Product Development, Operations, and Financial Plan 2. Provides the entrepreneur a window to test the 5.

test the 5. Component test – each component of the product or

performance and specifications of various materials and service must be tested independently to identify
 Product Development service processes. component failures for goods or service failures for
services. Any failure identified must be redesigned and
It is the process of developing, testing, and 3. Helps entrepreneur effectively describe the product or tested again until become full operational and functional
commercializing a product or service with the ultimate service to the product team.
objective of solving the problem of the primary target 6. Competitor’s product/service test – entrepreneur must
market. 4. Elicits respect from key stakeholders and customers, test a similar line of product or the competitor’s product
gives credibility to the entrepreneur. or service itself to compare and get the best practices to
Four Sequential Steps:
be applied to the new product or service.
Testing the Product Prototype
1. Developing a product or service description
Validation of Market Acceptability
 It is a vital process before an actual product or
2. Creating a prototype service is launched to the market. It is the process of finding out if the intended primary
target market will be buying the product or availing the
3. Testing the Prototype  This will uncover the final loopholes that need
service. Market acceptability is a critical factor that the
to be fixed before commercialization.
4. Validating the market entrepreneur must validate before launching the product
or service, because this can strongly suggest if business
 It gives the entrepreneur the leeway to
5. It describes how a product or service works and will be successful or not.
examine and scrutinize the prototype and
how it benefits the customers.
provide feedback as to what can be improved
before the launch.
6. It should directly address the primary target
market in a personal manner using everyday Objective questions that should be answered in the
Testing Methods applied by the Entrepreneur
language. whole process of market acceptability validation:
1. Focus Group Discussion – participants will provide
7. It should highlight the features that will cater to 1. Will primary target market like the product or
relevant insights about the new product or service. Its
the customer’s needs or address customer’s service?
objective is to identify errors, deficiencies, and issues
problems
that may impede the success of the product. 2. Will the primary target market buy the product
8. Realistic superlatives should be used for the or service when it is already in the market?
2. Legality and ethical test – entrepreneur must ensure
product description.
that the product or service complies with all relevant Activities to be performed by the entrepreneur to answer
laws and regulations and has a necessary license or the objective questions:
A Prototype is a preliminary model or sample of a new
permit to operate a particular business.
product or service that is created to test a product
1. Use the most strategic marketing research
concept or service process.
3. Safety test – Entrepreneur must ensure that the tool(FGD, Survey, Observation, Interview,
product is safe to use, safe to be consumed, and safe to Online Survey, E-mail, or a combination of
Advantages of Creating a Prototype
be applied. these research tool) to get the most relevant
1. Enables the entrepreneur to engage in trial and error, answer in the cheapest way possible.
4. Product costing test – entrepreneur must examine
provides room for improvement, and refines the
every stage of the manufacturing process or every 2. Prepare relevant open –ended questions that
functionality of the product design or service process.
process of the service blueprint to evaluate and finalize answer the objectives questions. Do not go
the costs involve. around the bush and be straight to the point.

3. Activities to be performed by the entrepreneur:

 4. 3. Find market experts who also target the
same market but not directly competing with
the entrepreneur.
5. 4. Collate all the data, analyze them, and
prepare a summative report that answers the
objective questions that were mentioned .
The 4 M’s of Operations
The operations plan is an important part of the business
plan because it simply states the details in operating the
business. Operations management controls the
implementation of the business plan. A strong operations
plan should have the four operational aspects.
The 4 M’s of Operations
1. Methods – the process to be followed in
effectively manufacturing or delivering a
product or service.
2. Manpower – the right human resources who
will handle certain business operations.
3. Machines – the technology used in efficiently
operating the business.
4. Materials – to be used in creating a product or
performing a service, which includes supply
chain management.
Methods
 It represents the day to day operations of a
business. It describes how an entrepreneur will
run the business from all facets of the business
such as the manufacturing of goods, service
delivery process, distribution of goods and
services, logistics for delivery of goods, and
inventory management, to name a few.
Manufacturing is the process of translating raw materials
into finished goods that are acceptable to the customer’s
standards. It consists of three elements:
a) Inputs – the materials or ingredients to be used
in creating the product.
b) Process – the transformation phase where inputs
are processed by manpower and machines to
come up with the final product.
c) Output – the final product of the process stage,
which is intended to be sold to target customers.
Manufacturing site is the place where manufacturing
process take place.
Types of Manufacturing site:
1. Home-based – the cheapest and highly flexible
site to start and manufacture products that are
usually manageable to be processed such as
food products and customized clothes.
2. Commercial space for rent – this is advisable if
the business really requires a commercial space
for the processing of goods and if the home
option is not viable anymore. A commercial
space gives the entrepreneur a more specialized
and suited manufacturing site than
manufacturing at home.
3. Commercial space purchase – this option
requires the biggest amount of capital
expenditure, but it also provides the
entrepreneur substantial freedom and flexibility
to design and run the commercial space.
Location – is where the delivery of raw materials
and finished goods will be conducted. The
transportation routes from or to the
manufacturing sites should be efficient, so that
the delivery of raw materials and finished goods
will be seamless.
Two options of Floor Plan:
1. Product-based layout – where the facilities are
prearranged according to the flow of the
manufacturing operations.
2. Process-based layout – where the facilities are
grouped according to their function.
Service delivery process
Service blueprint – a detailed flowchart of the service
business, the blueprint must be relevant to the service
business to minimize wastage.
Bottleneck – a part of the process where there is an
apparent inefficiency and where the customer waits
longer.
Distribution Method
Distribution – the process of bringing the products or
services to customers.
Distributors – are entrepreneur who often buy products
or services to the manufacturers and sell them at a mark
up price to either wholesalers or retailers.
Agents – negotiate with buyers as to how much or how
many are to be sold, so manufacturer will be able to
deliver goods directly to the buyer. Agents get the
commission for every product sold.
Assistance of distributors/agents to the entrepreneur:
1. Sharing industry knowledge, behavior, and
activities of the primary target market,
2. Pertinent rules and regulations imposed by the
government,
3. Best practices in marketing and selling the
product,
4. Best practices in operating the business,
 5. Their respective sticky relationship with business Training people – one of the biggest investments of an 1. Landline phones
associates such as suppliers, financial entrepreneur or a businessman.
institutions, or retailers, and others. 2. Mobile phones
Employee Qualifications
Manpower 3. Laptops and desktop computers
a. Educational background
One of the highest costs od operating a business but is also 4. POS machines
the most instrumental to its success. Having the right b. Work experience
5. Accounting and inventory software
people encompasses a myriad of advantages.
c. Special skills or knowledge
6. Website
Job description – enumerates the duties and
d. Work attitude
responsibilities of the potential employee, including the
Materials
scope, limitations, and terms and conditions of
Job Contract – summarizes the terms and conditions of the
employment Whether the entrepreneur will offer products or cater
candidate’s employment with the business.
services, he has to pinpoint a number of dependable
Job title – the summary of what the employee will do.
Training people – one of the biggest investments of an suppliers of quality raw materials and supplies. The
entrepreneur or a businessman. supplier must have a consistent and sufficient amount of
Compensation and benefit range – it details the potential
raw materials and supplies that can accommodate the
salary and benefits that the employee will get.
demand of the entrepreneur.
Duties – it clearly describe the job that the employee will
Strategies for talent management: Outsourcing – the process of appointing third party
assume with allowance for flexibility, it is usually high level
manufacturer to do the manufacturing operations of the
descriptions only. 1. Providing employees with a very competitive
business.
salary package.
Responsibilities and accountability – it must be
communicated well to the employee so that the he knows 2. Nonmonetary benefits
what to expect with the job.
3. Additional benefits
Work schedule – the specific days and working hours the
employee will perform Machines

Employee Qualifications Described as the “bestfriend” of manpower in producing

goods and offering services. It is not limited to physical
a. Educational background equipment but can also pertain to new technologies that
help business operations become standardized and
b. Work experience
seamless.
c. Special skills or knowledge
The sizes and shapes of the facilities and equipment affect
the entire operations process, so the site must adapt to
d. Work attitude
how big or small the pieces of equipment are.
Job Contract – summarizes the terms and conditions of the
Telecommunications and Information Technology
candidate’s employment with the business.
They are mandatory equipment in business. The
following are the tel. and IT equipment: