ENTREPRENEURIAL MANAGEMENT

GROUP 2

Topic: Chapter 3- Developing a Business Plan

1.Gaborno, Charry Mae
2.Galfo, Jaylord
3.Gallego, Daryn Joy
4.Galon, Norjun Paul
5.Galon, Maria Monica
6.Galvez, Maylen
7.Gamuyao, Mary Queen A.
8.Gaugano, Cyril Reigh
9.Gavileño, Novie Jude
 Entrepreneurial Management

CHAPTER 3
"A business plan does not guarantee the results you want to accomplish, but
it is still a step closer to making things work in advantage."

LEARNING OUTCOMES

1. Discuss the factors that should be studied before venturing a new business;
2. Explain the importance of environmental scanning;
3. Explain the importance of selecting the proper business location;
4. Discuss the important role of SWOT analysis before starting the business;
5. Discuss the importance of a business plan before business formation;
6.Give the different phases of a business plan; and
7. Prepare a comprehensive business plan.
The entrepreneurs are not discouraged with the constraints along the
causes of our economic malady. It should be turned into positive note and new
solutions must be made to make them different from other individuals. There
are lots of opportunities entrepreneurs who are hardworking, creative and
resourceful. Business opportunities are wide open for people who would like
to invest their money into gainful business activities. They need to find out this
new venture that interests them and how they can harness their technical
knowledge of the trade.

Before venturing into the field of business, the new entrepreneur should
look into the following factors:

1. Know your product or service.

First, one must believe on the product or service that one will offer to
the customer. If it is a new idea or concept, then one must be able to convince
that have a unique product that would satisfy customers' needs and wants.
Customers want to try new products but it must be better than those existing
in the market.

2. Analyze the market potentials.

The customer base will determine the success of one business venture.
The wider the market potential, the more chances of growth and success. The
entrepreneur must know his needs and wants and figure out how to satisfy
these needs. He analyze customers' profile as to their buying habits, income,
and social status.

3. Determine the marketing strategy.

A unique product or service needs effective distribution strategy to get

customer into the basket of demand potential. Continuous supply determines
product growth. Customers must have access to the product when they need
it. Outlets must be developed that would answer customers' demand. The
customers must be able to make suggestions as to product quality and
availability as they are the kings and queens of the entrepreneur.

4. Know the competitors.

In launching a product with existing competitors, one must know their

strengths and weaknesses. Develop new product and marketing strategy and
turn their weaknesses as new opportunity for the product. Continuous
innovation and research would mean better quality products or service. Make
things better and serve the customers with loyalty and dedication and it will
make a great difference.

5. Do not set on your laurels.

The landscape of business is continuously changing. Your initial success

in your business activities needs more proactive analysis for expansion and
growth and overcome possible competitions. Develop advertising and
promotion strategy to penetrate the wider market. Develop budget for
expansion and diversification either horizontally or vertically.
ENVIRONMENTAL SCANNING

The environment of business is vast with opportunities and the

entrepreneur must have a greater look into this potential as well as the
conditions prevailing in the community. The entrepreneur's ultimate objective
in diving into the business world is to make profit. Investment in money and
effort should generate financial gain for the entrepreneur. To generate income
for his product or service he must be able to deliver customer satisfaction.
The following factors are contributory to the development of customer
satisfaction

1. Business Location for Small Entrepreneurs

A retail outlet would need a site that is convenient to prospective customers in
terms of parking space or availability of transportation. A restaurant or an
entertainment centerr would need ample parking area where customers would not
worry on where to leave their cars while enjoying their stay. The same could be true
with a grocery store

.In choosing the location, the following factors must be looked into by
the entrepreneur:

a. Rent and Space - the cost of rent is a regular monthly expense and it must
be sustained with the possible income that will be generated. It is the operating cost
that will be added to the price of the product or service. The price input must be
competitive enough with those in the same location.
b. Terms of Lease Agreement - The term of lease must be studied carefully
as some owners of space might take advantage of lessee. The owners increase the
rent of the space when the business condition becomes favourable and then take
over the business.
c. Type of Goods or Merchandise - A convenient store is located where
there are pedestrians passing by. They need quick and easy access to the store and
would not spend a lot of time to purchase their goods.
d. Income Level of Prospective Customer - The type of pedestrians and
the income level of customer must be taken in to account. A good barber shop or a
beauty salon with facilities of air conditioning units and other amenities need to be
located in the community with higher income bracket.
e. Prospective Sales Volume - High density sales volume need to be located
in shopping areas where customers converse to buy essential goods. Lower sales
volume could be located in the community or secondary areas like subdivisions or
the BARANGAY.
f. Municipal or City Ordinances including taxes and fees - The location
must not violate city or municipal ordinances and the taxes and fees must be
reasonable for the owners of business. Excessive taxation will not encourage the
growth of business in the area.
g. Location of the Areas- The area must be free from floods and other
calamities that will endanger the business. It must be free from fire hazards or other
environmental factors that will disturb the operation of the business.
2. Location for Small Industrial Plant or Manufacturing Facilities

Environmental factors in locating a manufacturing plant or industrial

facilities need to be studied carefully as plant location is a great factor in the
investment of funds and its profitability in the long run. The industrial facility
must be suitable to the kind of operation. It must comply with government
zoning regulations related to pollution and environmental laws.

The following are important factors to consider:

a. Land Area-The contour of the land, its size, and shape must be suitable to
the plant site. It must be free from floods or other environmental hazards that
will disturb operation. The assessed value of the property must be reasonable
as expenses to start-up of operation requires a lot of money. The assessed
value is also a factor in the payment of taxes.

b. Facilities for Expansion - The land area must have ample space for plant
expansion and provisions for parking facilities for customers and employees.
Anticipation of growth and expansion in plant facilities should be considered as
additional site in the future may create a problem.

c. Power and Utilities - Availability of power supply and the cost of electricity
involve in the operation are great factors in the production of goods.
Continuous power supply is needed to keep the plant in operation for its target
production. Water supply is also needed and the proper disposal of waste must
be put in place to comply with environmental laws.

d. Building and Other Utilities - The building must be within the restrictions
code of the municipality or city. The utilities like canteens and other
employees' facilities must be put in place in compliance with the labor code.
Sidewalks and gutters are important component in employees' safety while in
the plant site. Fire safety and hazards signs are mandatory requirements.

e. Plant Site Accessibility - The plant site must be accessible to public or

service transport for its employees and valued customers. It must be near
highways or expressways to provide ease in travel time and reduce cost in the
transport of raw materials and finish product. Delay in transport systems are
added cost that must be avoided.

STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS (SWOT)

SWOT ANALYSIS is an entrepreneurial tool in determining the

profitability of the business operation. Opportunities carries with it some risk
involved and this should be looked into carefully. The strengths and
weaknesses are internal factors to the entrepreneur while the opportunities
and threats are external factors.

The product must be evaluated along the following areas:

1. Product strength in the market must have the following:

a. Available Technology in Product Processing- Technology is an

important component in producing the product as the economies of scale
determines the price index. The more products are produced, the lower the
price it can be offered to the market. Technology, on the other hand, improves
product quality and customers want those items with technical standards.

b. The Source of Raw Materials must be Abundant and at Lower Price -

The constant supply of raw materials is an important factor in the production
of the product. Cheap raw materials that are processed into good products
would be able to penetrate the market as its price could be competitive.
Continuous production will eliminate distribution disruption hence, maximum
supply to the target market.

C.Skilled Workers must be Available-Technology must have the

component of skilled workers that shall operate the machineries and other
equipment. They may need training in machine operation as quality products
also come from skilled workers. Worker's efficiency and productivity must be
looked into as they are lifeblood of any production line.

d. Capital Investment in Machinery and Operating Expenditures-A

starting venture may have little investment in terms of machinery and
equipment but starting with small capital should generate profitable
operation. As the enterprise expand its market base investment in operating
capital should expand to meet the growing demand of the customer.
 e. Expertise and Technical Skills of the Management Team - A good
product is the making of well-conceive idea of the management team.
Improvements in product quality is a continuing process and it must be the
management objective to get customers patronage. Customers seek better
products and the taste for quality changes over time.

2. Characteristics of Weak Products and Weak Management

a. Poor Quality and High Price - The entrepreneur should not launch a
poor product in the market as it will surely fail to advance in the sales and
profit. It is not wise to invest in the production of poor products. The
entrepreneur must see to it that product has undergone customer taste and
acceptance before it gets into the production line.

b. Product Design and Appeal - Product design should appeal to

customers demand. Poor design of the product is the making of people with no
technical expertise in handling the customer wants in terms of features.
Artistic designs are conceptualized and approved by the possible users.
Product appeal in terms of color and features are important ingredients for
customer patronage.

c. Production Cost-Production – Production cost is the price

determinant. Entrepreneurs cannot make maximum profitability on products
whose production cost cannot survive market competition. Production cost
may be attributed to high labor cost and the availability of cheap raw
materials.

d. Supply and Demand - Intermittent supply to the market will make

customers shift to other products. The supply chain management must be put
in place to make the products available to valued customers. The supply chain
management must be able to capture the widest market possible to sustain
product development.

e. Weak Product Management - Weak management is created when

people at the top of the organization fail to sustain a vigorous effort for
expansion and growth when management sets on his initial laurels and
ventured on vices and other extra activities that will lose his total investment.
Some people, who acquire money, became too complacent and forgot all
about expanding thereby competition gets them out of the market place.

3. Sustainable Product Opportunities in the Market:

a. Product Demand - Product demand is the greatest opportunity of an

entrepreneur. Demand is the essence of profit and this must be sustained by
the entrepreneur before wide competition appeared in the market place. The
absence of other products will expand production operation and thereby,
generate opportunities to expand into other ventures of vertical and horizontal
expansion.

b. Presence of Poor Quality in the Market - The presence of poor quality

product in the market place is an opportunity for the entrepreneur. The
alternative is on the side of the entrepreneur to supply the market with quality
product and sustain patronage. The product must be superior in quality and
the price must be reasonable compared with that of the competitor.

C.Government Policies and Support - The government support to local

entrepreneur is an opportunity for greater expansion. The government should
support the local entrepreneur in terms of taxes and government incentives.
Regulating on the importation of foreign products where local products are
available is one important government program that will sustain economic
growth of the local enterprise.

d. Liberal Credit Terms and Interest Rates - Liberal credit terms by banks
and other government institutions will generate expansion for the local
entrepreneurs. Banks and financing institutions serve as conduit of business in
their expansion program. Credit terms given by suppliers of raw materials and
other production inputs are opportunities for the growth of the business.

4. Treats to Product Profitability and Market Expansion:

a. Entrance of Competition- the entrance of many competitors market

place will definitely give problem to entrepreneurs. Competition The entrance
of many competitors in the will reduce profitability as the price has to be
competitive with those in the market place. When profit drops, expansion will
be limited and innovation will drain the opportunity for growth. Advertising
and promotion cost has to be sustained in order for the product to get
patronage.

b. The supply of raw materials will be limited as other competitors will

be getting the same suppliers. As demand for raw materials become
competitive in prices, production inputs go higher and this will affect product
pricing. Increased production cost means changes in product price.

C. The Emergence of Leftwing Labour Unions - Many companies close

shops with the advent of labour unions with leftist philosophy as they want
more wages and benefits that the company could not give. Company strikes
and lockouts are deterrent to the expansion and company's growth. Most
entrepreneurs would try to avoid Unions if possible, as leftist elements usually
come into the picture that will affect the opportunities of business growth and
expansion.

d. The Presence of Double Taxation - The government already imposed

a lot of taxes to the entrepreneur. Honest businessmen could not profit in their
operations as there are lots of taxes that the government would like to collect.
Still related are the unfavourable treatment given by the tax collectors to
businessmen that they have to put in grease money for a little favor. Taxes are
collected by the government and another tax by unofficial tax collectors.

e. Peace and Order in the Area of Business Operation-Peace and order

are components of business growth. Criminality and killings would drive scares
people to go into business. Hold up gangs and robbery syndicates away
investors. Killing competitors by those riding in tandem syndrome are not good
to business growth. Coupled with this problem is the revolutionary tax
collected by the leftist elements. If one does not pay the revolutionary tax
surely business will go into flames. These are some greater threats to the
expansion of business in the countryside.

f. The Cost of Power Supply - Cost of production increases with the cost
of utilities like current and water. The government private partnership in the
operation of power and water utilities has increased the cost of power by
about 400 percent. This contributed to increased production cost and pose
threat to our competitiveness in the world market. Power and water utilities
should be regulated by the government in order to sustain growth in our
industries.

The Entrepreneur should look deeper into the following areas:

1. The Management Team

Management must be able to set the direction of the enterprise with a

clear MISSION and VISION as the guiding tool for its plans and programs. Plans
and programs are tentative activities that will make a definite step towards the
accomplishments of target objectives. Objectives set into motion the goals of
the enterprise to profitability.

The technical and manpower complements are important factors in the

success of the business. They must work hard, persistent and must focus on
the vision and mission of the business.

Manpower complement may need some training and indoctrination of

company's operation. Motivated employees will perform better and they need
to be looked into by top management. They must know the management
philosophy. They must be involved in the planning process to get their utmost
cooperation in the undertaking the enterprise activities.

The management must introduce new technology to make work easier

for the working team. Technology in the workplace is a motivating factor for
the employees to produce more products or better service. Product quality is
improved and customers will always look for quality as vital component in
continuous patronage.

2. The Production Process

Product specifications must be maintained according to product

standards that are acceptable to customers. Product quality is now the name
of the game in business. Customers are now aware of product quality and they
must be able to get their money's worth. The physical properties must be
attractive and mechanical or electronic component must appeal to customers
demand.

The management must look into cheap available raw materials in the
production of goods. Good quality materials should not be sacrificed in terms
of price as poor quality will affect the production of quality products. Quality
and price must be looked into carefully by the management.

Production schedule must be made together with product specifications.

Work schedules must be followed to save on energy and time. Production
capacity must be followed according to target production so that delayed in
shipment could be avoided.

The rated daily production and monthly plant output must be put in
graph and charts for easy reference. Production rejects must be at minimum
level. Inventory reports must be available and warehousing activities are
supervised accordingly.

For service industries like restaurants, hotels, beauty salon, barber shops
or even water stations, the customers must be served with dignity and smile.
Front line production crew must have the personality that will attract
customers. They must possess pleasing personality, clean in looks, and proper
attire. The place must have an ambiance of cleanliness and the service must be
prompt and must follow an approved procedure.

3. The Marketing Program

The marketing program needs demand analysis for the last 5 years as to
the major users of the product. A new product would need customer view
point before it is launched into the market. Product samples may be necessary
at the initial stage so that customers' tastes and preferences could be
considered before mass production.

The demographic profile of the target customer must be taken into

account as the success of the product depends on the target customer. The
target market must be specified accordingly and their needs and wants must
be satisfied. Customers would like to have a lot of choices yet when they like
the product we turn them into regular customers.

Product competitiveness is determined by quality and price. A demand

and supply analysis must be conducted through marketing research. Marketing
research will determine the true picture of the market demand and the
product competitors. This has to be looked into carefully by the entrepreneur
as the success of the product depends greatly on the market size and its
demand.

The growth in market demand needs channels of distribution. The

channels of distribution should be measured in terms of the capability of the
distributors to handle the product. It must reach the consumer at the time
they need it and the price that is affordable to them. Various channel of
distribution in the prevailing market condition should be studied carefully as it
is the lifeblood of customers' wants and needs.

4. The Financial Management

Venturing into a business needs financial resources. Money is needed to

finance the activities of business. Whatever capital is available determines the
kind of business operation. Many small entrepreneurs start with limited capital
but they were able to make business empire as they knew how to invest their
money in profitable operation. Savings and wise investments are
characteristics of successful business entrepreneur.

THE IDENTIFICATION OF BUSINESS OPPORTUNITY

The entrepreneur's desire to establish his business is a visible idea yet it

must come into a test whether it is a viable business option. It needs a careful
analysis of opportunity evaluation. The entrepreneur who fails to evaluate his
noble idea because of his eagerness to plunge into the business world often
discovers later that he has more problems to solve and at times abandons the
idea after spending his time and money.

The following steps will help the prospective entrepreneur evaluate the idea
before going into business:

1. The Starting Point of Conceiving the Idea of the Type of Business

Conceiving a new product is a process of innovation and when this come

into a reality, the product must be different from an existing product. New
product needs customer evaluation and this process needs exposure to the
target market as to its economic value. This new product must satisfy
customers' needs and wants. It needs market exposure and public acceptance
before it could take off the ground.
2. The Technical Feasibility and Time Frame

An idea is not only concentrated on one entrepreneur. The entrepreneur

might have conceived an idea that is also in the mind of other person. The case
of cellular phone is a concrete example.

The new product must have its technical feasibility and the time to
launch the product must be immediately done to take ahead before others
take the idea. The entrepreneur must analyze the market demand and how he
will be able to meet this demand on time. He must be able to determine the
risk involved in the new venture and the investments in terms of money and
time.

The new product needs testing as to its technical capability to satisfy

customers' needs and wants. Some customers prefer branded products, those
that are produced by big names in the industry. Filipino innovators and
inventors find it difficult to convince the local consumers that their product is
good or better than those imported, hence many are selling their idea to
foreign investors.

In the food industry, the growing fast food chain is crowded with
growing senior citizens who have money to buy yet they have not discovered
their need for health foods with less cholesterol. A good restaurant or fast
food with fish and vegetables and some wellness program may do the trick for
this demographic sector. This work wonders in some developing urban sectors
outside Metro Manila as may it works wonders in some known restaurant in
the metropolis.

TIPS IN CHOOSING THE BUSINESS NAME

1. Easy to recall or remember - The business name must be understandable so

it is easily stored in the memory.

2. Pleasant meaning creates pleasant feelings - It produces positive or

favorable feeling upon saying or mentioning to the public.

3. Easy to pronounce - The business name must be cited as freely as it can be.

4. Easy to spell - The business name must be simple. Words that are used in
everyday communication will be an advantage.
5. Related to the product - The business name must describe the product. It
represents the features of the product.

ORGANIZING THE BUSINESS ENTERPRISE

The prospective entrepreneurs before going into the intricate field of the
business world should first go into deep analysis of their personal and social
attitudes. It is not enough that you have the capital and resources to go into
business as it involves not only material assets but personal values and
characteristics. Before venturing into the field of business, it is wise to develop
entrepreneurial studies that will help determine the feasibility of the project.

Some entrepreneurs failed because they are "plain copy cats" in putting
the business because the neighbour Juan makes money going into a Mini-
grocery. The entrepreneur must first evaluate his personal interest, experience
in the chosen field: the technical and human skills as these are vital component
in the success of the business.

THE EVENT FORMATION PROCESS FOR ENTREPRENEURS

The analysis of the following steps will benefit the entrepreneur before
going into the field of business:

1. The Change in Life Path

The entrepreneur must conceive the idea that going into business would
mean a great change in his lifestyle and working hours. He must be able to take
responsibility and lead others. He must be able to take the driver's seat of the
business in planning, organizing, directing and controlling not only the people
but also the resources under his disposal.

2. The Desirability of the Business Concept

The desirability of the business concept is usually born by the experience

of the entrepreneur from his previous employment or exposure.

3. The Feasibility of Implementation

The business project must be feasible whether it is an entirely new

venture or an expansion. It must be able to produce or sell products or services
for an attractive rate of return of investments to the entrepreneur. It requires
intensive planning and analysis of the market conditions prevailing in the
community.

4. Forming the Business Enterprise

The business form has to be studied according to the availability of

capital investment that will go into the operation of the enterprise. The
entrepreneur should also look into his personal capability of running the
choice of the form of business should take into account the risk involve and the
management system that will be implemented in its total operation

5. Stability of Business Income and Profit

Profit and Business Income are two important factors that encourage an
entrepreneur to make the stability of the business become possible. An
aggressive entrepreneur would like to expand his business operation to
generate more profit.

Money is the greatest factor in the operation of the enterprise that

without it business operation could not take off. The important savings of the
entrepreneur must be put in wise investments free from excessive risk.
Business risk can be prevented or avoided if properly planned and
conceptualized.

BUSINESS PLAN

An entrepreneur must see for himself the kind of management control

and how the business will be able to generate his projected profitable
investment. He sees the wide open market of opportunities and the possible
problems before he plunges into the intricate operation of the enterprise.
Wise investment through a careful analysis of the business environment would
minimize business failures.

The following steps in the business formation have been done by

entrepreneurs that applied a more scientific study of the business conditions. A
business project either new or an expansion must undertake a careful planning
of the project which will serve as guide in the implementation.
 In creating or searching to business opportunities, one must consider
the following factors:

1. The needs of the society

2. Availability of capital resources
3. Business inclination
4. Clientele
5. Availability of raw materials
6. Human Resources
7. Nature of product or service
BASIC PHASES OF BUSINESS PLAN

1. Management Structure and Component

It is designing the form of ownership of the business which at the outset

is known to the investors. It shall also define the organizational structure of the
organization and the operational system that must be put in place. It shall
define the duties and responsibilities of the people in the organizational
structure. Management should organize different operating departments and
delegate corresponding authority.

2. Marketing and Distribution System

The Marketing and Distribution Study shall deal with product demand
analysis. It should show the competitive product advantage over existing
product or service and designing the marketing program of the enterprise. It
should analyze market share and system of promotion, distribution,
advertising media and other marketing mix strategies to ascertain product
market acceptance and patronage.

3. Production and Technology

Production and Technology Studies refer to the need in making the

product or service. This refers to the machineries, plant location, and other
technical aspect in the making of the product. It shall describe the physical
layout of the building and the equipment that will be used in production. For
services, it shall specify the equipment that will be used and the manpower
needed to render the activity.

4. Financial Management

The Financial Management aspect refers to the capital investment and

sources of funding the operation of the business. It shall show financial
projections over a period of one year and five years program and shall
determine the rate of return on investments. It must be able to show the
return on equity and break even sales as well as pricing sensitivity test.

GENERAL FORMAT OF A COMPREHENSIVE BUSINESS PLAN

I. INTRODUCTION

The introduction contains the rationale and the background of the study
undertaken. It should include the importance of the project and the
proponent's background and their desire to establish the business.

II. PROJECT SUMMARY

A. Name of the Firm

B. Business Location

C. Brief Description of the Business

1. Brief history or how the business was organized.

2. Highlights of the findings in every phase of the business study.

III. MANAGEMENT AND PERSONNEL COMPONENTS

IV. MARKETING STUDIES

A. Market Profile - This refers to the market segmentation for the distribution
of the product or service. The study must cover the possible users of the
product and how to reach the particular market segments.

B. Demand Analysis

1. Projected consumption in the first year of operation, then Five years

and Ten years operation.
 2. Major segment users of the product and their location.

C. Supply Analysis

1. Source of Product Supply.

a. Foreign Suppliers

b. Local Suppliers

2. Factor Analysis of the Past and Future Supply Chain.

D. Competitive Analysis

1. Selling Price-This refers to the selling price of the product.

2. Competitions - It refers to the competing product in the markets as to its
quality and market acceptability.
3. Distribution and Cost of Transportation- It refers to the transfer or
movements of products from the producer to the ultimate user. The usage of
different vehicles and ways to transport the product should be easily defined.
4. Channel of Product Distributions - A mean of reaching the target market or
it is the method or strategy to penetrate a particular market segments.
5. General Competitive Practice It is the analysis of how competitors
distribute the product to existing end users.

E. Program Analysis of Marketing Strategies

1. Geographic Segmentation Strategy - This refers to the place of target

market and the approaches to penetrate the market niche.
2. Psychographic Strategy - The educational background and the
lifestyle of target market.
3. Demographic Segmentation Strategy - It means the target market as
sex, age, income and the other personal factors of the target market.
4. Pricing Strategy - This has something to do with the price index of any
pricing strategy that will attract customers.
5. Channel of Distribution-The choices could be retailers, wholesalers,
 dealership, franchise, or direct marketing.
6. Promotion and Advertising - Media network, personal selling,
billboard, or any media penetration strategy.
V. PRODUCTION

A. Product Specification- It tells about the product or service that the

entrepreneur will offer to its target market. It is an elaborate presentation of
the properties of the products and the benefits related therein. It is the service
that will be offered to the target consumer.
B. Production Process - It is the detailed layout of the production
process as the products goes into the production line indicating the flow
process, materials and equipment to be used and normal time table that the
product will be finished.
C. Plant Rated Capacity - This refers to the volume of production per
shift per day or a monthly basis considering target market consumption. It
must also make projections for five years forecast and the technical factors
involved.
D. Machinery and Equipment - It involves the kind of machine to be
used, its sources, spare parts, working guarantees, rated capacity per day, and
the cost estimates involved in its purchase.
E. Plant Location - A drawing or plant location and the vicinity map as to
its accessibility to supply or raw materials, and the transport of finished
product to the market. It must show advantages and other plus factors for
employees
and other services.

F. Building and Facilities - It must describe the type of building that will
be constructed or sketch of the building plan, electrical plants, drainage, and
other utilities. It must contain the cost estimates involved and the total floor
plan.

G. Raw Materials - It deals with the raw material requirements and its
specification, its source, cost and terms of payment, availability and the
possible long term supply. It must also show alternative suppliers of other
sources.
 H. Power Supply and Utilities - Utilities refer to the supply of electricity,
water, and its availability in the processing of the product. It also has to do
with environmental disposal of waste and compliance with government
requirements. Drainage system has to comply with sanitary requirements
imposed by municipal and national laws.

I. Production Cost - This refers to the direct labor and administrative

cost in the processing the products. Unit cost must be computed as basis for
pricing and marketing strategies.

VI. FINANCIAL STUDIES

A. For New Business Venture

1. Total Project Cost - This has to do with the entrepreneur fixed cost
and the working capital in the operation of the business.
2. Capital Investments Required.
3. Pre-operating cash flow and its relation to time table-financial
projections for the first year of operation, for the five year operation in
projected balance sheets and income statements.
4. Supporting Schedules in the Financial Statements and Income.
a. Collection Period for Projected Sales or Revenue
b. Inventory Levels
c. Payments for Purchases and Expenses
d. Production Costing, Administrative Expense and Cost of Sales
and other Projected Financial Expenses.

5. Projected Financial Estimates showing return on investments, return on

equity, break-even analysis, price analysis.

B. For Existing Project

1. Audited Financial Statement - last 3 years

a. Balance Sheet

b. Income Statement
 c. Cash Flow

2. Fixed Assets, Capital Investments, Depreciation used in Capital

Assets. 3. Tax Assessment, Liabilities, and other Payables.

4. Financial Trends and Ratio Analysis.

5. Financial Cost for Administrative expenses, Production and Selling

Expense.

6. Financial Projection for the Next Five Years.

7. Financial Analysis for Return of Investment, Return of Equity, Break

even Analysis, Production Volume and Price Analysis.

MICRO BUSINESS PLAN

The major objective of business plan is to assess, examine and analyze

the viability or feasibility of the study. Business plan is the ticket to success. It is
also a blueprint to success and document details what you plan to do with your
venture, and how exactly you want to achieve them. It is your road map to
your business, according to Elizabeth Manuel, Chief of the Trade Business
Management Division of the government run Philippine Trade Training Center.

Validate your business concept, instead of doing a business plan

outright. Identify the business SWOT, business planning begins before it has
materialized on paper. Have clear goals, your end goal must be clear to you
and your team. Evaluate not only the business idea but also your capacity to
handle and nurture it.

A. Executive Summary

Synopsis of your business plan so ideally, this part should be written last
in order to include all the necessary information and target points of the
document. You must possess the ability to predict the financial path of your
venture in correlation to the present economy. If your external analysis tells
you what you can and cannot do, you what you are able or not able to do. your
internal analysis tells
B. Marketing Plan

Push or pull, you must be able to tell how fast or slow your product will
move in the market, whether it would make use of a push or pull strategy or
both. The push strategy tells how I will move my products to the marketplace,
while the pull strategy tells how I will make customers ask for my product. The
pull strategy promises, the push strategy outlines what makes the business
stay.

C. Operations Plan

Ernesto Pineda, director of the UP, Institute of Small Scale Industries,

defines the operations plan as the company's expected sales for the coming
year and the costs of running the business in general. It keeps track of the
business performance for its conception down to its purchase. Determining the
number of people to hire to keep your perspective business running smoothly
is also a must. Managing your inventory and computing the production costs
are crucial at this point so you can project possible profits.

According to Dr. Alejandro Ferreria, entrepreneur and faculty member of

Ateneo Graduate School of Business, "Your main concerns in your operations
plan are the key areas of quality, delivery and productivity, both in keeping and
improving." This section of the business plan provides the competencies
necessary to get things done.

D. Financial Plan

According to Dr. Ferreria, "Your financial plan must show how much
money is needed to generate sales; how much is going to be spent on a
particular item; and how much will be borrowed and paid." The income
statement describes your company's ability to generate cash by computing for
sales and expenses. The balance sheet shows your financial condition by
accounting for your assets (cash, receivables, inventory, equipment, property,
investments) and liabilities (accounts payable, salaries, taxes, and bonds, notes
and mortgage payables.)

Although your business plan does not guarantee you the results you
want to achieve, it's still a step closer to making things work in your favor.
After all, any business venture is a risk and any entrepreneur must be ready for
a series of trial and error tests.