MODULE 4.

LESSON 1
DISCUSS THE IMPORTANCE OF A BUSINESS PLAN
Words to study:
Micro - means very small/ limited in quantity
Entity - means an effort to do a task
Business planning - is the process of setting up goals for a particular business
Business plan - means any plan that works for a business to look ahead
To start a small enterprise, you must have a foresight. Anticipate what may happen to your business.
Any endeavor, particularly the desired form or type of business, sets the direction of the enterprise.
A. The Benefits Derived from Planning a Business.
 Making a business plan can minimize or eliminate risks.
It involves a careful study of the competence, interest and resources of the entrepreneur
against the needs of the consumers. A feasibility study is necessary because through this,
An entrepreneur can determine whether his /her choice is profitable or not.
 A business plan can also minimize the cost of production.
This includes how each of the resources of the production such as manpower, money, ma-
Terials and machines are used. Every aspects of the business operations is monitored and
Controlled which prevents unnecessary wastes of resources that will result to economy and
Efficiency.
 A business plan can also identify the defects of the business operations.
Goals and objectives are formulated. Procedures, strategies and techniques are planned.
Reevaluation maybe done to avoid encountering the same problem.

B. The Basic Principles in Running a Small Business

The following must be consider in running a business/ enterprise:

1. Planning must be realistic.

- It must be based on available human, financial and physical resources. Planning without
enough resources may result to the failure fail of an enterprise.
-
2. Planning must be based on the needs of the community.
- It should fit in the needs of the people in the community which can be known through observa-
tions, personal interviews and questionnaires.

3. Planning must be flexible.

- You, as the entrepreneur should be able to adjust and to plan if development changes occur
or changes in the government laws or policies happen. Planning should respond to the trends
In the consumer’s tastes and preferences.

4. Planning must start with simple projects.

- This requires simple management and technology, thus, the micro business is advised.
 Planning is important to ensure a profitable and successful business.

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 ENTREP-9

Quiz # 1.
A. Direction: Fill-up or write the word or group of words in the blank of the given statement
Below. Choose your answer from the given option inside the box.

a. What to expect b. time management c. strength

d. micro e. business plan d. projects

1._________________ eliminates risks.

2. The passive factor of planning called _________________________.

3. Planning is what to do it, how to do it, when to do it and ________________ in the future.

4. Planning must start with simple _____________________________.

5. In business, time is gold. For this reason, an entrepreneur must be efficient in ___________.

B.LET US APPLY WHAT YOU HAVE LEARNED.

(This is classroom activity)

You are planning to get into t-shirt printing service business. Conduct a market survey if the service will
Become successful.

Direction: Divide yourself into two big groups. Simulate conducting a market survey in your group. Then present a
report on the market survey done by answering the following questions:

1. How did you conduct the market survey?

2. As a result of the survey, do you think your proposed business will be successful? Why / Why not?

3. What principle did you follow in conducting the market survey as part of your business plan?

4. Why do you consider this activity (market survey) as an important tool in planning a business?

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 Lesson 2

DETERMINE THE TYPES OF BUSINESS PLAN

Words to study

Component - is a constituent part of the business plan

Feasibility study - is an analysis and evaluation of a proposed project to
determined its profitability.
Marketing - deals with the selling and buying activities of the business.
Project summary - deals with the introduction statement of the problem .

After having learned about the importance of business planning, you must know the different types of busi-
ness plan.
1. Feasibility study
- It is created in order to minimize risk and to ascertain the viability of a project.
- It is not merely an investigation but a frame work on how the operation of a business project shall be
Accomplished.
- It used to determine the potential success of a proposed business venture.

A feasibility study has a project summary which deals with the introductory statement of the problem, the
Business name, the business logo, the business location, descriptive definition of the project and objectives.

A feasibility study contains five major components namely:

a. Marketing study
- The sufficient demands for the product as well as the competitive position of the firm in the industry
must be determined.
b. Technical study
- In this study, you must consider the manufacturing process, plant size, production schedule, machinery,
Plant location, and layout structure, raw materials, utilities and waste disposal.
c. Management study
- This involves on how the project shall be managed such as the business organization including the orga-
nization chart and function of each unit management personnel, skills and numbers of labor required.
d. Financial study
- You should include the assessment of total capital requirements break -even outputs , sales and prices,
amount of sales required to earn a certain amount of profit and the cash payback period.
e. Social desirability
- This is measured by economic benefits to the people living in the community and its vicinities.
2. Concept Paper
- It is a written plan for a business on how it will be managed. It is a tool to represent a certain venture
anticipating its future.

The different parts of the concept paper are the following:

a. Introduction- This is the part that discusses the significant details of the product / service and why the
product / service is needed by the community.
b. Objectives- This part gives the details of the business both specific and general.
c. Rationale- This part focusses on the advantages of putting a certain business.
d. Terms and conditions – IN this part, specific agreement from particular to general things are clarified.
e. Recommendations- This part is very important because it helps to improve the project in the future.
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3. Business Plan
A business plan describes the nature of the business, the sales and marketing strategy, the financial back
ground, containing a projected profit and loss statement.

Components of Business Plan

a. The environment –
The needs of the people in the community should be identified.
b. Behavior of the product –
You should know the market trends , product demand in the community, the
resources, quantity and quality goods in buying.
c. Location of the business-
You should consider the place where customers prefer to buy.
d. Organizational plan –
the needed workers in the business must be listed in the organizational chart.
e. Production plan –
This involves the manpower, money, machinery materials and methods to be able to
produce the desired output based on anticipated profit.
f. Financial Plan –
You as entrepreneur need to determine the fiscal needs of the business and the sources
Of needed funds.

4. Project Proposal
This is the initial document that converts an idea or policy into the details of a potential project.

The Essential Parts of a Business Proposal

a. Executive Summary –
The overview of the proposal from beginning to end should be stated in the project proposal.
b. Justification –
This emphasis the need of the proposal.
c. Procedure -
The steps are being explained where to start and to end.
d. Objectives -
The goals or target of the business are defined.
e. Project Organization and management -
The manpower and function of each are clearly stated
f. Budget -
You should determine the source for the input and output , the profits and the loss of the business.

A business plan unifies the different parts and activities of the business to
achieve its goals and objectives.

*Types of Business Plan:*

1. Feasibility study 2. Concept Paper 3. Business Plan 4. Project Proposal

Quiz #2
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Let’s checked how much have you learned?

Direction: Choose the letter of the attribute /attributes being described/ asked

1.The component of a business plan which identifies the available raw materials in your community.

a. Behavior of the product

b. environment
c. location of the business
d. Organizational plan

2. Why is organizational plan needed in planning a business?

a. To find out what products and services are available and which of these can be improved.
b. To coordinate with the activities of the workforce towards the company’s goal.
c. To determine the needs of the community
d. To determine the market trends in the community

3. It is the process of setting up goals for a particular business endeavor and taking up steps to achieve these:

a. business enterprise
b. business planning
c. business operation
d. business expertise

4. The component of a business plan in which you as an entrepreneur need to determine the fiscal needs of the
business and the sources of needed funds.

a. behavior of the product

b. environment
c. financial plan
d. organizational plan

5 . There are several factors to consider in selecting the location of your business. Which of these factors is not
included?

a. The cost and availability of land

b. The quality of the product
c. The availability of transportation facilities, communication, water, electricity and labor
d. Behavior of the product

Prepared by:
CORAZON S.D. ARGONCILLO
Subject Teacher/ T1

Lesson 3
5
 IDENTIFY AND DESCRIBE THE STEPS IN PREPARING A BUSINESS PLAN
Words to study:

Scheme – deals with the design of a project.

Adequate – means enough supply of the product.

Management – involves the administration of a business enterprise.

The following are the steps which can help you in preparing a business plan that you must follow:
1. Make an evaluation of your personal resources, interests, available raw materials and available specialized
Technical skills in your community. Create a name of your business. Does it tell well about what you are
selling? Is it easy to spell and remember?

These are the guide questions to help you evaluate your personal resources:
 Are you interested in the business?
 Do you have sufficient funds?
 D you possess management skills?
 Are raw materials available?
 Does government give financial and technical assistance?
 Do you have good personal relations with other people?

2. Conduct an analysis or survey of your market.

 Who are your customers?
 What product or service will you offer?
 Is there a good demand for your product or service?
 Are the customers interested in the existing product or services?
 How many competitors are there in the market?
 How much is your estimated share in the market?
 Could you possibly offer a quality product or service at a lower price?
 Is there a reasonable profit?

3. Select a proper business location.

 Is the location clean, decent and peaceful?
 Are there customers in the place?
 Are facilities such as electricity, water, transportation and communication available?
 Is the place accessible to raw materials and other supplies?
 In case your first choice is not available, do you have a good alternative?

4. Make a Financial Plan.

 Determine your objective.
 How much money will you need?
 What are your sources of funds?
 Does your budget determine how will you spend your money?
 How soon can you recover your investment?

5. Make a Production Plan

 Determine whether to buy or lease the production equipment.
 Will you improve the quality of an existing product?
 Can your production scheme meet market demand?
 Do you have a proper scheduling of production?

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 6. Make an Organizational Plan.
 Find out what type of organization is most suitable.
 Are you acquainted with the laws, policies and requirement of your business organization?
 Who will be your workers?
 What will be the duties and responsibilities of each?
7. Make a management plan.
 Write down your goals and objectives.
 Determine your strategies.
 What customer policies will you adapt?
 What human resources development program will you undertake?
 What will be your program of social responsibilities?

Being an entrepreneur, you must have an effective business plan. You should follow the steps in preparing a
Business so that the data must be accurate and adequate. This will help you to choose the appropriate and effective
Strategies to ensure success in your business venture.

=MAKE A BUSINESS PLAN OF YOUR BUSINESS USING THE FORMAT BELOW=

Business Name ___________________________________________________________________________

Location ___________________________________________________________________________
Name of Owner ___________________________________________________________________________

Introduction

_____________________________ is a registered business engaged in _________________________________

owned by ______________________________________________________________________________

Business goals are as follows:

a. The operation started on ______________________________________________________________

b. The location could be reached by ________________________________________________________
c. The business could be expanded by ______________________________________________________

Table of Contents
Section I: The Business

1. Description of the Business

The business is engaged in the distribution of or production, or of servicing customers.
_____________________________________________________________________________________
2. Product / Service
The product / service is _________________________________________________________________
3. Market
Production will be distributed in ( mention primary and secondary market) The clients belong to ( description
Of the socio-economic level. The product is brought by clients for the following reasons:
________________________________________________________________________________________

4. Location of the Business

The _________________________ is located at _________________________________________________
It can easily be reached by __________________________________________________________________
5. Competitors are as follows :

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 (state the name of the company and other relevant facts such as size and possible sales)
A competitor’s profile includes price, quality, location, image projected, strategies of selling and operations.

6. Price
The current price is ___________. It is derived from the following factors production cost and marked up
costs) _________________________________________________

7. Marketing Strategies
The product will be distributed in the following manner:
____________________________________________________________________________________

8. Management
The management is composed of the following (name, position, responsibility and qualification

________________________________________________________________________________________

9. Personnel
The personnel needed are the following ( enumerate the type of work and their qualifications)___________
_______________________________________________________________________________________

Summary of Section One

______________________________________________________________________________________________
______________________________________________________________________________________________

Section II: Financial Data

1. Sources and application of funding
Secure financial assistance from ________________________________________________________________

For the following purposes _____________________________________________________________________

___________________________________________________________________________________________

Using the following collaterals

_______________________________________________________________________________________________

2. Capital Equipment List

The capital and equipment list are the following:
__________________________________________________________________________________________

Briefly, described the equipment and their uses.( Include processes employed in the production.)
_________________________________________________________________________________________

3. Balance Sheet
This is a statement of a financial condition of an enterprise at a given point in time usually only a focus,
quarterly, semi-annually, or annually. It shows the owner how money has been invested and the accrued profit
Or losses.

4. Break-even Analysis
(It is a tool used by an entrepreneur in solving managerial problems.)It compares the total resources (TR) with
the total cost (TC)
TR represents income while TC represents expenses of the enterprise. When TR is greater than TC, there is
profit. But when TR equals TC it is break even. There is no profit, nor loss.

5. Income Projection ( Profit –Loss Statement)

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 a. Detailed by month (for the first year)
b. Detailed by quarter ( for the 2nd, 3rd, 4th, 5th )

Business planning is needed to guide the entrepreneur in the management and

other aspects of the business processes to ensure profit.

Quiz #3
How much have you learned?
Let’s checked.

Answer the following:

Direction: Choose the answer in column B to the questions in column A. Write the letter which corresponds to your
chosen answer in column B.

A B
1. Who will be your workers? a. organizational chart

2. How much money will you need? B. financial plan

3. How many competitors are there in the market? C. survey of your market

4. Are there customers in the place? D. management plan

5. What customer’s policy will you adapt? E. business location

B.Choose a partner exchange business plan that you have prepared in the application portion. Check f all the part are
complied with. Rate the business plan using the following descriptive ratings:

Descriptor Rating

Complete 5

Incomplete 3

Needs Improvement 1

Resources:
Computer with internet / cellphone
Journals
Magazines

Prepared by:
CORAZON S.D. ARGONCILLO
Subject Teacher/ T-1

9
Lesson V
ENUMERATE AND EXPLAIN THE STEPS/ PROCEDURE IN MAKING THE BUSINESS LEGAL

Let us Study

Ownership – means an exclusive right of a person to a business

Authorization – is the issuance of approval to operate
Legalize – means to be permitted by law
DTI – Department of Trade and Industry
DOLE – Department of Labor and Employment
SSS – Social Security System
SEC – Securities and exchange Commission
CDA – Cooperative Development Authority
BPLO – Business Permit and Licensing Office

Legality of your business venture is necessary to make your operation legal. The following shows some of
The documents to be secured from the different government agencies to run your enterprise legally. Without
compliance with the legal requirements your business is considered illegal. These are documentary transactions
between the owner of the business and the government.

I need to get a permit for my === DTI DOLE SSS SEC BPLO
business, where can I ask for Barangay permit or Business
an assistance clearance

The following is the procedure in registering a business as mandated by the Introduction to Entrepreneurs of Small
Enterprises, Research and Development Foundation ( SERDEF).

 Register your business name with the Department of Trade and Industry (DTI). The certificate issued after
registration becomes your proof of business ownership.
 Register with your municipal city government. When you have a municipal license or a mayor’s permit, this
Serves as you authorization to conduct or operate a business.
 Register with the Bureau of Internal Revenues (BIR). This will help systematize your financial operation and
payment of taxes.
 You have to register at the Social Security System ( SSS) if you have five or more employees.
 Register the article of partnership or Article of Incorporation with the Securities and Exchange Commission
(SEC).
 Register with the Department of Labor and Employment

There are Several Benefits derived from registering your business with the government as follows:
1. When you register your business with the Department of Trade and Industry, the certificate issued to
you becomes your proof of business ownership.
2. The municipal license or Mayor’s permit issued to you serves as an authorization for you to operate your
Business.
3. Your registration with the Bureau of Internal Revenue will help you systematize your financial operations
And the payment of taxes
4. If you have registered your business enterprise with Cooperative Development Authority (CDA) which is
Optional, you can enjoy the following privileges:
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 a. Exemption from taxes and fees except from real property and capital gains tax, import duties and
taxes, value added tax on imported articles, taxes on income not arising from CDA activity such as
interest, loyalties, prices and dividends.
b. Exemption of the CDA derived income from the computation s of the owners or members in division.
c. Exemption from any government rules and regulations on assets, income and activities directly
connected with the services of CDA.

It is a must to register your business for your own benefit and protection. When your business has
been registered you are now ready to own your business and face challenges coming your way.

QUIZ # 4

Lets. Checked how much have you learned?

Direction: Write the steps in registering your business. Record them in the correct order.

1.
2.
3.
4.
5.
6.

Prepared by :
CORAZON S.D. ARGONCILLO
Subject Teacher / T-1

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