11

ENTREPRENEURSHIP
M o d u le 1
INTRODUCTION TO BUSINESS PLAN
PREPARATION

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 I. Title of Material/Introduction:

INTRODUCTION TO BUSINESS PLAN PREPARATION

This module covers the entrepreneurial activities that must be

undertaken immediately prior to the opening of small business and during the
business operation.

II. Objectives:

At the end of this lesson, the learner should be able to implement the
business plan. Specifically, the learner must be able to :

1. Define business plan,

2. Specify the different sections of the business plan, and
3. Identify the information included in the Introduction section of the
business plan.
4. Compare and contrast business plan and feasibility study
5. Give the importance of the business plan

III. Vocabulary List:

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.

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 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.

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IV. Pre-Test:

Multiple Choice. Write the letter of your answer.

1. Which of the following BEST described a business plan?

a. A gallery of photos that explains the location
and construction of the business
b. A written plan that is a description of all the aspects of
the business and includes the business's goals
c. A collection of plans that are combined from different
business and then analyzed and compared to your
business
d. A list of guidelines that tell successful business's how to
run their company in order to make a profit.

2. What are the advantages of creating a business

plan? a. To secure financing
b. Allows the entrepreneur to focus on what they want to
accomplish
c. To set better objectives and benchmarks
d. All of the above

3. Who should prepare the business plan?

a. Anyone c. Someone on the business
b. Entrepreneur d. Stakeholder

4. What section of the business plan can we find the 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?
a. Introduction
b. Organizational Plan
c. Production Plan
d. Operation Plan
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 5. Which of following is the LEAST factor to be considered when
deciding on the location of the proposed business?
a. Distance from the sources of raw materials, labor, and utilities
b. Peace and order situation
c. The geographic and climatic conditions
d. Proximity to the house of the owner of the business

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V. Learning Activities:

1. Perform Activity #1 – FOUR PICS, ONE WORD!

2. Read the definition of a business plan and know the reasons why you need
to prepare a Business Plan for small business.

4. Read the comparison between Business Plan and Feasibility Study.

5. Identify the Major Parts of the Business Plan and be familiar of its content.

Activity #1 - FOUR PICS, ONE WORD!

What is/are the word/s being described by the group of four pictures?

1. 4.

2. 5.

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 3. 6.

Based on the words that you have formed on the previous activity; how do we
define a Business Plan?

Take time to Read Young Entrepreneur !

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. It provides a clear direction to any uncertain business endeavor.

A business plan is a detailed and integrated written document that describes

the various activities involved in opening and operating a new entrepreneurial
venture.

10 Reasons Why You Need to Prepare a Business Plan for Small Business

1. To help you with critical decisions

2. To iron out the kinks
3. To avoid the big mistakes
4. To prove the viability of the business
5. To set better objectives and benchmarks
6. To communicate objectives and benchmarks
7. To provide a guide for service providers
8. To secure financing
9. To better understand the broader landscape
10. To reduce risk

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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?

There is another written document that must be prepared and is equal

importance as the business plan. This is the feasibility study which serves as the
forerunner of the business plan.

Two Major Tests to be Conducted every time a New Business Idea is Created
1. Test of Possibility
2. Test of Feasibility

The test of possibility on the new business should have a positive result, so
that the test of feasibility or viability will be conducted.

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.

MAJOR PARTS OF THE BUSINESS PLAN

There is no universally accepted standard format or structure of the business
plan.

1. Introduction
2. Executive Summary
3. Environmental Analysis
4. Business Description
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 5. Organizational Plan
6. Production Plan
7. Operation Plan
8. Marketing Plan
9. Financial Plan
10. Appendix

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:

1. Proposed Name of the Business

2. Address of the Business
3. Name of the Owner or Owners
4. Description of the Business
5. Location of the Business
6. Funding Requirement and Source

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.

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.

The proposed business name must:

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

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.

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.

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.

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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 sections Address of the Business and
Location of the Business?

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.

The following factors should be considered when deciding on the location of

the proposed business:

1. Proximity to the target customers

2. Distance from the sources of raw materials, labor, and utilities
3. Availability and cost of transportation
4. Peace and order situation
5. Presence of direct competitors
6. The geographic and climatic conditions

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 b 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.

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VI. Practice Tasks

Practice Task 1 - WHO’S WHO? 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.

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?

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 Practice Task 2 - JUSTIFY ME.

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.
2. After the preparation of the business plan, the entrepreneur
prepares the feasibility study of the business.
3. The business plan is entirely different from the feasibility study.
4. The feasibility study is more detailed than the business plan.
5. One of the major parts or sections of the business plan is the
marketing research.
6. The executive summary is usually shown as the last part of the
business plan.
7. One of the sections in the introduction of the business plan is
the address of the business.
8. The funding source and requirements are usually shown as a
part of the business description.
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.
10. The business plan is a mixture of facts and assumptions.

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 Practice Task 3 – TELL ME A STORY

Cite a true story that you have known wherein the importance of
making a business plan before the implementation was needed. You
can share it in class or have it written in a paper.

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VII. Post Test:

LET’S JOIN TOGETHER!

Form a group of five (5) and do the following. Follow the format below
and then share your output in class. Please be guided with the scoring rubrics
below.

1. Think of three possible names(for the average learners) and five

possible names(for the advanced learners) of your small business.
Rank them according to your preferences.
2. Indicate the proposed complete address your business.
3. Write your names as owners of the business.
4. Make a brief description of your business. You may include the
product or service that you plan to sell or serve.
5. Cite the reason for choosing the location.
6. Based on the nature and type of your proposed small business,
determine the initial funding requirement.
7. State also the possible source/s of funds.

Proposed Proposed Name of Brief Reason/s Initial Possible

Business Address Owner/s Description for Funding Source/s
Name of the Choosing Requirement of Funds
Business the
Location

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Note to Students…

The group they will form will be the permanent group until they finished the
business plan and was able to implement it. The business that they will write should
be more realistic this time since those are the options that they need to consider and
subject for the approval of the teacher. Financial aspects should be taken in
consideration.

The scoring rubric below will be used.

SCORING RUBRICS

Category Beginning Developing Proficient Highly Excellent

Proficient
2 4 6 8 10

Completeness The work is Many questions Two or One question All questions
very are more is partially are answered
incomplete. missing/partially questions answered or completely.
complete. are missing completely
or partially missing.
complete.
Correctness The work Some There are 2 There is 1 There are 0
is full of questions/tasks or 3 errors error in the errors in the
errors. were not in the output. output.
answered output.
correctly.
Confidence in Shows no Shows little or Shows Demonstrates Demonstrates
Presentation interest in mixed feelings some greater strong
topic about the enthusiastic enthusiasm enthusiasm
presented. topic being feelings about topic about topic
presented about topic during entire during entire
presentation. presentation.
Collaboration We did the Only some of We worked We worked Everyone
work by the group together together so worked
ourselves. members are most of the that everyone together
We talked cooperative. time. contributed to using his/her
a little Sharing the final knowledge
among ideas output. and abilities
group regularly. to make the
members output come
together.
Cleanliness Our final There are some Our work is Our final There are no
output is erasures. clean. output is very erasures.
full of clean
erasures.

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VIII. Assignments

With the same group, do the following :

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
www.jynaphi@yahoo.com

OWNED BY:
(Your Names as the
Owners) ANGEL TOLEDO
PRINCESS MALAZARTE

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 Note that since the name, address, and name/names of the
owner/owners of the business appear on the cover page, they may no longer
be repeated in the Introduction section.

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

The requirement for spacing, paragraph indention, font size and style, margins and
other technical
Location of the writing requirements will be subject to the policy of the school or maybe
Business
patterned after other research activities of the school.

Scoring rubric below will be used.

Funding Requirement and Source of Funds

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 SCORING RUBRICS

Category Beginning Developing Proficien Highly Excellent

t Proficie
2 4 nt 8 10
6
Completenes The work Many Two or One All
s is very questions are more question questions
incomplete missing/partiall question is are
. y complete. s are partially answered
missing answered completel
or or y.
partially completel
complete y
. missing.
Correctness The work Some There There is 1 There are
is full of questions/task are 2 or error in 0 errors in
errors. s were not 3 errors the the
answered in the output. output.
correctly. output.
Collaboration We did Only some We We Everyone
the work of the group worked worked worked
by members together together together
ourselves are most of so that using
. We cooperative. the everyone his/her
talked a time. contribute knowledg
little Sharing d to the e and
among ideas final abilities
group regularl output. to make
members y. the
output
come
together.
Cleanliness Our There are Our Our There are
final some work is final no
output erasures. clean. output is erasures.
is full of very
erasure clean
s.

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