Cuenca Institute, Inc.

Senior High School Department

Gen. Malvar Street, Brgy 3, Cuenca, Batangas
Module No.
(043) 342-2045 | cuenca_institute@yahoo.com
SY 2023-2024 | Second Semester

Name of Learner Approved by

Strand & Section Approval Date

Entrepreneurship
ambrosio.magpantay@gmail.com
 ENTREPRENEURSHIP
Applied Track Subject

Course Description:
In this introductory business course, students learn the basics of planning
and launching their own successful business. Whether they want to start their own
money-making business or create a non-profit to help others, this course helps
students develop the core skills they need to be successful. They learn how to come
up with new business ideas, attract investors, market their business, and manage
expenses.

Content Standard:
1. The learner demonstrates understanding of concepts, underlying principles,
and processes of developing a business plan.
2. The learner demonstrates understanding of environment and market in one’s
locality/town.

Performance Standard:
1. The learner independently or with his/her classmates presents an acceptable
detailed business plan.
2. The learner independently creates a business vicinity map reflective of
potential market in one’s locality/town.
/

Most Essential Learning Competencies:

 Recognize a potential market
• Analyze the market need
• Determine the possible product/s or service/s that will meet the need;`
• Screen the proposed solution/s based on viability, profitability, and
customer requirements; and
• Select the best product or service that will meet the market need.

 Recognize the importance of marketing mix in the development of marketing

strategy

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  Describe the Marketing Mix (7Ps) in relation to the business opportunity vis-à-
vis:
Product;
Place;
Price;
Promotion;
People;
Packaging; and
Positioning

 Develop a brand name

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 Learning Objectives:
1. Recognize a potential market
The learners…
1.1 Identify the market problem to be solved or the market need to be met;
and
1.2 Propose solution/s in terms of product/s and service/s that will meet the
need using techniques on seeking, screening, and seizing opportunities:
1.2.1 Analyze the market need;
1.2.2 Determine the possible product/s or service/s that will meet the
need;
1.2.3 Screen the proposed solution/s based on viability, profitability, and
customer requirements; and
1.2.4 Select the best product or service that will meet the market need.

2. Recognize and understand the market

The learners…
2.1 Describe the unique selling proposition and value proposition that
differentiates one’s product/service from existing products/services;
2.2 Determine who the customers are in terms of:
2.2.1 Target market;
2.2.2 Customer requirements; and
2.2.3 Market size
2.3 Validate customer-related concerns through:
2.3.1 Interview;
2.3.2 Focused Group Discussion (FGD); and
2.3.3 Survey

3. Recognize the importance of marketing mix in the development of marketing

strategy
The learners…
3.1 Describe the Marketing Mix (7Ps) in relation to the business opportunity
vis-à-vis:
3.1.1 Product;
3.1.2 Place;
3.1.3 Price;
3.1.4 Promotion;
3.1.5 People;
3.1.6 Packaging; and
3.1.7 Positioning
3.2 Develop a brand name

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 4. Demonstrate understanding of the 4Ms of operations
The learners…
4.1 Describe the 4Ms (Manpower, Method, Machine, Materials) of operations
in relation to the business opportunity:
4.1.1 Develop a product description;
4.1.2 Create a prototype of the product;
4.1.3 Test the product prototype;
4.1.4 Validate the service description of the product with potential
customers to determine its market acceptability;
4.1.5 Select/pinpoint potential suppliers of raw materials and other inputs
necessary for the production of the product or service;
4.1.6 Discuss the value/supply chain in relation to the business enterprise;
and
4.1.7 Recruit qualified people for one’s business enterprise.
4.2 Develop the business model;
4.3 Forecast the revenues of the business;
4.4 Forecast the costs to be incurred;
4.5 Compute for profits; and
4.6 Create the company’s five (5) year projected financial statements.

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 MAJOR PARTS OF THE BUSINESS PLAN
Cover Page
Approval Sheet
Table of Contents
Executive Summary
General Company Description
I. Market and Industry Analysis
1.1. Trends in the Industry
1.2. Market Segment
1.2.1. Segmenting
1.2.2. Targeting
1.2.3 Positioning
1.3. SWOT Analysis
II. Strategy and Business Model
2.1. Strategies
2.2. Business Model
III. Organizational Plan
3.1 Ownership
3.2 Organizational Chart
IV. Marketing Plan
4.1. Product
4.2. Price
4.3. Place
4.4. Promotion
4.5. Physical Evidence
4.6. People
4.7. Processes
V. Operational and Production Plan
5.1. Stall Layout
5.2. Evaluation of Suppliers
5.3. Equipment
5.3. Sales Budget
5.4. Production Budget
VI. Financial Plan
6.1. Sources of Funds
62. Operating Expenses
6.3. Cost of Good Sold
6.4. Projected Financial Statement
APPENDICES (RESUME, and Articles of Partnership)

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 COVER PAGE

must include: the business name, logo, slogan, address, email address, phone
number, name of owners.

Proposed Name of the Business

• Careful and in-depth planning is of prime importance.
• At least three suggested trade names must be submitted to the
Department of Trade and Industry for approval and registration.
It must:
• Reflect the business identity 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 consumers

Logo
Logos come in two basic forms:
• abstract symbols, or
• logotypes, a stylized rendition of your company's name
***You can also use a combination of both. Alan Siegel, chairman of
Siegel+Gale, a design firm specializing in corporate identity, warns that
promoting an abstract symbol can prove very costly for a small business on a
budget. In addition, he says, such logos are harder to remember. "A logotype
or word mark is much easier to recall," says Siegel. "If you use an abstract
symbol, always use it in connection with your business name."

Slogan/Taglines
• Taglines should be simple and concise.
 Generally a tagline should be less than 5 short words, however, 3 is
even better.
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• Taglines must be descriptive.
 A tagline is most effective when it describes the target audience’s
interaction with the product or organization it represents.
• Taglines should point back to the company identity.
 Taglines should not only point back to the company identity, but
they should only be used if they reinforce it.
• The tagline must also be evocative and in tune with Social Psychology.
 A company tagline invites the target audience into participation
with the company identification.

TABLE OF CONTENTS

• usually headed simply "Contents" and abbreviated informally as TOC, is a

list, usually found on a page before the start of a written work, of its chapter
or section titles or brief descriptions with their commencing page numbers.
• (List of Tables and Figures for this particular Business Plan is also included
here in TOC)

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 EXECUTIVE SUMMARY

 The executive summary is probably the most critical part of the business
plan format. Many business plan readers will read the executive summary
and then decide whether to proceed further or discard the plan.
 The executive summary should be written last, once all the other sections
are complete. It should not exceed two pages and should eloquently
summarize the most important aspects of the plan.
 Key elements that should be included in the executive summary are:
• Business concept: A description of the business, its products, and the
market it will serve. You need to describe what will be sold, to whom
and how it has a competitive advantage.
• Financial features: The summary should highlight the important
financial points like sales, profits, cash flows and return on investment.
• Financial requirements: You need to be clear about the capital needed
to start and expand the business, as well as how the capital will be used.
• Current business position: Provide an overview of the company, its
legal form of operation, when it was formed, the principal owners and
key personnel.

GENERAL COMPANY DESCRIPTION

• presents the general perspective of the business

• consists of one to two pages
• includes the following:
a. Proposed name of the business - Explain how did you come up with
your name
b. Location and address of the business - Describe the location you
intend to put your business

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 c. Type of business and name of the owners
d. Description of the business (Type of products you intend to offer,
MVO)
e. Funding requirement and source
a. Proposed name of the business
• Careful and in-depth planning is of prime importance.
• At least three suggested trade names must be submitted to the
Department of Trade and Industry for approval and registration.
• It must:
 Reflect the business identity 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 consumers

b. Address of the business

• must be correctly written
• It is also necessary for the business to have an email address.
Location of the business
• Indicates the reason/s for the selection of the location
Factors to be considered when deciding the location of the proposed
business:
• Proximity to the target consumers
• Distance from the sources of raw materials, labor, and utilities
• Availability and cost of transportation
• Peace and order situation
• Presence of direct competitors
• Geographic and climatic conditions

c. Type of Business and Name of the Owner/Owners

• Sole Proprietorship: one name only

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 • Partnership: names of partners, including the extent of their
liabilities
• Corporations: names, nationalities, and addresses of the
incorporators

d. Description of the business

• Must include:
 Information about the type of product or service that the
business intends to produce or provide. (product description)
 Brief information about the ultimate mission, vision, and
objectives of the business
 Other products/services that the business plans to produce/
provide
BUSINESS GOALS

Goals - A goal is a general statement of what you want to achieve. More

specifically, a goal is a milestone (s) in the process of implementing a strategy.
Examples of business goals are:
• Increase profit margin
• Increase efficiency
• Capture a bigger market share
• Provide better customer service
• Improve employee training
• Reduce carbon emissions

Vision Statement
• An inspirational description of what an organization would like to
achieve or accomplish in the mid-term or long-term future.
• It is intended to serve as a clear guide for choosing current and future
courses of action.

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 Mission Statement
• A written declaration of an organization’s core purpose and focus that
normally
• remains unchanged over time.
• Properly crafted mission statements:
 serve as filters to separate what is important from what is not
 clearly state which markets will be served and how
 communicate a sense of intended direction to the entire
organization.
 Also called as company mission, corporate mission, or corporate
purpose.

MISSION vs. VISION

• Mission is the cause and Vision is the effect.
• Mission is something to be accomplished whereas a vision is something to
be pursued for that accomplishment.
• The Mission Statement concentrates on the present; it defines the
customer/s, critical processes and it informs you about the desired level of
performance. On the other hand, the Vision Statement focuses on the
future; it is a source of inspiration and motivation. Often it describes not
just the future of the organization but the future of the industry or society
in which the organization hopes to effect change.

Objectives
• Objectives must be more specific than Vision and Mission Statement.
• They should be SMART (Specific, Measurable, Achievable, Realistic and
Time-bound/Time Frame).

SPECIFIC
• The goals for your business need to be specific so they can be broken down
into precise steps you need to take.
• For example, the goal of being a successful salesperson is very general and
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 doesn't really clarify what you're hoping to achieve. However, saying

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 that you want to be the No. 1 salesperson in your insurance agency
clearly demonstrates your intentions.

MEASURABLE
• Your goals should be measurable, which typically involves breaking them
down into smaller, quantifiable increments.
• To be the top salesperson in your office, previous history may tell you that
you'll have to earn $60,000 in commissions for the year. To accomplish
this, you must average $5,000 in commissions per month while factoring
in allowances for illness and vacation time.

ATTAINABLE
• To be attainable, a goal should require you to push yourself to achieve it,
but it shouldn't be so hard to attain that it is virtually impossible.
• If your goal will require you to work 80 hours per week to achieve it,
there's a good chance that you'll burn out long before you reach it while
also possibly harming your health and family life. On the other hand,
working 50 hours a week may be demanding but doable.

REALISTIC
• Be realistic about your goals.
• If your goal is to earn $60,000 in annual commissions but your previous
high was $30,000, you'll need to take a close look at your current work
habits and prospecting methods. If you're not willing to change how you
operate, reaching your goal may be highly unrealistic.

TIME FRAME
• A time frame will keep you focused on your goal as well as help to motivate
you. If your goal is to open a new business, setting a firm deadline for a date
six months from now can force you to begin to take the necessary actions,
such as finding a building, arranging for financing, obtaining permits and
hiring employees.

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Examples of Objectives:
1. Earn at least a 20 % after-tax rate of return on our investment during the
next fiscal year
2. Increase market share by 10 % over the next three years.
3. Lower operating costs by 15 % over the next two years through
improvement in the efficiency

f. Funding Requirement And Source

• The estimated total initial cost of the business venture must be clearly
indicated.
• It must also present the source or sources of funds and operating
expenses.
• Estimated period to settle the funding source provided by creditors must
also be mentioned.

CHAPTER I
MARKET and INDUSTRY ANALYSIS

1.1 Trends in the Industry - Describe the forces affecting the industry in
which you will operate. These forces are covered by discussing barriers to
entry, suppliers, customers, substitute products, and competition. Answering
the following questions will enable you to cover the critical issues in discussing
the industry:

Question 1: What are the barriers to entry in this industry?

• Consider whether any of the following exist for your company and others
wanting to enter the industry: high capital costs, high production costs, high
marketing costs, consumer acceptance and brand recognition, extensive
training and skills, unique technology and patents, tariff barriers and quotas,
legislation or regulation.
• How will you overcome the barriers to entry?

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Question 2: How much power do the customers have?
• Who are the customers?
• Do they have significant power or influence over the prices they pay?
• Do they have significant choice when buying the product or service?

Question 3: How much power do the suppliers have?

• Who are the suppliers?
• Do they have significant power or influence over the prices they charge?
• Is there a limited number of suppliers?

Question 4: Are there substitute offerings for the product or service?

• What is the likelihood that customers will switch to a substitute product or
service? Will you have important indirect competitors (For example, video
rental stores compete with theatres, although they are different types of
businesses)
Question 5: Who are the competitors and how strong is the competitive
rivalry?
• What products and companies will compete with you?
• How will your products or services compare with the competition?

Question 6: What are the major changes affecting the industry?

• Consider changes in technology, in government regulations, in the
economy

1.2 Market Segment

Marketing STP: is a three-step approach to building a targeted marketing plan.
The "S" stands for SEGMENTING, the "T" for TARGETING and the "P" for
POSITIONING. Going through this process allows a business owner and
marketing consultants or employees to formulate a marketing strategy that
ties company, brand and product benefits to specific customer market
segments.
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SEGMENTING The segmenting step is essentially a brainstorming activity. You
list out all the potential market segments you could target in a marketing
campaign. Niche companies sometimes have only one target market, while
other businesses may have five or 10 possible segments, or more. Cell phone
providers, for instance, often separate customers by benefits. Some buyers
want high-tech gadgetry while others want dependable communication for
travel and emergencies. It is the process of classifying customers into groups
which share common characteristics. The commonly used methods for
segmenting the market are:
SEGMENTATION CATEGORIES

DEMOGRAPHIC GEOGRAPHIC BEHAVIORAL PSYCHOGRAPHIC

• Age • Country • Benefits Sought • Lifestyle
• Gender • City • Purchase Usage • Activity, Interest,
• Income • Language • Intent Opinion
• Education • Climate • Occasion • Concerns
• Family • Density • Buyer Stage • Personality
• Social Status • Population • User Status • Values
• Life Cycle
• Occupation • Area • Attitude
• Stage Engagement
• Life Stage

TARGETING When you have multiple, distinct market segments, you typically
need to customize marketing campaigns that appeal to each. As you go through
the STP process, you select which segment to target with your upcoming
campaign. Using the cell phone example, you might decide to launch a new
campaign to promote advanced mobile features, media, apps and texting tools
to younger, tech-savvy audiences. For this campaign, you would develop
messages and use media tailored to that market. It involves the process of
evaluating each segments attractiveness and selecting one or more segments
to enter. It aims to determine the set of buyers with common needs and
characteristics.
POSITIONING Positioning is how you align your brand or products in the
target market. The goal is to offer something that is bigger, better or more
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valuable than your competitors to a particular market segment. For example,
Apple attempts to position itself as an innovative, cutting-edge technology
provider to discerning tech buyers who want top-quality solutions. Your
positioning serves as your big-picture guide in building your marketing
campaign. Positioning is arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in the mind of the
consumer.
Source: https://slideplayer.com/slide/7950330

1.3 SWOT Analysis - is a simple but useful framework for analyzing your
organization's strengths and weaknesses, and the opportunities and threats
that you face. It helps you focus on your strengths, minimize threats, and take
the greatest possible advantage of opportunities available to you.

INTERNAL:
Strengths – Internal capabilities that may help a company reach its
objectives.
Weaknesses – Internal limitations that may interfere with a company’s
ability to achieve its objectives.
EXTERNAL:
Opportunities – External factors that the company may be able to
exploit to its advantage.
Threats – Current and emerging external factors that may challenge the
company’s performance.

The strengths of the business may include The weaknesses of the business may include
the following: the following:
• Qualified working force • Autocratic form of leadership
• Complete and new physical facilities • Demoralized employees
• Democratic leadership style • Poor and dilapidated equipment and
• Motivated workers machineries
• Valuable intangible assets • Unskilled workers
• Poor technological structures

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 The business threats may include the following:
The possible business opportunities are as
• Possible entry or presence of competitors
follows:
• Stiff government regulations
• Innovative products introduced to the • Higher interest rates
market • Entry of cheaper products
• Increasing the market share because of • Unstable peace and order situation
market advantage • Shift of customers’ taste and preference
• Providing services to new customers • Consumer Analysis
• New programs of the government

CHAPTER II
STRATEGY AND BUSINESS MODEL

2.1 Strategies A standard business plan format covers strategy and your
business model. You need to describe to readers how the business will
compete in the chosen markets. Your positioning strategy will be affected by a
number of variables related to the motivations and requirements of your
target market as well as what your primary competitors are doing.
• Before you position your product or service, you will need to know how your
competitors are positioning themselves, the specific attributes your product
has that your competitors do not and the needs your product fills for your
customers.
• Once you have these questions answered in the research stages, you can
develop a positioning strategy and illustrate it in your business plan. The
positioning statement does not have to be long or elaborate, as long as it
points out exactly how you want customers and your competition to
perceive your product.
• This requires a description and explanation of the strategic choices that
you have made as a business, including:
 The focus of the business: broad mass market or specific niche?
 How the business will succeed in the market? How will you create a
unique and valuable position, involving a different set of activities?
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  What is unique about the business? How is the offering different from
that of competitors?
 What is the value for the customers? Describe the value proposition
for the customer.

2.2 Business Model - A business model is the profit-making engine of the

business. It is central to a business’s success. The business model you choose
will be a strong determining point of the future success of your business. Your
business model must include information on what your company offers in
terms of products or services; what makes your offering unique; who you sell
them to; and how you make your money.
•
• The important aspects of a business model that should be presented in a
consolidated framework include: The sources of revenue
 The major costs involved in generating the revenue
 The profitability of the business (revenue less costs)
 The investment required to get the business up and running (to get
to scale)
 The critical success factors and assumptions for making the profit
model work
• Good business model depends on three qualities, finding high-value
customers, offering
significant value to
customers and delivering
significant margins.
• They also avoid three things
that can derail a business,
namely difficulties in
satisfying customers, trouble
maintaining market position,
and problems generating

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 funding for growth.

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 VALUE CUSTOMERS CUSTOMER
KEY PARTNERS KEY ACTIVITIES
PROPOSITIONS RELATIONSHIPS SEGMENTS
Key Suppliers/Partners:  What key activities do  What value do we  How do we get,  For whom are we
 Who are our key our value propositions deliver to the keep, and grow creating value?
require? customer? customers?
partners?  Who are our
 Who are our key  Our distribution  Which one of our  Which customer most important
channels? customers' relationships customers?
suppliers?
problems are we have we
 Which key resources  Customer  What are the
helping to solve? established?
are we acquiring from relationships? customer
our partners?  Revenue streams?  What bundles of  How are they archetypes?
products and integrated with
 Which key activities CHANNELS services are we the rest of our
do partners perform? offering to each business model?
 Through which
segment?
KEY RESOURCES channels do our  How costly are
customer segments  Which customer they?
 What key resources want to be reached? needs are we
do our value satisfying?
 How do other
propositions require?  What is the
companies reach them
 Our distribution now? minimum viable
channels? product?
 Which ones work
 Customer best? Which ones are
relationships? most cost-efficient?
 Revenue streams?  How are we
integrating them with
customer routines?

COST STRUCTURE REVENUE STREAMS

 What are the most important costs inherent to  For what value are our customers really willing to pay?
our business model?
 For what do they currently pay?
 Which key resources are most expensive?  What is the revenue model?
 Which key activities are most expensive?  What are the pricing tactics?

CHAPTER III
ORGANIZATIONAL PLAN

3.1 Ownership - This part of the paper simply describes the type of business
and includes the name of the owners.
3.2 Organizational Chart - An organization structure/chart is a system made
up of tasks to be accomplished, work movements from one work level to other
work levels in the system, reporting relationships and communication
passageways that unite the work of different individual persons and groups.

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Below is a classic example of an organizational chart applicable for small
business.

GENERAL MANAGER

SALES AND PURCHASE AND

MARKETING PRODUCTION FINANCE MANAGER
MANAGER MANAGER

CHAPTER IV
MARKETING PLAN

MARKETING MIX
The marketing mix is one of the most famous marketing terms. The
marketing mix is the tactical or operational part of a marketing plan. The
marketing mix is also called the 4Ps and the 7Ps. The 4Ps are price, place,
product and promotion. The services marketing mix is also called the 7Ps and
includes the addition of process, people and physical evidence/ packaging.
4.1 PRODUCT— A product according to Kotler and Armstrong (2010) is
“anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a need or want.” They further added that
product is more than just tangible objects, but also include service
(intangible). Similarly, Kotler and Keller (2009) defined product as “anything
that can be offered to a market to satisfy a want or need” they pointed out that
it includes physical goods, services, experiences, events, places, persons,
properties, organizations, information and ideas.
In order to actively explore the nature of a product further, let’s consider it as
three different products – the CORE product, the ACTUAL product, and finally
the AUGMENTED product.
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• The CORE product is NOT the tangible physical product. You can’t touch it.
That’s because the core product is the BENEFIT of the product that makes it
valuable to you. (e.g. convenience, speed)
• The ACTUAL product is the tangible, physical product. You can get some
use out of it. (e.g. the car vehicle)
• The AUGMENTED product is the non-physical part of the product. It usually
consists of lots of added value, for which you may or may not pay a premium.
(e.g. warranty, the customer service support offered by the car’s
manufacturer and any after-sales service)

Components of the physical products

Packaging – serves to contain and protect,
and, sometimes, identify and promote the
product.
Labelling – is a display of information about a product on its container,
packaging, or on the product itself. Labels are product’s “silent salesman.”

4.2. PRICE
• Price is the amount the consumer must exchange to
receive the offering. (Solomon et al; 2009).
• The company’s goal in terms of price is really to reduce
costs through improving manufacturing and efficiency, and
most importantly the marketer needs to increase the
perceived value of the benefits of its products and services
to the buyer or consumer.
• There are many ways to price a product.

PRICING STRATEGIES
1. Mark-up Pricing –is a pricing strategy that allows the
seller a fixed mark-up every time the product is sold.
2. Target Return Pricing - is a pricing method that allows
a product manufacturer to recover a certain portion of
his/her investment per year
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 3. Odd Pricing or Psychological Pricing - is a pricing
method premised on the theory that consumers will
perceive products with odd price endings as lower in
price than they actually are.
4. Loss Leader Pricing - A pricing strategy frequently used
by supermarkets. Is based on the practice of housewives
using only a few selected essential
products, e.g., sugar, coffee, eggs, laundry detergents, and some canned
good products, as their sole basis for price comparison.
5. Price Lining - A pricing strategy designed to simplify a consumer’s buying
decision. Involves reducing the number of price points on merchandise to
as little as possible, in extreme cases to only one price point.
6. Prestige Pricing - A pricing strategy that disregards the unit cost of a
product or service; instead, it capitalizes on the high value perception or
positive brand reputation of a product or service. It charges a price much
higher than its unit cost. This is a pricing strategy implemented by some
fragrance and skin care products. Using prestige pricing, it would be
unusual for a fragrance brand to have a unit cost of PhP1,300 and a selling
price of PhP3,500.
7. Marginal Pricing - It is where a business organization prices its products
at a range below its unit cost but higher that its unit variable cost.
8. Predatory Pricing - A pricing strategy where the firm prices its products
lower than unit variable cost, initially resulting in short-term losses.
Objective: to price a new or persistent competitor out of the market. After
its purpose is achieved, the product’s original selling price is restored and
short-term losses recovered.
9. Going Rate Pricing - A pricing strategy where the firm prices its products
at the same level as or very close to its competitors’ prices. It effectively
maintains the product’s price competitiveness in its market. The danger of
going rate pricing is that it may result in price wars, with each company
trying to out-price another, to the detriment of all industry participants.

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 10. Promotional Pricing - A pricing strategy involving a
temporary reduction in the selling price of a
product/service in order to induce trial or to
encourage repeat purchase.

4.3 PLACE
• Place includes company activities that make the product available to target
consumers. (Kotler and Armstrong; 2010).
• Place is also known as channel distribution, or intermediary. It is the
mechanism through which goods and/or services are moved from the
manufacturer/ service provider to the user or consumer.

Wholesaling vs. Retailing

• Wholesaling is the sale of goods to others to be resold. It is an important
product distribution function. Without wholesalers, product
manufacturers would have to deliver goods directly to retailers.
Manufacturers allow wholesalers a mark-up for the goods distributed.
• Retailing is the sale of goods/services to the final customer for his personal
consumption. Typical examples of retailers are drug-stores, sari-sari stores,
restaurants, movie houses, convenience stores, and supermarkets.

4.4 PROMOTION
• Promotion includes all of the activities
marketers undertake to inform consumers
about their products and to encourage
potential customers to buy these products.
(Solomon et al; 2009).
• Promotion includes all of the tools available to the marketer for marketing
communication
Types of media and techniques used in advertising
TRADITIONAL MEDIA AND TECHNIQUES—Radio, Print, Newspaper,
Magazine, and Television
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ALTERNATIVE/CONTEMPORARY MEDIA AND
TECHNIQUES—Cinema, Billboards, Websites,
Social Networking Sites, Directory advertising,
Product placement, E-mail advertising, Transit
advertising, Online ads, Direct response
advertising, Point-of-Purchase, and Signs,
Posters, and Leaflets.

4.5 PHYSICAL EVIDENCE

• The environment in which the service is delivered, and where the firm and
customer interact, and any tangible components that facilitate performance
or communication of the service. (Zeithaml et al; 2008)
• Physical Evidence is the material part of a service. Strictly speaking there
are no physical attributes to a service, so a consumer tends to rely on
material cues. There are many examples of physical evidence, including
some of the following: buildings, equipment, signs and logos, annual
accounts and business reports, brochures, your website, and even your
business cards.

4.6 PEOPLE
• All human actors who play a part in service delivery and thus influence the
buyers’ perceptions; namely, the firm’s personnel, the customer, and other
customers in the service environment. (Zeithaml et al; 2008).
• People are the most important element of any service or experience.
Services tend to be produced and
consumed at the same moment,
and aspects of the customer
experience are altered to meet
the individual needs of the person
consuming it.

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4.7 PROCESS
• It is the actual procedures, mechanisms, and flow of
activities by which the service is delivered (Zeithaml et al;
2008).

CHAPTER V
OPERATIONAL AND PRODUCTION PLAN

4M’s of OPERATIONS

Management is the art of getting things done with and through other
people. It is imperative for an entrepreneur to know about how to keep the
business running with the least effort (Edralin 2019). Production is an activity
that converts materials into useful forms. Operations Management is how
organizations produce or deliver the goods and services that provide the
reason for their existence (YGOAL 2016).

The 4M’s of operations cover the input portions. These 4 M’s are
composed of Manpower, Method, Machine and Materials. These four domains
are also applicable to business opportunities since it is in essence-tied to
manufacturing as well.

INPUT PROCESS OUTPUT

Manpower Manpower FINAL PRODUCT

Method Method
Machine Machine
Materials Materials

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 Manpower is the worker or human workforce involved in the
manufacturing process of business. People run factories and service
establishments. Even factories with the most advanced and automated
machines still require good people to operate and maintain the machine.
Hiring the right people is the first step to good operations management
(Morato 2017). Some of the criteria that an entrepreneur to consider in hiring
workforce:
a. Educational qualifications and experience required for the job
b. Status of employment (permanent or contractual)
c. Number of employees/ staffs needed in the job
d. Skills and expertise required
e. Availability of potential workers in the community f. Salary
requirements and other mandatory benefits (Aduana 2017).

Method refers to the system and step by step process in the business.
The process or technique of converting raw materials to finished products.
Operations proper implements and runs the factory or service shop that
converts the input into output (Morato 2017). Wrong methods can jeopardize
the operations because it may not be able to attain the results. The selection of
the method of production is dependent on some factors:
• Product to produce
• Mode of production
• Manufacturing equipment to use, and
• Required skills to do the work.

Machines are also important in the operations of the business. It refers

to the manufacturing equipment used in the production of goods or delivery
of services. Without proper equipment, business will not be able to perform
the needed tasks efficiently and fast. Selecting an equipment to purchase, the
entrepreneur may consider the following important elements:
• Types of products to be produced
• Production system to be adopted

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 • Cost of the equipment
• Capacity of the equipment
• Availability of spare parts in the local market
• Efficiency and durability of the equipment
• Skills require in operating the equipment

Materials simply refers to the raw materials needed in the production

or manufacturing of a product. Sourcing of raw materials is critical in any
business, the entrepreneur would want to acquire the cheapest possible price
at a highest quality. The entrepreneur may consider the following factors in
the selection of raw materials:
• Cost
• Quality
• Availability
• Credibility of suppliers
• Waste that the raw materials may produce

Describe the 4Ms of operations in relation to the business opportunity

Operations Management refers to the activities, decisions and
responsibilities of managing the resources, which are dedicated to the
production and delivery of products and services. It can contribute to the
success of business by using available resources to effectively produce
products and services in a way that satisfies the customers. Production
Management is important in the business firm (YGOAL 2016):
• It helps the business to achieve all its objectives. Therefore, the firm may
increase its sales.
• It helps the business to satisfy its customers. Therefore, it increases the
firm's reputation, goodwill and image.
• It helps to introduce new products in the market. Therefore, the firm can
develop and offer newer and better quality products.
• It helps the business to support other functional areas in the organization
such as marketing, finance and human resource. Therefore, marketing

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 can find an easier means to sell products and services, finance can get more
funds due to increased sales and human resources can effectively manage
the workforce due to better performance of the production management.
• It helps the business to face competition. Therefore, the firm can produce
products of right quantity, right quality, appropriate price and at the right
time.
• It helps the business to facilitate optimum utilization of resources such as
manpower, machines, methods and materials. Therefore, the firm can meet
the objectives.
• It helps the business to reduce the cost of producing products and services.
Therefore, the firm can achieve cost efficiency objectives.
• It helps the business to expand and grow. Therefore, the firm can earn
higher profits.
• It helps the business to generate employment.
• It helps the business to boost the economy.

Carter's 10 Cs of Supplier Evaluation

• Have you ever established a relationship with a supplier, only to realize,
later, that you'd made the wrong choice?
• For example, you may have found a supplier that offered a good price, but
later realized that its quality standards were low, or that its
communication was unacceptably poor.
• Mismatches between your needs and a supplier's offerings can add costs,
cause delays, and even damage your organization's reputation – for
example, if the equipment or resources supplied are substandard.
• Ray Carter, director of DPSS Consultants, first outlined his Seven Cs of
Supplier Evaluation in a 1995 article in "Purchasing and Supply
Management." He later added three new Cs to the model.
• The table on the next page is used in assessing the suitability of a potential
supplier. This is answerable by YES or NO or üand û mark. The result or
decision may vary based on the importance of each factor in your business.

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 Name of Name of Name of
Carter’s 10 C’s Criteria for Evaluation
Supplier 1 Supplier 2 Supplier 3
Can they give the quantity of
Competency
supplies we need?
Can they provide the ingredients
Capacity
we need?
Can they give assurance for the
Commitment
quality of their products?
Can we trust the safety of the
Control supply they are giving?
Cash Are they financially stable?
Are they selling at a reasonable
Cost price?
Can they keep their product’s
Consistency
quality consistent?
Can their product be applicable
Culture for diverse culture?
Are they running their business
Clean
legally and ethically?
Can we count on them anytime
Communication during the operation of the
business?

SALES BUDGET
It essential that an entity starts with the preparation of sales budget.
Important assumption in preparing a sales budget would be the firm’s sales
forecast. A sales forecast is a prediction of the firm’s sales over a specific period
based on external and internal information.

OCHOS COLLOS
SALES BUDGET
TOR-TUNA
FOR THE 1ST QUARTER: JANUARY-MARCH, 2022
January February March Total
Forecasted Sales (In Units) 910 910 910 2,730
Selling Price Per Unit (Php) 40 40 40 40
Total Sales (Php) 36,400 36,400 36,400 109,200

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PRODUCTION BUDGET—The production budget calculates the number of units of
products that must be manufactured, and is derived from a combination of the sales
forecast and the planned amount of finished goods inventory to have on hand.

OCHOS COLLOS
PRODUCTION BUDGET
TOR-TUNA
FOR THE 1ST QUARTER: JANUARY- MARCH 2023
January February March Total
Expected sales in units 1,560 1,560 1,560 4,680
Product to be manufactured (in units) 1,560 1,560 1,560 4,680
Multiplied by cost per unit (Php) 30.95 30.95 30.95 30.95
Estimated total manufacturing cost
48,282 48,282 48,282 144,846
(Php)

CHAPTER VI
FINANCIAL PLAN

FINANCIAL PLANNING
• It sets out road maps intended to guide, coordinate, and control actions
undertaken by the firm in order to achieve its objectives
• Through financial planning, managers are able to set a clear direction of where
they would want the business to be within a given span of time
• It provides quantitative measures that would aid businesses towards assessing the
viability of their goals and objectives.

Sources of Funds
The common source of funds of small business is their savings, this is where the
capital contribution will come from. Other sources are loan from Banks and Lending
Companies.

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In your business plan this is how you will present this chapter:
6.1 Sources of Funds

NAME OF OWNERS CONTRIBUTIONS

TOTAL AMOUNT OF CONTRIBUTION PHP

Table 6.1 Capital Contributions

6.2 Operating Expenses

OCHOS COLLOS
OPERATING EXPENSES
FOR THE YEARS 2021-2023
2021 2022 2023
Permit and Licenses Php 5,295 Php 4,295 Php 4,295
Rent Expenses Php 27,000 Php 36,000 Php 36,000
Utilities Expenses Php 22,500 Php 30,000 Php 30,000
Supplies Expenses Php 14,000 Php 14,000 Php 14,000
Advertising Expenses Php 1,200 Php 1,200 Php 1,200
TOTAL Php 69,995 Php 85,495 Php 85,495

Table 6.2 Table of Operating Expenses

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6.3 Cost of Goods Sold
OCHOS COLLOS
BUDGETED COST OF GOODS SOLD
TOR-TUNA
2021 2022 2023
st
1 Quarter ----- 84,493.50 114,846
2nd Quarter 48,282 84,493.50 114,846
rd
3 Quarter 48,282 84,493.50 114,846
4th Quarter 48,282 84,493.50 114,846
TOTAL PRODUCTION COST 144,846 337,974 459,384
Table 6.3.1 Cost of Goods Sold (TOR-TUNA)
6.4 Projected Financial Statement
PIKACHOYS FOODHUB
Projected Statement of Comprehensive Income

2021 2022 2023

SALES 1,053,290.00 1,493,500.00 1,893,720.00
Cost of Goods Sold 822,146.00 1,169,415.00 1,424,075.00
Gross Profit 231,144.00 324,085.00 469,645.00
Operating Expenses
Permits & Licenses 5, 000.00 5,000.00 5,000.00
Rent Expense 31,500.00 42,000.00 42,000.00
Utilities Expense 13,500.00 24,000.00 30,000.00
Supplies Expense 2,000.00 1,000.00 1,500.00
Advertising Expense 5,500.00 7,000.00 10,000.00
Total Operating
57,500.00 79,000.00 88,500.00
Expenses
Income before taxes 173,644.00 245,085.00 381,145.00
Taxes 0.00 0.00 0.00
Net Income 173,644.00 245,085.00 381,145.00
Other Comprehensive
0.00 0.00 0.00
Income
Comprehensive Income for
173,644.00 245,085.00 381,145.00
the period
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 ASSIGNMENT 4
1. Research for at least five known business and how did they come up with their names.
2. Choose one and relate it to the characteristics of a business name.

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