Entrepreneur:

What is Business Plan?

It is a document that helps the small business owner determine what resources are
needed.

-It is also a sort of business nlueprint and it keeps the entrepreneur on the right
tract.

What for?

-To serve as management's guide during the lifetime of the business and;

-to fulfill the requirements for securing lenders and investors

—In the course of writing the businessmplan, the small business operator (SBO) is
afforded to sufficient time considermall factors relevant to operating the
business.

—It will serve as a mean of prodviding some assurance that the investor will place
his fund in a worthwhile investment

*parts of the business plan*

-Title page and contents

-Executive summary
-Market Strategies
-Description of the Business
-Operation and Managmnt
-Analysis of the Competition
-Financial Date
-Supporting Documents

—It must be easily isentifiable thru cover page with a listing of the following:

-The name of the business

-The name of the opponents
-Address
-Telephone number
-E-mail and website
-Date
-Name of the person who prepared the business plan

|Executive Summary|

—It is a portion of the business plan that summarizes the plan and states the
objectives of the business.

—if the SBO is intending to borrow money, or is seeking capital from the investors,
the following must indicated:

-The capital needs of the business

-How the money will ne used
-What benefits will be derived by the business from the loan or investments

—the Executive Summary is prepared after the business plan is written.

| Description of the Business |

It is important to present the current situations and the outlook of the future.
Informations must be provided regarding the various markets within the industry.

—It is very useful to the SBO, as well as investors and lenders.

It is divided into two parts:

*A short explanation of the industry

*A description of the business

Statements about the following will be useful for this part:

-the industry sector where the business fall into (retail, manufacturing,
education, entertainment, and others)
-whether the business is new or established
-the ownership status of the business (sole, partnership, corporation)
-information on who the customers are
-infirmation on the size ofnthe market
-information on how the products or service is distributed

*questions*

-what general type of business is this?

-what is the status of the business? start-up, expansion or take-over?
-what is the business form? limited liability corp, sole prop, partnership, corp

*for start-ups*

-why will you be successful in this business?

-what is your experience with this type of business?
-what will be special or unique about this business?
-why will your business be successful?

The oroduct or service my be described early in the plan:

-the important features of the product or service, such as the maintenance-free

feature of the product, or the home delivery service for products ordered thru
phone
-a detailed description of how the product is used
-what makes the product or service different from others available in the market

—the objective or product or service description is to show that the firm has the
competetive edge over the others. factors:

-superior organization of the business

-latest equipment that are currently used by the company
-superior location of the company
-fair price of the product or service
-superior customer service offered by the company

*If the product is unique, take advantage; plan for the competetive battles that
will come.

*If the product is not unique, find a way to position your pdocuts in the mind of
your customer and to differentiate them from the competition.
Positioning — the process of establishing your image with prospects or customers.

Example: highest quality, lowest price, wider selections.

*basic questions*

1.what products are you selling?

2.what are the features and benefits of what you sell?
3.what position fo you have in the market?

| Market Strategies |

It refers to what SBO plans to do to acieve the market objectives of the firm.
These strategies are formulated after undertaking market research.

*definition of the market

*determination of the market share
*positioning strategy
*distribution strategy
*promotion strategy

—to determine which part of the potential market will be serves by the firm
—the market must be defined in terms of size, demographics, structure, growth
prospects, trends, and sales potential.

The business plan will be more useful to the reader, if market share of the firm is
presented.

*how to determine the firm' market share?*

-determine the number of prospects in the target market,

-determine the number of times the product or services is puchased by the target
market,
determine the number of times the product or service is purchased
-figure out the potentiak annual purchase,
-determine the percentage of the potentiak annual purchase that the firm can
attain.

| Positioning Atrategy |

It refers to how the firm differentiates its products or services from those of the
competitors.

—the objectives of positioning is to establish the firm's product or

serviceidentity in the mind of the buyers.

| pricing strategy

*determining the right price*

-customer's perception of balue in the firm's kind of business;

-cost involved such as overheadm storagem financing, production, and distribution,
-profit objectives of the firm

*following methods*

cost plus pricing – covers all cost, variable and fixed, plus an extra increment to
deliver profit.
demand pricing – is a method of pricing where the firm sets prices based on buyer
desires. The range acceptable to the target market is determined.
competitive pricing – calls for price – setting on the basis of prices charged by
competitors.
markup pricing – is a form of cost oriented
pricing in which the firm sets prices by adding per
– unit merchandise costs, operating expenses and

Distribution — refers to the process of moving goods and services from the firm to
the

| Distribution

-common distribution channels

-direct sales
-original equipment manufacturing sales
-manufacturer's representative
-wholesalers
-brokers
-retailers
-direct mails

| promotion

promotions strategy must include the following:

-advertising aspects
-packaging
-public relations
-sales promotion
-personal sales

| Analysis of the Competition |

the following must be determined:

-strengths and weaknesses of the firm's competitors

-strategies that will give the firm a competitive advantage
-barriers that can be developed a prevent competitors or would competitors from
exploiting the firm's market
-any opportunity that can be exploiteed
-the competitors of any business may either ne or both direct and or indirect.
-direct competitor will take away sales from a company in an indifecr manner.
-the aim of competitor analysis isnto determine how the firm stands against
competition.

| Operations and Management |

-organizational structure
-operating expenses
-capital requirements
-cost of goods sold

|organizational structure

-marketing
-production
-research development
-management
-human resources
| operating expenses

Projections of operating expenses — important aspects is the preparation of a

business plan. It is a projecting financial statements

*overhead, fixed or variable*

Rent
Advertising and sales promotion supplies Utilities
Packaging and shipping
Maintenance and repair
Equipment leases
Payroll
Payroll taxes and benefits Bad debts
Professional services Insurance
Loan payment depreciation Travel

*Capital Requirements — necessary items in operating business.

| Financial Date |

Financiers — interested in the financial aspects of the business plan.

-income statement/statement if earning, it is the income, expenses, and profits of

a firm.

-balance sheet - it is a financial statement that shows the financial condition of

a business as of a given date

*assets - portion of the balance sheet list the assets

of the firm in order of liquidity, from the most liquid to the least liquid.

*current assets:
*cash - which includes cash in checking, savings, and short-term investment
accounts;
*account receivables - refer to income derived from credit account
*inventory - refer to the inventory materials used to manufacture a product not yet
sold.

*fixed assets:
— durable assets that will last more than one year.

*capital and plant - refers to the book value of all capital equipment and others
such as land and building, if owned by the firm, less depreciation; and
*investments - are investments account owned by the company that can be converted
to cash in less than a year.
*liabilities:
— is classified as current or long-term.
*current liabilities - are due in one yeear and less.
*accounts payable - refers to all expenses incurred by the business that are
purchased suppliers and due for ayment.
*accrued liabilities - refer to operational expenses that are nt yet paid.
*taxes that are due and payable.

long term liabilities:

—due in moremthan one year.
*bonds payable - due and payable over one year
*mortgage payable - refers to loans used for the purchase of real estate and is
re[aid for a period of over one year.
*notes payable - are loans payable represented by a written document which is
payable for a period over one year.

-owner's equity — This section refers to how much the owner has in the
business. It provides a useful means in evaluating the company.

-cash flow statement — The cash flow statement is also a very useful tool for
business planners. It projects what the business plan means in terms of pesos.

cash - cash on hand in the firm

cash sales - are income from sales paid for by cash
receivables - income collected from credit sales
other income - income derived from investments, interest on money loans to
borrowers, and on cash derived from sales of assets.

| Supporting Documents |

1. the owner’s resume

• Contracts with suppliers
• Contracts with customers or clients
• Letters of reference
• Letters of intent
• A copy of firm’s lease
• A copy of copyright or patent acquire • Tax returns
Supporting Doc