GEE3: THE ENTREPRENEURIAL MIND

MODULE 3: INTRODUCTION TO BUSINESS PLAN PREPARATION

MS. DADA LUBITON
2nd SEMESTER | S.Y. 2023-2024

THE NEED FOR A opening and operating a new

BUSINESS PLAN entrepreneurial venture. In case the
The business plan is prepared using a business project is relatively large in terms
scientific approach in determining possible of financing or funding requirements, the
business situations considering the entrepreneur usually seeks the assistance
different perspectives of people who are of consultants. In this book, however, the
interested in the business. concept of business plan preparation is
more applicable to a small business that
Though the perspective of the the learner is expected to open as the final
entrepreneur has the major influence on major requirement of the course in
the business plan, he/she nonetheless entrepreneurship.
must still consider the views of the
customers, creditors, and even the Actually, the content and structure of the
employees and staff. He/She must gather business plan are almost the same as
sufficient and relevant information to those of the feasibility study. The data
support any perception or conclusion. shown in the feasibility study are the same
set of data presented or used in the
The business plan is actually the roadmap business plan. Nonetheless, the business
of the new business. It is the roadmap of plan presents a more detailed discussion
the entrepreneur. It is the only single of how the business will be undertaken
written document that must be prepared and operated.
before opening a new business or
expanding an existing business. It provides MAJOR PARTS OF THE BUSINESS PLAN
a clear direction to any uncertain business Though there are no universally accepted
endeavor. standard format or structure of the
business plan, this book adopts the
However, there is another written following format for the major parts of the
document that must be prepared and is of business plan:
equal importance as the business plan. 1. Introduction
This is the feasibility study which serves as 2. Executive summary
the forerunner of the business plan. 3. Environmental analysis
4. Business description
In general, two major tests are conducted 5. Organizational plan
every time a new business idea is created, 6. Production plan
namely, the test of possibility and the test 7. Operation plan
of feasibility. The test of possibility on the 8. Marketing plan
new business idea should have positive 9. Financial plan
results, so that the next test, which is the 10. Appendix
test of feasibility or viability, can be
conducted. The primary objective of the INTRODUCTION
feasibility study is to determine whether The introduction presents the general
the proposed business is feasible or not in perspective of the business; it consists of
all areas. If the outcome of the feasibility one to two pages. It includes, among
study is positive, then the entrepreneur others, the following sections:
prepares the business plan.
It may consist of one to
Business plan is defined as a detailed and 1. Proposed name of the business
integrated written document that 2. Address of the business
describes the various activities involved in 3. Name of the owner or owners

CABAY, J.B. | BMLS2 | PLT COLLEGE, INC.

4. Description of the business NAME OF THE OWNER
5. Location of the business The name of the owner must be properly
6. Funding requirement and source stated. In a sole proprietorship, there is
only one owner. In case the venture is a
In case the consulting team prepares the partnership, the names of the partners,
business plan for prospective owners or including the extent of their liabilities,
investors, the section Statement of must be indicated. For example, if a
Confidentiality is added as the last section. partner's contribution takes the form of a
service, a description like industrial
PROPOSED NAME OF THE BUSINESS partner or limited partner must be
The formulation and drafting of the properly mentioned.
proposed business name is not as simple
as it sounds. For business ventures that will operate as
a corporate entity, the names,
It is a delicate and important nationalities, and addresses of the
entrepreneurial task. Remember that the incorporators must be given. Incorporators
name of the business may exist in the are persons who originally formed the
market for many years. Careful and in- corporation.
depth planning is of prime importance.
DESCRIPTION OF THE BUSINESS
The proposed business name must A brief description of the business must
1. reflect the business identify and include information about the type of
image, product or service that the business
2. promote the philosophical values and intends to produce or provide. It may
culture that the business values the include a brief information about the
most, ultimate mission, vision, and objectives of
3. profess the brand identity of the the business. The other products or
product, and services that the business plans to
4. attract or influence the target produce or provide must also be
consumers. mentioned in the description of the
business.
At least three suggested trade names
must be submitted to the Department of LOCATION OF THE BUSINESS
Trade and Industry for approval and There are no rigid rules in the selection of
registration. the business location since several
variables affect the selection of the
ADDRESS OF THE BUSINESS business location. The basic
It is important that the address of the entrepreneurial consideration is to place
business is correctly written because all the proposed business in a strategic
business correspondence are mailed to the location that will assure competitive
business address. Raw materials and other advantage.
manufacturing supplies are also shipped
by the seller to the designated business What is the difference between the
address. sections Address of the Business and
Location of the Business?
Nowadays, it is also necessary for the The former simply states the exact
business to have an email address to business address. No additional
facilitate electronic communication description is provided to highlight the
between the business and the customers, exact business address. The latter
suppliers, creditors, and other significant indicates the reason/s for the selection of
parties. the location. In case the processing plant
is not within the vicinity of the business, its
exact location must also be described.

The following factors should be considered

when deciding on the location of the
proposed business:
1. Proximity to the target consumers
2. Distance from the sources of raw
materials, labor, and utilities
3. Availability and cost of transportation
4. Peace and order situation
5. Presence of direct competitors
6. The geographic and climatic conditions

FUNDING REQUIREMENT AND SOURCE

The estimated total initial cost of the
business venture must be clearly
indicated. It should include the projected
breakdown or allocation of the total cost,
e.g., how much will be for building,
fixtures, equipment, supplies, and working
capital. This section also presents the
source or sources of funds.

The initial cost of the investment may be

provided solely by the owner or owners or
partly by the owner and creditors. The
estimated period to settle the funding
source provided by creditors must also be
mentioned.