ENTREP REVIEWER 7.

Development skill required

8. Quality criteria
4Ms of Operation 9. Quality tolerances
10. Quality method
Operations Plan – an important part of the 11. Quality skills required
business plan because it simply states the details 12. Quality responsibilities
of operating the business.
TYPES OF PRODUCT
Operations Management – controls the
implementation of the business plan. Convenience product – lowest risk and lowest
effort products where either none or very small
MANPOWER decision-making is made by target consumers
❖ should be listed according from the before buying the products.
managerial position, supervisory 1. Staple goods – rice, sugar, and other
position to the staff commodities
2. Impulse goods – have no buyer loyalty
Qualification Standard involved and prices of different brands are
1. Manpower – refers to the personality mostly at par because there is no perceived
required to a worker’s traits, manners, product differentiation.
values, appearance
2. Experience – refers to the length of Perceived goods/products – consumers have
working experience in relation to the job specific preferences for brands or suppliers but
criteria. are willing to make substitutions when necessary
3. Academics – refers to the workers’
academic qualifications or the educational PRODUCT SATISFYING FEATURES
attainment required to perform the job better 1. Design – can improve the marketability
of the product through its design and
MACHINE appearance
❖ Without the proper equipment, you will not 2. Product colors – it is the customer’s
be able to perform the needed tasks rejection or acceptance of the product.
efficiently. 3. Product Quality – set of features and
attributes of a product or service that
METHOD determine its ability to satisfy human
❖ Conversion of raw materials into finished needs.
product (manufacturing) 4. Product Warranties – state where the
❖ system and step by step process in the buyer is assured that the product meets
business the specifications stated in the product
labels.
MATERIALS
❖ direct and indirect or consumable PROTOTYPE
materials. ● help add value to a project as well as
❖ specifications, quantity needed, and the credibility
schedule of delivery should be clearly ● draft version of a product that allows you to
stated. explore your ideas and show the
❖ Reliability of the supplies should be intention behind a feature
assured, and single source should be
avoided. Patent – a government authority or license
conferring a right or title for a set period,
Product Description and Prototype especially the sole right to exclude others from
making, using, or selling an invention.
PRODUCT DESCRIPTION 1. Utility patent - protects the function and
● marketing copy that explains what a operation of an item.
product is and why it’s worth purchasing 2. Ornamental design patent - only covers
● supply customers with important the appearance of the product
information about the features and
benefits of the product Service Description, Labels, and Raw Materials

The Structure of Product Description: Services - rental of goods, alteration or repair of

1. Identifier goods owned by consumers, and personal services
2. Title or topic 1. Rented Goods Service - consumer rented
3. Purpose or aims the facility or products of the sellers in a
4. Composition certain period of time.
5. Derivation
6. Format and presentation
 2. Owned Goods Service - Repair and BUSINESS MODEL
maintenance services rendered by the ➔ describes how the business will generate
sellers to the products of the customer. revenue and support financial
3. Non-Good Service - Personal service on projection/s
the part of the seller; most common are ➔ describing the importance of the business
the expertise and profession of the seller. in gaining profit and sales
➔ two primary levers of a company’s
SERVICE DESCRIPTION business model are pricing and costs
➔ Captures the functional and ➔ abstract representation of an
non-functional characteristics of a organization
service in a processable format. ➔ used to describe and classify
➔ Describing a service and the type of context businesses, especially in an
information in a comprehensive, entrepreneurial setting
unambiguous manner
➔ Descriptions of the functional and REVENUES
nonfunctional properties of the service, 1. Forecasting - calculating or predicting
service interfaces, and the legal and usually as a result of study and analysis
technical constraints of available pertinent data.
➔ Information about your business, contact 2. Revenue - total income produced by a
details, etc given source, a property expected to yield
large annual revenue, the gross income
LABELLING - part of the product that carries returned by an investment.
information of its features and attributes;
description of a certain services that the BUILDING FINANCIAL FORECAST
company can offer. 1) Fixed Costs/Overhead – cost that does
not change with an increase or decrease
1) Brand Label - Simply the brand alone that in the amount of goods or services
is applied to the product or package. produced or sold. (rent, utility bills, phone
(Clothing has labels that could be seen bills, accounting, bookkeeping)
inside the collars) 2) Variable Costs – costs that change as the
2) Descriptive Label - gives objective quantity of the good or service that a
information about the product’s use/s business produces changes (Cost of
construction, care, performance and Goods Sold, materials and supplies,
other pertinent features. (food ingredients, packaging)
medicines, canned goods) 3) Direct Labor Costs – wages or salaries
3) Grade Label - product judge quality with paid to employees who physically
letters, number or words. It contains produce products. (customer service,
product expiry dates, the content values direct sales, direct marketing)
and other features. (medicines, vitamins,
milk) KEY RATIOS IN FORECASTING
1. Gross margin – total direct costs to total
RAW MATERIALS - unprocessed and basic revenue during a given quarter or given
material that is used to produce goods, finished year.
products, energy, or intermediate materials 2. Operating profit margin – profitability or
which are feedstock for future finished products. performance ratio that reflects the
percentage of profit a company produces
Set Criteria in Choosing a Supplier from its operations
1. Reliability – State of being reliable.
2. Quality – a degree of excellence.
3. Value for Money – the lowest price does
not guarantee the best value for money.
4. Suppliers should deliver on time.
5. Financial security – the supplier must be
assured that the company has sufficiently
strong cash flow to deliver what the
company wants and it needs.
6. A partnership approach – a strong TYPES OF EXPENSES
relationship will benefit both producer and A. Fixed Costs – expenses that remain the
supplier. same every month. (rent, fixed salaries,
utilities, insurance, phone, internet)
Develop Business Model B. Variable Costs – expenses that change
every month, depending on your sales
volume. (cost of the goods sold, packaging
costs, sales, cost of labor, marketing)
 ASSETS - Debit Entries
PROFITS LIABILITY & OWNER’S EQUITY - Credit Entries
➔ excess of returns over expenditures in a
transaction THREE ELEMENTS OF ACCOUNTING
➔ the excess of the selling price of goods EQUATION
over their cost Assets – resources that a business owns
➔ net income usually for a given period of Examples: Cash, land, inventories,
time; accounts receivable, equipment
➔ reflected in reduction in liabilities, Liabilities – claims of external parties from the
increase in assets, and/or increase in business (debts)
owner’s equity Examples: Accounts Payable, Notes
➔ returns, proceeds, or revenue, as from payable
property or investments. Equity – residual claims or net assets of
owner/s of a business
BOOKKEEPING - recording of financial Examples: Capital and Income
transactions, and is part of the process of
accounting in business.

BOOKKEEPING SYSTEMS
1. Single-entry bookkeeping - uses only
income and expense accounts, recorded
primarily in a revenue and expense
journal
2. Double-entry bookkeeping system - at FINANCIAL STATEMENTS
least two accounting entries are required ➔ provide the detail of the entity’s financial
to record each financial transaction. information
entries may occur in asset, liability, equity, ➔ written records that convey the business
expense, or revenue accounts. activities and the financial performance
of a company
DAYBOOK - descriptive and chronological
(diary-like) record of day-to-day financial FINANCIAL PLAN
transactions also called a book of original entry ➔ capital investment and sources of funding
the operation of the business
PETTY CASH BOOK - record of small-value ➔ show financial projections over a period
purchases before they are later transferred to of one year and five year program
the ledger and final accounts ➔ helps in comparing the costs and benefits
over time to determine whether a project
JOURNALS - formal and chronological record of is profitable or not.
financial transactions before their values are
accounted for in the general ledger as debits PROJECTED FINANCIAL STATEMENTS
and credits 1) The Projected Income Statement - shows
the revenues, cost of goods sold or cost
LEDGERS - permanent summary of all amounts of sale, operating expense which
entered in supporting journals which list categorized into two types:
individual transactions by date marketing/distribution expenses and
administrative/office expenses,
TRIAL BALANCE - the balance of all ledgers is 2) The Projected Statement of Cash Flows -
compiled into debit and credit account column reflects the sources and uses of cash
totals that are equal and cash equivalent.
3) The Projected Balance Sheet or
BUSINESS TRANSACTION - activity or event that Statement of Financial Position - shows
can be measured in terms of money and which the financial position of the enterprise as
affects the financial position or operations of of the given period of time.
the business entity.
ASSETS - resources controlled by the entity as
BASIC ACCOUNTING EQUATION a result of past events and from which future
economic benefits are expected to flow to the
enterprise.

CURRENT ASSETS - provide economic benefits

for a period of one year or the normal operating
cycle
Cash and cash equivalents, marketable
securities, accounts receivable, inventories
NON-CURRENT ASSETS - company’s long-term BUSINESS IMPLEMENTATION
investments that have a useful life of more than ➔ process of executing a plan into practice
one year ➔ establishing structures and activities
Property, Plant & Equipment, Long-term needed to introduce a business into the
investments, Intangible assets marketplace
➔ responsibility of all the members of the
LIABILITIES - present obligation of an organization
enterprise arising from past events, the
settlement of which is expected to result in an IMPORTANCE OF BUSINESS IMPLEMENTATION
outflow embodying economic benefits. 1. Change – implementation of a plan brings
about change meant to help improve the
CURRENT LIABILITIES - economic obligations company or solve a problem
that are payable within one year or normal 2. Organizational Development – involves all
operating cycle employees in implementing changes;
Trade accounts and notes payable, Accrued workers will feel a sense of ownership and
expense payable, Unearned Income or loyalty to the company
Revenue, Income Tax Payable 3. Increased Cooperation – business
implementation can increase
NON-CURRENT LIABILITIES - economic interdepartmental cooperation.
obligations that are due after a year or more. 4. Clear Priorities – based on due dates,
Long-Term Bank Loan Payable, Bonds client needs, financial concerns, worker
Payable needs or logistics.
5. Moving Forward – when business fails to
Interpret Financial Statements: Financial Analysis implement and execute its strategies
properly, it fails to move forward and
FINANCIAL ANALYSIS - process of evaluating grow.
businesses, projects, budgets, and other
finance-related transactions to determine their BUSINESS IMPLEMENTATION STRATEGIES
performance and suitability 1) Get Staff and Management Involved
2) Invest in Training
FINANCIAL STATEMENT ANALYSIS 3) Consider Outside Factors
➔ selecting related data from financial 4) Open Communication
statements to evaluate the entity’s financial
position and operating performance and BUSINESS RECORDS
predict the outcome of future operations. ➢ documents (hard copy or digital) that
➔ assist the users in the decision making records business dealing.
process. ➢ includes meeting minutes, memoranda,
employment contracts, and accounting
TYPES OF FINANCIAL ANALYSIS source documents.
➢ must be retrievable at a later date so it
(1) VERTICAL ANALYSIS (COMMON-SIZE can be accurately reviewed as required.
APPROACH)
❖ looking at various components of the IMPORTANCE OF KEEPING GOOD RECORDS
income statement and dividing them by 1. Monitor the progress of the business -
revenue to express them as a percentage can show whether the business is
❖ determines the size or proportion of an improving or not and what changes the
item in the financial statements in relation need to make.
to the total 2. Prepare the financial statements - can
❖ Serve as a guide in the management of the help in dealing with the bank or creditors
resource allocation policy. and help manage the business.
3. Identify sources of income - it will help to
(2) HORIZONTAL ANALYSIS (COMPARATIVE separate business from non- business
APPROACH) receipts and taxable from non-taxable
❖ taking several years of financial data and income.
comparing them to each other to 4. Keep track of the deductible expenses -
determine a growth rate. greatly needed when preparing the tax
❖ determine if a company is growing or return.
declining and identify important trends. 5. Keep track of the basis in property - will
be used to figure the gain or loss on the
Business Implementation: Records and Operations sale, exchange, or other disposition of
property.
Implementation - process of executing a plan or 6. Prepare the tax returns
policy so that a concept becomes a reality 7. Support items reported on tax returns
SPECIFIC TYPES OF ACCOUNTING RECORDS

(1) JOURNALS
A. Sales Journal - used to record company's
sales.
B. Purchase Journal - used to record
company's purchase.
C. Cash Receipts Journal - used to record
company's cash receipts.
D. Cash Payments Journal - used to record
company's payments in cash.
E. General Journal - used to record
company's transaction mentioned above.

(2) LEDGERS
A. Accounts Receivable Ledgers - contain
company's individual trade with
customers (accounts).
B. Accounts Payable Ledgers - contain
company's individual accounts with
creditors.
C. Plant Ledgers - contain company's list of
all fixed assets.

BUSINESS OPERATION
➔ everything that happens within an
organization to keep it operating and
earning money
➔ Elements: process, staffing, location, and
equipment or technology.

BUSINESS OPERATIONS ELEMENTS

1. Process – important because of its impact
on productivity and efficiency. Processes
done manually that can be done quicker
with software.
2. Staffing – Staffing depends on the
processes made. Small business; few
people (generalists), Large company; many
people (specialists)
3. Location – more important to certain
types of businesses than to others and the
reason for the location will vary.
4. Equipment or technology – needed for
optimum business operations will often
have an impact on location.

GANTT CHART
● commonly used for tracking project
schedules, and they are especially useful
in project management
● illustrate and allow you to know what
needs to be done, and when it needs to
be done.
● able to show you additional information
regarding the different tasks or sections
of a project