ENTREPRENEURSHIP CORE COMPETENCY: ENTREPRENEURSHIP

Entrepreneur - came from the French word - The ability to identify opportunities, take
“Entreprendre” which means to undertake. calculated risks, and create value for customers.
- A reference to individuals who have initiated the - This competency is essential for successful
establishment of a business enterprise. entrepreneurship because it enables
Entrepreneurship - a process of initiating a business or entrepreneurship to innovate, adapt to changing
expanding an existing enterprise for providing a good market conditions, and create sustainable
service to the market and realizing profit for the firm. business.
According to Webster’s Dictionary - it is the activity of ENTREPRENEURIAL MINDSET
organizing, managing, and assuming the risks of a - It involves cultivating a set of skills and attitudes that
business enterprise. enable individuals to think creatively, take calculated
risks, and persevere in the face of challenges.
- One example of an entrepreneurial mindset is the
ENTREPRENEUR PERSON
ability to identify opportunities where others see
obstacles.
ENTREPRENEURSHIP PROCESS
- Another key aspect of the entrepreneurial mindset is
ENTERPRISE OUTCOME the ability to bounce back from failure and learn from
mistakes rather than being discouraged by setbacks.
Entrepreneur - is an individual who undertakes the risk
WHY DOES ENTREPRENEURSHIP MATTER?
associated with creating, organizing, and owning a
● It empowers individuals to create their own
business.
opportunities
ENTREPRENEURIAL PROCESS
● It makes a positive impact on society; and
Is a series of steps that entrepreneurs take to turn their
● Achieve financial success.
ideas into successful businesses.
Entrepreneurship is not just about starting a business. It
➔ Discovery
is a way of thinking and approaching problems.
➔ Development of Concept
❖ It requires creativity, risk-taking, and
➔ Organizing Resources
perseverance
➔ Implementation
❖ Identify opportunities, solve problems, and
➔ Reaping the Returns
create values for yourself and others
STEPS IN THE ENTREPRENEURIAL PROCESS
KEY CONCEPTS
1. DISCOVERY - the stage in which the
➢ INNOVATION - involves coming up with new
entrepreneur generates ideas, recognizes
ideas, products, or services that can solve a
opportunities, and studies the market.
problem or meet a need in the market.
a. Consider your hobbies or skills.
➢ RISK-TAKING - is the willingness to take
b. Consider consumer needs and wants.
calculated risks in order to achieve success.
c. Conduct surveys and questionnaires–test the
➢ CREATIVITY - is the ability to think outside the
market.
box and come up with unique solutions to
d. Study demographics.
problems.
2. CONCEPT DEVELOPMENT - develop a
COMMON COMPETENCIES
business plan: a detailed proposal describing
➔ COMMUNICATION SKILLS - effective
the business idea.
communication can help you articulate your
3. RESOURCING - the stage in which the
vision to persuade others to join your cause, and
entrepreneur identifies and acquires the
resolve conflicts when they arise.
financial, human, and capital resources needed
➔ PROBLEM-SOLVING ABILITIES - whether
for the venture startup, etc.
you’re trying to identify a market opportunity,
a. Apply for loans, grants, and assistance.
develop a new product, or overcome a setback,
b. Hire employees.
you need to be able to analyze complex
4. ACTUALIZATION - the stage in which the
information, generate creative solutions, and
entrepreneur operates the business and utilizes
make informed decisions.
resources to achieve its goal/objective
➔ ADAPTABILITY - allows entrepreneurs to
5. HARVESTING - the stage in which the
respond to changing circumstances, pivot their
entrepreneur decides on a venture's future
strategy when necessary, and learn from their
growth, development, or demise.
mistakes.
 THE BUSINESS PLAN Venture capitalists are concerned about the
BUSINESS PLAN - is prepared by the entrepreneur, a entrepreneur's character, value system, and
document that describes the various external and collaboration. The founding team's experience and
internal elements involved in starting a business or in breadth of experience are crucial for successful venture
expanding an existing venture, amidst a dynamic management, even if the venture capitalist doesn't
business environment. It integrates the different actively participate.
functional plans such as marketing, manufacturing, INFORMATION NEEDED FOR THE MAJOR
finance, and human resource management, taking into SECTIONS OF THE BUSINESS PLAN
consideration the overall strategy of the business.
IMPORTANCE OF BUSINESS PLAN
Business plans are important because of the following
reasons, among others:
➢ it helps determine whether a proposed or
existing business venture is viable given its
target market,
➢ it guides the entrepreneur in mobilizing the
resources needed by the business, and
➢ it serves as a tool in helping get financing for the MARKET INFORMATION
business. A critical piece of information for any aspiring
ITS IMPORTANCE TO ENTREPRENEURS entrepreneur is the potential market for his product or
➔ Serve as a road map for managing the business. service. To determine the size of the market, however,
➔ Identifies the resources needed to operate and the entrepreneur must be clear on who his primary and
grow the business secondary markets are. What are their demographic
➔ Allows the entrepreneur to anticipate potential characteristics? For example, is the product meant to
business risks. address the needs of highly-educated women with
Aside from providing the entrepreneur with a road map, high-income levels living in suburban areas? Or is it
the business plan allows him to anticipate potential risks likely to be bought by less-educated women belonging to
so that he can weigh the options when deciding to pour a lower-income class and living in dense urban areas?
resources into the business. This becomes more critical By coming up with a well-defined target market, the
if the entrepreneur has to invest in fixed assets, such as entrepreneur will be able to project the size of the market
land, buildings, and expensive equipment. and the estimated frequency purchase, allowing him to
ITS IMPORTANCE TO LENDERS set reasonable market goals and objectives.
➔ Allows the lender to assess whether the OPERATIONAL INFORMATION
entrepreneur will be able to meet debt and Whether the business venture will be viable also
interest payments depends largely on the cost of sourcing and
➔ Provides information about collateral or tangible manufacturing the product or of providing the service.
assets that can be secured for the loan. Going back to the entrepreneur who plans to open a
For lenders, the business plan allows them to assess hostel, he will need information on the following:
the entrepreneur using the four Cs of credit. ➢ LOCATION: Where will the hostel be built? How
4 Cs far is it from the airport or seaport? How far is it
❖ CHARACTER from restaurants, hospitals, churches, and major
❖ CASH FLOW tourist destinations in the area? Is it accessible
❖ COLLATERAL to public transportation?
❖ EQUITY CONTRIBUTION ➢ SERVICE OPERATIONS: Will the entrepreneur
Has the entrepreneur been able to pay his debt provide rooms only or will it be on a
religiously in the past? Will cash inflows be sufficient to bed-and-breakfast operation? Will it provide
meet the debt and interest payments? Does the other services (eg, laundry, airport transfer, local
entrepreneur have collateral or tangible assets against tours)?
which the loan can be secured? And how much of the ➢ EQUIPMENT AND/OR FURNITURE
entrepreneur's own money was invested in the REQUIRED: Given the number of rooms, how
business? many beds, furniture, furnishings, air
ITS IMPORTANCE TO INVESTORS conditioning units or electric fans, toilet bowls,
➔ Allows the investor to gauge whether projected bathroom fixtures, etc, must be purchased? How
returns are acceptable much will each of these cost?
➔ Provides information about the character of the ➢ SPACE REQUIREMENTS: What will be the total
entrepreneur and about the capability of the amount of space needed for the rooms, the
ventures manage team. lobby, the kitchen, and the dining area? Will
Investors prioritize substantial returns on their there be space set aside for a small garden or a
investment, assessing the business plan's financial parking area?
projections and reasonable assumptions about market
conditions and operating costs.
1
 ➢ LABOR REQUIREMENTS: What particular ❖ EXECUTIVE SUMMARY - The executive
skills are needed for the operations? How many summary, which is prepared after the total plan
employees are needed to adequately support has been written, must stimulate the interest of
the operations? Will the employees handle its reader, especially if he or she is a potential
multiple jobs, or will there be dedicated staff for investor. If it is written in a concise and
receiving guests, housekeeping, and doing compelling manner, the business plan might just
kitchen chores? Where and how will these convince the potential investor that the entire
employees be sourced? For each of the required business plan is worth reading. Key questions
skills, what are the wage rates in the area? that the business plan must answer include the
➢ RAW MATERIALS NEEDED AND POTENTIAL following:
SUPPLIERS: What raw materials or supplies ● What is the basic idea for the new
are needed (eg, soap, tissue paper) for the product or service? What makes it
rooms, and what ingredients are needed by the unique?
kitchen staff for the guests' meals? The ● How will the idea for this proposed
suppliers names, addresses, and contact venture be realized?
information, as well as the cost of the supplies ● Is the potential market big enough to
must be indicated. make the business viable?
➢ UTILITIES: Assuming an average occupancy ● How much revenue and income is the
rate, what is the estimated electricity and water business expected to generate?
consumption of the hostel? What are the current ● Who are the people behind the
and projected rates for these utilities? business?
FINANCIAL INFORMATION ● Do they have the knowledge, skills, and
The financial section of the business plan will require the experience required to develop the
entrepreneur to include a list of all sources of revenue product or service idea and to run the
and a list of all possible expenditures for the first year of proposed venture?
operations. The budget must include a forecast of sales The entrepreneur must use his judgment in determining
revenue, which can be prepared using assumptions which pieces of information ought to be included in the
about the potential market; capital expenditures, direct executive summary. For example, if there is a large
operating expenses, and cash required for non- expense untapped market that the business can readily exploit,
items. then this must definitely be highlighted.
MAJOR SECTIONS OF A BUSINESS PLAN ❖ ENVIRONMENTAL AND INDUSTRY
ANALYSIS - It is important to describe the
general conditions within which the
entrepreneurial venture will operate. These
environmental factors include the following:
● Sociocultural Conditions: The
demographic shifts in the Filipino
population, including the rise of the
middle class and elderly, lifestyle trends
focusing on health and sustainable
living, and changing consumer
preferences.

● Technological Conditions: The

assessment of major developments in
science and technology, such as
❖ INTRODUCTORY PAGE - This cover page e-commerce, has either beneficial or
provides a brief summary of the business plan's detrimental impacts on various
content. It must contain the following: industries, including wholesale, retail,
● the name and address of the company; tourism, banking, and
● the name of the entrepreneur and his telecommunications.
contact information (telephone number, ● Economic Condition: Describes the
fax number, email address, and growth of national and local economies,
personal website, if available); including Gross Domestic Product GDP,
● a brief description of the company and price movements, inflation, interest
the nature of the business; and rates, employment trends, and
● the amount of financing needed. The disposable income.
entrepreneur might also want to include ● Political-legal Conditions: To
a statement of confidentiality, especially effectively manage a business, it's
if his business idea involves a novel or crucial to consider existing laws and
cutting- edge technology. regulations, as well as future ones.
2
 Increases in minimum wage, stricter Forecasted sales are included to indicate
health and safety regulations, and tax business viability. A detailed marketing plan
exemptions can impact labor-intensive assures investors that the entrepreneur has
businesses. However, analyzed the potential market and has evidence
government-provided incentives and of customer demand.
subsidies can also benefit micro-, small- ❖ ORGANIZATION PLAN - The section lacks
and medium-scale enterprises documentation of the venture's ownership form
(MSMEs). Understanding these factors and an organizational chart for the management
helps businesses identify opportunities team. Potential investors must be convinced that
and threats, and formulate a competitive the team has the necessary competence,
strategy based on the industry character, experience, and expertise for a
conditions. successful business. The young entrepreneurs
● Supply and demand: Entrepreneurs may need assistance from business managers
must determine if their business venture or consultants, highlighting their academic
belongs to a rapidly growing, steadily background, training, and cognitive and social
growing, plateauing, or rapidly declining skills. Lastly, demonstrating energy and passion
industry, assess sales growth over five during meetings can also help.
years, and consider potential market ❖ FINANCIAL PLAN - The financial plan is a
saturation. crucial section of a business plan, determining
● Competition: Entrepreneurs must investment and determining the business's
understand their competitors' products economic viability. It includes a pro forma
and services, their major customers, balance sheet, which shows projected assets,
strengths and weaknesses, and focus liabilities, and earnings.
on a specific market niche to execute a ● First :The financial plan should outline
competitive strategy. This allows them to the business's assets, liabilities,
operate in a less cutthroat environment expected investment, and potential
and maintain profitability despite the retained earnings in a pro forma balance
threat of a larger competitor. sheet. This information helps lenders
❖ DESCRIPTION OF THE BUSINESS - The and investors assess debt-to-equity
entrepreneur should include the venture's ratios, working capital, and other
mission statement, product or service, location, financial ratios, justifying initial and
major assets, and background information about future funding for the company.
the owner and management team. They should ● Second: The financial plan should
also provide information on the business's include projected sales, costs, and
location, terms of purchase or lease, building expenses for the first three years,
age, renovation requirements, and necessary including net income after taxes, in a pro
equipment. This information can guide forma income statement.
decision-making in the venture. ● And finally, the financial plan should
❖ PRODUCTION PLAN - A manufacturing include a cash flow statement, detailing
venture entrepreneur must create a expected cash inflows and outflows over
comprehensive production plan detailing the several years. Monthly projections are
entire manufacturing process, including plant provided for the first year to ensure
layout, machinery, raw material suppliers, sufficient working capital for operations.
production costs, and future capital equipment If sales are irregular, the entrepreneur
needs. If subcontracting, the plan should detail may need to borrow money to cover
the subcontractor's facilities, selection reasons, fixed monthly expenses like salaries and
and subcontracting costs, crucial for potential utilities.
lenders or investors. ❖ ASSESSMENT OF RISK - Effective business
❖ OPERATIONAL PLAN - The operations plan plans must contain a section that discusses the
for a business should detail the flow of goods risks that might prevent the business from
and services, including purchasing, inventory achieving its objectives. Among these risks are
control, and distribution. For service businesses, the following:
it should outline transaction procedures. For (a) price cutting by competitors,
retail businesses, it should outline product (b) operating costs that exceed initial
offerings, inventory management, sales tracking, estimates,
and online sales. (c) failure to achieve sales forecasts,
❖ MARKETING PLAN - The target market for a (d) sudden unavailability or a steep
new product or service is defined, followed by increase in the price of raw materials,
pricing, promotion, and distribution. Market (e) difficulties in raising additional capital,
research highlights are presented to justify (f) advances in technology that might
marketing strategies. render the new product obsolete, and
3
 (g) unforeseen environmental conditions, You might encounter a potential investor while
such as a natural disaster, a major attending a social event, while having coffee at
recession, or an unfavorable legislation. Figaro or Starbucks, or you guessed it, while
Once these risks are identified, there standing by the elevator. This is a chance for
must be a discussion on what strategies you to make a one- to two-minute pitch of idea,
will be employed to prevent or minimize quick enough before the elevator ride is over.
risk, or to respond to risks should they Your goal is to get the person interested about or
occur. intrigued by your idea to make him want to learn
❖ Timetable/ milestones- For both the more about it. Hopefully, you will get a response
entrepreneur and the potential investor, knowing like: "Your idea sounds promising. Let us meet
when major activities will happen and when next week so that you can tell me more about it."
milestones will be reached serves a useful
purpose. Among the key milestones are the THE MARKETING PLAN
following: MARKETING - Marketing is the process of getting
(a) formal registration of the business, people interested in your company's product or service.
(b) completion of product or service design, This happens through market research, analysis, and
(c) completion of prototypes, understanding your ideal customer's interests. Marketing
(d) hiring of initial personnel, pertains to all aspects of a business, including product
(e) agreements with suppliers and development, distribution methods, sales, and
distributors, advertising.
(f) actual production, ENTREPRENEURIAL MARKETING - is a marketing
(g) receipt of initial orders, and strategy that involves company planning, consumer
(h) initial sales and deliveries. research, brand awareness strategies, the creation of an
❖ APPENDICES - To ensure that the main body of effective promotional message, and customer
the business plan is concise enough to include relationship management.
only the most essential information, several BENEFITS OF MARKETING YOUR BUSINESS
items could instead be appended to the ➢ Growing your sales. When you employ good
document. These items typically include market marketing tactics, you will make more sales.
research data, detailed financial projections, the ➢ Using and managing your reputation. .
full résumés of the business founders and ➢ Audience marketing benefits.
members of the top management team, and ➢ You earn trust.
even the profile of key competitors. By placing
➢ Knowing what works.
these items as appendices, the entrepreneur
provides information that some readers might ➢ Learning the marketplace.
want to examine more closely, but at the same ADVANTAGES OF MARKETING
time keeps the length of the business plan itself It helps to create brand awareness, drive profit and
manageable. growth, acquire and retain customers, and enhance
HOW TO PRESENT A BUSINESS PLAN engagement. Effective marketing strategies play a
1. TELL A COMPELLING STORY. - Remember pivotal role in establishing a strong presence in the
that the goal is to persuade and not to market and connecting with the target audience.
overwhelm your audience with facts and figures. THE GOAL OF MARKETING
2. EXHIBIT CONFIDENCE AND Marketing as a discipline involves all the actions a
PROFESSIONALISM.- This can be achieved company undertakes to draw in customers and maintain
by preparing well and rehearsing the relationships with them.Networking with potential or past
presentation several times so that you will be clients is part of the work too and may include writing
able to commit key points to memory and to thank you emails, playing golf with prospective clients,
present in a relaxed and natural manner returning calls and emails quickly, and meeting with
3. COVER THE BASICS - Make sure that you set clients for coffee or a meal.
up your audio- visual equipment ahead of time
so that you do not waste time trying to figure out COST-EFFECTIVE CHANNELS TO CONSIDER IN
how to show your slide presentation. MARKETING
4. ADOPT A COOPERATIVE ATTITUDE WHEN ➔ WEBSITE AND SEO - Importance of a
ANSWERING A QUESTION - Do not be well-designed website: role of SEO in optimizing
surprised if a certain member of the audience websites for search engines, improving visibility,
asks tough and pointed questions. After all, and driving organic traffic.
asking potential lenders or investors to provide ➔ SOCIAL MEDIA MARKETING (SMM) - Power
a substantial amount of money for your of social media platforms: creating compelling
proposed venture. content, two-way communication, leveraging
5. AND ALWAYS BE READY TO DELIVER AN analytics for better results.
ELEVATOR PITCH in case you need to give
one.
4
 ➔ EMAIL MARKETING - Effectiveness of email Example: Setting a specific goal to increase
marketing: building an email list, crafting social media engagement by 15% in the next
personalized and targeted campaigns, analyzing quarter.
email metrics. ➢ TARGET AUDIENCE - Clearly define your ideal
➔ CONTENT MARKETING - Significance of customers and their needs. Understand their
content marketing: providing valuable pain points and motivations.
information, building brand authority, and Example: Defining the ideal customer as
creating and distributing relevant and engaging environmentally conscious millennials aged
content. 25-34 who are active on social media.
4 Ps OF MARKETING ➢ MARKETING STRATEGIES - Outline the
The Four Ps collectively make up the essential mix a strategies you'll use to reach your audience.
company needs to market a product or service. This can include content marketing, social
NEIL BORDEN popularized the idea of the marketing media, email campaigns, advertising, etc.
mix and the concept of the Four Ps in the 1950s. Example: Using content marketing to create
1. PRODUCT - A product is a business plan to informative blog posts and videos about
meet market needs or demand. Marketers must eco-friendly living.
understand the product, its uniqueness, ➢ BUDGETING - Determine how much you can
compatibility with other products, and potential allocate to marketing activities. This should
substitutes before creating an effective cover expenses like advertising, staff, and tools.
campaign. Example: Allocating ₱500,000for social media
2. PRICE - Price is the company's proposed selling advertising and ₱250,000 for content creation
price, considering unit cost, marketing, and promotion.
distribution expenses, and market competition. ➢ TACTICS AND ACTION PLAN - Tactics and
It's crucial for companies to offer a reasonable Action Plan: Break down your strategies into
alternative. actionable steps with deadlines. Assign
3. PLACE - Place refers to product distribution, responsibilities to team members.
encompassing a physical storefront, online, or Example: Launching a monthly blog post and
both channels. Physical product placement and video series, assigning the content creation task
digital product placement are crucial to the marketing team.
considerations. ➢ METRICS AND KPIs - specify KEY
4. PROMOTION - Promotion is an integrated PERFORMANCE INDICATORS (KPIs) that will
marketing communications campaign involving help you track the success of your marketing
advertising, selling, sales promotions, public efforts.
relations, direct marketing, sponsorship, and Example: Measuring success with KPIs like
guerrilla marketing, considering consumer price website traffic, social media engagement, and
and distribution as quality factors. conversion rates.
STEPS IN PREPARING THE MARKETING PLAN ➢ TIMELINE - Create a timeline that details when
➢ MARKET RESEARCH - Gather data on your each marketing activity will be executed.
target market, including demographics, Example: Planning to launch the blog and video
preferences, and trends. Understand your series in January and track progress monthly.
competition and industry. ➢ MONITORING AND EVALUATION - Monitoring
Example: Conducting surveys and analyzing and Evaluation: Continuously monitor your
customer data to discover that your target marketing plan's progress and make
audience prefers eco-friendly products. adjustments as needed.
➢ SWOT ANALYSIS - Identify your Strengths, Example: Regularly reviewing website analytics
Weaknesses, Opportunities, and Threats to and social media insights to assess the impact
develop a clear understanding of your market of the content.
position. ➢ RISK ANALYSIS - Risk Analysis: Identify
Example: Identifying strengths like a strong potential risks and challenges that could affect
brand, weaknesses such as limited online your plan and develop contingency strategies.
presence, opportunities like expanding into new Example: Identifying a potential risk of negative
markets, and threats like increased competition. customer feedback due to product quality issues
➢ EXECUTIVE SUMMARY - Start with a brief and preparing a customer support strategy to
overview of the entire plan, summarizing your address it.
goals and key strategies. ➢ IMPLEMENTATION - Put your plan into action,
Example: A brief overview of the plan, following the timeline and strategies you've
summarizing that the goal is to increase online outlined.
sales by 20% over the next year. Example: Executing the content marketing plan
➢ GOAL SETTING - Define specific, measurable, as scheduled, posting blogs and videos on the
and time-bound marketing objectives. These website and social media channels.
should align with your overall business goals.
5
 ➢ MEASUREMENT AND REPORTING - regularly Table 6.1 compares the three legal forms with regard to
assess your KPIs and report on the results. ownership, cost and ease of starting the business,
Analyze what worked and what didn't. liability of owners, distribution of profits and losses,
Example: Monthly reports showing an increase management control, ability to raise capital,
in website traffic by 25% and a 20% rise in social transferability of ownership, and business continuity.
media engagement. OWNERSHIP - It is the state or fact of legal possession
➢ OPTIMIZATION - Based on your analysis, refine and control over property, which may be any asset,
your marketing plan for better performance. tangible or intangible.
COST AND EASE OF STARTING A BUSINESS
THE ORGANIZATIONAL PLAN EASE OF DOING A BUSINESS - is an index published
After the entrepreneur identifies the needs of his target by the World Bank. It is an aggregate figure that includes
market and spells out his strategy and action plan, he different parameters which define the ease of doing
can now proceed to the legal and organizational aspects business in a country. It is computed by aggregating the
of setting up the business distance to frontier scores of different economies. The
ORGANIZATIONAL PLAN - is the section of the distance to frontier score uses the ‘regulatory best
business plan that identifies the form of ownership the practices’ for doing business as the parameter and
business venture will take. It provides a background of benchmark economies according to that parameter.
the management team; describes the organizational
structure, including the management team's roles, Pieces of information that are typically included in a
responsibilities, and reporting relationships. outlines the partnership agreement are the following:
planning; decision-making, monitoring, and evaluation ● contribution of each partner to the business;
processes, and spells out the role of the board of ● how profits and losses will be distributed;
advisers, among others. ● agreement on partners' salaries or drawing
FORMS OF OWNERSHIP rights against profits;
One of the important decisions an entrepreneur must ● procedures for expanding or dissolving the
make is the form of ownership the business will take. He business;
could choose from any of the three basic legal forms of ● how partners can sell their interest in the
business ownership-sole proprietorship, partnership, or business, and
corporation each of which has its advantages and ● how assets will be distributed if the partnership
disadvantages. is dissolved.
Among the information that individuals creating a
corporation must provide include the following:
● the corporation's name;
● a statement of purpose;
● the length of time it will exist:
● names and addresses of incorporators;
● business address. ( capital stock authorization,
i.e., how many shares of stock can be issued,
● names and addresses of the officers of the
corporation; and
● the corporation's by-laws. Needless to say,
setting up a corporation means paying attorney's
fees and various government fees.

LIABILITY OF OWNERS - The extent to which the

owners of a business are liable for the debts of the
company.
SHARE OF PROFITS AND LOSSES - It is the method
utilized in Islamic banking to comply with the prohibition
of interest.
MANAGEMENT CONTROL - is a system which gathers
and uses information to evaluate the performance of
different organizational resources like human, physical,
financial and also the organization as a whole in light of
the organizational strategies pursued.
CONTINUITY OF BUSINESS - Business continuity is a
business's level of readiness to maintain critical
functions after an emergency or disruption.

6
TRANSFERABILITY OF OWNERSHIP - Any means by In addition, it would help to present an organization chart
which ownership of a property changes hands. that shows the reporting relationships within the
These include the purchase of a property, assumption of business.
mortgage debt, exchange of possession of a property via
a land sales contract or any other land trust device.
ABILITY TO RAISE CAPITAL - The ability of an
individual to obtain money/funds in order to get the
business off the ground or help in the daily operations of
the business such as the purchase of materials and
payment of wages etc. is known as his capital raising
skills.
ORGANIZATION STRUCTURE - An organizational
structure is a system that outlines how certain activities
are directed in order to achieve the goals of an
organization. These activities can include rules, roles,
and responsibilities. The organizational structure also
determines how information flows between levels within
the company.

TEMPLATE OF A SUMMARY TABLE SHOWING Notice that the managers handle multiple positions ( the
DETAILS ABOUT BUSINESS OWNERS purchasing and production functions are managed by
one person; the sales and marketing functions are
NAME OF MAJOR
OWNERS QUALITIES
PREVIOUS
ENTREPRENEURIAL CAPITAL
handled by another manager; while the finance and
(PARTNERS OR EXPERIENCE CONTRIBUTION human resource management functions are handled by
SHAREHOLDERS)
a third manager.)

THE MANAGEMENT TEAM - If the enterprise has a

management team that is largely distinct from the
business owners, it is best to highlight their
qualifications, skills, and managerial experience,
especially in relation to the position, for which they will
be handling. The goal is to convince the reader of the
business plan that the management team is composed
of a good mix of individuals with complementary skills
that will increase the chances of the business being run
effectively.
As the business grows bigger and its operations become
TEMPLATE OF A SUMMARY TABLE SHOWING more complex, this might require an individual handling
DETAILS ABOUT THE MANAGEMENT TEAM only a specific function.

NAME OF JOB TITLE DUTIES QUALIFICATIONS MANAGERIAL BUSINESS ADVISER - provide consultancy services in
MANAGER AND EXPERIENCE
RESPONSIBILITIES
their chosen specialized area of expertise. Most
business advisers will work with a range of client
organizations during their career, helping them to meet
their business objectives. Although this is essential
across all sectors, most business advisers tend to work
in public practice for corporate sector clients.

7
 THE FINANCIAL PLAN
FINANCIAL PLAN
➢ in entrepreneurship, it involves creating a
strategic plan for managing a business’s
finances. It includes setting financial goals,
creating a financial plan, implementing the plan,
and evaluating its success.
➢ includes the financial projections of the new
venture.
➢ includes a balance sheet, cash flow, and income
statement.
First, it must provide a summary of the projected sales,
the cost of goods sold, and general and administrative
expenses of the business, at least for the first year, and
typically for three years.
Second, it must anticipate the amount and timing of
expected cash inflows and outflows over a period of
PROJECTED INCOME STATEMENT - It is also known
several years so as to ensure that the business will have
as a budgeted income statement. It shows how much
sufficient working capital to sustain operations.
you expect in revenue and profit—as well as your
Third, it must provide a summary of the assets the
estimated expenses and losses—over a specific time in
business will own, its projected liabilities, and the
the future. This income statement also includes an
potential retained earnings.
estimate of the cost of goods sold, which, as shown in
table 7.3, is assumed to be 40% of total sales per month.
PREPARING FINANCIAL PROJECTIONS
In preparing the financial projections, the entrepreneur
must make reasonable assumptions about revenues,
costs, and expenses. Therefore, he must prepare,
among others, a sales forecast and an operating budget,
which will feed into the projected income statement.

8
CASH FLOW PROJECTIONS - It is also referred to as a
cash flow forecast. Cash flow projection is the process of
estimating and predicting future cash inflows and
outflows within a defined period—usually monthly,
quarterly, or annually.

ASSETS - These refer to everything that the business

owns that can be used to create value. Assets can be
current, which includes cash and other things that can
be easily converted into cash or consumed in the
operation of the business in less than a year. Fixed
assets are those, like land, building, or equipment, which
the business can use over a long period of time.
LIABILITIES - These represent everything that the
business owes to banks and other creditors. Those that
must be paid within a year are current liabilities, while
those that must be paid beyond one year can be
considered long-term liabilities.
OWNER’S EQUITY/SHAREHOLDER’S EQUITY -
Representing the excess of all assets over all liabilities,
this is also known as the net worth of the business
BREAKEVEN ANALYSIS
Breakeven refers to the volume of sales at which the
business neither makes a profit nor incurs a loss. The
breakeven sales point indicates how many units of the
product the business must sell to cover both variable
PROJECTED BALANCE SHEET - Projected balance
and fixed costs and expenses. Whenever sales exceed
sheets (pro forma balance sheets) are the statements
this point, the business earns a profit, as long as the
that show estimated changes to a company's financial
selling price remains above the costs of producing each
status, including investments, other assets, liabilities and
unit (variable cost).
financing for equity. It is to understand more about the
business and anticipate income and expenses for a
future period of time.