Entrepreneurship 12 Name___________________________________ Score ____________ Prefi

MODULE
4 Business Plan

The Business Plan

The business plan is a blueprint of the business that the entrepreneur would like to start. It aims to establish if a business
idea will bring in a fair return to one’s investment, will be beneficial to the society and will bring no harm to the environment when
it is operated. There are many business ideas that may look attractive to the entrepreneur at first, but not necessarily “doable.”
The goals of a business plan are:
a. To assess the feasibility of the business idea;
b. Develop business strategies to make the business idea doable, especially loans from financial institutions like banks.
According to Department of Trade and Industry, through the Bureau of Small and Medium Enterprise Development, the following
are the reasons why an entrepreneur still needs to make a business plan, no matter how good the business idea seems to be:
1. Reduce, if not remove, the risk of losing money invested in a poorly researched or unstudied business idea.
2. Avoid costly mistakes. Every sudden or careless decision the entrepreneur makes for the business entails costs that one
might not be able to recover.
3. Anticipate the financial requirements. It is always wise to foresee sudden increases or decreases in the demand for the
product or service so that the entrepreneur can plan for the lean months and ensure that the business will have enough
resources to meet business obligations during the periods when sales are low.
4. Organize the activities beforehand.
5. Assess actual performance against set goals. It enables the entrepreneur to set targets in terms of sales volume and
revenues, as well as expenses, among others.
6. Apply for financing from lending institutions.
A business plan is very important to various parties. Among those who need business plans that are the management team,
shareholders, bankers or creditors, customers, suppliers, and employees. To gain their confidence, these stakeholders will have to be
informed about what are purposes, directions, core business, and financial situation of the business venture from the time it will
start and in the next few years based on its forecast. Therefore, a good business plan is made up of the following essential elements
as shown below:
Business Plan Outline:
1. Executive Summary
 Description of the proposed business and business model.
 Description of the market opportunity to capture, or market problem the business solves.
 Reasons for why this is an attractive business opportunity.
 Key distinctions or differentiators or the business versus competitors.
 Overview of the sales, marketing, and operations strategy and plan
 Description of the execution plan and timeline.
 Overview of projected financials containing revenues, costs, profits and assumptions
2. Management and Organization
 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
3. Product/ Service Plan
 Purpose of the product/service
 Product’s unique features
 Material requirements and sources of supply
 Process an equipment that will be used to manufacture the product/render the service
 Production/Service Process and Controls
 Distribution Logistics
 Regulatory and other compliance issues
4. Market Plan
 Market Analysis which includes demand and supply vis-à-vis competitors
 Marketing and Sales Strategies
 Product/Service Characteristics or features
 Pricing policy
 Sales Projections
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Entrep 12 page 2 Prefinals
5. Financial Plan
 Start-up Costs Requirements
 Financial Projections
 Break-even analysis
 Budget
 FT1. Identify the part of the business plan where each description belongs. Write your answer on the space provided.
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FT2. Determine the element of the Executive Summary that is being referred to in each statement.
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1. Where do you see your business in the medium and long term?
2. What are the main strengths and weaknesses of your most important competitors?
3. List three features where you think your product or service could be improved.
4. How soon do you think you will need to expand your work force?
5. How many people do you plan to employ?
6. Do you have any contingency plan if your sales turn out to be lower or the costs higher than your
forecast?
7. What personal qualities and experience will you invest in the business?
8. How big is the sector you will be operating in?
9. Can you list your main competitors and their estimated market share?
10. Given the right condition, which business opportunities can you identify for growth and greater
profitability?
11. Do you have any plan to add more products or services to your current portfolio?
12. What are the general sector trends? Is it growing, static, or slowing down?
13. Are the business premises you have identified easily accessible to your clients?
14. What types of skills and/or experience are you looking for?
15. Set the basis for the Return on Investment you wish the business to give you.
1. What is the potential for your business?
2. How much money would you require to sustain your business during the first three years?
3. Provide some information about the product or service you wish to offer.
4. How long do you expect the loan repayment period to be?
5. What assistance would you require to help you launch your project?
6. What will the loan/overdraft/investment be used for?
7. What markets do you intend to target?
8. What do you hope to achieve in one to three years’ time?
9. How much money is required to start the business?
10. Give a summary of the sales and profit forecast figures for the next three years.
FT3. Distinguish the following situations. Analyze of if strengths, weakness, opportunities or threats. Just write the initials of each
analysis.
___1. A food business located near at the school ___11. Poor human relations
___2. Loyal employees ___13. New food offerings
___3. There is a teamwork between the workers ___14. Affordable food items
___4. Adequate capital ___15. Foods served are maintained
___5. Lacks customer care ___16. Locally supported
___6. New restaurant nearby ___17. Tourist visited
___7. Poor location ___18. Goo location of the business
___8. Well-trained employees ___19. Outdated machines
___9. Lacks technical ability ___20. Small size of business workforce
___10. Happy and satisfied employees
FT4. Answer the following questions briefly and concisely.
1. In doing a financial sub-plan, there are two kinds of costs that need to be considered. What are these two? Define each cost or
provide an example of each cost.

2. In coming up with a business plan, why is it necessary to consider the people who will be hired as employees?

3. What will an entrepreneur do in the SWOT Analysis?

4. What are the parts of the business plan?

5. Is planning and creating a business plan necessary? Why or why not?

6. How do you develop a business plan?

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