ARELLANO UNIVERSITY Neatness: 2

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Basic Education Department – Senior High School Creativity: 2
3058 Taft Avenue Pasay City Output: 8
Total: 15

Name: Year/Strand/Section:
Teacher: Date:
Class Session/Hour:

Subject: Applied Entrepreneurship Reference: Module in Entrepreneurship

Topic: Business Plan Type of Activity: Concept Notes
1. Business Concept and Business Model Activity No: 6
2. The Business Goals: Vision, Mission, Objectives and Performance Targets

Objective: at the end of the lesson the learner should able to:
1. Identify the business concept and business concept and business model
2. Appreciate the importance of business model in building a business
3. Apply the significant of business concept and business model in shaping the success of business

Concept Notes:

THE BUSINESS CONCEPT AND BUSINESS MODEL

A business model for a new enterprise should also cover projected start-up costs and sources of
financing, the target customer base for the business, marketing strategy, a review of the competition, and
projections of revenues and expenses.
A common mistake in creating a business model is underestimating the costs of funding the business
until it becomes profitable. Counting costs to the introduction of a product is not enough. A company has to
keep the business running until revenues exceed expenses.
A business model may also define opportunities for partnering with other established businesses. An
example would be an advertising business that could benefit from an arrangement for referrals to and from a
printing company.
A business concept contains the essence of the enterprise in a concise but powerful manner. It stresses
the value of the product offering to the target customers who would most likely buy it.
The product concept must then be translated into a business model. A business model is a formula on
how the enterprise exactly plans to make money out of the business. There are four areas of money making
which the business model must address:

1. How will business raise revenues? What critical factors will make the revenues to materialize?
2. What will be the costs of the enterprise products and other costs of doing business? How will these
costs be managed to ensure comfortable profits? What critical factors will drive the costs? How can
these factors be controlled?
3. What will be the major investment of the enterprise? Why will these investments give the enterprise
a competitive edge?
4. How will the enterprise finance the investments? How will the enterprise fund its growth?
THE BUSINESS GOALS: VISION, MISSION, OBJECTIVES AND PERFORMANCE TARGETS
The business goals show the future and long-term prospects of enterprise. It is comprised of the vision,
mission, objectives, key result areas and performance indicators of the enterprise.
The Business Goals are communicated by articulating the basic purpose of setting up the enterprise in a
mission statement. All business enterprise are established for the purposed of making money for its investors.
The vision and mission statements must then be translated into measurable and results called objectives.
To illustrate, an example of firm’s vision, mission, objectives and key results areas are shown below:

CASE EXAMPLE: TRIPLE A

The vision of Triple A is “to establish a commanding presence and market leadership as a food chain
servicing major business terminals in Central Luzon within the next five year”
For Triple A, its mission statement is “to provide quality food and passenger convenience services that
would generate sufficient profits for the stockholders and improve the lives of its employees”
Objectives must be more specific than the vision and mission statements. They should be measurable,
achievable and time-bounded.
For Triple A, the stated objectives are:
1. To establish a strong market presence in Central Luzon
2. To earn good financial returns for its owners
3. To delight customers with high quality food and services; and
4. To make Triple A, a happy and rewarding place to work in.
In the Triple A, the key result areas for each of the objectives are the following:
OBJECTIVES KEY RESULT
1. To establish a 1a. Number of food outlets in major bus terminals in Central Luzon
strong market 1b. Sales volume attained
presence in 1c. Market share in Central Luzon
Central Luzon 1d. Well known food outlets in major bus terminals in Central Luzon
2. To earn good 2a. Amount of net profits realized for the next five years
financial returns 2b. Return of Equity (ROE)
for its owners 2c. Returns of Assets (ROA)
2d. Return of Sales (ROS)
3. To delight 3a. Growth in sales per outlet
customers with 3b. Percentage of repeats customers
high quality food 3c. Number of customer commendations or complaints the government for
and services excellent service.
3e. Customer survey rating to ascertain customer’s degree of delight
4. To make Triple 4a. Compensation and benefits of managers and workers are above industry
A, a happy and standards
rewarding place 4b. Management and employee turnover
to work in 4c. Number of job applicants compared to other similar establishments

Exercise:
I. Answer the following questions.
1. What is the importance of business concept and business model?
2. How business model helps the entrepreneur for the success of the business?
3. What are the differences of business concept and business model?

II. Group Activity

Design/make your mission, vision, objectives and performance target or key result for your proposed business.