DEVELOPING

A BUSINESS
PLAN
Week 3 Module 3
 Learning Objectives:
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;
 The search for business opportunity should start with the individual entrepreneur. His
talent and skills are the beginning of his great investment in the trade. He must have the passion for
independence and willingness to work hard and long to keep up with his dream of being an
entrepreneur.

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

1. Know your product or service. 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.
2. Analyze the market potentials. 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.
4. Know the competitors. Develop new product and marketing strategy and turn their
weaknesses as new opportunity for the product.

5. Do not set on your laurels. Develop advertising and promotion strategy to

penetrate the wider market. Get new resources and develop new materials. Invest in
research projects that will enhance the quality of your products.
 ENVIRONMENTAL SCANNING

The environment of business is vast with opportunities and the entrepreneur

mush have a greater look into this potential as well as the conditions prevailing in the
community.
The following factors are contributory to the development of customer satisfaction:
1. Business Location for Small Entrepreneurs
In choosing the location, the following factors must be looked into by the entrepreneur:
a. Rent and Space
b. Terms of Lease Agreement
c. Types of Goods or Merchandise
d. Income Level of Prospective Customer
e. Prospective Sales Volume
f. Municipal or City Ordinances including taxes and fees
g. Location of the Areas
 STRENGHTS, WEAKNESSES,
OPPORTUNITIES, AND THREATS (SWOT)

SWOT ANALYSIS is an entrepreneurial tool in determining the profitability of the

business organization. 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

b. The source of raw materials must be abundant and at a lower price
c. Skilled workers must be available
d. Capital investment in machinery and operating expenditures
e. Expertise and technical skills of the management team
2. Characteristics of Weak Products and Weak Management

a. Poor quality and high price

b. Product design and appeal
c. Production cost
d. Supply and demand
e. Weak product management
3. Sustainable Product Opportunities in the Market:

a. Product demand
b. Presence of poor quality in the market
c. Government policies and support
d. Liberal credit terms and interest rates
4. Treats to Product Profitability and Market Expansion:

a. Entrance of Competition
b. The supply of raw materials will be limited as other competitors will be getting the
same suppliers
c. The emergency of leftwing labor unions
d. The presence of double taxation
e. Peace and order in the area of business operation
f. The cost of power supply
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.

2. THE PRODUCTION PROCESS

Product specifications must be maintained according to product standars that
are acceptable to customers.
3. THE MARKETING PROGRAM
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.

4. THE FINANCIAL MANAGEMENT

Venturing into a business needs a financial resources. Money is needed to
finance the activities of the business. Whatever capital is available determines the kind
of business operation.
 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 feeling. It produces positive or favorable feeling
upon saying mentioning to the public.
3. Easy to pronounce. The business name must be cited as freely as it can be.
4. Easy to spell. It must be simple. Words that are used in everyday communication will be
an advantage.
5. Related to the product. Must describe the product. It represents the features of the
product.