11
ENTREPRENEURSHIP
Module 1
INTRODUCTION TO BUSINESS PLAN
PREPARATION
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ENTREPRENEURSHIP – Grade 11
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
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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.
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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3.
6.
Based on the words that you have formed on the previous activity; how do we
define a Business Plan?
Take time to Read Young Entrepreneur !
A business plan is also a road map that provides directions so a business can
plan its future and helps it avoid bumps in the road. It is the only single written
document that must be prepared before opening a new business or expanding an
existing business. It provides a clear direction to any uncertain business endeavor.
A business plan is a detailed and integrated written document that describes
the various activities involved in opening and operating a new entrepreneurial venture.
10 Reasons Why You Need to Prepare a Business Plan for Small Business
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.
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
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5. Organizational Plan
6. Production Plan
7. Operation Plan
8. Marketing Plan
9. Financial Plan
10. Appendix
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
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At least three suggested trade names must be submitted to the department of
Trade and Industry for approval and registration.
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 planning 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.
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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
Business
Name
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Proposed
Address
Name of
Owner/s
Brief
Description
of the
Business
Reason/s
for
Choosing
the
Location
Initial
Possible
Funding
Source/s
Requirement of Funds
Note to Students…
The group they will form will be the permanent group until they finished the
business plan and was able to implement it. The business that they will write should
be more realistic this time since those are the options that they need to consider and
subject for the approval of the teacher. Financial aspects should be taken in
consideration.
The scoring rubric below will be used.
SCORING RUBRICS
Category
Beginning
Developing
Proficient
2
4
6
Completeness The work is Many questions
very
are
incomplete. missing/partially
complete.
Correctness
The work is
full of
errors.
Confidence in
Presentation
Shows no
interest in
topic
presented.
Collaboration
We did the
work by
ourselves.
We talked
a little
among
group
members
Cleanliness
Our final
output is
full of
erasures.
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Some
questions/tasks
were not
answered
correctly.
Shows little or
mixed feelings
about the topic
being
presented
Two or
more
questions
are missing
or partially
complete.
There are 2
or 3 errors
in the
output.
Highly
Proficient
8
Excellent
One question
is partially
answered or
completely
missing.
All questions
are answered
completely.
There is 1
error in the
output.
There are 0
errors in the
output.
10
Shows
Demonstrates Demonstrates
some
greater
strong
enthusiastic enthusiasm
enthusiasm
feelings
about topic
about topic
about topic during entire
during entire
presentation. presentation.
Only some of
We worked
We worked
Everyone
the group
together
together so
worked
members are
most of the that everyone
together
cooperative.
time.
contributed to using his/her
Sharing
the final
knowledge
ideas
output.
and abilities
regularly.
to make the
output come
together.
There are some Our work is
Our final
There are no
erasures.
clean.
output is very
erasures.
clean
VIII. Assignments
With the same group, do the following :
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
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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.
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
The requirement for spacing, paragraph indention, font size and style, margins and
other
technical
writing
requirements will be subject to the policy of the school or maybe
Location
of the
Business
patterned after other research activities of the school.
Scoring rubric below will be used.
Funding Requirement and Source of Funds
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SCORING RUBRICS
Category
Beginning
Developing
Proficient
2
4
6
Completeness The work is Many questions
very
are
incomplete. missing/partially
complete.
Correctness
The work is
full of
errors.
Collaboration
We did the
work by
ourselves.
We talked
a little
among
group
members
Cleanliness
Our final
output is
full of
erasures.
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Some
questions/tasks
were not
answered
correctly.
Only some of
the group
members are
cooperative.
There are some
erasures.
Two or
more
questions
are
missing or
partially
complete.
There are
2 or 3
errors in
the
output.
We
worked
together
most of
the time.
Sharing
ideas
regularly.
Our work
is clean.
Highly
Proficient
8
Excellent
One
question is
partially
answered
or
completely
missing.
There is 1
error in the
output.
All
questions
are
answered
completely.
We worked
together so
that
everyone
contributed
to the final
output.
Our final
output is
very clean
10
There are 0
errors in
the output.
Everyone
worked
together
using
his/her
knowledge
and
abilities to
make the
output
come
together.
There are
no
erasures.
IX. ANSWER KEY
Pre-test
1. B
2. D
3. B
4. A
5. D
Activity #1- FOUR PICS, ONE WORD!
1. Written
2. Document
3. Open
4. Operate
5. Business
6. Plan
A business plan is a written document prepared for opening and operating
a business.
Practice Task 1 - WHO’S WHO? ENTREPRENEUR X OR Y?
1. Among the two entrepreneurs, Entrepreneur Y did a better decision of
planning first before opening a business.
2. The risks to be taken by Entrepreneur X is what if his business will not
grow and he already used his money too much. Opening a business
should undergo planning first. On the other side, entrepreneur Y is on
the right track.
3. The importance of making a business plan is it will serve a guide for
your business.
Practice Task 2 - JUSTIFY ME.
1. True
2. False, feasibility study before business plan
3. False, almost the same
4. False, business plan is more detailed than feasibility study
5. False, not a major part
6. False, first page
7. True
8. False, separate
9. False, must be included
10. True
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Practice Task 3 – TELL ME A STORY
Students’ response will vary.
Post Test
Students’ response will vary.
Assignments
Students’ response will vary.
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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-businessplan
https://www.investopedia.com/terms/b/business.asp
https://dictionary.cambridge.org/us/dictionary/english/feasibility
https://corporatefinanceinstitute.com/resources/knowledge/finance/what-iscorporation-overview/
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