Title: INTRODUCTION

⮚ Adaptability and flexibility – must learn how to be a

Module No. 1 .
highly flexible and adaptable often deal very well with
I. INTRODUCTION a unique ability to choose actions even without all
necessary information.
The Philippines is a haven for the development of
⮚ Willingness to take risks – not only are successful
entrepreneurs. Small and Medium Enterprise explore
the wide area of business opportunities are the key to learners willing to take consequences, they can also
economic development. It is the Entrepreneur who identify and calculate risk.
could change the global economic landscape. ⮚ Interpersonal skills – They are very insightful with
Strengthen the domestic economy by developing new
industries and generate local employment for our regards to the behavior of others-understanding
people. motives and actions, quickly aware of strong
relationships, and both verbal and non-verbal
behaviors.

II. LEARNING OBJECTIVES Industry wide competencies work competencies

1. Discuss the relevance of the course;
2. Explain the key concepts of common 1. Networking/collaboration
competencies; and
⮚ Ability to build professional relationships.
3. Explore job opportunities for Entrepreneurship as
a career. ⮚ Perceived as trustworthy
III. TOPICS AND KEY CONCEPTS ⮚ Can negotiate with competitors, & identify
Importance of Entrepreneurship in Education mutual goals.
2. Creative/ critical thinking
Entrepreneurship as a key driver to our economy ⮚ Easily identify what is missing from current
It focuses in wealth and high majority of jobs created
by small businesses started by entrepreneurially minded product streams and have imagination,
individuals. creativity and empathy.
Entrepreneurship is a lifelong learning process ⮚ Can analyze problems and creative
It started as early as elementary school and innovative solutions.
progressed through all levels of education. Students discover 3. Organizing
and develop opportunities and take advantage of these.
Entrepreneurship will energize school management ⮚ Plan and prioritize work to ensure time is
School in the area of entrepreneurship must be managed effectively.
accessible, affordable and accountable of producing successful
students. ⮚ When goals are not met, they take
Entrepreneurship will transform learners to be innovators necessary steps to get projects back-on
Learners must be equipped with perseverance and track.
determination of an entrepreneurial mindset. They must take 4. Checking, examining & recording
ownership of their own success. ⮚ Ability to maintain confidential records, easily
The Concept of Entrepreneurship locate and complete appropriate forms and
paperwork, detect errors and make
⮚ Entrepreneur (Person) – derived from the French necessary corrections.
root “entreprendre”, meaning to begin something and 5. Planning
to undertake. Person responsible for setting up a ⮚ Must be specific about the direction of their
business or an enterprise.
venture and the strategy they will adopt.
⮚ Entrepreneurship (Process of action) – science of 6. Business principles
converting processed ideas into a remarkable ⮚ Must understand the basic principles of
business venture.
business (e.g. market knowledge, economic
⮚ Enterprise (Object) – a business or company; project principles, and ethical practices)
that is especially difficult, complicated or risky. 7. Computer competency
⮚ Must be competent in the use of basic
Entrepreneurial Competencies
computer hardware and software.
8. Workplace competencies
⮚ Locus of control – determine the state to which a
⮚ The application of knowledge, skills,
person agreed that their actions can directly affect a
situation or that they can control a result. attitudes, values and behaviors in the
workplace.
⮚ Specific goal settings – Should be motivated to set
⮚ Many successful entrepreneurs place great
goals, particularly business growth objectives. Goals
that are specific, measurable, and attainable. Realistic value on their industry experiences prior to
and time-bound. launching their own venture, as workplace
competencies.
⮚ Self-efficacy – believe in their own ability or 9. High-Growth, High-Value Entrepreneurship
self-confidence. Will persevere even in the face of ⮚ Entrepreneurs typically offer incentive
setbacks, will take negative feedback more positively
and use feedback to improve their performances. compensation, manage business operations,
build a strong entrepreneurial culture around
⮚ Need for achievement – must have a high need for determination and high work ethic, and form
achievement take responsibility for outcomes. effective boards of directors and advisors.
10. Innovation & creation
⮚ Layers of competency – universal competencies
occupying the bottom portion of the pyramid. Specific ⮚ Apply their creativity to the formulation of
competencies located near to the top. inventive systems and products. They have
an “opportunity orientation”-assessing
⮚ Ambition – must be motivated, persistent, and
changes in trends, identifying small niche or
persevere even in the face of situational challenges. group of markets, and seeking out
Learners embrace new challenges while achieving to opportunities to improve services and
exceed set expectations and standards. products.
⮚ Willingness to learn – often pursue opportunities to 11. Marketing
acquire new skills and competencies. ⮚ Competent in both executing strategies that
⮚ Strong initiative – they frequently work promote their products and establish
client/customer relationships. They conduct
independently to achieve task master, regardless of market analyses, set pricing objects and
the extra effort necessary to do so. customer objections into sales acceptance.
 12. Business operations The successful entrepreneur will always be reading
and researching ways to make the business better.
⮚ Entrepreneurs performs business operations
Successful entrepreneurs want to see what the view
that are able to both carry out daily is like at the top of the business mountain. Once they
operations, such as scheduling manpower see it, they want to go further. They know how to talk
and maintaining inventories of goods and to their employees, and their businesses soar as a
management human capabilities. result.
13. Risk assessment & management
⮚ Can handle risk management and can take
IMPORTANCE OF AN ENTREPRENEUR
into account legal actions. The role of entrepreneurship and an entrepreneurial culture in
⮚ Stay informed of business laws and economic and social development has often been
regulations, and bond to determine ways to underestimated. Over the years, however, it has become
prevent themselves against failure. increasingly apparent that entrepreneurship does indeed
14. Financial management contribute to the economic development. Transforming ideas
into economic opportunities is the crux of entrepreneurship.
⮚ Competent at accounting and funds History shows that economic progress has been significantly
management managing cash flows and advanced by pragmatic people who are entrepreneurial and
preparing estimated and projected balance innovative, able to exploit opportunities and willing to take
sheets. risks. Entrepreneurs produce solutions that fly in the face of
15. Problem solving and decision making established knowledge, and they always challenge the status
quo. They are risk-takers who pursue opportunities that others
⮚ They can generate, evaluate, and implement may fail to recognize or may even view as problems or threats.
solutions to difficult problems. Whatever the definition of entrepreneurship, it is closely
⮚ They locate and utilize relevant information, associated with change, creativity, knowledge, innovation, and
flexibility-factors that are increasingly important sources of
and when necessary, generate alternative competitiveness in an increasingly globalized world economy.
solutions. Thus, fostering entrepreneurship means promoting the
competitiveness of businesses.
QUALITIES OF AN ENTREPRENEUR Its importance can be expressed in the form mentioned
1. Disciplined. These individuals are focused on below:
making their businesses work and eliminate any 1. Provides employment to the people. People often
hindrances or distractions to their goals. They have hold a view that all those who do not get employed
overarching strategies and outline the tactics to anywhere jump into entrepreneurship, but in reality,
accomplish them. Successful entrepreneurs are now a days most of the business are set by those
disciplined enough to take steps every day toward the who have other options available with them.
achievement of their objectives. 2. Contributes towards research and development
2. Confidence. The entrepreneur does not ask system. Almost 2/3rd of all innovations is due to the
questions about whether they can succeed or whether entrepreneurs. Without the boom of inventions, the
they are worthy of success. They are confident with world would have been a much dry place to live in.
the knowledge that they will make their businesses Inventions provide an easier way of getting things
succeed. They exude that confidence in everything done through better and standardized technology.
they do. 3. Creates wealth for the nation and for the
3. Open Minded. Entrepreneurs realize that every event individuals as well. All individuals who search
and situation is a business opportunity. Ideas are business opportunities usually, create wealth by
constantly being generated about workflows and entering entrepreneurship. The wealth created by
efficiency, people skills and potential new businesses. them plays a significant role in the development of the
They have the ability to look at everything around nation. The entrepreneurs contribute to the economy,
them and focus it toward their goals. in the form of products, and services. Their ideas,
4. Self-Starter. Entrepreneurs know that if something thoughts, and inventions are also of a great help to
needs to be done, they should start it themselves. the nation.
They set the parameters and make sure that projects
follow that path. They are proactive, not waiting for FUNCTIONS OF AN ENTREPRENEUR
someone to give them permission. An entrepreneur frequently has to wear many hats. He has to
5. Competitive. Many companies are formed because perceive opportunity, plan, organize resources, and oversee
an entrepreneur knows that they can do a job better production, marketing, and liaison with officials. Most
than another. They need to win at the sports they play importantly he has to innovate and bear risk.
and need to win at the businesses that they create. The main functions of an entrepreneur are grouped in
An entrepreneur will highlight their own company’s three categories:
track record of success. 1. Risk bearing functions,
6. Creativity. One facet of creativity is being able to 2. Administrative and decision-making functions, and
make connections between seemingly unrelated 3. Distributive functions (responsibility of the organizer).
events or situations. Entrepreneurs often come up
with solutions which are the synthesis of other items. Risk Bearing Function
They will repurpose products to market them to new It is the most important and specific function of an
industries. entrepreneur. Every business involves some amount of risk.
7. Determination. Entrepreneurs are not thwarted by The production of goods and services is always related to
their defeats. They look at defeat as an opportunity for future demands. The future demand is uncertain and
success. They are determined to make all of their unpredictable because it is influenced by the changes in
endeavors succeed, so will try and try again until it fashion or taste and liking of the consumers. The price
does. Successful entrepreneurs do not believe that structure, value of money, climatic conditions and government
something cannot be done. policies are some other important factors that affect the
8. Strong people skills. The entrepreneur has strong demand of a commodity. All these factors are variable and as
communication skills to sell the product and motivate such an exact estimation of future demand is a difficult
employees. Most successful entrepreneurs know how exercise to work out. Since this unpredictable task is
to motivate their employees, so the business grows undertaken by the entrepreneur; he has to bear the risk. If his
overall. They are very good at highlighting the estimations prove to be wrong, then in the entire business
benefits of any situation and coaching others to their sphere, no other factor of production shares the loss incurred
success. by the entrepreneur. It is the main reason why the entrepreneur
9. Strong work ethic. The successful entrepreneur will becomes entitled for the surplus that is remaining with him
often be the first person to arrive at the office and the from the sale proceeds of the product, after distributing the
last one to leave. They will come in on their days off to shares to other factors. This surplus is termed as profit of the
make sure that an outcome meets their expectations. business.
Their mind is constantly on their work, whether they
are in or out of the workplace. Administrative and Decision-Making Functions
10. Passion. Passion is the most important trait of the a. Conceiving the Idea of Business
successful entrepreneur. They genuinely love their The entrepreneur conceives the idea of a business which suits
work. They are willing to put in those extra hours to their nature, skill and resources. They make a thorough
make the business succeed because there is a joy (intensive and extensive) study of the condition of market and
their business gives which goes beyond the money. business prospects. After making a thorough study of
economic viability, they decides the business that they has to Title: Recognizing a Potential Market
start. Module No. 2 .
b. Estimation of Details of Business and
Implementation of the Same I. INTRODUCTION
After arriving at a conclusion about the nature of business, the This module will present the lesson in developing a
entrepreneur works out the details of business, i.e., what, how business wherein students will learn to determine a
and when to produce and from where the resources are to be potential market and what the market needs. The
arranged. With all these estimations, they make an all-out effort search for business opportunity should start with the
to give a practical shape to his plans, organizes various factors individual entrepreneur. One has to find out the skill
of production and sets them to function in proper harmony. and talent for that particular type of business activity.
c. Supervision and Control of Business Activities
The entrepreneur has to supervise and control the day-to-day One’s talent and skill are the beginning of his great
business activities to accomplish the business objectives. For investments in the trade. He must have the passion for
this they properly coordinate between various factors of independence and willingness to work hard and long
production. As the risk (success or failure) of business to keep up with his dreams of being an entrepreneur.
operations directly affect the economy, they keep a vision and
control on the business affairs and avoids unnecessary
expenditures. They are required to take a numerous decision II. LEARNING OBJECTIVES
and has to get these decisions properly implemented.
d. Innovation After studying this module, you should be able to:
Innovation is one of the most important functions of an
entrepreneur. An entrepreneur uses information, knowledge, 1. Identify the market problem to be solved or
and intuition to come up with new products, new methods of the market need to be met;
reducing costs of a product, improvement in design or function 2. Propose solution/s in terms of product/s and
of a product, discovering new markets or new ways of service/s that will meet the need using
organization of industry. Through innovation, an entrepreneur techniques on seeking, screening, and
converts a material into a resource or combines existing seizing opportunities.
resources into new and more productive configurations. It is 3. Analyze the market need;
the creativity of an entrepreneur that results in invention 4. Determine the possible product/s or
(creation of new knowledge) and innovation (application of service/s that will meet the need;
knowledge to create the new products, services, or processes). 5. Select the best product or service that will
meet the market need.
Distributive Functions
The entrepreneur organizes different factors of production and
sets them to work. It, therefore, becomes his responsibility to III. TOPICS AND KEY CONCEPTS
make proper allocation of funds for each factor of production, Developing Business Plan
i.e., each factor of production must be properly remunerated.
The remuneration here refers to an important decision as to “Business plan does not guarantee the results you want to
what should be the share of each factor of production in the accomplish but it’s still a step closer to making things work in
sale proceeds of the entire product. The remuneration should advantage”
be just and equitable and the payment to each factor should be
commensurate, so that each factor is fully satisfied. If the Factors to Consider of a New Entrepreneur
factors of production remain dissatisfied, they will not be able
to deliver their best to the entrepreneur. So, it is the 1. Know your Product or Service.
entrepreneur, who has to ultimately suffer. Hence, it is very
essential for the entrepreneur to perform distributive functions ⮚ You must believe on the product or service that you
with extreme care and caution. will offer to your customer.
⮚ Unique product that would satisfy customers’ needs
IV. LEARNING TASK and wants.
ACTIVITY#1: True or False. ⮚ Customers want to try new products but it must be
Which of the following statements are True and which are False? better than those existing in the market.
1. ____________A business can be started in his residence or rented 2. Analyze the Market Potentials.
premises.
2. ____________A capital is needed in setting up a business. ⮚ The wider the market potential, the more chances of
3. ____________An entrepreneur should have its business far away growth and success.
from the location of customers.
⮚ Entrepreneur must know his needs and wants and
4. ____________There is no need for a business to have its
workforce. figure out how to satisfy these needs.
5. ____________A business can only be run by individuals. ⮚ Analyze customers’ profile as to their buying habits,
6. ____________Only the rich people can have a business.
7. ____________Sole proprietorship is run by many people. their income, and social status.
8. ____________Skilled workers are needed to have a successful 3. Determine the Marketing Strategy.
business. ⮚ A unique product or service needs effective
9. ____________A retail business should be started near residential distribution strategy to get customer into the basket of
area or in a marketplace. demand potential.
10. ___________ The entrepreneur requires money to buy machinery,
building, raw materials and pay wages. ⮚ Customers must have access to the product when
they need it.
4. Know the Competitors.
ACTIVITY#2:
⮚ Know their strength and weaknesses.
Entrepreneurial competencies refer to the characteristics of an
entrepreneur. It requires certain qualities or characteristics for ⮚ Develop new product and marketing strategy and turn
establishing and running a business enterprise. In your own words, their weaknesses as new opportunity for your product.
explain the different qualities you need to acquire to become a
successful entrepreneur. ⮚ Continuous innovation and research would mean
better quality products or service.
ACTIVITY#3: Test yourself. 5. Do not set on your Laurels.
1. Define Entrepreneurship. ⮚ Landscape of business is continuously changing.
2. State the importance of entrepreneurs.
3. Choose one of the qualities of an entrepreneur that you think best ⮚ Your initial success in your business activities needs
describes you. Explain. more proactive analysis for expansion and growth and
4. Explain the various functions of an entrepreneur. overcome possible competitions.
5. What are the factors that you would like to consider in putting up ⮚ Develop advertising and promotion strategy to
your own business?
penetrate the wider market.
⮚ Develop budget for expansion and diversification
either horizontally or vertically.
 e. Expertise and Technical Skills of the
Environmental Scanning Management Team – a good product is the
making of a well-conceived idea of the
1. Business Location for Small Entrepreneurs. management team.
A retail outlet would need a site that is convenient to 2. Characteristics of Weak Products and Weak
prospective customers in terms of parking space or an Management:
availability of transportation. a. Poor quality and High Price – the entrepreneur
should not launch a poor product in the market as
In choosing the location, the following factors must be looked it will surely fail to advance in the sales and profit.
into by the entrepreneur: b. Product Design and Appeal – Product design
a. Rent and Space – the cost of rent is a regular should appeal to customers’ demand. Poor
monthly expense and it must be sustained with the design of the product is the making of people with
possible income that will be generated. no technical expertise in handling customer
b. Terms of Lease Agreement – the term of lease must wants in terms of features.
be studied carefully as some owners of space might c. Product Cost – production cost is the price
take advantage of lessee. determinants. Entrepreneur cannot make
c. Types of Goods or Merchandise – they need quick maximum profitability on products whose
and easy access to the store and would not spend a production cost cannot survive market
lot of time to purchase their goods. competition.
d. Income Level of Prospective Customer – a good d. Supply and Demand – intermittent supply to the
barber shop or a beauty salon with facilities of air market will make customers shift to other
conditioning units and other amenities need to be products. The supply chain management must be
located in the community with higher income bracket. put in place to make the products available to
e. Prospective Sales Volume – high density sales valued customers.
volume need to be located in shopping area where e. Weak Product Management – weak
customers conversed to buy essential goods. management is created when people at the top of
f. Municipal or City Ordinances including taxes and the organization fail to sustain a vigorous effort
fees – the location must not violate city or municipal for expansion and growth when management
ordinances and the taxes and fees must reasonable sets on his initial laurels and ventured on vices
for the owners of business. and other extra activities that will lose his total
g. Location of the Area – the area must be free from investment.
floods and other calamities that will endanger the 3. Sustainable Product Opportunities in the Market:
business. a. Product Demand – product demand is the
greatest opportunity of the entrepreneur. Demand
2. Location for Small Industrial Plant or Manufacturing is the essence of profit and this must be
Facilities. sustained by the entrepreneur before wide
Environmental factors in locating a manufacturing competition appeared in the marketplace.
plant or industrial facilities need to be studied carefully as plant b. Presence of Poor Quality in the Market – the
location is a great factor in the investment of funds and its presence of poor quality product in the market
profitability in the long run. place is an opportunity for the entrepreneur.
c. Government Policies and Support – the
The following are important factors to consider: government support to local entrepreneur is an
a. Land Area – the contour of the land, its size, and opportunity for greater expansion. The
shape must be suitable to the plant site. government should support the local
b. Facilities for Expansion – the land area must have entrepreneur in terms of taxes and government
ample space for plant expansion and provisions for incentives.
parking facilities for customers and employees. d. Liberal Credit Terms and Interest Rates –
c. Power and Utilities – availability of power supply and liberal credit terms by banks and other
the cost of electricity involve in the operation are great government institution will generate expansion for
factors in the production of goods. the local entrepreneur. Banks and financing
d. Building and Other Utilities – the building must be institutions serve as conduit of business in their
within the restriction code of the municipality or city. expansion program.
the utilities like canteen and other employees’ 4. Treats to Product Profitability and Market
facilities must be put in place in compliance with the Expansions:
labor code. a. Entrance Competition – the entrance of many
e. Plant Site Accessibility – the plant site must be competitors in the market place will definitely give
accessible to public or service transport for its problem to the entrepreneur. Competition will
employees and valued customers. reduce profitability as the price has to be
competitive with those in the market place.
Strength, Weaknesses, Opportunities and Threats (SWOT) b. The supply of raw materials – will be limited as
other competitors will be getting the same
SWOT ANALYSIS. Opportunities carries with it some supplier. Increased production cost means
risk involved and this should be look into carefully. The changes in product price.
strengths and weaknesses are internal factors to the c. The Emergence of Leftwing Labor Unions –
entrepreneur while the opportunities and threats are external Many companies close shops with the advent of
factors. labor unions leftist philosophy as they want more
wages and benefits that the company could not
The product must be evaluated along the following areas: give.

1. Product Strength in the Market must have the SETTING UP A SMALL BUSINESS
following: You have learned that in entrepreneurship a person
(entrepreneur) who set up a business must recognize its
a. Available Technology in Product Processing – financial risk. One must make their business work by
technology is an important component in eliminating any hindrances or distractions to their goals. They
producing the product as the economies of scale must overarch strategies and outline the tactics to accomplish
determines the price index. them. Successful entrepreneurs are disciplined enough to take
b. The source of Raw Materials must be steps every day toward the achievement of their objectives. If
Abundant and at Lower Price – the constant you possess the quality of an entrepreneur to perform a
supply of raw materials is an important factor in business venture you may now start having your small
the production of the product. business. But before you start your business let us study
c. Skilled Workers must be Available – various factors required to be considered while setting up any
technology must have component of skilled small business.
workers that shall operate the machineries and
other equipment. WHO CAN START A BUSINESS?
d. Capital Investment in Machinery and Anyone can start a small business unit. He may be an existing
Operating Expenditures – a starting venture entrepreneur or a new one, having a business background or
may have little investment in terms of machinery not educated or uneducated from rural area or urban area.
and equipment but starting with small capital
should generate profitable operation. HOW CAN I ARRANGE MY CAPITAL?
The entrepreneur has to analyze and find out the amount and particular product or service the company offers will add more
the duration of finance required as well as the duration for such value or better solve a problem for them than other similar
finance is needed in the business. The entrepreneur requires offerings will.
money to buy machinery, building, raw material, pay wages to
labor, etc. Money spent on buying machinery, building, UNDERSTANDING A VALUE PROPOSITION
equipment, etc. is known as fixed capital. On the other hand, A value proposition stands as a promise by a company to a
money spent on buying raw materials and paying wages and customer or market segment. The proposition is an
salaries, rent, telephone and electricity bills, etc. is known as easy-to-understand reason why a customer should buy a
working capital. The entrepreneur has to arrange for both fixed product or service from that business. A value proposition
as well as working capital for his business. The finance can be should clearly explain how a product fills a need, communicate
raised by self-contribution or by borrowing from banks and the specifics of its added benefit, and state the reason why it is
other financial institutions. Money can also be borrowed from better than similar products on the market. The ideal value
friends and relatives. proposition is to-the-point and appeals to a customer's
strongest decision-making drivers.
HOW CAN I SELECT THE LINE OF RIGHT BUSINESS FOR
ME? REQUIREMENTS OF A VALUE PROPOSITION
The process of launching a business begins when the A company's value proposition communicates the number one
entrepreneur start thinking about a line of business, which can reason why a product or service is best suited for a customer
be undertaken by him. He may consider business opportunities segment. Therefore, it should always be displayed prominently
as per the market demand. He may go for an existing product on a company's website and in other consumer touch points. It
or a new product. But before taking any step he has to also must be intuitive, so that a customer can read or hear the
ascertain the profitability of the business and the amount of value proposition and understand the delivered value without
capital investment. Having estimated the profitability and risk needing further explanation. Value propositions that stand out
involved, the entrepreneur has to decide which line of business tend to make use of a particular structure. A successful value
could be desirable to pursue. proposition typically has a strong, clear headline that
communicates the delivered benefit to the consumer. The
WHAT IS THE RIGHT LOCATION OF MY BUSINESS? headline should be a single memorable sentence, phrase, or
Special care should be taken while selecting the location of the even a tagline. It frequently incorporates catchy slogans that
business. An entrepreneur can start business in his own become part of successful advertising campaigns. Often a sub
premises or in a rented premise. It can be located at a headline will be provided underneath the main headline,
marketplace or in a commercial complex or in an industrial expanding on the explanation of delivered value and giving a
estate. While deciding the location, the entrepreneur should specific example of why the product or service is superior to
consider various factors like sources of supply of raw material, others the consumer has in mind. The subheading can be a
nearness to the market, availability of labor, transportation, short paragraph and is typically between two and three
banking and communication facilities, etc. Factories should be sentences long. The subheading is a way to highlight the key
preferably located near the source of raw material and at a features or benefits of the products and often benefits from the
place that is well connected with rail and road transport facility. inclusion of bullet points or another means of highlighting
A retail business should be started near residential area or in a standout details. This kind of structure allows consumers to
marketplace. scan the value proposition quickly and pick up on product
features. Added visuals increase the ease of communication
HOW TO SELECT YOUR BUSINESS WORKFORCE? between business and consumer. In order to craft a strong
An entrepreneur cannot run the business alone. He has to value proposition, companies will often conduct market
employ people to help him. Skilled and Semi-skilled workers research to determine which messages resonate the best with
have to be recruited particularly for manufacturing work. Before their customers.
starting the business, the entrepreneur must find out whether
he will be able to get the right type of employees for the HOW TO DEVELOP A VALUE PROPOSITION?
activities involved. A good value proposition should allow companies to increase
their conversion rates which in turn lift revenue. However, the
IMPORTANCE OF POTENTIAL MARKET value proposition creation process is not something that can be
Now that you’re familiar on how to set up your small business. hastily done. It should loosely follow a series of actions that
It is now time for you to identify and recognize your potential flesh out what the company can offer to customers.
market by studying its definition and importance. A potential
market is the part of the market you can capture in the future. It 1. Understand the benefits customers receive
includes the demographic groups of customers that will To start creating a value proposition, leaders need to
purchase your product or services in the future who might understand how they create value. Therefore, the benefits the
become your regular customers from the expansion of your company provides to the consumers should be listed.
business. A target customer that make up its share in the Everything from the product’s use, customer service, delivery
available market is to be set by every business owner. The processes, and any other component should be on the list. The
best ways to grow your business is to identify your potential benefits the company and its products and services provided to
market that you can begin to target. The potential market consumers should be something each employee should be
allows you to: able to pinpoint easily.
1. Identifying new customers to ensure the future of 2. Connect benefits to the value
your business. Once leaders have a complete grasp on the benefits offered,
2. Think proactively about ways for your business to they should then link these benefits to the value the company
grow and change. creates for customers.
3. Show the potential of your business to investors or
✔ How do the benefits help the customer?
collaborators.
4. Increase your profit. ✔ Does the product address a problem or need?
5. Create a strategic plan when there will be changes
in the economy or market. ✔ Does the buying process significantly reduce the
In identifying your potential markets, you are not just increasing purchase time?
your share for today but ensuring the increase of your profit in
the future. If you are an ambitious entrepreneur with a ✔ How can customers expect to benefit from what the
promising product, you probably can’t wait to show it to company offers?
potential customers. But before you go into “sales mode,” you 3. Target your audience
might want to sit down at your desk, take a look at your value Every businesses product is not for every consumer. Leaders
proposition and do some research. need to sharpen the focus and decide who the target segment
for the product or service is. This information can include
VALUE PROPOSITION location, demographics, income, occupation, hobbies, and
A value proposition refers to the value a company promises to many other factors. Knowing who the audience is will help
deliver to customers should they choose to buy their product. A leaders decide which benefits should be mentioned and which
value proposition is part of a company's overall marketing might be best to leave out. It also creates a way to better link
strategy. The value proposition provides a declaration of intent benefits to value.
or a statement that introduces a company's brand to 4. Differentiate the Product and Service
consumers by telling them what the company stands for, how it This might be one of the most critical components of all. At this
operates, and why it deserves their business. A value point, leaders need to work with their teams to see how they
proposition can be presented as a business or marketing are different from competitors. This step revolves around the
statement that a company uses to summarize why a consumer question of why consumers should pick this company over
should buy a product or use a service. This statement, if someone else’s. It is a good idea to look at direct competitors
worded compellingly, convinces a potential consumer that one and note what they do similarly, and how the company either
does it better or more efficiently. Consumers need to know why 4. Vlaskovits & Cooper's CPS
they should look over another brand for someone else’s. In their Cheat Guide to Customer Development Cooper and
5. Put everything into a clear and easy to read Vlaskovits use what they call a Customer-Problem-Solution
sentence presentation.
Through research and analysis, leaders should emerge with an Template
idea of what to include in their value proposition. The purpose Customer: ____________ (who your customer is).
of this statement is not to become a long and arduous read, Problem: ____________(what problem you're solving
but it should quickly inform customers of who the company is. for the customer).
Customers should be able to read over the value proposition in Solution: ____________ (what is your solution for the
five seconds to get a feel for the benefits and value the problem).
business offers. If the statement cannot be whittled down to a Sample(s)
sentence, then leaders should go back to the drawing board to Customer: I believe my best customers are small and
cut out features that may not be needed. medium-sized business (SMB) markets.
6. Place it everywhere Problem: Who cannot easily measure campaign ROI
Once the leader and the team agree on a value proposition, because existing solutions are too expensive,
then leaders need to work with marketing to get this statement complicated to deploy, display a dizzying array of
as many places as possible. It should be included in a website, non-actionable charts.
logos, email newsletter signatures, on a company brochure, Solution: Low cost, easy to deploy analytics system
and everywhere possible. designed for non-technical marketers who need
7. Test its effectiveness actionable metrics.
Leaders need to assess how the value proposition is adding in
increasing revenue and bringing in new customers. Also, 5. Dave McClure's Elevator Ride
leaders should be aware of how the value proposition is In his How to Pitch a VC presentation Dave McClure presents
changing the perception of the company. a 3-step check list for creating positioning statements.
Template
✔ Have conversions increased?
• Short, simple, memorable; what, how, why.
✔ Are more people visiting the website? • 3 keywords or phrases
• KISS (no expert jargon)
✔ Are more email newsletters being opened? Sample(s)
• "Mint.com is the free, easy way to manage your money
✔ How are competitors responding? online."

7 PROVEN TEMPLATES FOR WRITING A VALUE 6. David Cowan's Pitchcraft

PROPOSITION THAT WORK Although a more elaborative one David Cowan shares some
You already know that getting your value proposition right is useful guidelines in Practicing the Art of Pitchcraft. I've put
critical to your business model. You can have the best features, together a summary.
the most perfectly executed presentation, the most stunning Template
price, but no one will ever know of it if they don’t get past your 1. Highlight the enormity of the problem you are
high-level value proposition. Here are among the proven tackling.
templates that are designed to help you create a clear, 2. Tell the audience up front what your company sells.
compelling value proposition in minutes. 3. Distill the differentiation down to one,
easy-to-comprehend sentence.
1. Geoff Moore's Value Positioning Statement 4. Establish credibility by sharing the pedigree of the
Probably the most popularized - in his seminal book Crossing entrepreneurs, customers, or the investors.
the Chasm - Geoff Moore suggests a specific template for Sample(s)
outlining your value positioning. In addition to the first part One person dies of melanoma every 62 minutes.
below, Moore also introduces a second statement focused on We offer a dermatoscope app for iPhone that enables
competitive positioning. people to easily diagnose their skin, leveraging patented
Template: pattern recognition technology trusted by the World Health
For ____________ (target customer) Organization.
who ____________ (statement of the need or opportunity)
our (product/service name) is ____________ (product 7. Eric Sink's Value Positioning
category) Eric Sink writes that marketing is somewhat like an iceberg -
that (statement of benefit) ____________ . the part sticking out of the water is highly visible. For this Eric
Sample(s) suggests the following format for positioning.
For non-technical marketers Template
who struggle to find return on investment in social media Superlative ("why choose this product").
our product is a web-based analytics software Label ("what is this product").
that translates engagement metrics into actionable Qualifiers ("who should choose this product").
revenue metrics. Sample(s)
The easiest operating system for netbook PC's.
2. Venture Hacks' High-Concept Pitch The most secure payment gateway for mobile e-commerce.
In Made to Stick, Dan and Chip Heath point to how
high-concept pitches such as 'Jaws on a spaceship' (Alien) and WHAT TO SELL: HOW TO SELECT THE RIGHT PRODUCT
'Die Hard on a bus' (Speed) convince movie executives to FOR YOUR BUSINESS
invest vast sums of money in a project on the basis of almost Key question often asked by start-up entrepreneurs is what to
no information. In Pitching Hacks Nivi and Navel from Venture sell in the business. What products or services could you sell
Hacks share examples of this technique applied to startups. that will make you money? The selection of the right product or
Template: service is critical. In fact, the choice of a product or service for
[Proven industry example] for/of [new domain]. your business can make or break your business. Choose a
Sample(s) product that requires significant production capital when you
Flickr for video. have none and couldn’t find any, and your business is
Friendster for dogs. compromised from the start. Offer a service that a hundred
The Firefox of media players. other entrepreneurs offer in your locality and you may find it
hard to get noticed above your competitors. Or select a product
with an extremely specialized market yet you do not know how
to reach the potential customers, and your business can go
3. Steve Blank's XYZ kaput. Your products or services define your business. Your
Steve Blank writes that a Value Proposition is a ten-dollar products are your business! If you want to turn your business
phrase describing a company’s product or service. It’s the into an income-generating machine, the first step is to choose
“what are you building and selling?" He suggests the following the right product or services to sell. With the right products, you
format for creating a value proposition statement that other even stand a better chance at keeping your customers. The
people understand. idea is to keep your customers forever by continually offering
Template: them a valuable product or service, thereby diminishing your
“We help X do Y doing Z”. costs of reaching and appealing to them. Wise product
Sample(s) selection is therefore critical to your business success.
We help non-technical marketers discover return on
investment in social media by turning How do you choose the right product to sell? Here are a few
engagement metrics into revenue metrics. questions to help you narrow your focus and hopefully select
the product that will work for you:
 least 3 design templates to help you create a clear, compelling value
1. What are your primary considerations for proposition.
choosing a particular product?
Make a list of your selection criteria, and what you think are Value Proposition 1.
important to you in identifying what business to engage in. Value Proposition 2.
There are a myriad reasons for selecting a product, and these Value Proposition 3.
reasons can include: financial benefit to your business,
relatively low investment requirements, positive return on Title: DEVELOPING A BUSINESS PLAN (DP)
investment, fit with present strategy, feasible to develop and Module No. 3 .
produce, easy to source and procure, relatively low risk, and I. INTRODUCTION
time to see intended results.
Entrepreneurs must have a full knowledge as to what
products are needed in the society. The product will be
2. Can you meet the needs of the customer and
for the satisfaction of the group of the target market. A
solve a specific problem?
product can be tangible or intangible in nature that can
Your product must address a need or an opportunity. You need
be offered for satisfaction of the recipients it may be
to know how your products or services can assist customers. It
an idea, a physical entity (a good), service or any
must have a real value that customers can recognize, want
combination of the three.
and need. Include in your product information and sales
materials how your products can benefit the customers, e.g. II. LEARNING OBJECTIVES
help reduce time, effort and expense.
After studying this module, you should be able to:
3. How capable are you to produce the product?
Just as an athlete needs to know his physical condition before 1. Propose solution/s in terms of product/s and
he enters a race, you must also know if you have the time, service/s that will meet the need using
resources and capability to produce your product. Many techniques on seeking, screening, and
entrepreneurs make the mistake of going forward with a seizing opportunities:
business idea only to find that they cannot afford the a. Analyze the market need;
manpower required, or do not have the resources to outsource b. Determine the possible product/s
the product development. As a result, many experience or service/s that will meet the
slippage in release dates making the mistake of launching need;
half-finished web sites. You must also evaluate at the onset c. Screen the proposed solution/s
how you can scale up the production if there is a strong based on viability, profitability,
demand for the product. and customer requirements; and
d. Select the best product or service
4. What is the size of your potential reachable that will meet the market need.
market?
You need to at least get an idea of the size of your market.
Know who are likely to use or benefit from your products. If you III. TOPICS AND KEY CONCEPTS
are selling an information product on how to sell at Lazada or Product: Its Nature and Sustainability
Shoppe, define who will be your potential customers you think
will be interested in your product. Many small and home LEVELS OF PRODUCT
business entrepreneurs view market research as an Tangible Products are the basic physical appearance which
unnecessary and expensive cost but understanding who and can be an idea having precise specifications and is offered
how big your market can pay off in the long run. under a given/specified description or a model number.
Augmented Products include the image and service features
5. Would you need to comply with government rules of a certain entity. It gives emphasis on the intangible benefits
and regulations? that the customer will be getting from buying the product.
New laws or government rules and regulations can impact your Generic Products emphasize the impact of the product to the
product. Some products can be sold immediately without the consumer, not the seller. This will signify the purpose of its
need for government approval. Others, however, require existence and the primary objective in creating the product.
permits, licenses and approval from the government.
TYPES OF PRODUCT
6. If a similar product exists, can your product be 1. Goods are sale of the physical products from the
superior in its functionality, presentation or manufacturer to the consumer of final and ultimate
marketing? user. These are tangible products that can measure
This entails knowing and understanding your Unique Selling the satisfaction with result or evidences as manifested
Proposition. Your unique selling proposition is the one thing through physical development.
that makes that your product different than any other. It’s the a. Durable Goods – are sale the physical products
one reason they think consumers will buy the product even that are used over a long period of time. These
though it may seem no different from many others just like it. It products are expensive because of the quality of
may be that the product has a lower price or more convenient the materials used.
packaging, or it may taste or smell better, or last longer. b. Non-Durable Goods – are the physical products
that are quickly and easily be consumed or worn
7. What barriers must be overcome for a potential out, become obsolete, unfashionable or no longer
new product entry? popular. These products are inexpensive and can
Barriers to entry include high research and development easily be damaged.
expenditure, high presence of start-up or sunk costs, and 2. Services are intangible products that satisfaction can
international trade restrictions such as tariffs and quotas. be measured in future preferences.
Patents are likewise important barriers for many small and a. Rented-goods services – are the consumer
home-based businesses, where your competitor may hold rented facility of the sellers in a certain period of
legal protection for an integral component of your product and time.
hence may prevent you from manufacturing your product. b. Owned-goods services – are the repair and
Other barriers to entry include predatory pricing of competitors maintenance services rendered by the sellers to
that will force you to operate at a loss, high advertising and the products of the customer.
marketing costs to compete with established brands in the c. Non-good service is personal service on the
industry, and the cost advantages enjoyed by your competitor part of the seller; most common are the expertise
that allows them to set lower prices. and profession of the seller.
Characteristics of Services
8. What are the potential sales, growth, profits, and 1. Intangibility is the services that cannot
time for payback? be displayed, transported, stored,
Before starting your business, run your numbers first. Get a packaged or inspected before buying.
clear idea of your cost structure, how much sales you need to 2. The credibility of the service provided
have to breakeven and post a profit, and what your return on most of the time counts.
investment will be. 3. Inseparability is the service provider and
services that cannot be separated. It
cannot accomplish the purpose if one is
IV. LEARNING TASK missing.
ACTIVITY#2: Think of a possible product/service that you want to 4. Variability is when the service is difficult
introduce in the market. Using the template above choose and write at to standardize because it varies upon
the performance of the provider.
 Best Product for Market Need
Consumer Products
These are goods and services destined/produced for Tips in Choosing the Business Name
the final consumer for personal, family, or household use. The 1. Easy to Recall or Remember – the business name
use of the goods or services designated it as a consumer must be understandable so it is easily stored in the
product. memory.
2. Pleasant Meaning Creates Pleasant Feelings – It
1. Convenience products are purchased with the produces positive or favorable feeling upon saying or
minimum or less effort because the buyer has mentioning to the public.
knowledge of product characteristics prior to 3. Easy to Pronounce – the business name must be
shopping. cited as freely as it can be.
a. Staples are low priced items that are 4. Easy to Spell – the business name must be simple.
routinely purchased on a regular basis and Words that are used in everyday communication will
are products that are used every day. be an advantage.
b. Impulse products are the items that the 5. Related to the Product – the business name must
consumer does not plan to buy. describe the product. It represents the features of the
2. Shopping products are products that the product.
consumers acquire through further knowledge
and information in order to make final purchase Product Life Cycle
decision. Consumers will exert effort in searching The Product Life Cycle concept describes a product’s
or looking for information because these products sales, profits, customers, competitors, and marketing emphasis
have high prices and are bought infrequently and from its beginning until is removed from the market.
are categorized as follows.
a. Attribute – based shopping products STAGES OF PRODUCT LIFE CYCLE
provide customers with information and STAGE 1. Product Development
evaluated product features, performance, The company must think of a new product. A new
options, warranties and other factors. product is a modification, creation, and innovation of
b. Priced – based shopping products enable an existing product which makes product more
customers to judge product attributes to be meaningful to the customer.
the same and look around for the least
expensive item. The new product planning process involves a series of
3. Specialty products are the items with particular steps:
brands and stores to which consumers are loyal. 1. Ideas Generation – searching and looking for a
They are willing to make a significant or specific new product or business opportunities. The
effort to acquire the brand desired units and will employees, channel members, competitors, and
pay a higher or above the price of similar customers can be a great source.
products. Methods
a. Brainstorming – all the members of
Industrial Products the group can contribute in sharing
Industrial products are goods or services purchased ideas, comments, and suggestions.
for use/consumption in the production/manufacturing of other b. Analyzing Existing Products – a
goods or services, in the operation of a business or for resale successful product that captures great
to other customers. market can be analyzed as a basis in
1. Accessory equipment is selected priced portable creating a new product.
goods which last long period of time, requiring a c. Reading Trade Publications – an
moderate amount of consumer decision making. inspirational story of a a successful
2. Raw materials are unprocessed basic materials entrepreneur can lead into a
from extractive and agricultural industries. Natural development of a new product.
environment promotes a good source of raw d. Visiting Suppliers’ Facilities –
materials. Supplier’s raw materials can be used
3. Industrial or operating supplies are inexpensive as a method to innovate and modify
convenience goods which are rapidly consumed existing product.
and are necessary for the day-to-day operation of e. Surveys – getting feedback coming
the firm. from the customers and potential
4. Component materials are semi-manufactured market.
goods which undergo further changes in form and 2. Idea Screening – ideas which are unsuitable,
later to be a part of the finished products. unattractive, or poor are junked. Ideas together
5. Installations are very expensive materials, with attributes are rated on the basis of a rating
non-portable goods which are used in the from 1-10.
production process and do not become part of the Ideas are rated on the following categories:
finished product. general, marketing and production
6. Fabricated parts are finished products of other characteristics.
companies which form part of the manufactures 3. Concept Testing – ideas which have passed the
product without further changes in form, but given screening stage will now require feedback from
added feature to make a new product. the consumer. It measures consumer enthusiasm
by asking potential consumer to react a picture,
New Product Development Process statement or oral description.
The process consists of two sets: one is internal which looks at 4. Business analysis – is a review of a market
the company’s objectives and resources, while the other is factors, revenues, cost and trends.
external which looks at the customer’s needs and wants. a. Demand Projections – sales
Product Satisfying Features potential; sales growth; rate of purchase;
Product patronage in the market is conditioned by the distribution intensity.
strategies and policies employed by the manufacturer and the b. Cost projections – per unit cost; raw
marketing organization on the product’s attributes. materials cost; cost of existing facilities and
1. Design It matters to the elements that collectively resources; breakeven point.
form of good or service that will satisfy customers c. Competition – market share of
and gain competitive advantage. company and competitors; strengths and
2. Product Colors It is the customer’s rejection or weakness of competitors; potential
acceptance of the product. This could be true in competitors.
clothing, cars or furniture and other fixtures.\ d. Required investment – engineering
Color can be an important consideration for highly patent search, product development, testing,
technical products. promotion, production, distribution.
3. Product Quality this is set of features and e. Profitability – time to recover initial
attributes of a product or services that determine cost; per unit profits, distribution
its ability to satisfy human needs. intermediaries; control over price; return on
Product Warrantees one very important attribute of the investment.
product is warrantee. It is the state where the buyer is assured 5. Product Development – ideas are converts into
that the product meets the specifications stated in the product tangible form. Stage involves:
labels. a. Product construction: type and
quality of materials, method of
 production, production tome and II. LEARNING OBJECTIVES
cost requirements peer unit, plan
capacity, sizes and colors. After studying this module, you should be able to:
b. Packaging: materials used in Recognize and understand the market
promotion or storage; cost; size 1. Describe the unique selling proposition and
and colors. value proposition that differentiates one’s
c. Branding: choice of new or product/ service from existing products/
existing name; exclusivity; services;
trademark protection. 2. Determine who the customers are in terms
d. Product positioning: selecting a of:
market segment. a. Target market;
e. Consumer attitude and usage b. Customer requirements; and
testing. c. Market size
6. Test Marketing – involves a selling of a fully 3. Validate customer-related concerns through:
developed product in a selected city and a. Interview;
observing the actual on the spot performance b. Focused Group Discussion (FGD);
under the chosen marketing plan. Depending on and
the results, a firm can decide to go ahead, modify c. Survey
the product or services, modify the marketing
plan or drop or delete the product. III. TOPICS AND KEY CONCEPTS
7. Commercialization – this involves the actual
Identify the Market Problem
marketing of the product in the target market. The
different activities to introduce the product to the
In building product, entrepreneurs can meet customers’ needs.
market must be presented.
In identifying market problem, the following can be considered:
STAGE 2. Introduction
1. Existing customers are the people who have already
A new product is introduced into the market place
purchased the product you are selling.
and the objectives is to generate customer
2. Target market users are the people in your target
interest.
market who are not currently looking for a solution.
STAGE 3. Growth
3. Prospects are the people who have not yet purchased
The product gains wider consumer acceptance
your product but have an intention to buy.
and the objective are to expand distribution and
the range of available product alternatives. More
Tips in Identifying Market Problem
firms enter the profitable and tested market.
1. Focusing only on innovation and the competition
STAGE 4. Maturity
2. Focusing only on customers
The product’s sales level and companies try to
3. Focusing only on revenue
maintain lower price, better product features for as
4. Stated vs. Silent Market needs
long as possible. Market is saturated, penetrated
and competition is at its highest level.
How to evaluate market problem?
STAGE 5. Decline
1. Consider if the market problem is urgent, if yes,
The product’s sales falls as substitutes and new
consider necessary actions by identifying alternative
competitors enter the market.
courses of action (ACA) then enumerating their
advantages and disadvantages.
2. Evaluate if the market problem is pervasive or easily
diffused, if yes, think for a temporary solution.
3. Determine if the buyers will pay to have this problem
solved.

Problem-Identification Research
By conducting new market research projects, learn can
discover problem or opportunity. You could discover any of
the following factors through problem-identification
research:
1. Brand Image – is the impression in customers’ mind
of brand’s total personality.
LEARNING TASK 2. Market Characteristics – describes attributes of the
ACTIVITY#1: BUSINESS 101: To succeed as an entrepreneur, you buyers in making decision related in purchasing a
must develop the ability to select and offer the right products or certain product.
services to your customers in a competitive market. More than any 3. Market Potential – is the estimated maximum total
other factor, your ability to make this choice will determine your sales revenue of all suppliers of a product in a
success or failure. Using the guided questionnaire below analyze your marketing during a certain product.
prepared product/services to begin with. 4. Market share – is a percentage of total sales volume
in a market captured by a brand, product or company.
1. What particular product do you think will be visible and be
accepted by consumer in the market today? Explain. Problem-Solving Research
2. In meeting the need of the customers, what specific activity 1. Distribution Research: determining on how transfer
plan will you do to improve it? the product from the manufacturer to ultimate user.
3. How capable are you to produce the product? 2. Market segmentation: grouping customers by similar
4. What are your potential market? characteristics or similar purchase behaviours.
5. Enlist the different government permit you need to comply for 3. Pricing research: determining the ideal price for the
you to open a business. How will you comply with each of their product. Setting the price for the product is one of the
requirements? most important marketing steps.
6. What barriers needed for you to overcome for a potential new 4. Product research: testing the new or revised products
product entry? or completing test marketing.
5. Promotional research: determining the best research
in the area of disseminating information.
Title: THE MARKET
Module No. 4 .
I. INTRODUCTION Factors in Determining Economic Growth
The following factors are contributory determinants to
The Philippines is a haven for the development of our slow growth in economic development as a nation:
entrepreneurs. Small and Medium Enterprise explore
the wide area of business opportunities are the key to The Filipino Values and Culture
economic development. It is the Entrepreneur who 1. Love for the imported Products.
could change the global economic landscape. The country’s colonization for centuries has
Strengthen the domestic economy by developing new developed in the Filipinos a culture of dependence
industries and generate local employment for our and love for foreign products. We still feel that
people. imported are superior in quality and we looked upon
our own products as inferior.
2. Our values of “Bahala Na”.
 A true Filipino entrepreneur will not put his destiny in Investors must determine the needs of the market
the hands of the Bathala. He must act with strong through analysis based from research conducted
determination and push for the development of his focusing on their needs.
ideas. Innovation and the creation of more goods and 4. Competition
services are in the hands of entrepreneur who has the Determining the competitor’s positioning and describe
ability to make and innovative products or create a their strengths and weaknesses.
new channel of their distribution.
Barriers to Entry
Bahala Na is a concept of belief in Bathala, the Gods These are the hindrances or something material that
of lazy of goals and undermined individuals. block or intend to block passage.
3. Our Crab Mentality.
Is the action of the people to pull down others who are Here are a few examples of barriers to entry:
about to get out of the verge of poverty and reach for 1. Investment (project that requires a huge of
their success. Enviousness is the making of people investments)
who could not think better for himself. There many of 2. Technology (application of the combination of
us who destroy others yet when we look at the mirror scientific and engineering knowledge)
we are not better than them. 3. Brand (the huge marketing costs required to get a
4. The Mañana Habit. certain level of appreciation)
Mamaya na or Bukas na is a culture that is brought to 4. Regulation (licenses and permits in particular)
us by the colonizers who were fond of Siesta after 5. Access to resources (exclusivity with suppliers,
lunch time. We take time in stride wasting time. The accessibility of suppliers)
real entrepreneurs do not believe in siesta as they 6. Access to distribution channels (exclusivity with
keep working until things are done according to their distributors, availability of intermidiaries)
plans. 7. Location (place, venue where the business is located)
5. The Value of Time.
Relative to above discussion is our lack of value to WRITING A DETAILED BUSINESS PLAN
the precious time given to us, 24 hours a day and 364
days in a year. We are always late in the start of the A business plan is a document that describes your
program, coming to our classes, attending to office to business in terms of what it does, the products and
work and even in important meetings and services it offers, your business strategy and business
appointment. We take all the time in our hands not goals, and your action plan outlining how you plan to
thinking that the meaning of progress rest in our value achieve your goals and earn money.
of this precious gift of time.
6. Our Values of “Hiya”. The main purposes of a business plan are to:
HIYA could be a positive value in dealing with ● Show the future financial performance of the company
business condition. It could propelling reason for us to and its economic situation for the owners and
create better service and proper dealings in business investors.
transaction. Our beautiful country is noted for ● Help identify risk that may affect the growth of the
hospitability, value that many people of the word company and its economic situation for the owners
admire, yet many foreigners are afraid to go to our and investors.
country because there are still some of us who are ● Help make predictions about market trends,
WALANG HIYA. competitor behavior, customer requirements and
7. Fiesta and Social Occasions define and prioritize key business objectives.
The celebration of Fiestas of Saints that we inherited ● Serve as a key resource for developing budgets
from the Spanish colonizers could be another factors
in the slow development of our economy. People Writing a business plan shouldn’t be complicated. In this
especially in the country side would have all their step-by-step guide you will quickly and easily write a business
savings spent in a day of the fiesta, entertaining plan that will get the results you want. You don’t have to have a
guest, only to find out the next day that there is no business or accounting degree to put together a great business
more rice to feed their children. plan. This guide will show you how to get your plan done
step-by step without any of the complexity or frustration. The
Market Need Analysis following are the six components of a Business Plan.

Define the Market Need for the New Business 1. Executive Summary. The executive summary of your
business plan introduces your company, explains what you do,
In analyzing the market need, the following questions should and lays out what you’re looking for from your readers.
be asked: Structurally, it is the first chapter of your business plan. And
1. Who will get interested in my product? while it’s the first thing that people will read, I generally advise
2. What does the market need or want? that you write it last.
3. Who is buying the product? What and how much? Or
how, where and why are they buying those goods or Why? Because once you know the details of your business
services? inside and out, you will be better prepared to write your
executive summary. After all, this section is a summary of
Market Analysis everything else you’re going to write about. Ideally, the
A market analysis is a quantitative and qualitative executive summary can act as a stand-alone document that
assessment of a market ability to respond positively. It looks covers the highlights of your detailed plan. In fact, it’s very
into the size of the market both in volume and in value, the common for investors to ask for only the executive summary
various customer segments and buying patterns, the when they are evaluating your business. If they like what they
competition, and the economic environment in terms of the see in the executive summary, they’ll often follow up with a
barriers to entry and regulation in the industry. request for a complete plan, a pitch presentation, and more
in-depth financials.
How to do a Market Analysis?
This is show to the investors that company knows Because your executive summary is such a critical component
their target market. It is large enough to build a sustainable of your business plan, you’ll want to make sure that it’s as clear
business. and concise as possible. Cover the key highlights of your
business, but don’t into too much detail. Ideally, your executive
The following activities can be recommended: summary will be one to two pages at most, designed to be a
quick read that sparks interest and makes your investors feel
1. Demographics and Segmentation eager to hear more.
Demographics is the statistical characteristics of The critical components of a winning executive summary:
human population (as age or income) used especially
to identify markets. ✔ One sentence business overview. At the top of the
Segmentation is the process of dividing into segments
page, right under your business name, include a
with similar characteristics.
one-sentence overview of your business that sums up
2. Target Market
the essence of what you are doing. This can be a
This is the type of customers that are focused within
tagline, but is often more effective if the sentence
the market. It is focused on the more qualitative side
describes what your company actually does. This is
of the market analysis by looking at what drives the
also known as your value proposition.
demand.
3. Market Need
 away the most critical element of your business plan and
✔ Problem. In one or two sentences, summarize the
crucial for your business success. If you can’t pinpoint a
problem you are solving in the market. Every problem that your potential customers have, then you might not
business is solving a problem for its customers and have a viable business concept.
filling a need in the market. To ensure that you are solving a real problem for your
✔ Solution. This is your product or service. How are potential customers, a great step in the business planning
process is to get away from your computer and actually go out
you addressing the problem you have identified in the and talk to potential customers. Validate that they have the
market? problem you assume they have, and then take the next step
✔ Target market. Who is your target market, or your and pitch your potential solution to their problem. Is it a good fit
ideal customer? How many of them are there? It’s for them?
important here to be specific. If you’re a shoe Once you have described your target market’s
company, you aren’t targeting “everyone” just problem, the next section of your business plan should
because everyone has feet. You’re most likely describe your solution. Your solution is the product or service
targeting a specific market segment such as that you plan on offering to your customers. What is it and how
“style-conscious men” or “runners.” This will make it is it offered? How exactly does it solve the problem that your
much easier for you to target your marketing and customers have? For some products and services, you might
sales efforts and attract the kinds of customers that want to describe use cases or tell a story about a real user who
are most likely to buy from you. will benefit from (and be willing to pay for) your solution.

✔ Competition. How is your target market solving their Target market

problem today? Are there alternatives or substitutes in Now that you have detailed your problem and solution
the market? Every business has some form of in your business plan, it’s time to turn your focus toward your
competition and it’s critical to provide an overview in target market: Who are you selling to? Depending on the type
your executive summary. of business you are starting and the type of plan you are
writing, you may not need to go into too much detail here. No
✔ Company overview and team. Provide a brief matter what, you need to know who your customer is and have
overview of your team and a short explanation of why a rough estimate of how many of them there are. If there aren’t
you and your team are the right people to take your enough customers for your product or service, that could be a
idea to market. Investors put an enormous amount of warning sign.
weight on the team—even more than on the
idea—because even a great idea needs great Market analysis and market research
execution in order to become a reality. If you are going to do a market analysis, start with
✔ Financial summary. Highlight the key aspects of your some research. First, identify your market segments and
determine how big each segment is. A market segment is a
financial plan, ideally with a chart that shows your group of people (or other businesses) that you could potentially
planned sales, expenses, and profitability. If your sell to. Don’t fall into the trap, though, of defining the market as
business model (i.e., how you make money) needs “everyone.” The classic example is a shoe company. While it
additional explanation, this is where you would do it. would be tempting for a shoe company to say that their target
✔ Funding requirements. If you are writing a business market is everyone who has feet, realistically they need to
target a specific segment of the market in order to be
plan to get a bank loan or because you’re asking
successful. Perhaps they need to target athletes or
angel investors or venture capitalists for funding, you
businesspeople who need formal shoes for work, or perhaps
must include the details of what you need in the
they are targeting children and their families.
executive summary. Don’t bother to include terms of a
potential investment, as that will always be negotiated
TAM, SAM, and SOM
later. Instead, just include a short statement indicating
A good business plan will identify the target market
how much money you need to raise.
segments and then provide some data to indicate how fast
✔ Milestones and traction. The last key element of an each segment is growing. When identifying target markets, a
executive summary that investors will want to see is classic method is to use the TAM, SAM, and SOM breakdown
the progress that you’ve made so far and future to look at market sizes from a top-down approach as well as a
milestones that you intend to hit. If you can show that bottom-up approach.
your potential customers are already interested in—or Here are some quick definitions:
perhaps already buying—your product or service, this ● TAM: Your Total Available or Addressable Market
is great to highlight. You can skip the executive (everyone you wish to reach with your product)
summary (or greatly reduce it in scope) if you are ● SAM: Your Segmented Addressable Market or
writing an internal business plan that’s purely a Served Available Market (the portion of TAM you will
strategic guide for your company. In that case, you target)
can dispense with details about the management ● SOM: Your Share Of the Market (the subset of your
team, funding requirements, and traction, and instead SAM that you will realistically reach—particularly in
treat the executive summary as an overview of the the first few years of your business)
strategic direction of the company, to ensure that all Once you have identified your key market segments, you
team members are on the same page. should discuss the trends for these markets. Are they growing
or shrinking? Talk about the market’s evolving needs, tastes, or
2. Opportunity. There are four main chapters in a business other upcoming changes to the market.
plan—opportunity, execution, company overview, and financial
plan. The opportunity chapter of your business plan is where Your ideal customer
the real meat of your plan lives—it includes information about When you have your target market segments defined,
the problem that you’re solving, your solution, who you plan to it’s time to define your ideal customer for each segment. One
sell to, and how your product or service fits into the existing way to talk about your ideal customer in your plan is to use
competitive landscape. You’ll also use this section of your your “buyer persona” or “user persona.” A buyer persona is a
business plan to demonstrate what sets your solution apart fictitious representation of your market—they get a name,
from others, and how you plan to expand your offerings in the gender, income level, likes, dislikes, and so on. While this may
future. seem like additional work on top of the market segmentation
People who read your business plan will already know a little that you have already done, having a solid buyer persona will
bit about your business because they read your executive be an extremely useful tool to help you identify the marketing
summary. But this chapter is still hugely important because it’s and sales tactics you’ll need to use to attract these ideal
where you expand on your initial overview, providing more customers.
details and answering additional questions that you won’t cover
in the executive summary. Key customers
The final section of your target market chapter should
The problem and solution. discuss key customers. This section is really only required for
Start the opportunity chapter by describing the enterprise (large) companies that have very few customers.
problem that you are solving for your customers. What is the Most small businesses and typical startups can skip this and
primary pain point for them? How are they solving their move on. But if you selling to other businesses (B2B), you may
problems today? Maybe the existing solutions to your have a few key customers that are critical to the success of
customer’s problem are very expensive or cumbersome. For a your business, or a handful of important customers that are
business with a physical location, perhaps there aren’t any trend leaders in your space. If so, use this final portion of your
existing solutions within reasonable driving distance. Defining target market chapter to provide details about those customers
the problem, you are solving for your customers is far and and how they are important to your business’s success.
 For [target market description] who [target market need],
Competition [this product] [how it meets the need]. Unlike [key
Immediately following your target market section, you competition], it [most important distinguishing feature].
should describe your competition. Who else is providing
solutions to try and solve your customers’ pain points? What For example, the positioning statement for LivePlan, our
are your competitive advantages over the competition? Most business planning product, is:
business plans use a “competitor matrix” to easily compare “For the businessperson who is starting a new company,
their features against their competition. The most important launching new products or seeking funding or partners,
thing to illustrate in this section of your business plan is how LivePlan is software that produces professional business
your solution is different or better than other offerings that a plans quickly and easily. Unlike [name omitted], LivePlan
potential customer might consider. Investors will want to know creates a real business plan, with real insights—not just
what advantages you have over the competition and how you cookie-cutter, fill-in-the-blank templates.”
plan on differentiating yourself. One of the biggest mistakes
entrepreneurs make in their business plans is stating that they Pricing
don’t have any competition. Once you know what your overall positioning strategy
The simple fact is that all businesses have is, you can move on to pricing. Your positioning strategy will
competition. Competitors may not always come in the form of often be a major driver of how you price your offerings. Price
“direct competition,” which is when you have a competitor sends a very strong message to consumers and can be an
offering a similar solution to your offering. Often times, you may important tool to communicate your positioning to consumers.
be dealing with “indirect competition,” which is when If you are offering a premium product, a premium price will
consumers solve their problem with an entirely different kind of quickly communicate that message to consumers. Deciding on
solution. your price can feel more like an art than a science, but there
For example, when Henry Ford was first marketing his are some basic rules that you should follow:
cars, there was very little direct competition from other car ● Covering your costs. There are certainly exceptions
manufacturers—there weren’t any other cars. Instead, Ford to this, but for the most part, you should be charging
was competing against other modes of transportation—horses, your customers more than it costs you to deliver your
bikes, trains, and walking. On the surface, none of these things product or service.
look like real direct competition, but they were how people ● Primary and secondary profit center pricing. Your
were to solving their transportation problems at that time. initial price may not be your primary profit center. For
example, you may sell your product at, or even below,
Future products and services your cost, but require a much more profitable
All entrepreneurs have a vision of where they want to maintenance or support contract to go along with the
take the business in the future if they are successful. While it’s purchase.
tempting to spend a lot of time exploring future opportunities ● Matching the market rate. Your prices need to match
for new products and services, you shouldn’t expand too much up with consumer demand and expectations. Price
on these ideas in your business plan. It’s certainly useful to too high and you may have no customers. Price too
include a paragraph or two about potential future plans, to low and people may undervalue your offering.
show investors where you are headed in the long term, but you
don’t want your plan to be dominated by long-range plans that You can approach your pricing strategy in different ways.
may or may not come to fruition. The focus should be on Here are a few ways that you can think about your pricing and
bringing your first products and services to market. come up with the right strategy for your business:
● Cost-plus pricing. You can establish your pricing
3. Execution. Now that you’ve completed the opportunity based on several factors. You can look at your costs
chapter, you’re going to move on to the execution chapter, and then mark up your offering from there. This is
which includes everything about how you’re actually going to usually called “cost-plus pricing” and can be effective
make your business work. You’ll cover your marketing and for manufacturers where covering initial costs is
sales plans, operations, how you’ll measure success, and the critical.
key milestones that you expect to achieve. ● Market-based pricing. Another method is to look at
the current landscape of competitors and then price
Marketing and sales plan based on what the market is expecting. You could
The marketing and sales plan section of your price at the high-end or low-end of the market to
business plan details how you plan to reach your target market establish your positioning.
segments (also called target marketing), how you plan on ● Value pricing. Yet another method is to look at a
selling to those target markets, what your pricing plan is, and “value pricing” model where you determine the price
what types of activities and partnerships you need to make based on how much value you are providing to your
your business a success. Before you even think about writing customer. For example, if you are marketing lawn
your marketing plan, you must have your target market care to busy professionals, you may be saving your
well-defined and have your buyer persona(s) fleshed out. customers 1 hour/week. If that hour of their time is
Without truly understanding who you are marketing to, a valued at P50/hour, your service could charge
marketing plan will have little value. P30/hour.

Your positioning statements Promotion

The first part of your marketing and sales plan is your With pricing and positioning taken care of, it’s time to
positioning statement. Positioning is how you will try and look at your promotion strategy. A promotion plan details how
present your company to your customers. Are you the you plan on communicating with your prospects and
low-price solution, or are you the premium, luxury brand in your customers. Remember, it’s important that you’ll want to
market? Do you offer something that your competitors don’t measure how much your promotions cost and how many sales
offer? they deliver. Promotional programs that aren’t profitable are
Before you start working on your positioning statement, you hard to maintain in the long term.
should take a little time to evaluate the current market and
answer the following questions: Packaging
● What features or benefits do you offer that your If you are selling a product, the packaging of that
competitors don’t? product is critical. If you have images of your packaging,
● What are your customers’ primary needs and wants? including those in your business plan is always a good idea.
● How are your competitors positioning themselves? Be sure the packaging section of your plan answers the
● How do you plan on differentiating from the following questions:
competition? In other words, why should a customer ● Does your packaging match your positioning
choose you instead of someone else? strategy?
● Where do you see your company in the landscape of ● How does your packaging communicate your key
other solutions? value proposition?
Once you’ve answered these questions, you can then ● How does your packaging compare to your
work on your positioning strategy and define it in your business competition?
plan. Don’t worry about making your positioning statement very
long or in-depth. You just need to explain where your company Advertising
sits within the competitive landscape and what your core value Your business plan should include an overview of the
proposition is that differentiates your company from the kinds of advertising you plan to spend money on. Will you be
alternatives that a customer might consider. advertising online? Or perhaps in traditional, offline media? A
key component to your advertising plan is your plan for
You can use this simple formula to develop a positioning measuring the success of your advertising.
statement:
Public relations lots of suppliers and then make that inventory
Getting the media to cover you—PR—can be a great available to retailers to purchase. Of course, these
way to reach your customers. Getting a prominent review of distributors take a percentage of the sales that pass
your product or service can give you the exposure you need to through their warehouses.
grow your business. If public relations if part of your ● Manufacturers’ representatives. These are typically
promotional strategy, detail your plans here. salespeople who work for a “ripping” agency. They
often have relationships with retailers and distributors
Content marketing and work to sell your products into the appropriate
A popular strategy for promotion is engaging in what channel. They typically work on commission and it’s
is called content marketing. Content marketing is what not uncommon for a rep to be necessary for getting a
Business plans is all about. It’s when you publish useful new company access to a distributor or retailer.
information, tips, and advice—usually made available for ● OEM. This stands for “original equipment
free—so that your target market can get to know your company manufacturer.” If your product is sold to another
through the expertise that you deliver. Content marketing is company that then incorporates your product into their
about teaching and educating your prospects on topics that finished product, then you are using an OEM channel.
they are interested in, not just on the features and benefits that A good example of this is car parts suppliers. While
you offer. large auto manufacturers do build large components
of their cars, they also purchase common parts from
Social media third-party vendors and incorporate those parts into
These days, having a social media presence is the finished vehicle. Most companies use a mixture of
essentially a requirement for the vast majority of businesses. distribution channels as part of their plans, so don’t
You don’t need to be on every social media channel, but you feel that you need to be limited to a single channel.
do need to be on the ones that your customers are on. More For example, it is very common to both sell direct and
and more, prospects are using social media to learn about via distributors—you can purchase an iPhone directly
companies and to find out how responsive they are. from Apple, or go into a Target store and get one
Strategic alliances there.
As part of your marketing plan, you may rely on
working closely with another company in a form of partnership. Milestones and metrics
This partnership may help provide access to a target market A business plan is only a document on paper without
segment for your company while allowing your partner to offer a real path to get the work done, complete with a schedule,
a new product or service to their customers. If you have defined roles, and key responsibilities. While the milestones
partnerships already established, it’s important to detail those and metrics section of your business plan may not be long, it’s
partnerships in your business plan. critical that you take the time to look forward and schedule the
next critical steps for your business. Investors will want to see
Operations that you understand what needs to happen to make your plans
The operations section is how your business works. a reality and that you are working on a realistic schedule.
It’s the logistics, technology, and other nuts and bolts. Start with a quick review of your milestones. Milestones are
Depending on the type of business you are starting, you may planned major goals. For example, if you are producing a
or may not need the following sections. Only include what you medical device, you will have milestones associated with
need and remove everything else. clinical testing and government approval processes. If you are
producing a consumer product, you may have milestones
Sourcing and fulfillment associated with prototypes, finding manufacturers, and
If your company is buying the products it is selling first-order receipt.
from other vendors, it’s important to include details on where Traction
your products are coming from, how they get delivered to you, While milestones look forward, you will also want to
and ultimately how you deliver the products to the take a look back at major accomplishments that you have
customer—that’s sourcing and fulfillment. If you are sourcing already had. Investors like to call this “traction.” What this
products from manufacturers overseas, investors are going to means is that your company has shown some evidence of
want to know about your progress working with these early success. Traction could be some initial sales, a
suppliers. If your business is going to be delivering products to successful pilot program, or a significant partnership. Sharing
your customers, you should describe your plans for shipping this proof that your company is more than just an idea—that it
your products. has actual evidence that it is going to be a success—can be
critically important to landing the money you need to grow your
Technology business.
If you are a technology company, it’s critical for your
business plan to describe your technology and what your Metrics
“secret sauce” is. You don’t have to give away trade secrets in In addition to milestones and traction, your business
your business plan, but you do need to describe how your plan should detail the key metrics that you will be watching as
technology is different and better than other solutions out there. your business gets off the ground. Metrics are the numbers
At a high level, you will want to describe how your technology that you watch on a regular basis to judge the health of your
works. You don’t need to go into excruciating detail here, business. They are the drivers of growth for your business
though—if an investor is interested in more detail they will ask model and your financial plan. For example, a restaurant may
for it, and you can provide that information in your appendix. pay special attention to the number of table turns they have on
Remember, your goal is to keep your business plan as short an average night and the ratio of drink sales to food sales. An
as possible, so too much detail here could easily make your online software company might look at churn rates (the
plan much too long. percentage of customers that cancel) and new signups. Every
business will have key metrics that it watches to monitor
Distribution growth and spot trouble early, and your business plan should
For product companies, a distribution plan is an detail the key metrics that you will be tracking in your business.
important part of the complete business plan. For the most
part, service companies can skip this piece and move on. Key assumptions and risks
Distribution is how you will get your product into the hands of Finally, your business plan should detail the key
your customers. Every industry has different distribution assumptions you have made that are important for your
channels and the best way to create your distribution plan is to business’s success. Another way to think about key
interview others in your industry to figure out what their assumptions is to think about risk. What risks are you taking
distribution model is. with your business? For example, if you don’t have a proven
Here are a few common distribution models that you may demand for a new product, you are making an assumption that
consider for your business: people will want what you are building. If you are relying on
● Direct distribution. Selling directly to consumers is online advertising as a major promotional channel, you are
by far the most simple and most profitable option. You making assumptions about the costs of that advertising and the
could consider passing the savings of selling directly percentage of ad viewers that will actually make a purchase.
on to your customers or you could simply increase Knowing what your assumptions are as you start a business
your profit margins. You will still need to cover the can make the difference between business success and
logistics of how you will get your products to your business failure. When you recognize your assumptions, you
customers from your warehouse, but a direct can set out to prove that your assumptions are correct. The
distribution model is usually fairly simple. more that you can minimize your assumptions, the more likely
● Retail distribution. Most large retailers don’t like the it is that your business will succeed.
hassle of dealing with thousands of individual
suppliers. Instead, they prefer to buy through large 4. Company overview and team. In this chapter, you’ll review
distribution companies that aggregate products from the structure of your company and who the key team members
are. These details are especially important to investors as structure. Are you an LLC? A C-corp? An S-corp? A
they’ll want to know who’s behind the company and if they can sole proprietor? In a partnership? Be sure to define
convert a good idea into a great business. provide a review of how the business is owned as
well. Does each business partner own an equal
Team portion of the business? How is ownership divided?
The old adage is that investors don’t invest in ideas, Potential lenders and investors will want to know the
they invest in people. Some investors even go as far as to say structure of the business before they will consider a
that they would rather invest in a mediocre idea with a great loan or investment.
team behind it than a blockbuster idea with a mediocre team. ● The business location. Finally, the company
What this really means is that running a successful business all overview section of your business plan should
comes down to getting the work down. Can you actually describe your current location and any facilities that
accomplish what you have planned? Do you have the right the company owns. For businesses that serve
team in place to turn a good idea into a great business that will consumers from a storefront, this information is
have customers banging down your doors? The company critical. Also, for businesses that require large
overview and team chapter of your business plan is where you facilities for manufacturing, warehousing, and so on,
make your best case that you have the right team in place to this information is an important part of your plan.
execute on your idea. It should show that you have thought ● A brief history of the company if it’s an existing
about the important roles and responsibilities your business company. If you are writing a business plan for an
needs in order to grow and be successful. existing company, it’s appropriate to include a brief
Include brief bios that highlight relevant experiences history of the company and highlight major historical
of each key team member. It’s important here to make the case achievements. Again, keep this section short—no
for why the team is the right team to turn an idea into a reality. more than a few paragraphs at most. This section is
Do they have the right industry experience and background? especially useful to give context to the rest of your
Have members of the team had entrepreneurial successes plan and can also be very useful for internal plans.
before? A common mistake novice entrepreneur make in The company history section can provide new
describing the management team is giving everyone on the employees with a background on the company so that
team a C-level title (CEO, CMO, COO, and so on). While this they have a better context for the work that they are
might be good for egos, it’s often not realistic. As a company doing and where the company has come from over
grows, you may require different types of experience and the years.
knowledge. It’s often better to allow for future growth of titles
rather than to start everyone at the top with no room for future 5. Financial plan. Last, but certainly not least, is your financial
growth or change. Your management team doesn’t necessarily plan chapter. This is often what entrepreneurs find most
need to be complete in order to have a complete business daunting, but it doesn’t have to be as intimidating as it seems.
plan. If you know that you have management team gaps, that’s Business financials for most startups are less complicated than
O.K. In fact, investors see the fact that you know you are you think, and a business degree is certainly not required to
missing certain key people as a sign of maturity and build a solid financial forecast. That said, if you need additional
knowledge about what your business needs to succeed. If you help, there are plenty of tools and resources out there to help
do have gaps in your team, simply identify them and indicate you build a solid financial plan. A typical financial plan will have
that you are looking for the right people to fill certain roles. monthly sales and revenue forecast for the first 12 months, and
Finally, you may choose to include a proposed then annual projections for the remaining three to five years.
organizational chart in your business plan. This isn’t critical and Three-year projections are typically adequate, but some
can certainly live in your business plan’s appendix. At some investors will request a five-year forecast. Following are details
point, as you explore funding options, you may be asked for an of the financial statements that you should include in your
“org chart,” so it’s good to have one. Beyond raising money, an business plan, and a brief overview of what should be in each
org chart is also a useful planning tool to help you think about section.
your company and how it will grow over time. What key roles
will you be looking to fill in the future and how will you structure Sales forecast
your teams to get the most out of them? An org chart can help Your sales forecast is just that—your projections of
you think through these questions. how much you are going to sell over the next few years. A
sales forecast is typically broken down into several rows, with a
Company overview row for each core product or service that you are offering. Don’t
The company overview will most likely be the shortest make the mistake of breaking down your sales forecast into
section of your business plan. For a plan that you intend to just excruciating detail. Just focus on the high-level at this point.
share internally with your business partners and team For example, if you are forecasting sales for a
members, skip this section and move on. For a plan that you restaurant, you might break down your forecast into these
will share with people outside of your company, this section groups: lunch, dinner, and drinks. If you are a product
should include: company, you could break down your forecast by target market
● Mission statement. Don’t fall into the trap of segments or into major product categories. Your sales forecast
spending a day or more on your mission statement. will also include a corresponding row for each sales row to
An hour or two should be plenty of time. Avoid putting cover Cost of Goods Sold, also known as COGS (also called
together a long, generic statement about how your direct costs). These rows show the expenses related to making
company is serving its customers, employees, and so your product or delivering your service. COGS should only
on. Your company mission should be short—one or include those costs directly related to making your products,
two sentences at most—and it should encompass, at not regular business expenses such as rent, insurance,
a very high level, what you are trying to do. Frankly, salaries, etc. For restaurants, it would be the cost of
your mission statement and your overall value ingredients. For a product company, it would the cost of raw
proposition might even be the same thing. Here at materials. For a consulting business, it might be the cost of
Palo Alto Software (makers of Bplans), our mission paper and other presentation materials.
statement is this: “We help people succeed in
business.” It’s simple and encompasses everything Personnel plan
we do from the types of products that we build to the Your personnel plan details how much you plan on
kind of marketing that we do. paying your employees. For a small company, you might list
● Intellectual property. This mostly applies to every position on the personnel plan and how much will be
technology and scientific ventures, so just skip this if paid each month for each position. For a larger company, the
you don’t need to discuss your patents and other personnel plan is typically broken down into functional groups
intellectual property. But, if you have intellectual such as “marketing” and “sales.” The personnel plan will also
property that is proprietary to your business and helps include what is typically called “employee burden,” which is the
your business defend itself against competitors, you cost of an employee beyond salary. This includes payroll taxes,
should detail that information here. If you have insurance, and other necessary costs that you will incur every
patents or are in the patent application process, this is month for having an employee on your payroll.
the place to highlight those patents. Equally important
to discuss is technology licensing—if you are Income statement or profit and loss statement
licensing core technology from someone else, you Also known as the income statement, the profit and
need to disclose that in your business plan and be loss (or P&L) is where your numbers all come together and
sure to include details of the financial relationship. show if you’re making a profit or taking a loss. The P&L pulls
● A review of your company’s legal structure and data from your sales forecast and your personnel plan and also
ownership. includes a list of all your other ongoing expenses associated
Business structure and ownership with running your business. You can download a free example
Your company overview should also include a of an income statement here.
summary of your company’s current business
 The P&L also contains the all-important “bottom line” the investors’ funds will be spent. These could include
where your expenses are subtracted from your earnings to marketing, R&D, sales, or perhaps purchasing inventory.
show if your business is making a profit each month or
potentially incurring some losses while you grow. Exit strategy
A typical P&L will be a spreadsheet that includes the The last thing that you might need to include in your
following: financial plan chapter is a section on your exit strategy. An exit
1. Sales (or income or revenue). This number will strategy is your plan for eventually selling your business, either
come from your sales forecast worksheet and to another company or to the public in an IPO. If you have
includes all revenue generated by the business. investors, they will want to know your thoughts on this. If you’re
2. Cost of goods sold (COGS). This number also running a business that you plan to maintain ownership of
comes from your sales forecast and is the total cost of indefinitely, and you’re not seeking angel investment or VC
selling your product. For service businesses, this can funding, you can skip the exit strategy section. After all, your
also be called the cost of sales or direct costs. investors will want to get a return on their investment, and the
3. Gross margin. Subtract your COGS from your sales only way they will get this is if the company is sold to someone
to get this number. Most profit and loss statements else. Again, you don’t need to go into excruciating detail here,
also show this number as a percentage of total sales but you should identify some companies that might be
(gross margin / sales = gross margin percent) interested in buying you if you are successful.
4. Operating expenses. List all of your expenses
associated with running your business, excluding the 6. Appendix
COGS that you already detailed. You should also An appendix to your business plan isn’t a required chapter
exclude taxes, depreciation, and amortization. by any means, but it is a useful place to stick any charts,
However, you do include salaries, research and tables, definitions, legal notes, or other critical information that
development (R&D) expenses, marketing expenses, either felt too long or too out-of-place to include elsewhere in
and other expenses here. your business plan. If you have a patent or a patent-pending,
5. Total operating expenses. This is the sum of your or illustrations of your product, this is where you’d want to
operating expenses. include the details.
6. Operating income. This is also known as EBITDA, or
earnings before interest, taxes, depreciation, and
amortization. This is a simple calculation where you Title: MARKETING MIX IN THE DEVELOPMENT OF
just subtract your total operating expenses and COGS MARKETING STRATEGY
from your sales. Module No. 5 .
7. Interest, taxes, depreciation, and amortization. If I. INTRODUCTION
you have any of these expense streams, you will list
The Philippines is a haven for the development of
them below your operating income.
entrepreneurs. Small and Medium Enterprise explore
8. Total expenses. Add your operating expenses to
the wide area of business opportunities are the key to
interest, taxes, depreciation, and amortization to get
economic development. It is the Entrepreneur who
your total expenses.
could change the global economic landscape.
9. Net profit. This is the all-important bottom line that
Strengthen the domestic economy by developing new
shows if you’ve made a profit, or taken a loss, during
industries and generate local employment for our
a given month or year.
people.
Cash flow statement II. LEARNING OBJECTIVES
The cash flow statement often gets confused with the
profit and loss statement, but they are very different and serve After studying this module, you should be able to:
very different purposes. While the P&L calculates your profits Recognize the importance of marketing mix in the
and losses, the cash flow statement keeps track of how much development of marketing strategy
cash (money in the bank) that you have at any given point. The 1. Describe the Marketing Mix (7Ps) in relation to
key to understanding the difference between the two the business opportunity vis-àvis:
statements is understanding the difference between cash and a. Product;
profits. The simplest way to think about it is when you make a b. Place;
sale. If you need to send a bill to your customer and then your c. Price;
customer takes 30 or 60 days to pay the bill, you don’t have d. Promotion;
the cash from the sale right away. But, you will have booked e. People;
the sale in your P&L and shown a profit from that sale the day f. Packaging; and
you made the sale. g. Positioning
A typical cash flow statement starts with the amount 2. Develop a brand name
of cash you have on hand, adds new cash received through
cash sales and paid invoices, and then subtracts cash that you III. TOPICS AND KEY CONCEPTS
have paid out as you pay bills, pay off loans, pay taxes, etc.
This will then leave you with your total cash flow (cash in minus MARKETING MIX DEFINED…
cash out) and your ending cash starting cash + cash in – cash
out = ending cash). Your cash flow statement will show you Marketing may refer to the process of value exchange that is
when you might be low on cash, and when it might be the best facilitated by the 4P’s. The term marketing mix is a foundation
time to buy new equipment. Above all, your cash flow model for businesses, historically centered on the product,
statement will help you figure out how much money you might price, place and promotion. The marketing mix has been
need to raise or borrow to grow your company. Since an defined as the “set of marketing tools that the firm uses to
operating business can’t run out of cash without having to pursue its marketing objectives in the target market”. Thus, the
close its doors, use your cash flow statement to figure out your marketing mix refers to four broad levels of marketing decision.
low cash points and consider options to bring in additional
cash.
4P’S OF MARKETING MIX
Balance sheet
The last financial statement that most businesses will PRODUCT. A Product is a tangible or intangible item that is
need to create as part of their business plan is the balance built or produced to satisfy the needs of a certain group of
sheet. The balance sheet provides an overview of the financial people. It is in the form of a service or goods. To ensure the
health of your business. It lists the assets in your company, the right product, an entrepreneur must know the demand of their
liabilities, and your (the owner’s) equity. If you subtract the consumer in the market. They must also know how to create
company’s liabilities from assets, you can determine the net the right product mix by expanding and diversifying the depth
worth of the company. Instead of providing additional detail on of your product line. A product has a certain life cycle that
the balance sheet here, I’ll refer you to this article on building includes the growth phase, the maturity phase and the sales
and reading balance sheets. You can also download this decline phases. During the product development phase, the
balance sheet example to help you get started. entrepreneur must do an extensive research of the product that
they are creating. Another product must be developed to
Use of funds maintain the progress and its life cycle to gain more profit even
If you are raising money from investors, you should there will be changes in the economy. In developing the right
include a brief section of your business plan that details exactly product for your business, you must answer the following
how you plan on using your investors’ cash. This section questions:
doesn’t need to go into excruciating detail about how every last
dollar will be spent, but instead, show the major areas where 1. What does the client want from the service or
product?
 2. How will the customer use it? ● What kind of stores do potential clients go to? Do they
3. Where will the client use it? shop in a mall, in a regular brick and mortar store, in
4. What features must the product have to meet the the supermarket, or online?
client’s needs? ● How do you access the different distribution
5. Are there any necessary features that you missed channels?
out? ● How is your distribution strategy different from your
6. Are you creating features that are not needed by the competitors?
client? ● Do you need a strong sales force?
7. What’s the name of the product? ● Do you need to attend trade fairs?
8. Does it have a catchy name? ● Do you need to sell in an online store?
9. What are the sizes or colors available?
10. How is the product different from the products of your PROMOTION. Promotion is a very important component of
competitors? marketing as it can boost brand recognition and sales. It
11. What does the product look like? comprises the various elements like sales organization, public
relations, advertising, and sales promotion.
● Sales Organization – is a part of the total business
organization of a firm. This unit of the firm is
PRICE. The Price of the product is the amount that the
concerned with distribution of goods or services. It
customer pays for them to satisfy. It is the important
may be produced by the organization itself or may be
component of a marketing plan to determine if the business will
purchased from manufacturers for resale.
gain profit and survive. It gives an impact on the entire
● Public relation – It is the practice of deliberately
marketing strategy affecting the sales and demand of the
managing the release and spread of information
product. If a company is not yet popular and does not yet make
between an individual or an organization and the
a name in the market your target customer will unlikely pay a
public to generate awareness and positive responses
high price for the product being sold. The value of the product
to products and services of the business.
depends on its price. A low price of the product usually means
● Advertising – It is the activity or profession of
an inferior good in the consumer’s eyes as they may compare
producing advertisement for commercial products or
your product to your competitor. Making it affordable with good
services. It is a marketing tactic involving paying for
quality may encourage customer to purchase and share it with
space to promote a product, service, or a cause. The
others to buy. On the contrary, a too high price of the product
goal of advertising is to reach out people most likely
will make the cost outweigh the benefits in customer’s eyes,
to be willing to pay for a company’s product or
and they will therefore value their money instead of having
services and entice them to buy.
your product purchased. Be sure to know and examine your
● Sales promotion – It is the process of persuading a
competitors pricing so that you may adjust and benefited to
potential buyer to buy the product designed to be
price competition. When setting the product price, marketers
used as a short-term tactic to boost sales.
should consider the perceived value that the product offers.
In a contemporary time, there seems to be a shift in focus
There are three major pricing strategies, and these are:
from offline to the online world. Promoting a product or services
● Market penetration pricing – It is a pricing strategy using the social media is beneficial to the business owner to
where the price of a product is initially sent low to reach out more customers and suppliers. An extremely good
rapidly reach a wide fraction of the market and initiate example of this is online social media and managing a firm's
word of mouth. online social media presence.
● Market skimming pricing – It is a pricing strategy in
which a marketer sets a relatively high initial price for In creating an effective product promotion strategy, you
a product or service at first, then lowers the price over need to answer the following questions:
time. 1. How can you send marketing messages to your
● Neutral pricing -Generally a default strategy to potential buyers?
minimize the role of pricing in the marketing mix, not 2. When is the best time to promote your product?
utilizing price to gain or restrict market share. 3. Will you reach your potential audience and buyers
through television ads?
Here are some of the important questions that you should ask 4. Is it best to use the social media in promoting the
yourself when you are setting the product price: product?
5. What is the promotion strategy of your competitors?
● How much did it cost you to produce the product? Your combination of promotional strategies and how you go
● What is the customers’ perceived product value? about promotion will depend on your budget.
● Do you think that the slight price decrease could
significantly increase your market share? 7P’S OF MARKETING MIX
● Can the current price of the product keep up with the The 7P’s model is a marketing model that modifies the 4P’s
price of the product’s competitors? model. It is generally used in the service industries. Here are
the additional elements that transition the 4P’s to the 7P’s
PLACE. A Place is the position and distribution channel of the marketing mix model.
product to make it accessible to the potential buyers. An
entrepreneur must examine and study the location of its buyer PEOPLE. People makes the business run. Looking for the right
to easily deliver the product that the customer needs. An person in the business is one of the important elements in
entrepreneur must also know the nearest suppliers to reduce marketing mix model. They are the employees who do the
the cost of transportation for the raw materials to be used in work, produce the product, and the ones who deliver the
making the product or services. product or services. A selection of skilled personnel is needed
There are many distribution strategies, including: to make the business run smoothly and successful. It is
● Intensive distribution – It mainly means a important to hire and train the right people to deliver superior
distribution on a large-scale and displaying the service to the clients. When business finds people, who believe
product in as many ways and places as possible so in the product or services that the particular business creates,
that the customer sells in high volume due to large it’s highly likely that employees will perform the best they can.
scale distribution. They are the internal competitive advantages a business can
● Exclusive distribution – It is an agreement between have over other competitors which can inherently affect a
supplier and retailer that grants the exclusive rights business’s position in the market.
within a specific geographic area to carry the
supplier’s product. PROCESS. Process refers to the flow of activities or
● Selective distribution – It is a retail strategy that mechanism that take place when there is an interaction
involves making a product or group of products between customers and the businesses. It is a systems and
available only in certain markets. processes of the organization that affects the execution of the
● Franchising – An agreement where one party (the service. A combination of some consecutive things or objects
franchiser) grants another party (the Franchisee) the that may enable an entrepreneur to achieve a certain goal in a
right to use its trademark or trade-name as well as structured way. They develop some of the processes regarding
certain business system and processes, to produce marketing decisions like marketing segmentation, customer
and market a good or service according to certain needs, identification, promotional campaign designing, and
specifications. some other essential process. Example of the process would
be when a customer decides to subscribe to a
Here are some of the questions that you should answer in telecommunication company to install telephone and internet
developing your distribution strategy: equipment. The customer will apply by submitting its
● Where do your clients look for your service or requirements and pay the necessary fees. After processing its
product? application, the company then install the telephone and
modem for them to access the internet service. It is now a supermall that put excitement to the people for their spin on
relationship for a given time that the customer will be paying shopping, dining and entertainment. The mall is a unique mix
monthly, and the company will give its service according to of local, national, and global brands that suit every mall-goer’s
their contract plan. need. This physical evidence is where you immediately know
TYPES OF PROCESS exactly what their presence in the marketplace. So when you
1. Technological processes. The process of creating think of a branding concept, if asked of a place to go, you think
tangible products is called technological process. The of a “Mall”, you would probably say of SM because “They got it
objectives to ensure that the customers feel the all, for You”. This manipulated their customers perception when
product to be theirs. The manufacturer should ensure asked for a different brand it is already inside in that place.
that he creates the product that is wanted by the
customers and should also make the products that he DEVELOPING A BRAND NAME
as a businessman would want to sell in the market. A Brand is name, term, design, symbol, or any other
The balance between both would ensure that the features that identifies one seller’s good or service as
technological process would run smoothly. distinction from those of other sellers. If you are ready to
2. Electronic processes. Use of receipts or barcodes brand yourself or your business, you need to have a clear
or forms or other methods of information about a understanding of what developing a brand involves before you
product of a company that manufactures them is really get started. Your brand-development process should
called an electronic process. This also includes the always follow these steps:
course which is used to scan with the help of an 1. Decide what you’re going to brand. Are you
application using a mobile phone. branding a product or a service? A company or an
3. Direct activities. Direct activities, as the name individual? If a product, think of something that you
suggests, is about the reactions of the customers think your target will be interested. It might be tangible
regarding the process. How did they feel about the or intangible item that is easy to make and available
process that they just underwent through is known with the supplier. If it is a service, think of a demand in
thereby making any changes if necessary, in order to the market today. As we are experiencing pandemic
make the process smoother. Direct activities are what do you think is a possible service that you could
occurred and recorded in present time provide to your target market. Are you establishing a
4. Indirect activities. When the interaction does not company? Who will compose your team or your
take place in person and it happens before or after workforce? Do they have enough funding to establish
the product has been bought is termed as an indirect your company? An individual? Are you ready to
activity. create your own business alone?
2. Do your research. First, find out everything there is
MIXING PROCESS. Processes in something as a tool to know about your market. Then, find out everything
to create something enormous or monumental. For there is to know about your product or service.
example, the combination of telemarketing and Research and Development is an important factor to
internet marketing is used to promote a certain be successful in putting up a business. It is a way of
service or a product to the targeted set of customers. knowing what product or service will be a demand in
the market? In your years of stay in Senior High
CONCEPTS RELATED TO PROCESS. School you were taught on how to write and develop
1. Workflow. Movement of information or tasks for your own research. This will be a great help for you to
material from one participant to the other is start with.
termed as workflow. This includes but is not 3. Position your product or service. Find and win a
limited to people and tools procedures that are place for your offering in the marketplace and in
involved in every step of the marketing mix consumer’s mind by providing unique solutions to
process. problems or need that aren’t already being addressed
The workflow may be sequential that is the by competing products. A Place is the position and
consequent step is begin only when the prior step distribution channel of the product to make it
is completed or parallel that is multiple steps may accessible to the potential buyers. You must examine
occur at the same time. Single workflows may be and study the location of your buyer to easily deliver
combined in multiple ways to have an overall the product that your customer needs. In the
process. customer’s perspective, they will choose a product or
2. Business process reengineering. Business service nearest to their residence so when they
process reengineering commonly abbreviated as encounter problem to the product or service it will be
BPR is a means to enhance or improve the easy for them to return for a replacement.
effectiveness of the organization along with its 4. Write your brand definition. Your brand definition
productivity. It consists of starting right from the describes what you offer, why you offer it, how your
beginning or from scratch and creating a major offering is different and better, what unique benefits
business process along with the application of IT your customers can count on, and what promise or
or information technology in order to achieve set of promises you make to all who work with and
significant improvement of performances. buy from your business. In writing your brand, it is
3. Business process management. Business important that you know your mission, vision, and
process management is commonly abbreviated objectives. Describe your brand that is easy to
as BPM. It is defined as a discipline which has a remember and catchy messages to your target
mix of different business activities and their flows customers.
and which strives to support the vision and 5. Develop your name, logo, and tagline. Your name
mission of business within and also beyond many is the key that unlocks your brand image in your
boundaries which one was people customers consumer’s mind. Your logo is the brandmark or
internal the employee’s external stakeholders as symbol that serves as the face of your brand. Your
well as external partners. tagline is the memorable phrase that provides
4. Total quality management. Commonly consumers with a quick indication of your product,
abbreviated as TQM, Total Quality management brand, and market position. Your business name
is sought in order to improve the quality of the refers to a name that is different from a true name of
product. Six sigma method was used by Motorola an individual which is to be used or signed in
in order to find out about total quality connection with your business on any written or
management. printed receipts, including business taxes duties and
It consists of methods to improve the processes fees collected to the business owner. A logo is a
in the business and thereby reduce the problems symbol, designed to represent your organization or to
in the output increase the output and thereby identify your products used to aid and promote public
maximize the profits. identification and recognition. It is an abstract or
figurative design with text. Make sure to make it easy
PHYSICAL EVIDENCE, In the service industries, there should for the customer to remember the images. A tagline
be physical evidence that the service was delivered. It pertains on the other hand, is a phrase or slogan used in
on how a business and its products are perceived in the advertising to impress and encourages the customer
marketplace. It is the physical evidence of a business’ to patronize your product or service offered to them.
presence and establishment. They are generally market 6. Launch your brand. Your brand goes public when
leaders that establishes a physical evidence that the customer you unveil your name, logo, and slogan, and when
will go when buying things that they need. Example of a you begin to tell your market the story of how your
physical evidence is when you think of a place where all the brand reflects what you stand for. A new brand must
things you need are already in that place like SM City get to make a splash in the market if it’s going to be
Olongapo Central in Olongapo City is a much-awaited successful. You’ve got to stand out in the crowd to
 present your product or service. Make sure to allot C. Point-of-purchase communications
enough time to prepare your presentation to the D. Yield management
public. Giving yourself more time also helps to 5. It can be a meal or some other tangible item that a hotel or
develop hype for your brand while giving you ample restaurant provides to its guest. It can also be an intangible
time to make sure that all is ready. Your goal is to service or a hotel or restaurant’s concept.
develop a marketing strategy for launching your A. Product
product or service. Make sure that your presentation B. Price
belongs to your target audience. It’s no use promoting C. Place
it to people who are not interested, so get to know D. Promotion
your potential buyers. In addition, make a research to 6. Is the amount that a hotel charges for its product?
your competitor to find out what niche they might be A. Product
missing out on, then go after the market. B. Price
7. Manage, leverage, and protect your brand. This is C. Place
the “care and feeding” phase of the branding process; D. Promotion
it’s the step that leads to a strong, healthy, resilient 7. Is the physical location of a business and the site where the
brand. Just like good parenting, good branding reservation for the hotel is made?
management can be summed up in a single word — A. Product
consistency. Your brand image is an important factor B. Price
in determining your success, which is why it is C. Place
absolutely necessary to make sure it’s protected at all D. Promotion
cost. Knowing how to prevent it from being diluted, 8. Is the decisions made about how to communicate the
damaged or taken advantage if misused by product, place, and price of the hotel. It is made up of
competitors, counterfeiters, or unrelated companies. several promotional activities.
Managed to apply and register your brand to the right A. Product
agency for trademarking is one of the important things B. Price
to remember to protect it. C. Place
8. Realign your brand to keep it current. Occasionally, D. Promotion
you can (and should) change how your brand is 9. It is the process of persuading a potential buyer to buy the
presented. From time to time, you need to update product designed to be used as a short-term tactic to boost
your brand presentation (the face of your brand) to sales.
keep it relevant to the market in which it lives. A. Sales organization
Perhaps the most obvious reason to refresh a brand B. Advertising
is that its image has simply outgrown its effectiveness. C. Public relation
An update to visual elements is necessary to build D. Sales promotion
upon the brand structure that is already known and 10. It is an agreement between supplier and retailer that grants
loved. the exclusive rights within a specific geographic area to
carry the supplier’s product.
SUMMARY: A. Intensive distribution
● Marketing mix refers to the process of value B. Exclusive distribution
exchange that is facilitated by the 4P's. It is the C. Selective distribution
foundation model for business. D. Franchising
● 4P's was develop by a marketing expert named E.
Jerome McCarthy ACTIVITY. Personal Branding Worksheet and Instruction
● 4P's of Marketing mix refers to four broad levels of Guide By: Brooke Webb Smith
marketing decision
Instructions for Completing the Personal Branding Worksheet
● Product, Price, Place and Promotion are the 4-broad
level of marketing mix decisions Part A: Inspiration
● 7P's model is a marketing model that modifies the
4P's model. 1. Who are the people you admire most in your industry?
● People, Process and Physical evidence are the 3 Who are the market leaders? Do you have any role models?
added marketing mix decision. Who are the most successful people? The Industry
● A brand is a name, term, design, symbol, or any other Influencers? (Note: You can also include people in other
features that identifies one seller's good or service as industries who you admire and who may also serve as role
distinction from those of other sellers. models.)
IV. TEACHING AND LEARNING MATERIALS 2. What are the characteristics of their personal brand?
AND RESOURCES For example, do they have a background story that
everyone knows such as a turning point in their life? A
Slide Presentations, books, video clips signature phrase which everyone associates with that
person (like Nike’s, Just Do It)? Or Emeril Lagasse,
“BAM!” Even if you don’t care for his cooking or watch
V. LEARNING TASK his show, chances are you have heard that phrase and if you
say it most people will hear him saying in their head. What
MULTIPLE CHOICE. Directions: Circle or darken the letter that about Industry Influencers? Do you have a few that you
corresponds to the BEST answer. keep up with? They could have a nickname that describes
their brand, such as The Jerk (obviously not someone
1. A manager of Venezia Hotel must make marketing known for their compassion). They may even have a style
decisions to help it stand out from its competition. To make that distinguishes them, such as always wearing a baseball
these decisions, they must determine all but which of the hat and sandals.
following? List the things that distinguish the people you listed in Step
A. What customers want 1.
B. When customers want their services 3. Where are these people seen most often?
C. How to provide services to customers The places where you are seen most often are the places
D. How to persuade customers to patronize the hotel where you will have the greatest opportunities to build your
2. Raven Fredric decides that Lighthouse Hotel is going to personal brand. Where are your market leaders hanging out
offer a free Sunday brunch to weekend guests in an attempt and promoting their brand? For example, do they do
to increase the weekend business. What pricing approach is frequent seminars or speak at large conferences? Do you
he using? often see them on Facebook, Twitter, YouTube, LinkedIn or
A. Loss leader Google+? Their blog may be their biggest source of
B. Cost-plus pricing branding, or podcast and advertisements.
C. Customer-based pricing Conduct online searches to see where their name appears
D. Yield management most often. Your goal is to determine where the Industry
3. When discussing marketing, what does “product” refer to? Influencers spend the most marketing time. Locate the
A. The location on which the hotel is built trend-setters. Follow the movers-and-shakers. Emulate the
B. The hotel’s concept strategies that may work well for your business. By all
C. The hotel’s advertising means, do not try to replicate their brand.
D. The price at which rooms are sold Remember, your brand is about the essence of you – not
4. Which of the following is not a category into which anyone else.
promotional activities are classified? 4. What do you admire most about these people?
A. Personal selling Make a list of some of the characteristics you would want
B. Public relations to model or adapt to your own brand. For example, they
 may have a very personal way of communicating with their 5. What’s your style? (e.g., casual, professional, grunge,
market in which they share their own pains and heartaches. etc.)
Or they might have a very no-nonsense attitude and be Write down the specifics of your current style. For
known most for their guerilla-style, aggressive marketing example, do you tend to be more casual or professional?
tactics. Are you more of a 60’s throwback or a futuristic
5. What makes them unique? trend-setter? Are you predominately Forever 21 or Banana
How do they stand out from the rest of their industry and Republic?
the world? Why are people so attracted to them? For At the same time, note which of these style elements would
example, do they meet a specific need that no one else does most appeal to your target market. Your style may not be a
quite as well? What impression are they leaving on their direct reflection of your target market. For example, I tend
audience? How are they making them feel? One of the to be very closely identified with the style of Tory Burch,
things that intrigue me about comedians who use Land’s End, Soma, Kate Spade, Burberry, Chanel and
self-degrading humor; they are often the most popular. Nordstrom. Yet, many of my peers and members of my
Louis C.K. and Jim Gaffigan illustrated this beautifully. tribe are very like me preferring a chic, sophisticated
There is something about sharing their pain of being lonely, image; they do tend to lean more toward the trendy side.
tired, overweight or single that makes others not only burst They prefer to be fashionable in the styling of Gucci,
out in laughter but also resonate with their pain. How many Michael Kors, Juicy Couture, Prada, True Religion and
comedians can you think of who had a rise to fame because BCBG. Although I wear items from each of those brands, I
they talked about how broke they are or how they, “get no tend to be less about staying up-to-date with the latest but
respect.” ~Rodney Dangerfield, yes, you remember! rather have timeless classic pieces. I give this illustration to
make the point, my communication, marketing and public
Part B: Brainstorm Your Brand relations each must speak to the importance of beauty and
image in their lives. I must make a note of this in my
1. Who are the people you want to appeal to?
language, graphics and presentations. If I ignore that
What is the target market for your personal brand? Is it
critical part of their identity, they will no doubt tune me out
primarily your buyers? Or are you targeting your ideal
and ignore me. I am in business to serve them, not meet my
future employers? What are some of the characteristics of
own needs. I must get my needs met with another service
your market? For example, how old are they, are they more
provider who has me in their target market. Think about
conservative or liberal, what other brands appeal to them?
your preference and that of your target market, Capitalize
Are they Target or Walmart? Are they on team Android or
on the similar.
iPhone? Do they prefer a bottle of beer, a bottle of wine or
6. The skills you want people to know you have (natural,
a glass of champagne? Are they Jimmy Choo, Calvin
valuable talents)
Kline, Tory Burch or Kate Spade? Talk to people in your
Make a list of the skills your think are most important to
target market and get a feel for what makes them tick. Hang
the target market for your personal brand. These should
out in forums where they are and listen in. Study their likes
include the natural talents that would provide the biggest
as well as their dislikes.
impact and value for your market, such as a keen
2. How do other people see you now?
problem-solving ability. If you work in branding and
Ask some people who know you to describe the way they
marketing, you are probably both creative and have a thing
see you. What do they see as your strengths and
for studying human behavior. A systems engineer probably
weaknesses? Ask them what stands out most about you. If
doesn’t rely on creativity so much to persuade their
possible, do an anonymous questionnaire so you can get
prospects.
honest feedback on the way you’re seen now. Please note:
7. Signature phrase or value proposition (just a few words):
prepare yourself for the unexpected feedback you may
Do you have a signature phrase, value proposition or
receive. It is a good starting point to close the gap in
personal tag line? This would just be a few words. For
between, how you think you are and how others perceive
example, the phrase “Elementary, my dear Watson” was
you. It is not uncommon for our words, actions, behavior
Sherlock Holmes’ signature catchphrase. One of Steve
and habits not to be in accord with our intentions. This may
Jobs’ famous lines was, “Design is not just what it looks
prove to give you some valuable insight. Consider a
like and feels like. Design is how it works.” You may not
learning experience and an opportunity for self-reflection.
become as famous as Steve Jobs, but you should have a
3. What do you want to be known as? (e.g., the person who
short phrase that describes you and the essence of your
does X)
service.
What are the key traits you want people to associate with
8. What’s unique about you?
you? For example, do you want to be known as the
Finally, brainstorm all the different ways that you are
‘one-step marketing solutions’ expert? Or perhaps your
unique from others in your market. What makes you stand
reputation is for ’10-minute sales guru or
out? If you’re not sure, go back to what other people have
‘compassion-based coaching’. Brainstorm different
said about you. You can also think about ways that you
possibilities based on the people you want to appeal to as
would like to be unique, even if you aren’t right now.
well as your own strengths. Your natural skills, talent and
extraordinary gifts are your first clue.
Another way to think about it, imagine, two people are
talking and one says, “I am in desperate need of (insert Part C: Define Your Brand
your thing here!)” And the other says, Oh I know! You
absolutely must call, (insert your name here) because she is 1. Your story
the go-to person for ! Fill in the blank. What are you the What is your background story?
go-to person for? You are the leader in this arena. When What are some of the key events in your life that have
you are doing this thing, you get in a zone. You are on made you who you are today? What are some of your key
FIRE and no one can touch you with a ten-foot pole! It’s accomplishments or turning points in your life that you
inspires you. It motivates you. It excites you. You would do want to share with others?
it for free if money were not a factor. You absolutely love it 2. Personal Values
and want to share it with the world. Sit still for a bit. What are your most important personal values?
Sit in silence and allow your gifts and talents come to you. Some sample values could be around seeing the best in all
As you reflect, answer the above questions. Soon you will people, laughing about something every day, learning
be confident that you for sure can be a leader in something new every day, striving for excellence, helping
____________ or doing __________. others be their best etc. List your top 5.
4. What’s your story? 3. Personal brand statement (state who you are in 1
Why do you do what you do? Write down some of the sentence)
details of your background that have impacted your life. Is Write out your unique, personal brand statement in one
there a good story, which you can use as part of your sentence or phrase.
brand? Of course, it is. We all have one. Whether it’s an This should reflect the element that defines you as a person.
integral part of your brand or not, people will always want For example, Helen of Troy was, “The Face That Launched
to know your story, they want to identify with you. Think a Thousand Ships”.
about the journey to your current space. Your obstacles, 4. Your USP - unique value proposition (how you uniquely
your challenges, your persistence, your determination, your provide value to your market)
fear, your faith…each of these elements is what a good Now write out a short sentence or two that describes how
story makes. Share openly how you arrived at your current you provide value to your market in a unique way, different
state. Not only will you inspire others; but also some or all from others in your market. For example, Scott
parts of your story will undoubtedly resonate with your Tousignant’s value proposition is, “I lead by example and
ideal buyer. When this happens, you have created brand encourage others to sculpt their body into a work of art
loyalty. while living their life to their fullest potential.”
5. Mission (why you do what you do)
 Your mission statement tells the world a little bit more
about why you do what you do. It’s not your story. Instead,
it combines the elements of your personal values, brand,
and value proposition all into one statement that describes
your personal mission for your life. This doesn’t have to be
about your whole life. If you are developing a personal
brand primarily around your business, then your personal
mission statement can be focused more on those aspects.

WORKSHEET: CREATING YOUR PERSONAL BRAND

PART A: INSPIRATION

1. PEOPLE YOU ADMIRE IN YOUR INDUSTRY:

2. WHAT ARE THE CHARACTERISTICS OF THEIR
PERSONAL BRAND? (E.G., BACKGROUND STORY,
SIGNATURE PHRASE, NICKNAME, STYLE, ETC.)
3. WHERE ARE THEY SEEN MOST OFTEN? (ONLINE
SITES, OFFLINE, SEMINARS, ETC.)
4. WHAT DO YOU ADMIRE ABOUT THEM?
5. WHAT MAKES THEM UNIQUE?

PART B. BRAINSTORM YOUR BRAND

1. WHO ARE THE PEOPLE YOU WANT TO APPEAL TO?

(CHARACTERISTICS)

2. HOW DO OTHER PEOPLE SEE YOU NOW?

3. WHAT DO YOU WANT TO BE KNOWN AS? (E.G.,

THE PERSON WHO DOES X)

4. WHAT’S YOUR STORY? (E.G., WHY YOU DO WHAT

YOU DO)

5. WHAT’S YOUR STYLE? (E.G., CASUAL,

PROFESSIONAL, GRUNGE, ETC.)

6. THE SKILLS YOU WANT PEOPLE TO KNOW YOU

HAVE (NATURAL, VALUABLE TALENTS)
7. SIGNATURE PHRASE OR VALUE PROPOSITION
(JUST A FEW WORDS):

8. WHAT’S UNIQUE ABOUT YOU?

9. DEFINE YOUR BRAND

10. YOUR STORY

11. PERSONAL VALUES

12. PERSONAL BRAND STATEMENT (STATE WHO YOU

ARE IN 1 SENTENCE)

13. YOUR UNIQUE VALUE PROPOSITION (HOW YOU

UNIQUELY PROVIDE VALUE TO YOUR MARKET)

14. MISSION (WHY YOU DO WHAT YOU DO)