Entrepreneurship:

A Catalyst in Nation Building

 Chapter 1:
Planning the Enterprise
 Learning Objective

• To understand the definition, parts,

and importance of a business plan
 What Is a Business Plan For?
 There are business plans written prior to setting up an
enterprise, which are similar to a prefeasibility study and
a feasibility study.
 There are business plans that are written during the first
few years of the enterprise in order to guide the
entrepreneur on which strategies would be most
beneficial for the enterprise to take.
 There are business plans that are focused on bringing the
enterprise to a higher level of growth, a period where the
enterprise has already reached its peak and would want
to enter into another endeavor by recreating and re-
establishing itself.
 The Business Plan Serves
Many Masters
1. The entrepreneur who must set the
navigational course
2. The investors and financier
3. The managers and staff of the organization so
they know the strategies and programs of the
enterprise
Format of a Business Plan
The Business Plan Serves Many Masters

1. The entrepreneur who must set the

navigational course
2. The investors and financier
3. The managers and staff of the organization so
they know the strategies and programs of the
enterprise
 What Is a Business Model?

A business model is a formula on how the

enterprise exactly plans to make money out of
the business.
 Four Areas of Moneymaking Which
the Business Model Must Address
1. How will the business raise revenues? What critical factors
will cause 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 investments 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

 Show the future and long-term prospects of

the enterprise

 Composed of the vision, mission, objectives,

key result areas, and performance indicators
of the enterprise
 The Executive Summary
 A synthesis of the entire plan containing the
major argumentations of the business
proponent on why the business will work and
succeed

 Should provide the business plan audience all

the arguments on why they should
participate in the business venture
Contents of an Executive Summary

 Should provide the business plan audience all

the arguments on why they should
participate in the business venture
Contents of an Executive Summary
 Should introduce and highlight the good
qualities of:
1. the business proponents and their
partners;
2. the enterprise organization and its
capabilities;
3. the technology providers and their
expertise and experience; and
4. the suppliers and all the major service
providers.
Contents of an Executive Summary
 Should likewise describe the
products/services of the enterprise, their
features and attributes, and why they are the
right ones to deliver to the customers

 Should then proceed to discuss and justify

the Enterprise Strategy and Enterprise
Delivery System
Contents of an Executive Summary
 Should also contain a section on the
environmental and regulatory compliance of
the proposed business, as well as the more
proactive programs to become a more
responsible corporate citizen

 Should present the capital structure of the

proposed business and show how this
structure will respond to the investment
programs and financial forecasts of the
enterprise.
 Four Types of Stakeholders
1. Resource mobilizers and financial backers

2. Technology providers and applicators

3. Governance and top management

4. Operating and support team

 The Target Customers and the
Main Value Proposition
 The business proponent must be very precise
about the target audience or target customers.
 Target Customers must be of sufficient size,
sufficient paying capacity, and have sufficient
interest to purchase the products being offered by
the enterprise.
 The Main Value Proposition is the unique selling
proposition of the enterprise.
 Relevant Industry Dynamics
• Who are the competing enterprises in the industry
and what are their comparative advantages and
disadvantages? What business models and
strategies are they employing?

• Who are the suppliers in the industry and what are

their capabilities and bargaining power?

• What are the channels of distribution being used

by the industry? How effective are these channels?
 SPEET Forces
Social environment includes the demographics and cultural dimensions that
govern the relevant entrepreneurial behavior. The structure, social status, and
dynamics of the population at large, as well as the people’s beliefs, tastes,
mores, customs, and traditions dictate the major parameters of market
behavior.
Political environment defines the governance system of the country or the
local area of business. It includes all the laws, rules, and regulations on
allowable and disallowable business practices.
Economic environment is mainly driven by supply and demand forces. It is the
same factor that drives the interest and foreign exchange rates to fluctuate
with the movement of the market forces.
Ecological environment includes all natural resources and the ecosystem that
defines the habitat of man, animals, plants, and minerals.
Technological environment makes or breaks competing participants in any
industry. New scientific and technological discoveries often lead to the launch
and commercialization of new products with superior attributes or to
rendering the old ones obsolete.
 Important Return Calculations

1. expected return on sales

2. expected return on assets or investments

3. expected return on stockholders’ equity

 Environmental and Regulatory
Compliance
 The business plan must articulate the laws, rules,
and regulations governing the business, and the
industry that the enterprise is in. It should ascertain
that all the necessary permits, licenses, and
authority to use proprietary intellectual capital had
either been secured or would definitely be secured.

 The business plan should also assure the reader that

all the necessary local government ordinances and
barangay ethics would be followed by the
enterprise.
 Capital Structure and Financial
Offering: Returns and Benefits to
Investors, Financiers, and Partners
 The tenth section of the business plan contains the
capital structure and financial offerings of the
enterprise including some discussions on who are the
investors, the financiers, and the partners of the
enterprise.
 The business plan must ultimately appeal to its target
audience. It must highlight for them the main
features of the business plan that they are looking
for.