed designs of face masks. At the same time, competition
and encouraging marketing campaign will be done to increase the visibility of Via’s
Fashionable Face Mask using different types of social media and scouting potential
online resellers to widen the market. The enterprise offers price differential based on
the size and designs with the price ranging from Php 31-40.

V. FINANCIAL PLAN

A. Start-up Summary
685pcs. - Total
Expenses Cost/pc. Year 1
Qty./Month
Neoprene Fabric 85 5,865 70,380
(10 masks per yard)
Equipment 7,500 7,500 7,500
(Sewing Machine)
Utilities 2,000 2,000 24,000
(water, electricity and
Internet)
Labor 7,350 7,350 88,200
Miscellaneous 1,285 1,285 15,420
Permit and License 3,000 3,000 3,000
Total 27,000 208,500
Table 3.1 (Start-up Summary)
Notes:
*Total quantity per month is based from the sales projection.
*Add all the salaries of the employees to get the Labor cost.
*Neoprene fabric, permit and license, utilities, and equipment costs are based on their actual
cost. Do the research.
Formula used:
*Cost/pc multiply to the total qty. per month
*Since every 1 yard of neoprene fabric can make 10 masks, total qty. per month divide 10 is
equal to 69.
=85 x 69
=5,865
For year 1:
*Total qty. per month multiply by 12 (except for permits and license; and sewing machine
because they are not consumable)
=5,865 x 12
= 70,380
Do the same process to the succeeding data.

B. Financial Projections

Table 3.2 (Financial Projections – Income Statement)

Note:
*Income Statement – is a financial statement that shows you how profitable your business
will be within a given period.
*Revenues from total sales projection table-Year 1 Sales in Peso
*Cost of goods sold from start-up summary table, all the materials cost needed in production
of goods like fabric and labor
*Gross profit is equal to Revenues less Cost of Goods Sold.
*Expenses include all the expenses that are not included in cost of goods sold like utilities,
miscellaneous expense and permit and licenses.
*Income before Interest and Taxes = Gross profit - expenses.
*Tax = 32% (tax rate) of Income before Interest and Taxes
E.g. 89280 x .32 = 28,570
*Net Income = Income before Interest and Tax less Tax
To compute for years 2-5:
*Do the same procedure.
*Cost of goods sold and expenses multiply to the desired percentage you want. In that
projection, 10% increase per year is used to get the amount for years 2-5 (except for permit
and licenses).

Table 3.3 (Financial Projections – Cash Flow)

Note:
*Cash flow – this financial statement shows the flow of cash (inflow and outflow).
*Beginning balance for the year 1 is based on start-up summary total qty, per month. For the
years 2-5, the ending cash balance of the preceding year will be the beginning balance for the
current year.
*Cash sales are based on the sales projection table from the total sales in peso per year.
*Total cash inflows = Beginning year + cash sales plus + cash inflows
*Total Cash outflow = Expenses plus Payable and withdrawal. *In that projection, 10%
increase per year is used to get the amount for years 2-5 (except for permit and licenses).
*Owner’s Withdrawal is projected amount only.
*Ending Cash Balance = Total Cash Inflows - Total Cash Outflows.
E.g. in Year 1
=317,280 – 237,070
=80,210
Table 3.4 (Sales Projections – Balanced Sheet)
Note:
*Balanced Sheet – the financial statement that reports a company’s assets, liabilities, and
owner’s equity within a given period.
*Always remember that in Balanced Sheet the Total Assets must be equal to Total Liabilities
and Equity.
*Assets and Liabilities consist of current and non-current.
*Current assets are cash and other assets converted to cash within a year while non-current
assets are cash and other assets that will not be realized or converted within a year.
*Current liabilities are liabilities or short-term financial obligations that are due within a year
while non-current liabilities are long-term financial obligations that the due is more than a
year.
*Cash at hand is based on Net Income.
*Income tax payable= 32% (tax rate) of Income before interest and taxes.
*Capital is based on the cost per month in start-up summary table.
*Drawings – total drawings for the period.
*Net Capital = Capital Beginning + Net Profit – Drawings
*Total Liabilities and Equity = Total Liabilities + Net Capital