Lesson 1: BUSINESS PLAN

Is a written document that describes all the steps necessary for opening and operating a successful business.
Objectives:
 Describe what your business will produce, how will you produce it and who will buy your product or service
 Explains who will run your business and who will supply it with goods
 States how your business will win over customers from competitors and what your business will do to keep
customers
 Provides detailed financial information that shows how your business will succeed in earning a profit
 Describes plans for future growth of your business
 Note: Writing a solid business plan is critical because the plan can make or break your business
Purposes of a business plan
1. A business plan explains the idea behind your business and spells out how your product or service will be produced
and sold
2. A business plan sets specific objectives and describes how your business expects to achieve them.
3. A business plan describes the backgrounds and experience of the leadership team of the business.

ACTIVITY 101
Think of a business that you want to establish
Deliberate as a group
Give your business a name

Lesson 2: Basic Elements of the business plan

The content of the business plan for a small, home based, single-owner business will differ from a business plan for
a large corporation with offices in many cities. But regardless of the business, all business plans serve the same basic
purposes. They should contain the same three basic components---- introductory materials, the main body and the
appendix (supporting documents)

Preliminaries
Title Page
Table of Contents
Statement of the Problem
Executive Summary
Parts of the Main Body
1. Introduction
2. Marketing
3. Financial Management
4. Operations
5. Concluding Statement
Part 1: Introduction
 a detailed description of the business and its goals (Short term and long term)
 The ownership of the business and the legal structure
 The skills and experience you bring to the business
 The advantages you and your business have over your competitors.
the advantages that you may include are:
O Performance
O Quality
O Reliability
O Distribution
O Price
O Promotion
O Public image or reputation
Legal Structure/ Type of Ownership
1. Sole Proprietorship is a business with one owner who operates the business on his or her own or employ
employees. A sole proprietor can work as an independent contractor or operate a small business. Sole proprietors
own businesses in many industries. Many home-based businesses are operated by sole proprietors. or more
persons
2. Partnership is a non-incorporated business that is created between two or more people. In a partnership, your
financial resources are combined with those of your business partner(s), and put into the business. You and your
partner(s) would then share in the profits of the business according to any legal agreement you have drawn up.
There are three classification of partnerships: 1) general partnership (partner divide responsibility, liability and
profit or loss according to their agreement), 2) limited partnership (with at least one general partner, there are one
or more limited partner who have limited liability to the extent of their investment), and
3) limited liability partnership (all of the partners have limited liability of the business debts; it has no general
partners).
3. A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights
and responsibilities that an individual possesses and has the right to enter into contracts, loan and borrow money, sue
and be sued, hire employees, own assets and pay taxes.
 A cooperative is owned and controlled by an association of members. It can be set up as a for-profit or as a not-for-
profit organization. This is the least common form of business, but can be appropriate in situations where a group
of individuals or businesses decide to pool their resources and provide access to common needs, such as the
delivery of products or services, the sale of products or services, employment, and more.

ACTIVITY 102
1. Short description about the business (one paragraph with at least three sentences)
2. Prepare 2 smart goals for the business
3. Ownership and structure
4. List the skills and experiences you have for the business
5. At least two competitive advantages

Lesson 3: WHAT IS MARKETING?

Marketing may be defined as a social and managerial process by which individuals and groups obtain what
they need and want through creating and exchanging products and value with others.
Other authors would define marketing as the managerial process of producing, pricing, distributing and promoting
products to satisfy the needs, wants and demands of their respective markets.

Important terms in Marketing

Needs are states of self deprivation felt by humans. Needs also stand for Natural essential elements designed for
survival.
Wants are forms of human needs shaped by culture and individual personality. These pertain to the preferences of
people regarding their survival requirements.
Demands are simply needs and wants that are backed up by consumer purchasing power. No matter how strong
the need or want of the market for the product, if they do not have the money to buy such product , marketers normally
will not make the product available.
Markets are simply customers and consumers of a business. Technically, customers are the buyers of the product
while consumers are end users of the product.
Markets are characterized by:
1. Groups of people
2. With money to buy; and
3. Willingness to spend this money they have.
Without these characteristics, target group could not be considered a market.
Products are bundles of attributes and benefits designed to be offered to buyers to satisfy their needs, wants and
demands. Products may be termed goods, if they are tangible and services if generally intangible.
Customer Value is technically defined as the difference between what the customer gains from the product and what the
customer loses from the costs of acquiring such product.

Customer satisfaction is the extent to which product tends to meet the expectations the buyers of a product which they
bought to fulfill their need and want.

Quality originally refers to the product’s freedom from defects.

Exchange is known as the act of obtaining a desired object from someone by offering something in return.

Transactions refer to an agreement between two parties where both parties give up something to receive something else.
Usually the determining factor before transaction is consummated between a buyer and seller in the agreement on the
price of the product

Market Research
O Is a system for collecting, recording and analyzing information about the customers, competitors, products
and services.
O
Identify your market
Customer are the people or organization who buy the product or services companies offer.
Note:
Before establishing your new enterprise, you will have to determine who your primary customers are and
whether these customers are willing to buy your product or service
Understanding people needs and wants will allow you to identify business opportunities

MARKET SEGMENTATION
Since the market are often too large it is impossible to please every one in the market Segmenting a target
market helps you develop a product/service that will meet specific customer needs
 Geographic data
 Demographics data
 Psychographics data
 Used based data
 
Where to get data?
A. Primary
1. Survey
2. Observation
3. Focus Group
B. Secondary
1. Publication
2. Books
3. Information on websites
4. Trade Magazines and journals
5. Newspaper articles and statistics

To identify the target market for your product or service, you will need to answer the following questions:
1. Who is my potential market? Are my customers individuals or companies?
2. If my customers are individuals, how old they are? How much money they earn? Where they live? How do they
spend their money?
3. If my customers are companies, what industries are they in? Where are those companies located?
4. What needs or wants will my product or service satisfy?
5. How many potential customers live in the area in which I want to operate?
6. What is the demand for my products or services?
7. Where do these potential customers currently buy the products or services I want to sell them?
8. What price are they willing to pay for my products or services?
9. What can I do for my customers that other companies are not already doing for them?

Activity 103
Identify your target market and prepare a customer profile. Use the guide question given