The 4MS of Operation
- Methods - the processes to be
followed in effectively manufacturing
or delivering a product or service
- Manpower - the right human
resources who will handle certain
business operations
- Machines - the technology used in
efficiently operating the business
- Materials - used in creating a product
or performing a service, which
includes supply chain management
4MS: METHODS
- MANUFACTURING OF GOODS
- Manufacturing is the process of
translating raw materials into finished
goods that are acceptable to the
customer's standard. It consists of
three elements:
- INPUTS the materials or ingredients
to be used in creating the product
- PROCESS-the transformation phase
where inputs are processed by
manpower and machines to come up
with the final product
- OUTPUT - the final product of the
process stage, which is intended to be
sold to target customers
Manufacturing sites:
- • Home-based
- Commercial space for rent
- Commercial space purchase
- get
SERVICE DELIVERY PROCESS
- Service blueprint - a detailed
flowchart of the service business
- Bottleneck - a part of the
process where there is an apparent
inefficiency and where the customer
waits longer
DISTRIBUTION METHOD
- Distribution-the process of bringing
the products or services to customers
- Manufacturer - handles the
invention, development, and
production of the product or service
- Distributors-entrepreneurs who
often buy products or services to the
manufacturers and sell them at a
markup price to either wholesalers or
retailers
- Agents - they negotiate with buyers
as to how much or how many are to
be sold, so the manufacturer will be
able to deliver the goods directly to
the buyer
PAYMENT PROCESS
- 1. Mode of Payment: Cash, credit
cards, instalment plans or simple
accounts payable or pautang
- 2. POINT OF SALE MACHINE -
machine put by entrepreneur in their
shops to accommodate customers who
will pay through their credit or debit
cards
4MS: MANPOWER
- JOB DESCRIPTION - enumerates the
duties and responsibilities of the
potential employee, including the
scope, limitations, and terms and
conditions of employment
- JOB TITLE - the heading of the job
description; the summary of what the
employe will do
- COMPENSATION AND BENEFIT
RANGE - details the potential salary
and benefits that the employee will
- • Duties - clearly describe the job
that the employee will assume with
allowance for flexibility
- • Responsibilities and
Accountabilities - must be
communicated well to the employees
so that he/she knows what to expect
with the job
- WORK SCHEDULE - the specific days
and working hours for the employee
EMPLOYEE QUALIFICATION
- 1. Educational Background - this
gives the entrepreneur an idea on the
 degree of the candidate's knowledge
of basic things
- 2. Work Experience - This will tell
him/her what to expect from the
applicant and what he/she can
potentially contribute to the business
based on his/her past position and
experiences
- 3. Specific Skills or Knowledge -
This one is important especially on
technical jobs that require high
proficiency.
- 4. Work Attitude - This deal with the
worker's integrity and how he/she
deals with his/her coworkers, bosses,
and customers.
PREPARATORY SELECTION OF JOB
● Headhunters - help companies find
a set of people suited for their
requirements. They usually charge a
finder's fee once the entrepreneur has
decided to accept an applicant.
- Manpower Agencies - recruit
temporary employees under a short
contract, usually on a six-month
period.
SELECTION OF JOB APPLICANTS - The
entrepreneur must now do the difficult task
of screening them and picking the most
qualified and most suited for the job.
Preliminary screening can easily be done
because the entrepreneur will just need to
refer to the required qualifications and
eliminate those who did not qualify. The
entrepreneur or the HR department can now
conduct a series of interviews for the
shortlisted candidates with the objective of
the getting the most qualified candidate for
the job.
JOB OFFER
- Job contract - generally summarizes
the terms and conditions of the
candidate's employment with the
business.
It includes:
1. Rank or position of the candidate
2. List of responsibilities or deliverables
and its scope and limitations
3. Salary and benefits including vacation
and sick leaves
4. Work Schedule
5. Probationary period if any and
qualifications to become a regular
employee
6. Duration of the contract
7. Resignation Procedure (e.g., 30-day
notice or leave immediately)
EMPLOYEE DEVELOPMENT
- Training people - one of the biggest
investments of an entrepreneur or a
businessman. Therefore, he/she must
devise strategies on how to keep
employees satisfied working in the
company.
- Employee Orientation - a one-to-
two-day session that summarizes the
history of the business, its vision and
mission, policies and procedures,
culture, and norms of the business.
This also includes introduction to the
co-employees and superiors, the tour
of the workplace, and the discussion
of daily responsibilities and
accountabilities including key
performance indicators (KPI) and
key result areas (KRA) of the
employee.
- Buddy System - a training program
wherein an expert team member is
assigned to assist a new employee in
his/her function
- Mentor-Mentee Program - a
training program for supervisors,
wherein they will be mentored by a
senior executive or senior officer of
the business
- Online Learning Programs or
Webinars (Seminar on the Web) -
a practical way of learning because
the entrepreneur or the employee
 does not need to go abroad or out of
the town just to get the necessary
training.
- Internal Training Programs - led by
competent subject matter experts to
discuss the intricacie each department
to the newly hired employees
4MS: MACHINES
- MACHINES- It can be described as
the "best friend" of manpower in
producing goods and offering services
- EQUIPMENT AND OTHER
FACILITIES
- TELECOMMUNICATIONS AND
INFORMATION TECHNOLOGY
ADVANTAGES IN THE BUSINESS:
- Landline Phones- order-taking,
telemarketing, and teleconferencing
with business partners and customers
- Mobile Phones - mobile application
for order-taking, mobile application for
payments, mobile marketing, social
media marketing, teleconferencing
with business partners and customers,
marketing research, mobile banking
and internet promotions.
- Laptop and Desktop Computers -
order-taking, internet
marketing,making conference calls
with business partners and customers,
marketing research, online banking,
preparing reports such as financial
statement, business case, inventory
reports, and legal and compliance
reports
- POS Machine - charging customers'
debit or credit card, tracking sales,
storing data, analysing purchases
- Accounting and Inventory
Software - accounting all business
transactions and profitability,
monitoring sales and inventory
- Web Site- order-taking, 24/7
marketing, having online
conversations with customers,
tracking customer activities online,
collecting customer information
-
4MS: MATERIALS
- Outsourcing-the process of
appointing a third party manufacturer
to do the manufacturing operations of
the business
- Warehousing-storing the finished
goods manufactured in a facility until
they are distributed to end users.
- Transportation - the process of
efficiently transferring the products to
retailers or consumers
- Distribution hub- where the
entrepreneur/ manufacturer combines
the goods before delivery to retailers
or end users
FUNDAMENTALS OF PRODUCT DEVELOPMENT
PRODUCT DEVELOPMENT
• It is the process of developing, testing, and commercializing
a product or service with the ultimate objective of solving the
problem of the primary target market.
It is composed of four sequential steps:
(1) developing a product or service description, (2) creating a
prototype, (3) testing the prototype, and (4) validating the
market.
DEVELOPING A PRODUCT OR SERVICE DESCRIPTION PRODUCT
OR SERVICE DESCRIPTION
• It simply describes how a product or service works and how
it benefits the customer. Therefore, the entrepreneur has to
take note of the following regarding the product or service
description:
1. It should directly address the primary target market in a
personal manner using everyday language
2. It should highlight the features that will cater to the
customer’s need or address customer’s problems.
3. Realistic superlatives should be used for the product
description.
PROTOTYPE - preliminary model or sample of a new product or
service that is created to test a product or concept or service
process.
ADVANTAGES OF CREATING A PROTOTYPE:
1. Creating a prototype enables the entrepreneur to
engage in trial-and-error, provides room for
improvements, and refines the functionality of the
product design or service process.
2. Creating a prototype provides the entrepreneur a
window to test the performance and specifications of
various materials and service processes.
3. A prototype helps the entrepreneur effectively
describe the product or service to the product team.
 4. Creating a prototype elicits respect from key
stakeholders and customers. At the same time, a
prototype gives credibility to the entrepreneur.
TESTING THE PRODUCT PROTOTYPE METHODS IN TESTING
APPLIED BY ENTREPRENEUR:
 Focus Group Discussions
 Legality and Ethical Test
 Safety Test
 Product Costing Test
 Component Test
 Competitors’ Product/Service Test
VALIDATING THE MARKET VALIDATION OF MARKET
ACCEPTABILITY
THESE QUESTIONS CAN EASILY BE ANSWERED IF THE
ENTREPRENEUR WILL PERFORM THE FOLLOWING ACTIVITIES:
1. Use the most strategic marketing research tool (FGD,
survey, observation, interview, online survey, e-mail,
or a combination of these research tools).
2. Prepare relevant open-ended questions that answer
the objectives.
3. Find market experts who also target the same market
but are not directly competing with the entrepreneur.
4. Collate all the data, analyze them, and prepare a
summative report that answer the objective questions.
IMPLEMENTATION OF MARKETING PLANS AND STRATEGIES
1.PREPARING A MARKETING PLAN is research-based, very
technical, and focused on coming up with a methodical
marketing plan.
2.IMPLEMENTING A MARKETING PLAN is strategy-and tactics-
based needs manpower to execute, and is results oriented.
8 STEPS TO IMPLEMENT YOUR MARKETING PLAN
1. Step 1: Divide the marketing plan into small
manageable pieces and manageable time lines. “Gantt
Chart-an important implementation tool that
enumerates all the planned marketing activities into
one file and arranges the marketing activities
chronologically, together with the interrelations with
each other and other dependencies.”
2. Step 2: Explain and delegate the marketing tasks to
assigned individuals.
3. Step 3: Keep the communication line open.
4. Step 4: Monitor accomplishments and progress.
5. Step 5: Open yourself to relevant ideas of your
marketing team.
6. Step 6: Adapt to the internal and external factors that
affect the marketing function.
7. Step 7: Incorporate incentives and penalties for
motivation.
8. Step 8: Analyze and interpret the results.
ACTUAL SELLING OF A PRODUCT OR SERVICE
1. COLD CALLING This is a selling strategy whereby the
seller calls a random person who has no relationship
with the business yet but considered as a potential
customer.
2. CONSULTATIVE SELLING It is a dialog process between
the buyer and the seller (who act as an expert
consultant) as to how the buyer ' s problems or pain
points can be addressed by the product or service of
the seller.
3. DIRECT SELLING This is a common selling strategy in
the Philippines. It is where an independent direct
seller goes directly to the customer ' s house or office
and presents his or her products for selling.
4. PERSUASIVE SELLING This is often associated with
being pushy, but persuasive selling is different in such
a way that it is selling with subtlety. This is positioning
the product or service as rare, limited, or
recommended by experts. The persuasive seller is able
to engage a customer in a conversation rather than a
sales pitch. This way, the customers are put at ease.
VARIOUS SELLING STRATEGIES VARIOUS SELLING STRATEGIES
Step 1: Find prospects.
Step 2: Sell credibly to your primary target market (Sales
Presentation) Channels to contact the Prospects:
 Face-to-face Internet (e-mail, website, social media)
 Mobile phone
 Landline phone
 Text message
 Advertisement
 Affiliates
 Any other creative strategic channel
 Sales Leads or Prospect - also called the primary target
market
Step 3: Manage customers' inquiries and objections.
Step 4: Close the sale.
Step 5: Develop a long-lasting relationship with customers.
TYPES OF SALES PRESENTATION TYPES OF SALES
PRESENTATION:
1. Stimulus response - offering the customer a compelling
proposition that triggers them to initiate purchase
2. Formula selling - follows a standardized selling approach or
based on formula
3. Canned Presentation - a sales presentation memorized by
the presenter
4. Need presentation - a question-and-answer presentation
with the aim of understanding the exact needs and wants of
the customers
1. Methods
Step 1: Register the business.
Step 2: Determine the manufacturing elements or ingredients
of the product.
Step 3: Decide the most practical and efficient manufacturing
site and location: home-based or rent/buy a commercial
space.
Step 4: Decide whether to follow a product-based or process
based internal layout, and then draw the manufacturing
process flow.
Step 5: Decide on what distribution process and distribution
channel will be most economical for the business.
2. MANPOWER
Step 1: Create a table of organization to show a graphical
description of the manpower complement of the business
Step 2: Prepare a job description for each member of the
organization so that everyone is aware of what is expected of
hir or her.
Step 3: List the qualification of employees needed and de
where to source them.
Step 4: Decide on where to source candidates (e.g. friends,
relatives, employment agencies, referrals, manpower agencies,
newspapers, social media, walk-ins).
Step 5: Interview the potential candidates and ask them
relevant question about the job.
Step 6: Choose the best candidate and provide a job offer. The
job offer should contain the following details:
-List of responsibilities or deliverables and its scope and
limitations
-Salary and benefits including vacation and sick leaves
-Work Schedule
-Probationary period if any and qualifications to become a
regular employee
-Duration of contract
-Resignation procedure (i.e, 30-day notice or leave
immediately)
Step 7: Ensure there is an employee training and development
program for the business.
3. MACHINE
Step 1: List all the equipment and technology needed and
decide whether it is economical to purchase them or just rent
them.
Step 2: Understand how to use these machines properly, and
apply all the necessary safety precautions before using them.
Protect these pieces of equipment from physical and security
risks.
Step 3: List alternate options in case the equipment becomes
dysfunctional. The key is for the business to continue no
matter what. Know where to find repair shops when needed.
4. MATERIALS
Step 1: To determine the requirements for materials, the
entrepreneur must decide on which path to choose:
(1) Manufacture own products or offer own services,
(2) Outsource manufacturing of service activities to a third
party, and
(3) Purchase finished products or services from a
manufacturer
Step 2: List all the materials needed for the manufacturing or
service business and decide where to source them efficiently
(at least two suppliers).
Step 3: Implement efficient logistics management -
warehousing, transportation, and inventory management.
FINANCIAL STATEMENT ANALYSIS AND OVERALL
INTERPRETATION OF BUSINESS RESULTS
T H E I M P O R T A N CE O F KEEPI N G B U SI N ESS REC O RDS
BUSINESS RECORD'S IMPORTANCE - serves as a powerful
analytical tool to review the past performance of the business,
to understand the current performance of the business, and to
project future business performance
- serves as an audit trail where the entrepreneur can
track the transactions of the past
SEPARATE ENTITY - the basic accounting concept where a
business enterprise is separate and distinct from the owner or
investor.
GENERAL JOURNAL - where the initially entries are recorded
and is considered as books of original accounting entries.
GENERAL LEDGER - where all the original accounting entries
are transferred to appropriate accounts
APPROPRIATE ACCOUNTS - bases of forming basic financial
statements
ACCOUNTING EQUATION
Assets Liabilities + Owner ' s Equity and Net Income = Gross
Income – Expense
NORMAL BALANCES OF INCOME STATEMENT ACCOUNTS
Income - Credit
Expenses - Debit
NORMAL BALANCES OF BALANCE SHEET ACCOUNTS
Assets - Debit
Liabilities - Credit
Owner ' s Equity - Credit
T-ACCOUNT - a summary of the debits and credits for each
balance sheet or income statement account that will be offset
from each other to come-up with the ending balance
Step 1. Prepare the accounting entries either manually (using a
general journal) or by using an Excel Sheet (Spreadsheet).
Step 2. Calculate the balance of each account using a T-
account or an Excel Sheet.
Step 3. Prepare the income statement and calculate the net
profits of the business.
Step 4. Prepare a balance sheet and ensure that the equation
is balanced.
Step 5. Prepare a cash flow statement that summarizes the
whereabouts of cash. The entrepreneur must ensure that he
or she will not run out of cash in the course of the business
BUSINESS MODEL
•A business model describes how a company creates, delivers,
and captures value.
Everyone has their unique way of viewing the business model.
THE BUSINESS MODEL CANVAS
THE GREEN LIGHTS - The Green Lights are the positive signals
that can help entrepreneurs develop ideal business models
and eventually succeed.
1. Target high-value customers. A high-value customer is…
someone who is easy to find someone who is willing to pay a
price that will reasonably profit the entrepreneur someone
who is easy to persuade with the least promotional efforts
someone who can join the bandwagon of customers
2. Offer products or services with great value.
3. Offer products or services with reasonable profits. Ways of
achieving reasonable profit: • increasing markup • decreasing
operational cost
THE RED LIGHTS - The negative signals that the entrepreneurs
should be wary of.
1. Satisfying the customer becomes too costly and irrational.
2. Being a market leader is difficult to sustain.
3. Return on Investment (ROI) takes too long and too small.
FINANCIAL PLAN
Financial Management - begins when the entrepreneur starts
to raise capital for the business venture.
CAPITAL is the money that will be allocated by the
entrepreneur to establish a business.
COLLATERAL refers to a high value asset that is submitted by
the business to the bank when applying for a loan and will be
subject for repossession if the business defaults.
FACTORS AFFECTING ESTIMATION OF REVENUE
REVENUE is the output of a sale wherein the sales price
exceeds the cost to produce the product or render the service.
Revenue is considered EARNED when the product is already
sold, or service has been rendered regardless if the business is
paid in cash or credit.
• Salaries Payable
• Taxes Payable
NON-CURRENT LIABILITIES • Refer to long term liabilities or
obligations which are payable longer than one year.
• Note Payable • Mortgage Payable • Bond Payable
OWNER’S EQUITY • represents the claim of the owner over the
assets of the business after the liabilities have been deducted.
Capital • a financial statement that details the computation of
net revenue by deducting cost of sales, expenses, and taxes
from gross revenues generated.
“Net Income = Gross Income – Expenses”
BALANCE SHEET • a core financial statement that describes the
financial position of the business.
• Composed of three (3) elements: Assets, Liabilities and
Owner’s Equity (Capital)
• Accounting Equation: Asset = Liabilities + Owner’s Equity

Revenue is considered DEFERRED when the product or service

has not yet been delivered or sold but the customer already
paid in advance.

CLASSIFICATION OF ACCOUNT
CURRENT ASSETS • refer to cash and other assets that are
easily converted into cash or consumed during the accounting
period usually one year.
• Cash
• Account Receivables
• Inventory
• Short Term Investment
• Prepaid Expenses
• Marketable Securities

NON-CURRENT ASSETS
• assets not included in the current assets such as property,
plant and equipment.
• Land
• Building
• Equipment
• Machinery
• Furniture and Fixtures
• Long Term Investment
• Accumulated Depreciation

CURRENT LIABILITIES • refer to debts or obligations reasonably

expected to be liquidated in the normal course of the
enterprise’s operating cycle or paid within a period of one year
using current assets or the creation of other current liabilities.
• Accounts Payable
• Loan Payable
• Utilities Payable
• Other Payables:
• Interest Payable