Entrep Reviewer

4 M’s of Production
Manpower
Manpower talks about human labor force involved in the manufacture of products. It is measured as
the most serious and main factor of production. The entrepreneur must determine, attain and match the most
competent and skilled employees with the jobs at the most appropriate time period.
Materials
It simply refers to the raw materials necessary in the production of a product. Materials mainly form part of
the finished product. The entrepreneur may consider cost, quality, availability, credibility of suppliers and waste that
the raw materials may produce.
Machine
Machine is about manufacturing equipment used in the production of goods or delivery of services.
Method
Method or production method is the process or way of transforming raw materials to finished products.
The product is the physical output of the whole production process. It should be valuable and beneficial to
the consumers and should satisfy their basic needs and wants. A product can be heterogeneous or homogeneous.
Heterogeneous product
has dissimilar characteristics, parts, and physical appearance. It can be easily identified from other products.
Entrepreneurial ventures that produce heterogeneous products include makers of furniture, bags, and home decors.
Homogeneous product
has a physical appearance, taste, or chemical content that can hardly be distinguished from that of the other
products. Businesses that produce homogeneous products include makers of soft drinks, and medicines.
Product description
wherein product description promotes and explains what a product is and why it’s worth buying. The
purpose of a product description is to provide customers with details around the features and benefits of the product
so they’re obliged to buy.
Prototype
is created before the massive production of such product; an entrepreneur must consider prototyping. A
prototype is a duplication of a product as it will be produced, which may contain such details as color, graphics,
packaging and directions.
Value chain
is a method or activities by which a company adds value to an item, with production, marketing, and the
provision of after-sales service.
Supply chain
is a structure of organizations, people, activities, data, and resources involved in moving a product or service
from supplier to customer.
Business model
describes the factors of how an organization creates, delivers, and captures value in economic, social, cultural
or other contexts. The development of business model construction and variation is also called business model
innovation and forms part of a business plan.
The following are the components found in a Business Plan:
 Introduction - this part discusses what is the business plan all about.
 Executive Summary - is part of the business plan which is the first to be presented but the last to be made.
 Management Section - shows how you will manage your business and the people you need to help you in your
operations.
 Marketing Section - shows the design of your product/service; pricing, where you will sell and how you will
introduce your product/service to your market.
 Financial Section - shows the money needed for the business, how much you will take in and how much you will
pay out.
 Production Section - shows the area, equipment and materials needed for the business.
 Competitive Analysis - is the strategy where you identify major competitors and research their products, sales and
marketing strategies.
 Market- refers to the persons who will buy the product or services
 Organizational chart - is the diagram showing graphically the relation of one official to another, or others of a
company.
4 factors
1. The economic condition of the country.

2. The competing business or competitors.
3. Changes happening in the community.
4. The internal aspects of the business.
Terms Definition
Revenue Result when sales exceed the cost to produce
goods. Are recognized when earned in cash.
Sales Amount of good sold with mark up.
Cost The price before adding mark-up.
Mark-up Refers to the amount added to the cost. Depend

on the seller.
Cost of goods sold Total amount of good sold without mark up.
Purchases Goods/merchandise purchased by the seller to

supplier or by the customer to the seller.
Purchase Amount of merchandise or goods bought
Merchandise Purchases
Merchandise inventory beginning Goods at the beginning of the operation or

business.
Merchandise inventory end Goods available for sale the next day.
Freight in Amount paid to transport and was shouldered by

the buyer.
Terms Definition
Forecasting Allows manager to make educated estimate the
revenue.
Bookkeeping Process of recording of business transactions.
Book keeper The person who is in charge to record business

transactions
Book of accounts Composed of journals and ledger.
Journals Book of originality entry.
Ledger Book of final entry.
General journal Basic journal
General ledger Can be found in the chart of account.
Account receivable ledger A sub-ledger which records all credits sales.
Account payable ledger Contains the details for all invoices received from
supplier.
Debit Left-hand side entry or “value receive”
(pasok sa company) (assets)
Credit Right-hand side entry or “value parted with”
(lumabas sa company) (liability) (capital)
Assets Represent an economic resource.
Liability Something a person or company owes. Are

settled through the transfer of money, goods or
services.
Owners’ equity Is a degree of residual ownership in a firm.
Revenue Commonly known as income, fees, and sales.
Expenses Refers to the cost of operations that a company

incurs to generate revenue.

Entrep Reviewer

Uploaded by

Copyright:

Available Formats

Entrep Reviewer

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Entrep Reviewer

Uploaded by

Copyright:

Available Formats

4 M’s of Production

The following are the components found in a Business Plan:

1. The economic condition of the country.

Cost The price before adding mark-up.

Mark-up Refers to the amount added to the cost. Depend

Purchases Goods/merchandise purchased by the seller to

Merchandise inventory beginning Goods at the beginning of the operation or

Freight in Amount paid to transport and was shouldered by

Book keeper The person who is in charge to record business

Journals Book of originality entry.

Ledger Book of final entry.

General journal Basic journal

General ledger Can be found in the chart of account.

Account receivable ledger A sub-ledger which records all credits sales.

Liability Something a person or company owes. Are

Revenue Commonly known as income, fees, and sales.

Expenses Refers to the cost of operations that a company

You might also like