Guidelines in Starting a New Business designed after the decision to go

ahead has already been made.

Feasibility Study
- Is an analysis that takes all of a Methodology
project’s relevant factors into  Essentially, feasibility studies are
account (economic, technical, research projects, whereas
legal) to ascertain the likelihood of business plans are projections for
completing the project the future.
successfully.
- The goal of a feasibility study is to Risks
thoroughly understand all aspects  Feasibility studies determine the
of a project, concept, or plan; risk associated with the idea,
become aware of any potential whereas business plans explain
problems that could occur while how management will deal with
implementing the project. the risks so that it will make a
profit.
Business Plan
- Is a written document that Cost
describes in detail how a business  Feasibility studies can acquire
– usually a new one – is going to hiring outside professionals with
achieve its goals. expertise who will conduct
- Business plans are important to thorough studies, whereas
allow a company to lay out its business plans are written by the
goals and attract investment. employees, as apart of their jobs.

Feasibility Study vs Business Plan Conducting a Feasibility Study

i. A feasibility study is not the
same thing as a business plan. Product Demand:
ii. The feasibility study would be  is there a need or want fro your
completed prior to the business product or service? Is the need
plan. already there? Or is here a room
iii. The feasibility study helps for another product?
determine whether an idea or Market Condition:
business is a viable option.  Who would buy your product and
iv. The business plan is developed where are they? Can you serve
after the business opportunity their location? Is the market
is created. saturated or is there room/need for
ore products?
Purpose Pricing:
 Feasibility studies determine  What do current users pay for
whether to go ahead with the similar products? What do you
business or with another idea, need to charge so that you will be
whereas business plans are
 profitable, and will consumers pay
your price? Main Contents of the Business Plan
i. Chapter I (Introduction)
Risk: ii. Chapter II (Management and
 What are the risk associated with Organization Plan)
your idea? iii. Chapter III (Marketing Plan)
Probability of Success: iv. Chapter IV (technical and
 Can you reasonably overcome the Operational Plan)
risks to become profitable? v. Chapter V (Financial Plan)

Introduction to Business Plan Learning Objectives

 To specify the different
Preliminary Pages components of the introduction of
- The business plan will consist the business plan and identify its
preliminary pages such as Cover importance.
Page, Acknowledgement,
Proposed Business Logo, Chapter I (Introduction)
Executive Summary, Table of - This section of the business plan
Contents, and List of Tables, serves as the creative section of
figures and acronyms. your work. It must present the
industry analysis of the proposed
Acknowledgement business. It includes, among others
- This portion enables the group to the following sections:
thank all those who have helped in
carrying out their business plan. i. Proposed name of the business
ii. Description of the business
Proposed Business Logo iii. Potential worth and
- Is a graphic presentation of what importance to the people and
customers associate your brand community
with. This portion will help you to iv. Location of the business
define the identity of your v. Name of the owner or owners
business. vi. Funding requirement and
source
Executive Summary vii. Key success factors
- In this section, you will provide an
effective synopsis of the overview Proposed name of the business
of your proposal by summarizing - Reflect the business identity and
the key points and highlights of image, promote the philosophical
your business plan. The summary values and culture that the
must attract the interest of the business values the most, profess
reader. It should be written after the brand identity of the product,
the rest of the document is and attract or influence the target
completed. consumers.
 - The Department of Trade and - The name of the owner must be
Industry suggest to provide at least properly stated. This states the
three business names for approval proponents behind the business
and registration. idea that is presented. In a sole
proprietorship, there is only
oneowner. In the case of
partnership, the names of the
Description of the business owners and the extent of their
- A brief description of the business liabilities must be indicated.
must include information about
the type of product or service that Funding requirement and source
the business intends to produce or - The estimated total initial cost of
provide. It may include brief the business venture must be
information about the ultimate clearly indicated. It should include
vision, mission, goals, and the projected breakdown or
objectives of the business. allocation of the total cost, e.g.
how much will be the building and
Potential worth and importance to the working capital. This section also
people and community. presents the source/s of funds.
- This part includes the
compounded benefits that you can FORM OF THE BUSINESS
derive from the product and the ORGANIZATION
business. The importance should
be presented in an orderly manner  A business organization can come
from the people to the community. in the form of a sole
This will help the business to proprietorship, a partnership, or a
persuade more investors to engage corporation. There must be a
in their business. purpose for the selection of the
most appropriate business form. In
Location of the business other words the mere statement.
- There are no rigid rules in the “The ABC Manufacturing shall be
selection of the business location in the form of a sole
since several variables affect the proprietorship,” is an incomplete
selection of the business location. description of the business
The basic entrepreneurial organization.
consideration is to place the  Most new businesses start out as
proposed business in a strategic sole proprietorships. This is the
location that will assure simplest form of ownership for a
competitive advantage. This sole owner and requires little more
indicates the reason/s for the than a tax ID number. However,
selection of the location. when there are concerns over
taxation or liability issues, or
Name of the owner or owners when the business has multiple
 owners, other organization types company (but this could also be a
should be considered. disadvantage).
 One of the first decisions you’ll  It is the easiest and least expensive
make as a business owners is how form of ownership to organize.
your business will be structured.
You need to know the advantages Disadvantages
and disadvantages of each of the  There is unlimited liability if
different forms of business anything happens in the business.
organization to make sure you Your personal assets are at risk
make the right decision for your  It is limited in raising funds and
new business. the owner might have to acquire
 All businesses must adopt some consumer loans.
legal configuration that defines the
rights and liabilities of participants Partnership
in the business’s ownership, - In a partnership, two or more
control, personal liability, lifespan people share ownership of a single
and financial structure. The form business. Like proprietorships, the
of business determines which law does not distinguish between
income tax return form to file and the business and its owners. The
the company’s and owner’s legal partners should have a legal
liabilities. agreement that establishes how
decisions will be made, how
The different forms of business profits will be shared, how
organization: disputes will be resolved, how
future partners will be admitted to
Sole proprietorship the partnership, how partners can
- The vast majority of small be bought out or what steps will
businesses start out as sole be taken to dissolve the
proprietorships. partnership when needed.
- These businesses usually are
owned by one person, the Advantages
individual who has day-to-day  It is easy to establish (with the
responsibility for running the exception of developing a
business. Sole proprietors can be partnership agreement).
independent contractors,  Separate legal status gives liability
freelancers or home-based protection.
businesses.  Profits are taxed only once.
 Partners may have complementary
Advantages skills.
 The owner receives all profits.
 Profits are taxed only once. Disadvantages
 The owner makes all decisions
and is in complete control of the
  Partners are jointly and
individually liable for other
partners’ actions.
 Profits must be shared with the
partners.
 Decision making is divided.
 Business can suffer if the detailed
partnership agreement is not in
place.

Corporations
- A corporation is considered by
law to be a unique entity, separate
from those who own it.
- A corporation can be taxed, sued
and enter into contractual
agreements. The corporation has a
life of its own and does not
dissolve when ownership changes.