Module 8

ENTREPENEUSHIP: ENTREP 111
Module 8 Business Plan Components

Week 14-15: November 30- December 6, 2020 | 1st Semester, S.Y. 2020-2021
Introduction
This course introduces the basic concepts of Entrepreneurship in the
Philippine Setting. Topics covered include theories and concept of
entrepreneurship, legal forms of business organization, business
opportunity identification and making of business plan.
Intended Learning Outcomes

COURSE MODULE
 Explain what business plan is.

 Identify the different reasons in preparing a business plan.
 Elaborate the purposes of a business plan.
Lesson: Business Plan
Business planning takes place when the key stakeholders in a business

sit down and flesh out all the goals, strategies, and actions that they
envision taking to ensure the business’s survival, prosperity, and
growth.
What Is Business Planning?
Business planning can play out in many different ways. Anytime upper
management comes together to plan for the success of a business, it
is a form of business planning. Business planning commonly involves
collecting ideas in a formal business plan that outlines a summary of
the business's current state, as well as the state of the broader market,
along with detailed steps the business will take to improve
performance in the coming period.
Business plans aren't just about money. The business plan outlines the
general planning needed to start and run a successful business, and
that includes profits, but it also goes beyond that. A plan should
account for everything from scoping out the competition and figuring
out how your new business will fit into the industry to assessing
employee morale and planning for how to retain talent.
Reasons Why You Need a Business Plan

1. To prove that you’re serious about your business. A formal business
plan is necessary to show all interested parties — employees,
COURSE MODULE
investors, partners and yourself — that you are committed to

building the business.
2. To establish business milestones. The business plan should clearly
lay out the long-term milestones that are most important to the
success of your business. To paraphrase Guy Kawasaki, a milestone is
something significant enough to come home and tell your spouse
about (without boring him or her to death). Would you tell your
spouse that you tweaked the company brochure? Probably not. But
you’d certainly share the news that you launched your new website
or reached $1M in annual revenues.
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3. To better understand your competition. Creating the business plan

forces you to analyze the competition. All companies have
competition in the form of either direct or indirect competitors, and it
is critical to understand your company’s competitive advantages.
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4. To better understand your customer. Why do they buy when they

buy? Why don’t they when they don’t? An in-depth customer
analysis is essential to an effective business plan and to a successful
business.
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5. To enunciate previously unstated assumptions. The process of

actually writing the business plan helps to bring previously “hidden”
assumptions to the foreground. By writing them down and assessing
them, you can test them and analyze their validity.
6. To assess the feasibility of your venture. How good is this
opportunity? The business plan process involves researching your
target market, as well as the competitive landscape, and serves as
a feasibility study for the success of your venture.
COURSE MODULE
7. To document your revenue model. How exactly will your business

make money? This is a critical question to answer in writing, for
yourself and your investors. Documenting the revenue model helps
to address challenges and assumptions associated with the model.
8. To determine your financial needs. Does your business need to
raise capital? How much? One of the purposes of a business plan is
to help you to determine exactly how much capital you need and
what you will use it for. This process is essential for raising capital for
business and for effectively employing the capital.
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9. To attract investors. A formal business plan is the basis for financing

proposals. The business plan answers investors’ questions such as: Is
there a need for this product/service? What are the financial
projections? What is the company’s exit strategy?
10. To reduce the risk of pursuing the wrong opportunity. The process
of creating the business plan helps to minimize opportunity costs.
Writing the business plan helps you assess the attractiveness of this
particular opportunity, versus other opportunities.
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11. To force you to research and really know your market. What are
the most important trends in your industry? What are the greatest
threats to your industry? Is the market growing or shrinking? What is
the size of the target market for your product/service? Creating the
business plan will help you to gain a wider, deeper, and more
nuanced understanding of your marketplace.
12. To attract employees and a management team. To attract and
retain top quality talent, a business plan is necessary. The business
plan inspires employees and management that the idea is sound
and that the business is poised to achieve its strategic goals.
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13. To plot your course and focus your efforts. The business plan
provides a roadmap from which to operate, and to look to for
direction in times of doubt. Without a business plan, you may shift
your short-term strategies constantly without a view to your long-term
milestones.
14. To attract partners. Partners also want to see a business plan, in
order to determine whether it is worth partnering with your business.
Establishing partnerships often requires time and capital, and
companies will be more likely to partner with your venture if they can
read a detailed explanation of your company.
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15. To position your brand. Creating the business plan helps to define
your company’s role in the marketplace. This definition allows you to
succinctly describe the business and position the brand to
customers, investors, and partners.
16. To judge the success of your business. A formal business plan
allows you to compare actual operational results versus the business
plan itself. In this way, it allows you to clearly see whether you have
achieved your strategic, financing, and operational goals (and why
you have or have not).
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17. To reposition your business to deal with changing conditions. For

example, during difficult economic conditions, if your current sales
and operational models aren’t working, you can rewrite your
business plan to define, try, and validate new ideas and strategies.
18. To document your marketing plan. How are you going to reach
your customers? How will you retain them? What is your advertising
budget? What price will you charge? A well-documented marketing
plan is essential to the growth of a business.
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19. To understand and forecast your company’s staffing needs. After

completing your business plan, you will not be surprised when you
are suddenly short-handed. Rather, your business plan provides a
roadmap for your staffing needs, and thus helps to ensure smoother
expansion.
20. To uncover new opportunities. Through the process of
brainstorming, white-boarding and creative interviewing, you will
likely see your business in a different light. As a result, you will often
come up with new ideas for marketing your product/service and
running your business.
COURSE MODULE
What is the overall purpose of a business plan?

A business plan is used to help manage an organisation by
stating ambitions, how they will be achieved, and exactly
when. The plan will also help summarise what the business is
about, why it exists, and where it will get to.
Your business plan will serve as a key point of reference for
investors, partners, employees and management to gauge
progress against objectives.
What is the purpose of a business plan?
A business plan has two primary purposes.
1. First, and foremost, it should be used to help run your

company with a more cohesive vision. It is your roadmap. By
truly analyzing your plan for marketing, sales, manufacturing,
website design, etc., you greatly improve your chances for
success.
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2. The second purpose of a business plan tends to be the reason

most clients request plan advice from SCORE. That is, a
financial institution or other lender will not invest in your
company unless you can demonstrate that you have a
roadmap to success. Banks want to mitigate their risk of
default and private investors, such as Angel’s, want a realistic
forecast for when they will be reaping a return on their
capital.
References
 https://smartasset.com/small-business/top-components-of-a-
business-plan
 https://articles.bplans.com/reasons-business-plans-are-
important/
 https://www.thebalancesmb.com/why-write-a-business-plan-
2948013
 https://www.thebalancesmb.com/business-planning-
definition-2947994
 Sevandal, Rosewin L., 2018,Lecture Manual Fundamentals of
COURSE MODULE
Entreprenuership
 Somoray, Ana Marie., 2000, Lecture Compilation,
Entrepreneurship and Business Planning
 Azarcon et.al. 2005, Enrepreneurship, Principles and Practices,
Valencia Educational Supply, Baguio City

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ENTREPENEUSHIP: ENTREP 111

Module 8 Business Plan Components

Intended Learning Outcomes

 Explain what business plan is.

Business planning takes place when the key stakeholders in a business

What Is Business Planning?

Reasons Why You Need a Business Plan

investors, partners and yourself — that you are committed to

3. To better understand your competition. Creating the business plan

4. To better understand your customer. Why do they buy when they

5. To enunciate previously unstated assumptions. The process of

7. To document your revenue model. How exactly will your business

9. To attract investors. A formal business plan is the basis for financing

17. To reposition your business to deal with changing conditions. For

19. To understand and forecast your company’s staffing needs. After

What is the overall purpose of a business plan?

1. First, and foremost, it should be used to help run your

2. The second purpose of a business plan tends to be the reason

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