Technical Education and Skills Development Authority (TESDA) Director General Secretary Isidro

Lapeña welcomes at least 700 representatives from Technical and Vocational Education and Training
(TVET) providers, Industry Associations, and other stakeholders in this year’s 3rd National Quality TVET
Forum themed “Driving Quality Assurance in TVET in the 4th Industrial Revolution (4IR).”
The 4IR, characterized by the emergence of various smart technologies and digital disruption, impacts
industries and services such that it demands innovations from Technical-Vocational Institutions (TVIs) and
the integration of 21st century skills in TESDA Training Regulations (TRs).   
The forum aims to address challenges in managing quality TVET amidst the onset of the said era (4IR), as
well as its impacts on skills needs and future job profiles.
Divided into two sessions, experts will be sharing their insights on talks such as Quality Assurance for
TVET in the 4IR, Industry Required STEM Skills in the 4IR, Skills to Survive in the Information Age,
TVET in the Age of Digital Economy and 21st Century Skills for the TVET Learner.  
Participants will witness also the TESDA System for TVET Accreditation and Recognition (STAR)
Awards to 131 programs of 53 TVIs.
The STAR Program recognizes TVET programs that have exceeded the minimum requirements of
program registration set by TESDA.
It utilizes four major objective and evidence-based criteria, namely: Governance and Management,
Curriculum Development, Support Services and Program Performance Measures, which are translated into
value points that will correspond to the STAR Level Award of the program.
Among the 131 awardees, 100 will be receiving 1 STAR Level rating, and will be recognized as Centers of
Technical Development.
Meanwhile, 31 TVIs will be receiving 2 STAR Level rating, and will be recognized as Centers of
Technical Proficiency.

https://www.tesda.gov.ph/News/Details/17915

The Technical Education and Skills Development Authority (TESDA) (Filipino: Pangasiwaan sa

Edukasyong Teknikal at Pagpapaunlad ng Kasanayan) serves as the Philippines' Technical Vocational
Education and Training (TVET) authority. As a government agency, TESDA is tasked to both manage and
supervise the Philippines' Technical Education and Skills Development (TESD). Its goals are to develop
the Filipino workforce with "world-class competence and positive work values" and to provide quality
technical-educational and skills development through its direction, policies, and programs.[2]

Predecessor[edit]
Technical-Vocational Education was first introduced to the Philippines through the enactment of
Commonwealth Act No. 3377, or the “Vocational Act of 1927.” [3] On June 3, 1938, the National
Assembly of the Philippines passed Commonwealth Act No. 313, which provided for the establishment of
regional national vocational trade schools of the Philippine School of Arts and Trades type, as well as
regional national vocational agricultural high schools of the Central Luzon Agricultural High School Type,
effectively providing for the establishment of technical-vocational schools around the country.[4]
On June 22, 1963, Republic Act. No. 3742, or “An Act Creating A Bureau of Vocational Education,
Defining its Functions, Duties, and Powers, and Appropriating Funds Therefor” was passed, which
provided for the creation of a Bureau of Vocational Education (BVE). The creation of the BVE led to the
abolishment of the Vocational Education Division of the Bureau of Public Schools. The BVE was created
with the purpose of “strengthening, promoting, coordinating, and expanding the programs of vocational
education now being undertaken by the Bureau of Public Schools.” It was also created “for the purpose of
enhancing the socio-economic program of the Philippines through the development of skilled manpower in
agricultural, industrial and trade-technical, fishery and other vocational courses.”[5]
The Manpower Development Council (MDC) was created by virtue of Executive Order No. 53 on
December 8, 1966, which was issued by President Ferdinand Marcos. The MDC was tasked with
“developing an integrated long-term manpower plan as a component of the overall social and economic
development plan.” Targets which were to be established by the said manpower plan were to be “used by
the Department of Education and the Budget Commission in programming public investments in
education and out-of-school training schemes.”[6]
The MDC was eventually replaced by the National Manpower and Youth Council (NMYC), which was
created by virtue of Republic Act. No. 5462, or the Manpower and Out-of-School Youth Development Act
of the Philippines. The NMYC was placed under the Office of the President, and was charged with
establishing a “National Manpower Skills Center under its authority and supervision for demonstration
and research in accelerated manpower and youth training.” It was also tasked with establishing “regional
and local training centers for gainful occupational skills,” as well as adopting “employment promotion
schemes to channel unemployed youth to critical and other occupations.”[7] Republic Act No. 5462 was
eventually repealed by Presidential Decree No. 422, otherwise known as the Labor Code, on May 1, 1974.
[8]
President Marcos, on September 29, 1972, issued Presidential Decree No. 6-A, or the “Educational
Development Decree of 1972,” which highlighted the government’s educational policies and priorities at
the time. The decree also provided for the “establishment and/or operation, upgrading or improvement of
technical institutes, skills training centers, and other non-formal training programs and projects for the
out-of-school youth and the unemployed in collaboration with the programs of the National Manpower
and Youth Council.”[9]
The 1975 reorganization of the Department of Education, Culture and Sports led to the abolishment of the
Bureau of Vocational Education, along with the Bureau of Public Schools and the Bureau of Private
Schools. In their place, the Bureau of Elementary Education, the Bureau of Secondary Education and the
Bureau of Higher Education were established. The responsibilities of the Bureau of Vocational Education
were absorbed by the newly established Bureau of Secondary Education.[10]
Eventually, the Education Act of 1982 paved the way for the creation of the Bureau of Technical and
Vocational Education (BTVE). The BTVE was tasked to “conduct studies, formulate, develop and
evaluate post-secondary vocational-technical programs and recommend educational standards for these
programs,” as well as to “develop curricular designs and prepare instructional materials, prepare and
evaluate programs to upgrade the quality of teaching and non-teaching staff, and formulate guidelines to
improve the physical plant and equipment of post-secondary vocational-technical schools.”[11]
Establishment of TESDA[edit]

President Fidel V. Ramos signed Republic Act No. 7796, or the "Technical Education and Skills
Development Act of 1994," on August 25, 1994.

The Philippine Congress enacted Joint Resolution No. 2 in 1990, effectively creating the Congressional
Commission for Education or EDCOM. The commission was tasked to review and assess the education
and manpower training system of the country. Among the recommendations of the commission was the
establishment of the Technical Education and Skills Development Authority (TESDA), a government
agency tasked with developing and overseeing the country’s vocational and technical education programs
and policies.[12] The commission further recommended that the new agency be created as a fusion of the
following offices: the National Manpower and Youth Council (NMYC) of the Department of Labor and
Employment (DOLE), the Bureau of Technical and Vocational Education (BTVE) of the Department of
Education, Culture and Sports (DECS), and the Apprenticeship Program of the Bureau of Local
Employment of DOLE. Subsequently, the enactment of Republic Act No. 7796, or the “Technical
Education and Skills Development Act of 1994,” authored by Senator Francisco Tatad led to the
establishment of the present-day TESDA. RA 7796 was signed into law by President Fidel Ramos on
August 25, 1994.[13]
The merger of the aforementioned offices was meant to reduce bureaucratic oversight on skills
development activities initiated by the private and the public sector and to provide a single agency that will
take charge of the country’s technical vocational and training (TVET) system. Hence, a major thrust of
TESDA is the formulation of a comprehensive development plan for middle-level manpower based on the
National Technical Education and Skills Development Plan. This plan provides for a reformed industry-
based training program that includes apprenticeship, dual training system and other similar schemes.[14]
Further reforms[edit]
The National Training Center for Technical Education and Staff Development (NTCTESD) and its
administration were transformed from the authority of the then-Department of Education, Culture and
Sports (DECS) to TESDA by virtue of Executive Order No. 337, which was issued by President Fidel V.
Ramos on May 17, 1996. The transfer was done in accordance with R.A. 7796, which effectively
transferred the DECS' responsibility of administering the technical-vocational education and training to
TESDA. This necessitated the transfer of the administration of the NTCTESD from the DECS to TESDA.
[15]
On September 15, 2004, President Gloria Macapagal-Arroyo issued Executive Order No. 358, which
provided for the "institutionalization ladderized interface between Technical-Vocational Education and
Training (TVET) and Higher Education (HE)."[16] It further mandates that TESDA and the Commission
on Higher Education (CHED) "develop and implement a unified national qualifications framework that
establishes equivalency pathways and access ramps for easier transition and progression between TVET
and higher education. The framework shall include the following mechanisms:"[17]
 National System of Credit Transfer
 Post TVET Bridging Programs
 System of Enhanced Equivalency
 Adoption of Ladderized Curricula/Program
 Modularized Program Approach
 Competency-based Programs
 Network of Dual Sector Colleges and Universities
 Accreditation/Recognition of Prior Learning
 List of TVIs under EO 358
Executive Order No. 75, issued by President Benigno Aquino III on April 30, 2012, designated
the Department of Transportation and Communications (DOTC) as the "single administration in the
Philippines responsible for oversight in the implementation of the 1978 International Convention on
Standards of Training, Certification, and Watchkeeping for Seafarers." Prior to the executive order,
TESDA had the power to issue the Certificate of Competence for Ratings by virtue of Executive Order No.
242, s. 2000.[18]
President Rodrigo Duterte's Executive Order No. 1, issued on June 30, 2016, effectively placed TESDA
and other government agencies under the supervision of the Cabinet Secretary. The executive order
mandates that the agencies mentioned "shall primarily evaluate existing poverty reduction programs and,
if deemed necessary, formulate a more responsive set of programs complementing existing ones,
channeling resources as necessary to reduce both the incidence and magnitude of poverty." Other duties
and responsibilities have also been ascribed to the concerned agencies by this executive order.[19] It was
later placed under the Department of Trade and Industry on October 31, 2018 following the reorganization
of the Office of the Cabinet Secretary.[20]

Benefits[edit]
Graduating from the programs given by TESDA will ensure the trainee a National Certificate from
TESDA Assessment that comes with benefits that include a quality assurance that the graduate has
acquired proper knowledge and an understanding of the task at hand from undergoing a series of practical
and hands-on demonstrations, positive attitudes from interviews with people who contribute to the job and
work projects. Not only that, but the certificate will also guarantee that the graduate has acquired the
values that can help his/her skills needed for the said occupation and for future opportunities that can
follow from the success of the current project.[21]

Current State[edit]
The labor force participation rate (LFPR) of TVET graduates accounted for 74.5% of all graduates.
[22] Graduates of scholar programs, though, had an LFPR of 75.9% than the 71.9% LFPR of regular
TVET-program graduates. In terms of delivery mode, enterprise-based program graduates had the highest
LFPR (89.1%) while community-based programs had the lowest LFPR (71.7%).
The overall employment rate of TVET graduates was 60.9% in 2011. The region having the highest
employment rate is CAR (82.8%), followed by Region VII (74.1%) and IV-B(71.4%). Also, TVET
graduates of scholarship programs had an employment rate of 61.7% as compared to TVET graduates of
regular programs (59.1%). Again, in terms of delivery mode, enterprise-based programs had the highest
employment rate (83.1%) while community-based programs had the lowest (56.4%). Out of all training
providers, TESDA’s graduates had the highest employment rate (67.9%). 39.8% of the employed TVET
graduates had an average monthly income of 5000-9999 pesos while 27.7% are earning more than 10000
pesos. 21.5% are earning less than 5000 pesos a month.
Recently, the unemployment rate among young aged 25–29 years old with tertiary education has been
increasing, especially in European countries like Slovenia.[23] This has been coupled with an increase in
the enrolment rate in vocational and technical education. This has also led to the decreasing share of
unemployed young people with secondary education from 58.0% in 2007 to 51.1% in 2012 along with the
increasing share of unemployed young people with tertiary education from 13.1% to 19.5% in the same
time period. Still, a majority of the people who have completed secondary education move on to tertiary
education. It should also be noted that the percentage of unemployed young people who have completed
vocational education stands at 18.1% while that of those who have completed secondary technical or
general education stands at 33%. Thus, many professionals believe that there is a greater need for
employees with technical or vocational education in the labor market rather than those with general tertiary
education. As it stands, some even say that these people have a greater likelihood of attaining success in
their careers than those with just a college degree.

Programs and services offered[edit]

Technical-Vocational Education and Training (TVET)[edit]

Diagram by TESDA portraying the TVET program as a "2-pronged" strategy" against poverty and
unemployment.

United Nations Educational, Scientific and Cultural Organisation (UNESCO) defines Technical-
Vocational Education and Training (TVET) as the education or training process which involves, in
addition to general education, the study of technologies and related sciences and acquisition of practical
skills relating to occupations in various sectors of economic life and social life that comprises formal
(organized programs as part of the school system) and non-formal (organized classes outside the school
system) approaches.[24]
TESDA is mandated to provide Technical Vocational Education and Training (TVET) in the Philippines.
[25] TVET provides education and training opportunities for students and clients in preparation for
employment. It is also offered to those part of the labor market looking to improve or develop new
competencies to enhance employability in their chosen fields.[25][26]
TVET Training Systems[edit]
TVET is classified into two main systems: the formal system and the non-formal system.[27] The formal
system is a post-secondary technical education of six months to three years which entitles a student or
trainee to a certificate in a specialized field. Programs under the formal system are delivered by both
private and public vocational-technical schools. The non-formal system, on the other hand, consists of a
variety of short-term programs usually up to six months targeting a special group of clientele. This
includes those seeking employment in the government, special-interest
organizations, services and salesmanship, farming, and forestry and fishing.[28]
TVET Clientele[edit]
TVET clientele is primarily composed of high school graduates, secondary school dropouts, and college
graduates and undergraduates looking to gain the necessary skills in various sectors. TVET also considers
part of their targeted clientele those who are unemployed but actively looking for work, Overseas Filipino
Workers (OFWs) returning to the Philippines permanently to work, and those currently employed wanting
to enhance or acquire new skills.[25]
TVET Delivery Modes[edit]
TESDA undertakes direct training provisions in order to provide TVET clients access to the various
Technical Education Skills Development (TESD) programs offered. The following are the four training
modalities:[25][26]

 School-based: Formal delivery by the schools of TVET programs of varying duration of at least a
year but not exceeding three years.
 Centre-based: Provision of short duration non-formal training undertaken in TESDA Regional
and Provincial Training Centers.
 Community-based: Training programs specifically designed to answer the needs for skills training
in the community to facilitate self-employment.
 Enterprise-based: Training programs like apprenticeship, learnership, and dual training which are
carried out within the firms or industries.
TVET Delivery Networks[edit]
There are more than 4,500 TVET providers in the country, around 62% (2,786) of which are private and
38% (1,714) public.[25][26] The Public TVET institutions include 126 Technology Institutes nationwide.
Other public TVET providers include state-owned universities and colleges and local colleges offering
non-degree programs; Department of Education-supervised schools; and local government units and other
government agencies providing skills training programs.[26] TVET funding would depend on the type of
provider. In private TVET institutions, students or trainees pay fees. Public TVET institutions, on the other
hand, are subsidized by the government so the trainees pay only a minimal or no amount for the training.
[26]
Training Programs[edit]
TESDA provides direct training programs which are divided into four distinct training modalities: School-
Based Programs, Center-Based Programs, Community-Based Programs, and Enterprise-Based Programs.
[29]
School-Based Programs[edit]
School-based programs are TVET programs that are directly delivered or provided by TESDA-
administered schools. Currently, there are 57 TESDA-administered schools, 19 of which are agriculture
schools, 7 are fishery schools and 31 are trade schools. School based programs include post-secondary
offerings of varying duration not exceeding three years.
Center-Based Programs[edit]
These are training provisions or programs that are being offered in TESDA Regional and Provincial
Centers throughout the country. There are fifteen (15) Regional Centers and forty-five (45) provincial
centers, adding up to a total of 60 centers that provide center-based programs. Such programs are offered
under selected trade areas in the different regions and provinces of the country.[30]
The TESDA Training Center Taguig Campus Enterprise (TTCTCE) provides advanced technology
training programs that are registered under the Unified TVET Program Registration and Accreditation
System (UTPRAS). The TTCTCE conducts these training programs in partnership with industry
organizations under a co-management scheme in response to a given industry's training requirements.[30]
TESDA is also the implementing agency of three grant assistance projects from the Government of the
Republic of Korea. The Korea-Philippines Information Technology Training Center (KPITTC),
located at the Polytechnic University's Quezon City compound in Novaliches provides training on
computer graphics and animation. Another grant assistance project from the Republic of Korea's
government that is under the implementation of TESDA is the KPITTC located at the Regional Skills
Development Center in Guiguinto, Bulacan.[30]
Enterprise-Based Programs[edit]
Enterprise-based programs are training programs that are being implemented within companies or firms.
There are several programs being offered by TESDA that fall under enterprise-based programs.[31]
The Apprenticeship Program is a training and employment program that involves a contract between an
apprentice and an employer in an occupation that has been approved for apprenticeship. The period of
apprenticeship covers a minimum of four months and a maximum of six months. Only companies with
approved and registered apprenticeship programs under TESDA can hire apprentices.[31]
The Learnership Program, on the other hand, involves practical on-the-job training for pre-approved
learnable occupations, as determined by TESDA. The program must not exceed three months. Only
companies with TESDA approved and registered learnership programs can hire learners.[31]
The Dual Training System involves an instructional mode of delivery for technology-based education and
training in which learning takes place alternatively in two venues: the school or training center, and the
company. One of the strategic approaches on this program is the conversion of selected industry practices/
programs registered under the apprenticeship program into DTS modality. Schools or training centers and
business establishments interested in adopting the dual training system must apply for accreditation with
TESDA.[31]
Community-Based Programs[edit]
TESDA also provides community-based programs, which are primarily offered to those belonging to
marginalized groups. These are intended to expand educational access to those who are unable to access, or
are not accessible, by formal training provisions and programs. The program is also designed to assist
partner agencies such as LGUs, NGOs, people organizations and other agencies and organizations with
regard to their poverty-alleviation and livelihood programs.[32]
Scholarship Programs[edit]
These are programs created to give help and financial assistance to deserving TVET enrollees and trainees
in the country.
Private Education Student Financial Assistance (PESFA)[edit]
The program offers educational scholarships and benefactions to college who are not only qualified but
also deserving of financial assistance. In publicizing and also promoting TVET, it also guides the enrolees/
beneficiaries on what choice of career they plan on pursuing and the skills needed to be successful in these
jobs which are a hot pick in the economy. Established through Section 8 of Republic Act No. 8545, the
PESFA also gives assistance to institutions and establishments that gave a respectable amount of effort in
the program by supplying a fair amount of enrolees to their respective courses.[33]
Training for Work Scholarship (TWSP)[edit]
Launched in May 2006 by the Office of the President, the Training For Work Scholarship (TWSP) aims to
give out solutions to the where the lack in skills in sectors that relate with one another such as metals and
engineering, along with construction, tourism many more. Beginning in 2008 as a part of the regular
budget, this program also looks to give out more opportunities for employees through incentives and
proper training programs that link both jobs internationally and domestically. Also, its goal is to
reinforce TVET institutions in making the quality of their delivery programs better in order to meet the
requirements of a certain job.[33]
Bottom-up Budgeting (BUB)[edit]
The program seeks to increase access to local service delivery taking into consideration the development
needs of municipalities through a budget planning process that focuses on demands. It also aims to
strengthen the government's accountability in public services. Participating agencies are expected to ensure
implementation of priority through the BuB planning & budgeting processes.[33]
Special Training for Employment Program (STEP)[edit]
The Special Training for Employment Program (STEP) plans to focus on the specific skills needed by the
communities in order to promote employment. This tackles self-employment and service-oriented activities
to be more specific. In this program, the objective is to provide skills and training opportunities to not only
enhance the enrolees in the barangay area but to also make the enrolees more adept and keen of their skills
needed to be ready for the job. Those who are a part of this program receive free training, competency
assessments, tool kits and training allowance worth sixty pesos per day during the training period.[33]

Other functions[edit]
Job matching[edit]
TESDA finds and trains people for employment. It seeks jobs by identifying specific job requirements
through the use of international market intelligence reports. For jobs in partnership with Non-government
organizations, social welfare agencies and institutions, school community and organizations, TESDA finds
people who it deemed suitable to be trained. TESDA then trains these people through the TVET program.
TESDA developed this matching process to find the best job-skills fit, as well as increase productivity of
training programs by assisting those who wish to go into micro business, small and medium enterprises of
entrepreneurship.[34]
TESDA Core Business[edit]
Programs and services are created and designed to provide direction for TVET in the Philippines. Some of
these include the creation of plans and policies through the generation and dissemination of reliable
information and research for the TVET sector.
TESDA's plans and policies include the following:
 National Technical Education Skills Development (TESD) Plan
 National Technical Education Skills Development (TESD) Research Agenda
 Philippine Technical Vocational Education and Training (TVET) System
 Philippine Technical Vocational Education and Training (TVET) Outlook
 Labor Market Intelligence Reports
 List of Technical Vocational Education and Training (TVET) Studies
 Technical Vocational Education and Training (TVET) Statistics

Organizational structure[edit]
TESDA Board[edit]
The following are mandated by Republic Act No. 7796 to serve as the members of the TESDA Board:[35]

 The Secretary of Labor and Employment as Chairperson

 The Secretary of Education, Culture and Sports (now the Secretary of Education) and
the Secretary of Trade and Industry as Co-Chairpersons
 The Secretary of Agriculture, the Secretary of Interior and Local Government, and the Director-
General of the TESDA Secretariat as members.
R.A. 7796 also provides additional guidelines pertaining to the TESDA Board's membership:
"In addition, the President of the Philippines shall appoint the following members from
the private sector: two (2) representatives, from the employer/industry organization, one
of whom shall be a woman; three (3) representatives, from the labor sector, one of whom
shall be a woman; and two (2) representatives of the national associations of private
technical-vocational education and training institutions, one of whom shall be a woman.
As soon as all the members of the private sector are appointed, they shall so organize
themselves that the term of office of one-third (1/3) of their number shall expire every
year. The member from the private sector appointed thereafter to fill vacancies caused
by expiration of terms shall hold office for three (3) years."[35]
Additionally, the President of the Philippines is authorized "to revise membership of the TESDA Board,
whenever the President deems it necessary for the effective performance of the Board’s functions through
an administrative order."[35]
Secretary Silvestre H. Bello III, as the Secretary of Labor and Employment, currently serves as the
Chairperson of the TESDA Board. Secretary of Education Leonor M. Briones and Secretary of Trade and
Industry Ramon M. Lopez both serve as the Co-Chairpersons of the TESDA Board. The TESDA Board
currently has 22 members, who are representatives of the Government Sector, Labor Sector, Employer
Sector, Business and Investment Sector, and the Education and Training Sector of the Philippines.[36]
TESDA Secretariat[edit]
The TESDA Secretariat, by virtue of R.A. 7796, is tasked "to establish and maintain a planning process
and formulate a national technical education and skills development plan in which the member-agencies
and other concerned entities of the Authority at various levels participate;"[35] among other duties and
responsibilities. It is headed by a Director-General, who serves as the Chief Executive Officer of the
TESDA Secretariat. In this capacity, the Director-General exercises general supervision and control over
TESDA's technical and administrative personnel.[35] The current Director-General of TESDA is Secretary
Isidro S. Lapeña.[36][37]
According to R.A. 7796, the Director-General is assisted in his or her duties by two Deputy Directors-
General who are appointed by the President of the Philippines upon the recommendation of the TESDA
Board. One of the Deputy Directors-General is responsible for Vocational and Technical Education and
Training, and one is responsible for Policies and Planning.[35] Currently, however, TESDA has four
Deputy Directors-General:

 Rosanna A. Urdaneta, Deputy Director General for Policies and Planning

 Alvin S. Feliciano, Deputy Director General for TESD Operations
 Rebecca J. Calzado, Deputy Director General for Partnerships and Linkages
 Gaspar S. Gayona, Deputy Director General for Communities and Local Government Units
Services[38]
 , Deputy Director General for Communities and Local Government Unit Services[38]
Aside from the Deputy Directors-General, the Director-General is also assisted by a Chief of Services for
Administration who is appointed by the TESDA Board.[38]
Aside from the aforementioned offices, there are also other offices under the TESDA Secretariat.[35] Each
office is headed by an Executive Director, who is appointed by the Director-General.[36]
 Planning Office
 Partnerships and Linkages Office
 National Institute for Technical Education and Skills Development
 Qualifications and Standards Office
 Certification Office
 Administrative Service
 Financial and Management Service
There are also Regional Offices, which are under the direct authority of the Director-General. These
regional offices are headed by Regional Directors who are directly appointed by the President of the
Philippines. The Regional Offices are further divided into the Provincial TESDA Offices, which are
headed by Skill Development Officers.[35]

ENTERPRISE BASED PROGRAMS

Enterprised-Based Programs are training program being implemented within companies/firms. These
programs can be any of the following:

 Apprenticeship Program is a training and employment program involving a contract

between an apprentice and an employer on an approved apprenticeable occupation.
Generally, it aims to provide a mechanism that will ensure availability of qualified
skilled workers based on industry requirements. The period of apprenticeship covers a
minimum of four months and a maximum of six months. Only companies with approved
and registered apprenticeship programs under TESDA can be hire apprentices.

Objectives:

To help meet the demand of the economy for trained manpower;

To establish a national apprenticeship program through the participation of

employers, workers and government and non-government agencies; and  
To establish apprenticeship standards for the protection of apprentices.


 Learnership Program is a practical training on-the-job for approved learnable occupations, for a
period not exceeding three months. Only companies with TESDA approved and registered
learnership programs can hire learners. 
 Dual Training System is an instructional mode of delivery for technology-based education and
training in which learning takes place alternately in two venues: the school or training center and
the company. 

One of the strategic approaches on this program is the conversion of selected industry practices/
programs registered under the apprenticeship program into DTS modality. 

Objectives: To strengthen manpower education and training in the Philippines by

institutionalizing the DTS as an instructional delivery system of technical and vocational
education and training (TVET).

Target Beneficiaries: 
 Trainees/ Students
 Companies
 Schools
 Training Centers
 Training Institutions
  IBs/Industry Associations
 LGUs
 NGOs
 GOs
 Parents
 Teachers
 Trainers

Benefits of the Dual Training System: 

FOR STUDENTS:
 Quality training and proper skills, work attitude and knowledge
 Enhanced employability after training
 Better chances for career mobility
 Allowance for transportation and other expenses.
FOR COMPANIES:
 Workers developed according to the company's needs
 Guaranteed highly skilled and productive workers
 Savings on production cost through tax incentives
FOR SCHOOLS:
 Less need for sophisticated equipment and facilities
 Responsiveness to industries' needs
 Maximized use of equipment and facilities
 Better employment opportunities for its graduates
 Enhanced public image
 Tax exemption for imported equipment 

Coverage of DTS:

Participants in the dual training system include duly accredited:

 Public and private educational institutions/training centers

 Agricultural, industrial and business establishments

DTS Accreditation Procedures

Schools or training centers and business establishments interested in adopting the dual training
system must apply for accreditation with TESDA. 

Accreditation is necessary to ensure quality training and prevent abuses in program

implementation. 

To qualify for accreditation, the school or training center must have the necessary facilities,
equipment, qualified teachers, and training plan. 

To become a DTS cooperator, a company must apply for accreditation through an accredited
school. The company accepting trainees must have the necessary equipment and workshop areas
for hands-on training, qualified trainors, and training plan. 
 

Enterprise-Based Training Program

There are three training modalities being implemented in partnership with companies/establishments.
These are:

a. Apprenticeship Program – a training and employment program involving a contract between an

apprentice and an employer on an approved apprenticeable occupation. Generally, it aims to provide a
mechanism that will ensure availability of qualified skilled workers based on industry requirements. The
period of apprenticeship covers a minimum of four (4) months to a maximum of six (6) months. Only
companies with approved and registered Apprenticeship Program under TESDA can hire apprentices.

b. Learnership Program – is a practical training on-the-job for approved learnable occupations for a period
not exceeding three (3) months. Only companies with TESDA approved and registered Learnership
Program can hire learners.

c. Dual Training System – The DTS is a unique and most suitable training modality as the training takes
place in the school/training center and in the partner-company within a period of one and a half to two
years. It is a type of training modality that employs an active partnership between the business enterprises
and technical vocational schools, thereby ensuring a steady supply of best job-fit and ready workers to the
industry. Its legal basis is RA 7686, or the DTS Act of 1994.

Under the DTS, the training is tailor-fit based on the actual needs of the accredited partner industries,
including their employment requirements (physical and behavioral domain of workers). Participating
companies are assured of savings and returns in their investments thru tax incentives and less labor costs
apart from having desirable and competent workers who are trained in accordance to their needs,
standards, and facilities.

Benefits for the Company:

a. DTS minimizes recruitment expenses. It ensures a ready pool of manpower. It helps reduce/ lower
turnover.
b. DTS helps save in production, maintenance and administrative cost and it also aids in the reduction of
training expenses.
c. DTS helps companies avail of tax incentives. The Dual Training System Law provides a host of benefits
to participating schools and companies. Tax deduction from taxable income for Dual Training expenses,
donations and contributions is granted to participating establishments. Schools/ training centers are entitled
to tax- free importation of equipment, apparatus and materials.

Benefits for the School/Training Center:

a. The DTS ensures that an updated curriculum is maintained as there is an active participation from the
industry players. The training plan, which forms part of the curriculum, is designed according to feasibility
and effectiveness in its delivery.
b. DTS also helps in resource optimization. This means the full use of school and company facilities and
resources allows the admission of more trainees. While the DTS trainees are in their in-plant training, the
equipment and facilities can be used by other students.
c. There is regular feedback to and from the industries thru industrial coordinator (school-based staff).
He/she monitors the performance of the trainees in the workplace and makes sure that the right skills are
learned according to the training plan.
d. There is advent exposure to the latest technology. The trainees’ access to the expertise and resources
available and the well-coordinated delivery of instructional activities in learning venues, guarantees quality
and relevant training aside from their readiness to the expected working environment.

Benefits for the DTS Trainees:

a. Trainees develop proper work attitudes. Aside from technical skills, the trainees also learn proper work
habits, and how to get along well with the company staff and workers.
b. They are able to apply the theories learned in school. The general and occupation-related theoretical
instruction provided by the school is complemented by their training in the workplace. It also helps them
cope with the real world of work.
c. DTS trainees are equipped with appropriate work knowledge, skill and attitudes making them highly
competitive and in demand in the labor market. The technology used in a way dictates the likely
knowledge, skills and attitudes to be possessed by the trainees.
d. Most of all, DTS trainees become responsible and productive workers. DTS ensures that trainees
undergo systematic development of trade skills and knowledge making them productive and responsible
community members.

School Based Training Program

All post-secondary, technical vocational courses registered under the Unified TVET Program Registration
and Accreditation System (UTPRAS) are being delivered by a more than 500 private and public technical
vocational institutions (TVIs) in Central Luzon. The registered courses number more than 2,600. These
schools and their course offerings are being monitored following the UTPRAS guidelines, relevant
education laws, and the implementing rules and regulations under the Philippine TVET Qualification
Framework (PTQF).

These refer to training provisions being undertaken in the TESDA Regional (15) and Provincial (45)
Training Centers totaling 60 in selected trade areas in the different regions and provinces in the country.

 List of TESDA Regional and Provincial Training Centers

 Training Calendar
 TESDA Women Center 

 TESDA Training Center Taguig Campus Enterprise (TTCTCE)

The TTCTCE conducts and advanced technology training programs registered under UTPRAS in
partnership with industry organizations under a co-management scheme in response to the training
requirements of the industry. These programs generate income to support TESDA Development Fund
(TDF). The TESDA board approves the training fees. From the training fees, at an agreed sharing scheme
contained in a MOA, the industry partners assume all the training expenses, repair and maintain the
training facilities of the center. They also bring the equipment to augment TESDA's delivery system.

Click to download TCCTCE Brochure.

 Korea-Philippines Training Centers

TESDA is the implementing agency of three grant assistance projects from the Government of the
Republic of Korea. The Korea-Philippines Information Technology Training Center (KPITTC) at the
Quezon City Polytechnic University compound in Novaliches hopes to become the premier information
and communication technology training center in the Asia-Pacific region by producing competent IT
practitioners to service the local and global manpower needs. KPITTC Quezon City will also provide
training on computer graphics and animation.  
Another grant assistance is th e KPITTC located at the Regional Skills Development Center in Guiguinto,
Bulacan.

Also part of this bilateral cooperation projects with the Korea International Cooperation Agency (KOICA),
Quezon City Government for KPITTC Quezon City, Bulacan Provincial Government for KPITTC
Bulacan, and Davao City Provincial Government for KorPhil Davao.

Community-based Training for Enterprise development Program is primarily addressed to the poor and
marginal groups, those who cannot access, or are not accessible by formal training provisions. They have
low skills, limited management abilities, and have few economic options. They have no access to capital –
most of them are unqualified for formal credit programs. The program goes further than just mere skills
training provision. It is purposively designed to catalyzed the creation of livelihood enterprises that shall be
implemented by the trainees, immediately after the training. Likewise, it is designed to assist partner
agencies such as LGUs, NGOs, people organizations and other agencies organizations with mission to help
the poor get into productive undertakings to help themselves and their communities.

Community Based Training Program

This refers to the training programs that are specifically designed to answer the needs of  the barangays.
The  training programs being conducted are basic capability building courses that aim to enhance the
citizens productivity thru productive livelihood endeavors and self-employment. The target beneficiaries
include the poor and under privileged residents such as out of school youth, women, and unemployed
adults; marginalized groups (subsistence farm workers, fisher folks), indigenous people, and even the
members of the informal sector.

Community-based training programs (CBT) utilizes the convergence approach in its implementation. Its is
carried out in partnership with local government units, non-government groups, civic, religious, and
people’s organizations, politicians, and other national government agencies.

TESDA provides technical assistance in  CBT. it provides the standard training module/s and related
equipment, supplies and materials; recommends qualified trainer/s;  approves fitness of training venue; co-
sign the training certificates; conduct competency assessment and certification, conduct monitoring and
evaluation; and if possible, facilitate the provision of starter tool kits to graduates.

In view of the need to provide equitable access and provision of TESD programs to the growing TVET
clients, TESDA continues to undertake direct training provisions. There are four training modalities
school-based, center-based, enterprised-based and community-based. These are being done with TESDA’s
infrastructure in place – 57 TESDA administered schools, 60 training center, enterprized-based training
through DTS/apprenticeship and community-based training in convergence with the LGU’s.

 School Based Program

 Center Based Programs
 Community Based Programs
 Enterprise Based Programs

TESDA SUPPORTS TRAINING PROVISION

TESD creates opportunities for people to be responsible and become productive citizens. The need to
provide and make accessible relevant TESD compels TESDA to undertake direct training activities at the
same time support training activities undertaken by other key players in the TESD sector.

TESDA Technology Institutions are composed of 125 schools, regional, provincial and specialized training
centers nationwide which undertake direct training activities for TESDA. The absence of an institution in
the area which can provide people equitable access to TESD necessitates TESDA to undertake direct
training activities. These TTIs also serve as venues to test new training schemes and are used as
laboratories for new technology.

Among TESDA’s specialized training centers are the following:

TESDA Women’s Center (TWC) seeks to advance the economic status of women through training,
entrepreneurship development, gender sensitive policies, programs and projects and research and
advocacy. It was established through a grant from the Government of Japan.

Language Skills Institute (LSI ) serves as TESDA’s facility for language programs specifically for
workers intending to work abroad. The LSI conducts training on workplacecommunication on the language
of the country of the worker’s destination. There are 35 LSI nationwide offering different language courses
which include English, Korean, Mandarin, Japanese and Spanish.

Korea-Philippines IT Training Centers are grant-assisted projects from the Government of the Republic
of Korea. These KPITTCs are located at the Polytechnic University in Novaliches, Quezon City and at the
Regional Skills Development Centers in Guiguinto, Bulacan and Tibungco, Davao City, respectively.

The Importance of a Business Plan

 A few years ago, a software company surveyed its users to determine how helpful a business plan was to
success. The results were reviewed by the University of Oregon for validation, and seem to point to the
improved outcomes for those with business plans:

 Of those who created plans, 64 percent grew their businesses, compared to 43 percent of
companies that hadn’t yet finished a plan.
 Those who created plans were more likely to secure a loan or investment capital.
A Babson College study discovered a written business plan wasn’t all that important — unless you were
trying to raise money. In cases involving raising capital or getting a loan, businesses with plans were more
likely to get the funding they needed.

Consider the company Coffee House, Inc. The founders are excited about providing a coffee shop for
customers using their own brand of coffee. They plan to grind the beans at the coffee house to provide
fresh coffee, as well as sell some of their product in bulk to customers who want to brew at home. They
can also sell accessories to help customers make the most of their coffee experience, at the shop and at
home.

Coffee House isn’t sure about how to proceed or measure success. A business plan can take ideas from the
founders, put them to paper and provide a roadmap to take action.

Times You’ll Be Glad You Have a Business Plan

Any business hoping to raise funds, either with the help of loans or through venture capital, needs a plan. If
you show up at the bank to ask for a loan, all the decision-makers will want to see a business plan. Venture
capitalists also like to know that you are organized and informed and that you have a strategy to help them
realize a return on their investment.

However, you can benefit from a business plan beyond raising money. Even if you aren’t currently looking
for funding, you’ll be glad to have a direction when you are trying to figure out what your next step should
be. The market analysis section can help you clarify your efforts so you focus on just the right thing to find
your niche and exploit it.

A good business description can help you stay on track, while sales strategies can remind you of how you
plan to increase your revenue. Your business plan is about organizing and planning ahead so you have the
 lay of the land and are ready to build your business in a way that makes sense. When you face uncertainty
and you aren’t sure where to go next, your business plan can provide you with the guidance you need.

7 Elements of a Business Plan

Your well-thought-out business plan lets others know you’re serious, and that you can handle all that
running a business entails. It can also give you a solid roadmap to help you navigate the tricky waters. The
seven components you must have in your business plan include:

1. Executive Summary
2. Business Description
3. Market Analysis
4. Organization Management
5. Sales Strategies
6. Funding Requirements
7. Financial Projections
All of these elements can help you as you build your business, in addition to showing lenders and potential
backers that you have a clear idea of what you are doing.

1. Executive Summary

The executive summary is basically the elevator pitch for your business. It distills all the important
information about your business plan into a relatively short space. It’s a high-level look at everything and
should include information that summarizes the other sections of your plan.

One of the best ways to approach writing the executive summary is to finish it last so you can include the
important ideas from other sections.

Coffee House, Inc.’s executive summary focuses on the value proposition of the business. Here’s what
they’ve written into their plan:
 “Market research indicates that an increasing number of consumers in our city are interested in the
experience of coffee. However, there isn’t a viable place for them to meet and learn locally. Instead, they
only have access to fast coffee. Coffee House, Inc., provides a place for people to enjoy fresh-ground
beans and truly enjoy their cup.

“Coffee House, Inc., provides a hub for a subculture of coffee, offering customers a place to purchase
their own coffee-grinding supplies in addition to enjoying the modern atmosphere of a coffee house.

“The founders of Coffee House, Inc., are coffee aficionados with experience in the coffee industry and
connections to sustainable growing operations. With the experience and expertise of the Coffee House
team, a missing niche in town can be fulfilled.”

2. Business Description

This is your chance to describe your company and what it does. Include a look at when the business was
formed, and your mission statement. These are the things that tell your story and allow others to connect to
you. It can also serve as your own reminder of why you got started in the first place. Turn to this section
for motivation if you find yourself losing steam.

Some of the other questions you can answer in the business description section of your plan include:

 What is the business model? (What are your customer base, revenue sources and products?)
 Do you have special business relationships that offer you an advantage?
 Where are you located?
 Who are the principals?
 What is the legal structure?
 What are some of the market opportunities?
 What is your projected growth?
Answering these questions narrows your focus and shows potential lenders and backers how you’re
viewing your venture.

3. Market Analysis
This is your chance to look at your competition and the state of the market as a whole. Your market
analysis is an exercise in seeing where you fit in the market — and how you are superior to the
competition.

As you create your market analysis, you need to make sure to include information on your core target
market, profiles of your ideal customers and other market research. You can also include testimonials if
you have them.

Part of your market analysis should come from looking at the trends in your area and industry. Coffee
House, Inc., recognizes that there is a wide trend toward “slow” food and the idea of experiencing life. On
top of that, Coffee House surveyed its city and found no local coffee houses that offered fresh-ground
beans or high-end accessories for do-it-yourselfers.

Coffee House can create an ideal customer identity. The ideal customer is a millennial or younger member
of Gen X. He or she is a professional and interested in experiencing life and enjoying pleasures. The ideal
customer probably isn’t wealthy, but is middle class, and has enough disposable income to have a hobby
like coffee. Coffee House appeals to professionals who work (and maybe live) in a downtown area. They
meet their friends for a good cup of coffee, but also want the ability to make good coffee at home.

4. Organization and Management

Use this section of your business plan to show off your team superstars. In fact, there are plenty of
indications that your management team matters more than your product idea or pitch.

Venture capitalists want to know you have a competent team that has the grit to stick it out. You are more
likely to be successful and pivot if needed when you have the right management and organization for your
company.

Make sure you highlight the expertise and qualifications of each member of the team in your business plan.
You want to impress.

In the case of Coffee House, Inc., the founders emphasize their connections in the world of coffee,
particularly growers that use sustainable practices. They can get good prices for bulk beans that they can
brand with their own label. The founders also have experience in making and understanding coffee and the
business. One of them has an MBA, and can leverage the executive ability. Both have worked in marketing
departments in the past, and have social media experience, so they can highlight their expertise.

5. Sales Strategies

How will you raise money with your business and make profits a reality? You answer this question with
your sales strategy. This section is all about explaining your price strategy and describing the relationship
between your price point and everything else at the company.

You should also detail the promotional strategies you’re using now, along with strategies you hope to
implement later. This includes your social media efforts and how you use press releases and other
appearances to help raise your brand awareness and encourage people to buy or sign up for your products
or services.

Your sales strategy section should include information on your web development efforts and your search
engine optimization plan. You want to show that you’ve thought about this, and you’re ready to implement
a plan to ramp up sales.

Coffee House needs to make sure they utilize word of mouth and geolocation strategies for their
marketing. Social media is a good start, including making Facebook Live videos of them demonstrating
products and how to grind beans. They can encourage customers to check in when visiting, as well as offer
special coupons and promotions that activate when they come to the house to encourage sales.

6. Funding Requirements

Here’s where you ask for the amount of money you need. Make sure you are being as realistic as possible.
You can create a range of numbers if you don’t want to try to pinpoint an exact number. Include
information for a best-case scenario and a worst-case scenario. You should also put together a timeline so
your potential funders have an idea of what to expect.

It can cost between $200,000 and $500,000 to open a coffee house, and profit margins can be between 7
and 25 percent, depending on costs. A well-run coffee house can see revenues of as much as $1 million a
year by the third year, according to the Chronicle. Some of the things Coffee House, Inc., would include in
its timeline are getting premises, food handlers’ permits and the proper licenses, arrange for regular supply
and get the right insurance. How long these items take depend on state and local regulations. No matter
your business, get an idea of what steps you need to take to make it happen and how long they typically
take. Add it all into your timeline.

7. Financial Projections

Finally, the last section of your business plan should include financial projections. Make sure you
summarize any successes up to this point. This is especially important if you hope to secure funds for
expansion of your existing business.

Your forward-looking projections should be based on information about your revenue growth and market
trends. You want to be able to use information about what’s happening, combined with your sales
strategies, to create realistic projections that let others know when they can expect to see returns.

Even though it can be time-consuming to create a business plan, your efforts will be rewarded. The process
is valuable for helping you identify potential problems, as well as help you plan ahead. You’ll be more
organized and better prepared for success.

This paper was prepared for presentation at “Entrepreneurship in a Global Economy,” a conference
sponsored by the Western New England College’s Law and Business Center for Advancing
Entrepreneurship, held in Springfield, Massachusetts, on October 17, 2008.
Purpose
This paper outlines the most important issues and opportunities facing small business owners and
entrepreneurs in this election year. While it does not delve into policy solutions, the next administration
will almost certainly need to address many of them, regardless of who wins the presidency.
Challenges
The paper outlines five major challenges that small business owners will face in the coming years.
•  Strengthening the Overall Economy. Small businesses continue to struggle in the economic downturn,
and it will be important for policy leaders to get the economy moving again. Small businesses will be a
large part of that, as entrepreneurs will spur new innovation and employment in the coming years. These
firms will continue to be the job generators that we have become accustomed to. With that said, industries
will recover from the downturn in different ways, and some industries have clearly been hit harder this
time than in past business cycles.
•  Taxes and Regulation. Business conditions have a fundamental impact on entrepreneurial activity, and
small business owners frequently cite tax and regulatory policies as a concern. Moving forward, it will be
important for policymakers to consider the impact of taxes and regulations on small business owners and
would-be entrepreneurs.
•  Cost and Availability of Health Insurance.Health insurance premiums have risen substantially in this
decade. The Kaiser Family Foundation reports that the cost of employee-sponsored health insurance plans
has increased 119 percent since 1999. It is also well-documented that employees at smaller firms are less
likely to be offered health care coverage. Finding ways to control the cost of providing health insurance to
employees and increasing coverage will remain a priority for our national and state leaders.
• Attracting and Retaining a Quality Workforce. Small businesses must compete forlabor with their larger
counterparts. This is more dif- ficult in light of the disparity in total compensation, especially benefits, and
the result is greater employee turnover. Demographic trends in the coming years might also exacerbate
these challenges.
•  Global Competition. American businesses face competitors on a number of fronts, both at home and
abroad. The U.S. government has worked to increase the ability of our firms to compete overseas by
lowering trade barriers. There are also some structural disadvantages that work to make our products less
competitive, and many companies have reduced their costs by outsourcing some processes and tasks
abroad. While insourcing also exists, many of these issues—especially the assertion that firms are
“outsourcing jobs”—remains controversial; yet, firms argue that these are necessary strategies for survival
in a global marketplace.
 
Opportunities
The paper also discusses five opportunities that small businesses will hopefully pursue in the next decade.
•  Increased Investments in Technology and Innovation. There are strong linkages between innovation and
new firm formation, and policymakers fully understand that risk-taking entrepreneurs have positive
impacts on regional economic development. With many regional officials seeking the “next big thing” that
will drive their local and regional econo- mies for years to come, there is an appreciation that small
businesses are leading the way toward new inventions, processes, and products. Such innovations are vital
to our economic growth, and they will provide the tools to make our economy more competitive in an
increasingly globalized marketplace.
•  “Economic Gardening” and Grooming Local Entrepreneurs. Proponents of “economic gardening,”
which has communities plow the dollars that would have been spent on luring big businesses to their town
to promote local small businesses instead, argue that grooming existing firms can ultimately lead to greater
payoffs in terms of job creation.
•  Pursuing New Markets Overseas. One of the strengths in our current economic climate is the export
sector, and international trade represents an opportunity for small businesses. Historically, many small
business owners have not been proactive about trading with foreign partners. While 28.9 percent of the
known export value stemmed from small firms, entrepreneurs have yet to fully tap the potential for growth
in the export arena.
•  Promoting Business Ownership among Selected Demographic Groups. Women and minorities have been
extremely entrepreneurial over the past few years—a trend that is expected to continue. One of the driving
factors for minorities has been the influx of immigrants coming to this country. Recent studies show a
strong connection between immigration and high-technology entrepreneurship, suggesting enormous
benefits for embracing these new citizens. In addition, many of the veterans returning home from Iraq and
Afghanistan, are likely to devote themselves to entrepreneurship, as previous generations of veterans have
done. Policymakers should find ways to promote greater business ownership among each of these groups.
 • Advancing Education and Training. Education and training are important as there are strong linkages
between entrepreneurship and human capital. Moreover, small business owners devote significant
resources to training their workforce. These firms are able to increase their labor productivity and reduce
their labor turnover. In this way, small business owners should look at education not just as a means of
retraining their workers, but also as methods of building new skills, developing new human talent, and
preserving employee morale. Failure to do so might result in a reduced competitive position for the most
talented employees.
 The challenges of growing a business - and how to
meet them

Growing businesses face a range of challenges. As a business grows, different problems and
opportunities demand different solutions - what worked a year ago might now be not the best
approach. All too often, avoidable mistakes turn what could have been a great business into an also-
ran.

Recognising and overcoming the common pitfalls associated with growth is essential if your business
is to continue to grow and thrive. Crucially, you need to ensure that the steps you take today don't
themselves create additional problems for the future. Effective leadership will help you make the most
of the opportunities, creating sustainable growth for the future.

This guide highlights the particular risks and mistakes that most commonly affect growing businesses
and outlines what you can do about them.

 Keeping up with the market

 Planning ahead
 Cash flow and financial management
 Problem solving
 The right systems
 Skills and attitudes
 Welcoming change

Keeping up with the market

Market research isn't something you do as a one-off when you launch your business. Business
conditions change continually, so your market research should be continuous as well. Otherwise you
run the risk of making business decisions based on out-of-date information, which can lead to
business failure.

The more you succeed, the more competitors notice - and react to - what you are doing. A market-
leading offer one day may be no better than average a few months later.
Apparently loyal customers can be quick to find alternative suppliers who provide a better deal.

As products (and services) age, sales growth and profit margins get squeezed. Understanding where
your products are in their lifecycles can help you work out how to maximise overall profitability. At the
same time, you need to invest in innovation to build a stream of new, profitable products to market.

Information sources

Published information can provide useful insights into market conditions and trends. As a growing
business, your own experience can be even more valuable.

You should be able to build up an in-depth picture of what customers want, how they behave and
which of your marketing approaches work best.
Taking the time to talk to key customers pays off. Your suppliers and other business partners can be
important sources of market information. You should encourage your employees to share what they
know about customers and the market. Effective IT systems can also make it easier to share and
analyse key information such as customers' purchasing behaviour and preferences.

You may want to carry out extra research as well - for example, to test customer reaction to a new
product. You might do this yourself, or use a freelance researcher or market research agency.

Planning ahead

The plan that made sense for you a year ago isn't necessarily right for you now. Market conditions
continually change, so you need to revisit and update your business plan regularly. See the page in
this guide on keeping up with the market.
As your business grows, your strategy needs to evolve to suit your changed circumstances. For
example, your focus is likely to change from winning new customers to building profitable relationships
and maximising growth with existing customers. Existing business relationships often have greater
potential for profit and can also provide reliable cash flow. Newer relationships may increase turnover,
but the profit margins may be lower, which may not be sustainable. See the page in this guide on cash
flow and financial management.

At the same time, every business needs to be alert to new opportunities. There are obvious risks to
relying solely on existing customers. Diversifying your customer base spreads those risks.

Following the same business model, but bigger, is not the only route to growth. There are other
strategic options such as outsourcing or franchising that might provide better growth opportunities.

It's important not to assume that your current success means that you will automatically be able to
take advantage of these opportunities. Every major move needs planning in the same way as a new
business launch.
Watch out for being too opportunistic - ask yourself whether new ideas suit your strengths and your
overall vision of where the business is going. Bear in mind that every new development brings with it
changing risks. It's worth regularly reviewing the risks you face and developing contingency plans.

Cash flow and financial management

Good cash flow control is important for any business. For a growing business, it's crucial - cash
constraints can be the biggest factor limiting growth and overtrading can be fatal

.Making the best use of your finances should be a key element in business planning and assessing
new opportunities. With limited resources, you may need to pass up promising opportunities if
pursuing them would mean starving your core business of essential funding.
Every element of working capital should be carefully controlled to maximise your free cash flow.
Effective credit management and tight control of overdue debts are essential. You may also want to
consider raising financing against trade debts.

Good stock control and effective supplier management tend to become increasingly important as
businesses grow. Holdings of obsolete stock may become a problem that needs periodic clearing up.
You may want to work with suppliers to reduce delivery cycles, or switch to suppliers and systems that
can handle just-in-time delivery.

Planning ahead helps you anticipate your financing needs and arrange suitable funding. For many
growing businesses, a key decision is whether to bring in outside investors to provide the equity
needed to underpin further expansion.

Problem solving
New businesses often run in perpetual crisis mode. Every day brings new challenges that urgently
need resolving and management spends most of their time troubleshooting.

As your business grows, this approach simply doesn't work. While a short-term crisis is always urgent,
it may not matter nearly as much as other things you could be doing. Spending your time soothing an
irritated customer might help protect that one relationship - but focusing instead on recruiting the right
salesperson could lay the foundations of substantial new sales for years to come

.As your business grows, you also need to be alert to new problems and priorities.

For example, your business might be increasingly at risk unless you take steps to ensure your
intellectual property is properly protected.
If you are focusing on individual marketing campaigns, you might need to devote more resources to
developing your brand.

Identifying the key drivers of growth is a good way of understanding what to prioritise.

A disciplined approach to management focuses on leading employees, developing your management

team and building your business strategy. Instead of treating each problem as a one-off, you develop
systems and structures that make it easier to handle in the future.

The right systems

All businesses produce and rely on large volumes of information - financial records, interactions with
customers and other business contacts, employee details, regulatory requirements and so on. It's too
much to keep track of - let alone use effectively - without the right systems.

Changes to laws, regulations and the business environment can pose a risk to
Fortum if not identified and managed effectively. The same applies to changing
views of our main stakeholders.

Operating power and heat generation plants, circular economy services and
waste management as well as use, storage and transportation of fuels and
materials can have adverse effects on the environment and expose personnel to
safety risks. We assess environmental and safety risks according to the ISO
14001 and OHSAS 18001 or ISO 45001 standards and are ready to operate in
exceptional and emergency situations.

Environmental, health and safety (EHS) risks as well as social risks related to
Fortum’s supply chain are evaluated through supplier qualification, internal and
external audits and risk assessments.

If you have read ‘Zen and the Art of Motorcycle Maintenance” by

Robert Pirsig, you will know what “quality” is – not as a
characteristic, but as an inherent value. To embed that value of
quality into sustainability is by far the biggest challenge any
company in any sector can face. We can produce huge
sustainability reports with huge reams of data lacking quality.
But what good is that?

We need to understand that the sustainability challenge is more

of quality than of quantity.
WATER

Welcome NSW planning reform...Pls

add recycled water
 Read now

One, sustainability cannot sit in a silo or in isolation. To be most

effective, it needs to be integrated within the business model
where functional areas within the company have to pass through
the sustainability check-point.

Two, we keep hearing the importance of senior leadership buy-in

for sustainability to be a success in an organization. That’s true
to kick start the initiatives initially but the buy-in soon needs to
seep deep down into the culture so that sustainability not only
survives but thrives despite the leadership change.

Three, the challenge is not technological as much as political.

This hinders the uptake of cross-sector sustainability thinking.

But where there are challenges, there are also opportunities. So

here’s a list of 9 real challenges and the innovation
opportunities.

Challenges & Opportunities

1. The challenge is to find new ways of capturing values and
income streams. But it’s also an opportunity to create
service-led business models rather than product-oriented
ones.
2. The challenge is to develop a sustainable product portfolio
via design for environment strategies. But it is also an
opportunity to use Biomimicry, Dematerialization and
Cradle to Cradle thinking in product development.
3. The challenge is to bring a culture change within the
organization and across the entire sector. But it is also an
opportunity to frame the genesis of sustainability thinking
in a particular sector.
 4. The challenge is to communicate sustainability initiatives
to various stakeholders. But it is also an opportunity to
become open to scrutiny and thus building further trust.
5. The challenge is compliance with disclosures, norms and
standards. But it is also an opportunity for innovative
technologies and frugal engineering.
6. The challenge is to define industry specific metrics and the
necessary tools to measure and improve. The opportunity
is to forge partnerships with players that once were outside
the scope of enterprise thinking.
7. The challenge is to create an environmental accounting
balance sheet because of its complexity with lot of grey
areas in between. The opportunity is to understand your
firm’s negative as well as positive external impacts.
8. The challenge is to incorporate sustainable behaviour into
employee compensation. The opportunity is the inevitable
culture change.
9. The challenge is to get the supply chain on board to change
towards more sustainable business practices. The
opportunity is the future value generated because of the
cascade effect.

Collaboration across sectors is going to be the key in future. I

had blogged in my earlier post about the need to reward not any
single company on sustainability, but rewarding multiple
companies across sectors that come together for a common
sustainability goal. Challenges will always be there. The question
is whether we are able to convert them into opportunities for
sustainable growth.

Pankaj Arora blogs at Linking Sustainability.

Responsibilities and tasks can be delegated as your business grows, but without solid management
information systems you cannot manage effectively. The larger your business grows, the harder it is to
ensure that information is shared and different functions work together effectively. Putting the right
infrastructure in place is an essential part of helping your business to grow.

Documentation, policies and procedures also become increasingly important. The informality that
might work with one or two employees and a handful of customers simply isn't practical in a growing
business. You need proper contracts, clear terms and conditions, effective employment procedures
and so on.

Many growing businesses find using established management standards one of the most effective
ways of introducing best practice. Quality control systems can be an important part of driving
improvements and convincing larger customers that you can be relied on.
Investing in the right systems is an investment that will pay off both short and long term. You benefit
every day from more effective operations. If you ever decide to sell the business, demonstrating that
you have well-run, efficient systems will be an important part of proving its value.

Skills and attitudes

Entrepreneurs are the driving force behind creating and growing new businesses. All too often, they
are also the people holding them back.

The abilities that can help you launch a business are not the same as those you need to help it grow.
It's vital not to fool yourself into valuing your own abilities too highly. The chances are that you'll need
training to learn the skills and attitudes required by someone who is leading growth.
To grow your business, you need to learn to delegate properly, trusting your management team and
giving up day-to-day control of every detail. It's all too easy to stifle creativity and motivation with
excessive interference. As the business becomes more complex, you also need to develop your time
management skills and learn to focus on what's really important.

As your business grows, you may need to bring in outsiders to help. You'll want to delegate
responsibility for particular areas to different specialists, or appoint a non-executive director or two to
strengthen your board. As you start tackling a new opportunity, someone who has experience of that
activity can be vital.

For many successful entrepreneurs, learning to listen to - and take - advice is one of the hardest
challenges they face. But it may also be essential if you are going to make the most of your
opportunities. Some entrepreneurs, recognising their own limitations, even appoint someone else to
act as managing director or chairman.

Welcoming change
 Complacency can be a major threat to a growing business. Assuming that you will continue to be
successful simply because you have been in the past is very unwise.

Regularly revisiting and updating your business plan can help remind you of the changing market
conditions and the need to respond to them. See the page in this guide on planning ahead.

An up-to-date plan helps you identify what action you need to take to change your business and the
way it operates, for example:

 Changing to suppliers who can grow with you and meet your new priorities. As your business
grows, consistent quality and reliability may be more important than simply getting the cheapest offer.
 Renegotiating contracts to take account of increased volume.
 Training and developing employees. Your own role will also evolve as the business grows.
See the page in this guide on skills and attitudes.
 Making sure that you keep up to date with new technologies.

You need to be fully committed to your strategy, even if it takes you out of your comfort zone. This may
involve hard decisions - for example making employees redundant or switching business away from
suppliers you have become friends with. But unless you're prepared to do this, you risk putting your
business at a dangerous competitive disadvantage.
Original document, The challenges of growing a business - and how to meet them, © Crown copyright
2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Québec by Info entrepreneurs

Getting involved in cause-based marketing is nowadays a priority for

businesses, as brands that ‘do good’ through corporate social
responsibility are continuing to increase in popularity. This month’s
issue of Admap, WARC’s monthly thought leadership report,
explores sustainability: opportunities and challenges for brands.
A challenge that marketers can no longer ignore, Admap presents ten
articles by experts from across the globe who share their knowledge
and advice on this vital topic.
Julia Wilson, Vice president, global responsibility & sustainability,
Nielsen, looks at how Sustainable shoppers buy the change they
want to see in the world, through identifying the forces of change
driving the sustainability movement, the environmental challenges
impacting people around the world and how governments and
corporations are responding. This condensed version of Nielsen’s
report revealed that 81% of global respondents feel strongly that
companies should help improve the environment, matching an upward
trend in corporate sustainability and proving that companies will need
to ensure they are putting consumer needs at the centre of their strategy
if they want to stay relevant.
According to David Droga, founder and chairman, Droga5, “Too
many brands don’t want to offend anybody, so they try to take a stand
for something but effectively they stand for nothing.” In Building
brands in a transparent age, he argues that brands must get behind
something that’s true to themselves, the category they’re in, what they
believe and what they can contribute to, while ensuring they avoid
aligning with a popular cause before having fixed such issues within
their own organisation.
Rachel Barton, Masataka Ishikawa, Kevin Quiring and Bill
Theofilou, Accenture Strategy explain Why purpose is key to
competitive agility. Accenture’s global survey of nearly 30,000
consumers found that 62 percent of customers want companies to take
a stand on current and broadly relevant issues like sustainability,
transparency or fair employment practices. These expectations for
brand alignment also present an opening for companies to demonstrate
their competitive agility. The opportunity lies in building more
authentic and profitable relationships with customers.
In Tackling global challenges through cause-related marketing:
How brands should promote their support to social
causes, Benedetta Crisafulli, Jaywant Singh and La Toya
Quamina investigate how consumers respond to guilt-arousing
messages in cause-related advertising and what level of guilt appeal
intensity is most effective in cause marketing campaigns. Their
empirical research revealed that “consumers do not identify with the
advertised brand if exposed to intense, ‘in-your-face’ guilt-arousing
messages” and, consequently, the authors advise brands to
communicate their genuine motives, ensure cause-brand compatibility
and be realistic about the outcomes.
Changing people’s behaviour to be more environmentally and socially
responsible is a huge challenge. In Saving the planet nudge by
nudge: Using behavioural economics to create effective
communications for a sustainable future, Crawford Hollingworth
and Sarah Murray of The Behavioural Architects reveal how
behavioural economics can provide strategies for effective
communications that go beyond shifting attitudes to altering
behaviours.
Fiona Ball, Group Head of responsible business, Sky, notes how
telco Sky has the unique opportunity to connect with millions of people
and help share important, change-driven messages in Sustainability
across the business at Sky. She details how, in 2017, Sky realised the
huge impact that single-use plastic waste was having on the world’s
oceans, which led to the launch of Sky Ocean Rescue, an initiative that
vowed to make the entire business single-use plastic free by 2020.
In Sustainability and recycling-by-design, Mark Curtis, Chief
client officer, Fjord, examines the circular economy, which focuses
on minimising waste and making the most of resources by keeping
them in use for as long as possible. He notes that “applying circular
economy principles at scale could bring an estimated savings of £523
billion for European companies alone”, therefore designing for
ecosystems must be at the heart of rethinking how organisations
approach the supply chain.
In How mainstream eco-brands can suffer at the shelf, Stacy
Wood, Stefanie Robinson and Morgan Poor argue mainstream
brands that advertise their greenness probably won’t perform well
compared to niche green brands who “may be seen as more
authentically able to focus on environmental friendliness without
sacrificing performance”. The authors draw on research which states
that while green brands are popular in the marketplace, consumers
often see a trade-off between a product’s get-the-job-done performance
and its moral, environmental friendliness.
In 2019's post-plastic landscape, brands will need to move beyond
simplistic messaging and token gestures and embrace systemic change
says Duncan Baizley, Senior commissioning editor, WGSN,
in Sustainability and the consumer in 2019. He unpacks three of the
seven sustainability trends that were identified in WGSN’s
Sustainability and the Consumer 2019 report: corporate action lagging
behind consumer sentiment, zero tolerance for waste and non-
recyclable packaging causing a barrier to purchase.
Today’s modern consumer wants the brands they buy to have a
positive impact on the world and, Chris Arnold, founder, Creative
Orchestra, argues in Why doing good is good for business, that
brands are responding in different sectors and through different
strategies to meet these new demands.
WARC subscribers can access a deck which summarises the expertise
and advice from all our authors. And look out for Q&A videos with
some of our authors.