Entrepreneurship-Business-Plan-Part-I.ppt

education

1. Strategic plans operational plans internal plans Lean Pans Blue print

2. At the end of this module, you are expected to: A. Define a business plan B. Determine the importance and parts of a business plan. C. Specify the different sections of the business plan D. Give the importance of the business plan Objectives of the topic:

3. A business plan is also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. It is the only single written document that must be prepared before opening a new business or expanding an existing business Business Plan:

4. It also provides a clear direction to any uncertain business endeavor. and A business plan is a detailed and integrated written document that describes the various activities involved in opening and operating a new entrepreneurial venture Business Plan:

5. 10 Reasons Why You Need to Prepare a Business Plan for Small Business To help you with critical decisions To iron out the kinks To avoid the big mistakes To prove the viability of the business To set better objectives and benchmarks To communicate objectives and benchmarks To provide a guide for service providers To secure financing To better understand the broader landscape To reduce risk

6. Guided Questions: 1. What are some of the tests that need to be conducted before putting up a business? 2. What is the difference between Business Plan and Feasibility Study? 3. Who should prepare a business plan? Two Major Tests to be Conducted every time a New Business Idea is Created Test of Possibility Test of Feasibility Note: The test of possibility on the new business should have a positive result, so that the test of feasibility or viability will be conducted.

7. Business Plan versus Feasibility Study The primary objective of the feasibility study is to determine whether the proposed business is feasible or not in all areas. If the outcome of the feasibility study is positive , then the entrepreneur prepares the business plan . The content and structure of the business plan are almost the same as those of the feasibility study. The data shown in the feasibility study are the same set of data presented or used in the business plan. Nonetheless, the business plan presents a more detailed discussion of how the business will be undertaken and operated.

8. MAJOR PARTS OF THE BUSINESS PLAN There is no universally accepted standard format or structure of the business plan. Introduction Executive Summary Environmental Analysis Business Description Organizational Plan Production Plan Operation Plan Marketing Plan Financial Plan Appendix

9. INTRODUCTION The first part of Business plan

10. I - Introduction The introduction presents the general perspective of the business. It may consist of one to two pages. It includes, among others, the following sections: Proposed Name of the Business Address of the Business Name of the Owner or Owners Description of the Business Location of the Business Funding Requirement and Source Note: In case the consulting team prepares the business plan for prospective owners or investors, the section Statement of Confidentiality is added as the last section.

11. Business - refers to the organized efforts and activities of individuals to produce and sell goods and services for profit. Business Plan - is a detailed and integrated written document that describes the various activities involved in opening and operating a new entrepreneurial venture. Entrepreneur – refers to a person who strongly advocates and correctly practices the concepts and principles of entrepreneurship in operating and managing the self-owned entrepreneurial venture. Entrepreneurship – is the art of observing correct practices in managing and operating a self-owned, wealth-creating business enterprise by providing goods and services that are valuable to the customers. Feasibility – the possibility that can be made, done, or achieved, or is reasonable. Corporation - is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Vocabulary list :

12. 1. Proposed Name of the Business The formulation and drafting of the proposed business name is not as simple as it sounds. It is a delicate and important entrepreneurial task. Remember that the name of the business may exist in the market for the many years . Careful and in-depth planning is of prime importance.

13. The proposed business name must: Reflect the business identify and image, Promote the philosophical values and culture that the business values the most, Profess the brand identity of the product Attract or influence the target costumers Note: At least three suggested trade names must be submitted to the department of Trade and Industry for approval and registration.

14. 2. Address of the Business It is important that the address of the Business is correctly written because all business correspondence is mailed to the business address. Raw materials and other manufacturing supplies are also shipped by the seller to the designated business address. Nowadays, it is also necessary for the business to have an e-mail address to facilitate electronic communication between the business and the customers, suppliers, creditors, and other significant parties.

15. 3. Name of the Owner The name of the owner must be properly stated. In a sole proprietorship, there is only one owner. In case the venture is a partnership, the names of the partners, including the extent of their liabilities, must be indicated. For example, if a partner’s must be properly mentioned. For business ventures that will operate as a corporate entity, the names, nationalities, and addresses of the incorporators must be given. Incorporators are persons who originally formed the corporation.

16. 4. Description of the Business A brief description of the business must include information about the type of product or service that the business intends to produce or provide. It may include a brief information about the ultimate mission, vision, and objectives of the business. The other products or services that the business plans to produce or provide must also be mentioned in the description of the business

17. 5. Location of the Business There are no rigid rules in the selection of the business location since several variables affect the selection of the business location . The basic entrepreneurial consideration is to place the proposed business in a strategic location that will assure competitive advantage. What is the difference between the Address sections of the Business and Location of the Business?

18. The former simply states the exact business address. No additional description is provided to highlight the exact business address. The latter indicates the reason/s for the selection of the location. In case the processing plant is not within the vicinity of the business, its exact location must be described.

19. The following factors should be considered when deciding on the location of the proposed business: Proximity to the target customers Distance from the sources of raw materials, labor, and utilities Availability and cost of transportation Peace and order situation Presence of direct competitors The geographic and climatic conditions

20. 6. Funding Requirement and Source The estimated total initial cost of the business venture must be clearly indicated. It should include the projected breakdown or allocation of the total cost, e.g., how much will be for building, fixtures, equipment, supplies, and working capital. This section also presents the source or sources of funds . The initial cost of the investment may be provided solely by the owner or owners or partly by the owner and creditors . The estimated period to settle the funding source provided by the creditors must also be mentioned

21. 1. Prepare the introduction section of your business plan. The cover page of your final output will appear below. BUSINESS PLAN (Name and Address of Your Proposed Business) JYNAPHI PROCESSING COMPANY 216 JALIPA STREET, PBLACION 1 PIGCAWAYAN, COTABATO [email protected] OWNED BY: (Your Names as the Owners) ANGEL CO PRINCESS TAN

22. 2. Use the guide for the format of the Introduction section of your business plan. INTRODUCTION This section of the business plan presents the description of the business, its location, and the total funding requirements and the possible funding source. Description of the Business Location of the Business Funding Requirement and Source of Funds

23. Activity: ENTREPRENEUR X OR Y ? Consider the following situation. Entrepreneur X: Entrepreneur X put up a coffee shop immediately in his barangay. He thought of an idea that early bird catches the worm. He eventually hired his friends and ordered stocks for his coffee shop business. Entrepreneur Y: Entrepreneur Y is planning to open a bakery shop in his place. He gathered first information from the residence of his place whether what kind of bread they love to eat.

24. Questions: 1. Among the two entrepreneurs, who do you wanted to be? Why? 2. What is/are the risks to be taken by each entrepreneur? 3. What do you think the importance of business planning is?

25. Answers Key: WHO’S WHO? ENTREPRENEUR X OR Y? Among the two entrepreneurs, Entrepreneur Y did a better decision of planning first before opening a business. The risks to be taken by Entrepreneur X is what if his business will not grow and he already used his money too much. Opening a business should undergo planning first. On the other side, entrepreneur Y is on the right track. The importance of making a business plan is it will serve a guide for your business.

26. Short Quiz: Write True if the statement is correct. Otherwise write False and state your reason briefly/change the word/s that make it false. 1. The process of determining the profitability of the business is considered a test of possibility. 3. The business plan is entirely different from the feasibility study. 2. After the preparation of the business plan, the entrepreneur prepares the feasibility study of the business.

27. 4. The feasibility study is more detailed than the business plan. 7. One of the sections in the introduction of the business plan is the address of the business. 6. The executive summary is usually shown as the last part of the business plan. 5. One of the major parts or sections of the business plan is the marketing research.

28. 8. The funding source and requirements are usually shown as a part of the business description. 10. The business plan is a mixture of facts and assumptions. 9. The name or names of the owner or owners ,of the proposed business are considered very delicate information. Hence, they must not be included in the business plan.

29. Thank you!..

30. Answers Key: True False, feasibility study before business plan False, almost the same False, business plan is more detailed than feasibility study False, not a major part False, first page True False, separate False, must be included True