SHS

ENTREPRENEURSHIP
Module 1
INTRODUCTION TO BUSINESS PLAN
PREPARATION

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ENTREPRENEURSHIP

Module 1: Introduction to Business Plan Preparation

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Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

Development Team of the Module

Writer: Marijo S. Balin

Editor: Cynthia C. Competente

Reviewers: Edwin L. Mias

Christie L. Alvarez

Illustrator/ Layout Artist: Jaypee M. Ignacio

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I. Title of Material/Introduction:

INTRODUCTION TO BUSINESS PLAN PREPARATION

This module covers the entrepreneurial activities that must be

undertaken immediately prior to the opening of small business and during the
business operation.

II. Objectives:

At the end of this lesson, the learner should be able to implement the
business plan. Specifically, the learner must be able to:

1. Define business plan,

2. Specify the different sections of the business plan, and
3. Identify the information included in the Introduction section of the
business plan.
4. Compare and contrast business plan and feasibility study
5. Give the importance of the business plan

III. Vocabulary List:

Business - refers to the organized efforts and activities of individuals to

produce and sell goods and services for profit.

Business Plan - is a detailed and integrated written document that describes

the various activities involved in opening and operating a new
entrepreneurial venture.

Entrepreneur – refers to a person who strongly advocates and correctly

practices the concepts and principles of entrepreneurship in
operating and managing the self-owned entrepreneurial venture.

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 Entrepreneurship – is the art of observing correct practices in managing and
operating a self-owned, wealth-creating business enterprise by
providing goods and services that are valuable to the customers.

Feasibility – the possibility that can be made, done, or achieved, or is

reasonable.

Corporation - is a legal entity created by individuals, stockholders, or

shareholders, with the purpose of operating for profit.

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IV. Pre-Test:

Multiple Choice. Write the letter of your answer.

1. Which of the following BEST described a business plan?

a. A gallery of photos that explains the location and construction
of the business
b. A written plan that is a description of all the aspects of the
business and includes the business's goals
c. A collection of plans that are combined from different
business and then analyzed and compared to your business
d. A list of guidelines that tell successful business's how to run
their company in order to make a profit.

2. What are the advantages of creating a business plan?

a. To secure financing
b. Allows the entrepreneur to focus on what they want to
accomplish
c. To set better objectives and benchmarks
d. All of the above

3. Who should prepare the business plan?

a. Anyone c. Someone on the business
b. Entrepreneur d. Stakeholder

4. What section of the business plan can we find the Proposed Name
of the Business, Address of the Business, Name of the Owner or
Owners, Description of the Business, Location of the Business,
Funding Requirement and Source?
a. Introduction
b. Organizational Plan
c. Production Plan
d. Operation Plan

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 5. Which of following is the LEAST factor to be considered when
deciding on the location of the proposed business?
a. Distance from the sources of raw materials, labor, and utilities
b. Peace and order situation
c. The geographic and climatic conditions
d. Proximity to the house of the owner of the business

V. Learning Activities:

1. Perform Activity #1 – FOUR PICS, ONE WORD!

2. Read the definition of a business plan and know the reasons why you need

to prepare a Business Plan for small business.

4. Read the comparison between Business Plan and Feasibility Study.

5. Identify the Major Parts of the Business Plan and be familiar of its content

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 Activity #1 FOUR PICS, ONE WORD!

What is/are the word/s being described by the group of four pictures?

1. 4.

2. 5.

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1. To help you with critical decisions
2. To iron out the kinks
3. To avoid the big mistakes
4. To prove the viability of the business
5. To set better objectives and benchmarks
6. To communicate objectives and benchmarks
7. To provide a guide for service providers
8. To secure financing
9. To better understand the broader landscape
10. To reduce risk

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Guided Questions:
1. What are some of the tests that need to be conducted before putting up a
business?
2. What is the difference between Business Plan and Feasibility Study?
3. Who should prepare a business plan?

There is another written document that must be prepared and is equal

importance as the business plan. This is the feasibility study which serves as the
forerunner of the business plan.

Two Major Tests to be Conducted every time a New Business Idea is Created
1. Test of Possibility
2. Test of Feasibility

The test of possibility on the new business should have a positive result, so that
the test of feasibility or viability will be conducted.

Business Plan versus Feasibility Study

The primary objective of the feasibility study is to determine whether the

proposed business is feasible or not in all areas. If the outcome of the feasibility study
is positive, then the entrepreneur prepares the business plan.

The content and structure of the business plan are almost the same as those
of the feasibility study. The data shown in the feasibility study are the same set of data
presented or used in the business plan. Nonetheless, the business plan presents a
more detailed discussion of how the business will be undertaken and operated.

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MAJOR PARTS OF THE BUSINESS PLAN
There is no universally accepted standard format or structure of the business
plan.

1. Introduction
2. Executive Summary
3. Environmental Analysis
4. Business Description
5. Organizational Plan
6. Production Plan
7. Operation Plan
8. Marketing Plan
9. Financial Plan
10. Appendix

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Introduction

The introduction presents the general perspective of the business. It may

consist of one to two pages. It includes, among others, the following sections:

1. Proposed Name of the Business

2. Address of the Business
3. Name of the Owner or Owners
4. Description of the Business
5. Location of the Business
6. Funding Requirement and Source

In case the consulting team prepares the business plan for prospective owners
or investors, the section Statement of Confidentiality is added as the last section.

Proposed Name of the Business

The formulation and drafting of the proposed business name is not as simple as it
sounds. It is a delicate and important entrepreneurial task. Remember that the name
of the business may exist in the market for the many years. Careful and in-depth
planning is of prime importance.

The proposed business name must:

1. Reflect the business identify and image,
2. Promote the philosophical values and culture that the business
values the most,
3. Profess the brand identity of the product, and
4. Attract or influence the target costumers

At least three suggested trade names must be submitted to the department of

Trade and Industry for approval and registration.

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Address of the Business

It is important that the address of the Business is correctly written because all
business correspondence is mailed to the business address. Raw materials and other
manufacturing supplies are also shipped by the seller to the designated business
address.

Nowadays, it is also necessary for the business to have an e-mail address to facilitate
electronic communication between the business and the customers, suppliers,
creditors, and other significant parties.

Name of the Owner

The name of the owner must be properly stated. In a sole proprietorship, there is only
one owner. In case the venture is a partnership, the names of the partners, including
the extent of their liabilities, must be indicated. For example, if a partner’s must be
properly mentioned.

For business ventures that will operate as a corporate entity, the names, nationalities,
and addresses of the incorporators must be given. Incorporators are persons who
originally formed the corporation.

Description of the Business

A brief description of the business must include information about the type of
product or service that the business intends to produce or provide. It may include a
brief information about the ultimate mission, vision, and objectives of the business.
The other products or services that the business plans to produce or provide must also
be mentioned in the description of the business.

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Location of the Business

There are no rigid rules in the selection of the business location since several
variables affect the selection of the business location . The basic entrepreneurial
consideration is to place the proposed business in a strategic location that will assure
competitive advantage.

What is the difference between the sections Address of the Business and Location
of the Business?

The former simply states the exact business address. No additional description is
provided to highlight the exact business address. The latter indicates the reason/s for
the selection of the location. In case the processing plant is not within the vicinity of
the business, its exact location must be described.

The following factors should be considered when deciding on the location of the
proposed business:

1. Proximity to the target customers

2. Distance from the sources of raw materials, labor, and utilities
3. Availability and cost of transportation
4. Peace and order situation
5. Presence of direct competitors
6. The geographic and climatic conditions

Funding Requirement and Source

The estimated total initial cost of the business venture must be clearly indicated. It
should include the projected breakdown or allocation of the total cost, e.g., how much
will b for building, fixtures, equipment, supplies, and working capital. This section also
presents the source or sources of funds. The initial cost of the investment may be
provided solely by the owner or owners or partly by the owner and creditors. The
estimated period to settle the funding source provided by the creditors must also be
mentioned.

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VI. Practice Tasks

Practice Task 1 - WHO’S WHO? ENTREPRENEUR X OR Y?

Consider the following situation.

Entrepreneur X

Entrepreneur X put up a coffee shop immediately in his

barangay. He thought of an idea that early bird catches the worm.
He eventually hired his friends and ordered stocks for his coffee
shop business.

Entrepreneur Y

Entrepreneur Y is pl anning to open a bakery shop in his

place. He gathered first information from the residence of his
place whether what kind of bread they love to eat.

Questions:

1. Among the two entrepreneurs, who do you wanted to be?

Why?
2. What is/are the risks to be taken by each entrepreneur?
3. What do you think the importance of business planning is?

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 Practice Task 2 - JUSTIFY ME.

Write True if the statement is correct. Otherwise write False and state
your reason briefly/change the word/s that make it false.

1. The process of determining the profitability of the business is

considered a test of possibility.
2. After the preparation of the business plan, the entrepreneur
prepares the feasibility study of the business.
3. The business plan is entirely different from the feasibility study.
4. The feasibility study is more detailed than the business plan.
5. One of the major parts or sections of the business plan is the
marketing research.
6. The executive summary is usually shown as the last part of the
business plan.
7. One of the sections in the introduction of the business plan is the
address of the business.
8. The funding source and requirements are usually shown as a part
of the business description.
9. The name or names of the owner or owners ,of the proposed
business are considered very delicate information. Hence, they
must not be included in the business plan.
10. The business plan is a mixture of facts and assumptions.

Practice Task 3 – TELL ME A STORY

Cite a true story that you have known wherein the importance of
making a business plan before the implementation was needed. You can
share it in class or have it written in a paper.

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VII. Post Test:

LET’S JOIN TOGETHER!

Form a group of five (5) and do the following. Follow the format below
and then share your output in class. Please be guided with the scoring rubrics
below.

1. Think of three possible names (for the average learners) and five
possible names (for the advanced learners) of your small business.
Rank them according to your preferences.
2. Indicate the proposed complete address your business.
3. Write your names as owners of the business.
4. Make a brief description of your business. You may include the
product or service that you plan to sell or serve.
5. Cite the reason for choosing the location.
6. Based on the nature and type of your proposed small business,
determine the initial funding requirement.
7. State also the possible source/s of funds.

Proposed Proposed Name of Brief Reason/s Initial Possible

Business Address Owner/s Description for Funding Source/s
Name of the Choosing Requirement of Funds
Business the
Location

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VIII. Assignments

1. Prepare the introduction section of your business plan. The cover page of
your final output will appear below.

BUSINESS PLAN

(Name and Address of Your Proposed Business)

JYNAPHI PROCESSING COMPANY
216 JALIPA STREET, PBLACION 1
PIGCAWAYAN, COTABATO
www.jynaphi@yahoo.com

OWNED BY:
(Your Names as the Owners)
ANGEL TOLEDO
PRINCESS MALAZARTE

Note that since the name, address, and name/names of the owner/owners
of the business appear on the cover page, they may no longer be repeated in the
Introduction section.
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 2. Use the guide for the format of the Introduction section of your business plan.

INTRODUCTION

This section of the business plan presents the description of the business, its
location, and the total funding requirements and the possible funding source.

Description of the Business

Location of the Business

The requirement for spacing, paragraph indention, font size and style, margins and
other technical writing requirements will be subject to t he policy of the school or maybe
patterned after other research activities of the school.

Scoring rubric below will be used.

Funding Requirement and Source of Funds

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References:

Aduana, Nick L (2017).Entrepreneurship in Philippine Setting for Senior High

School, Quezon City, Philippines : C & E Publishing Inc. pp.6, 211-220.

https://www.entrepreneur.com/encyclopedia/business-plan

https://www.waveapps.com/blog/entrepreneurship/importance-of-a-business-

plan

https://www.investopedia.com/terms/b/business.asp

https://dictionary.cambridge.org/us/dictionary/english/feasibility

https://corporatefinanceinstitute.com/resources/knowledge/finance/what -is-
corporation-overview/

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