3. What is entrepreneur?
Someone who exercises initiative by organizing a
venture to take benefit of an opportunity and, as
the decision maker, decides what, how, and how
much of a good service will be produced.
An entrepreneur supplies risk capital as a risk
taker, and monitors and controls the business
activities. The entrepreneur is usually a sole
proprietor, a partner, or the one who owns the
majority of shares in an incorporated venture.
4. According to economist Joseph Alois
Schumpeter (1883-1950), entrepreneurs are
not necessarily motivated by profit but regard
it as a standard for measuring achievement or
success.
8. What is a business plan for?
Business plans written prior to setting up an
enterprise, which are similar to a prefeasibility
study and a feasibility study.
9. Business Plan Format
I. Introduction
a. The Business Concept and the Business Model
b. The Business Goals: Vision, Mission, Objectives,
and Performance targets
c. The Business Offering and Justification
II. Executive Summary
III. The business proponents: Organizers with their
capabilities and contributions
10. IV. The Target customers and Main Value proposition to
the customer
V. The Market, Market Justification based on the
Industry Dynamics and the Macro Environmental
factors affecting the opportunities and threats in the
market, the size, potential and realistic share of the
market
VI. The product and service offerings
VII. The enterprise strategy and enterprise delivery
systems: Business Competitiveness
VIII. The Financial Forecasts and Expected returns, risks,
and contingencies
IX. Environmental and regulatory compliance
X. The capital structure and financial offering: returns
and benefits to investors financiers, and business
partners
11. Contents of the Business Plan
1. How will the business raise revenues? What
critical factors will cause the revenues to
materialize?
2. What will be the costs of the enterprise
products and other costs of doing business?
How will these costs be managed to ensure
confortable profits? What critical factors will
drive the costs? How can these factors be
controlled?
12. 3. What will be the major investments of the enterprise?
Why will these investments give the enterprise a
competitive edge?
4. How will the enterprise finance the investments?
How will the enterprise fund its growth?
13. The Business Goals: Vision,
Mission, Objectives, and
Performance Targets
The business goals show the future and long-
term prospects of the enterprise. It is composed
of the vision, mission, objectives, key result
areas, and performance indicators of the
enterprise.
14. Case Example 1: Double
Happiness
The vision of Double Happiness is “to
establish a commanding presence and market
leadership as a food chain servicing major bus
terminals in central luzon within the next five years.”
The Business goals are communicated by
articulating the basic purpose of setting up the
enterprise in a mission statement. Needless to say,
all business enterprises are established for the
purpose of making money for its investors.
15. for Double Happiness, its mission statement is “to
provide quality food and passenger convenience services that
would generate sufficient profits for the stockholders and
improve the lives of its employees.
the vision and mission statements must then be
translated into measurable end results, more popularly called
objectives.
objectives must be more specific that the vision and
mission statements. They should be measurable, achievable,
and time-bound.
for double happiness, their stated objectives are:
1. to establish a strong market presence in central
luzon
2. to earn good financial returns for its owners;
3. to delight customers with high quality food and
services; and
4. to make double happiness a happy and
rewarding place to work in
16. The objectives should then be translated into
KRAs. KRAs are the qualitative manifestations that the
objectives are being achieved.
Double Happiness, KRAs for each of the
objectives are as follows:
Objectives Key Result Areas
1. To establish a strong market
presence in Central Luzon
a. Number of food outlets in major
bus terminal in Central Luzon
b. Sales volume attained
c. Market share in central luzon
17. 2. To earn good financial returns
for its owners
a. Amount of net profits realized
for the next five years
b. Return of equity (ROE)
c. Return on assets (ROA) or
Return on investment (ROI)
d. Return on sales (ROS)
3. To delight customers with high
quality food and services
a. Growth in sales per outlet
b. Percentage of repeat customers
c. Number of customer
commendations or complaints
d. Awards and recognition given by
the community or the government
for excellent service
e. Customer survey rating to
ascertain customers’ degree of
delight
18. In turn, the key result areas must be rendered into quantified performance
measurements, otherwise called performance indicators. These performance indicators
or PIs serve as the aspirational scorecard of the enterprise managers and the
motivational results of the investors. However, the PIs must actually be credible to the
business audience in mind
4. To make Double Happiness a
happy and rewarding place to
work in
a. Compensation and benefits of
managers and workers are
above industry rates
b. Management and employee
turnover
c. Number of job applicants
compared to other similar
establishment
19. In the case of Double Happiness, the performance indicators for each of the
key result areas are as follows:
Key Result Areas Performance Indicators
2014
(Now)
2015 (one
year Later)
2020 (five
years later)
a. number of food outlets in
major bus terminals in central
luzon
b. Sales volume
c. Market share in Central Luzon
3
Php. 7
million
2%
5
Php. 13
million
3%
20
Php. 60
million
12%
20. 2014
(Now)
2015 (One
Year Later)
2020 (Five Years
Later)
a. Amount of net profits realized for the
next five years
b. Return on equity (ROE)
c. Return on assets (ROA) or return on
investment (ROI)
d. Return on sales (ROS)
Php.
1million
30%
15%
14%
Php. 2 million
40%
20%
15%
Php. 10 million
60%
30%
16%
a. Growth is sales per outlet
b. Percentage of repeat customers
c. Number of customer
commendations; number of
costumer complaints
d. Awards and recognition given by the
community or the government for
excellent service
e. Customer survey rating to ascertain
customers’ degree of delight
20%
30%
4 out of
20
1 out of
20
None
3.5 (on a
scale of 1
to 5)
20%
40%
6 out of 20
1 out of 50
One by
bulacan
chamber
4 (on a scale
of 1 to 50)
20%
50%
10 out of 20
1 out of 100
21. 2014 (Now) 2015(One
year later)
2020 (Five
year later)
a. Compensation and
benefits of managers and
workers are above
industry rates
b. Management and
employee turnover
c. Number of job applicants
compared to other similar
establishments
Same as
industry
3 out of 10
per year
10% more
job
applicants
5% above
industry
2 out of 10
per year
20% more job
applicants
15% above
industry
1 out of 10 per
year
30% more job
applicants
22. The Executive Summary
The executive summary contains everything that is
relevant and important to the business audience. It is a
synthesis of the entire plan. It must contain the major
argumentations of the business proponent on why the
business will work and succeed. It should provide the business
plan audience all the arguments on why they should participate
in the business venture.
The executive summary should then introduce and
highlight the good qualities of:
1. the business proponents and their partners;
2. the enterprise organization and its capabilities;
3. the technology providers and their expertise and
experience; and
4. the suppliers and all the major service providers
23. it should likewise describe the products/services of the
enterprise, their features and attributes, and why they are the
right ones to deliver to the customers.
The executive summary should then proceed to discuss
and justify the enterprise strategy and enterprise delivery
system. The enterprise strategy builds and develops the game
plan for attaining competitiveness. The enterprise delivery
system is the entire process of converting input (resources)
into output and these output into outcomes.
It should then render all the major institutional, market,
operations, and organizational strategies previously cited into
financial strategies and forecasts.
24. Investment requirements should be presented along
with the summaries of the projected income statements,
balance sheets, cash flows, and funds flow, and their analyses
and conclusions. Yields and returns, along with risks and
contingency measures, should round up this section.
The Executive Summary should also contain a section
on the environmental and regulatory compliance of the
proposed business, as well as the more proactive programs to
become a more responsible corporate citizen.
Finally, the Executive Summary should present the
capital structure of the proposed business and show how this
structure will respond to the investment programs and financial
forecasts of the enterprise.
however, the Executive Summary can only be written
last in order to capture the findings and insights of the other
parts, but for presentation purposes, it is placed in the first part
of the business plan.
25. The Business Proponents
The third section of the business plan contains information
about the business proponents or stakeholders. There are four types
of stakeholders:
1. Resource mobilizers and financial backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team
if the business plan readers are the resource providers, then
they will want to know who else are on board to share the burden of
raising money to see the whole thing through.
if the business plan readers are the technology providers,
they will want to know if there will be sufficient funds to pay for the
technology.
26. If the business plan readers are the governance
and top management team, then they will want to know
what strategies and performance indicators are being
proposed.
If the business plan readers are the implementing,
operating, and support teams, they will want to know what
programs, activities, tasks, and resources would be in
place.
27. The target customers and the main value
proposition
The business proponent must be
very precise about the target audience of target
customers. Target Customers must be of
sufficient size, sufficient paying capacity, and
have sufficient interest to purchase the products
being offered by the enterprise. The main value
proposition is the unique selling proposition of
the enterprise.
28. Market Demand and Supply, Industry
Dynamics, and Macro Environmental
Factors
It is normal for enterprises to actually expand their
product offerings to include the other segments of a bigger
market. The business proponent should examine all the
opportunities in this bigger market in order to determine what
exactly influences this bigger market.
The business plan should estimate the total market
supply and demand for the product offerings of the enterprise.
The business plan should then determine the major critical
factors that influence this market demand and supply
once these critical factors or variables are determined,
the business plan should then forecast the future demand and
supply. If these physical factors are
29. Expected to remain the same, then most likely, the future
forecast will follow the past trends. If not, the future estimate of
demand and supply should be revised according to the new
variables influencing the demand and supply.
The market analysis and forecasting exercise should
lead to a quantification of the current and prospective size of
the market. Both the current and potential consumptions
should then be dissected.
The business plan should discuss the relevant industry
dynamics.
Who are the competing enterprises in the industry and what
are their comparative advantages and disadvantages? What
business models and strategies are they employing?
Who are the suppliers in the industry and what are their
capabilities and bargaining power?
What are the channels of distribution being used by the
industry? How effective are these channels?
30. Both the industry players and the market are affected by
the macro environment, which includes the social,
political, economic, ecological, and technological
(SPEET) forces.
Social Environment includes the demographics and
cultural dimensions that govern the relevant
entrepreneurial behavior.
Political Environment defines the governance system of
the country or the local area of business.
Ecological Environment includes all natural resources
and the ecosystem that defines the habitat of man,
animals, plants and minerals.
Technological Environment makes or breaks competing
participants in any industry.
31. Product/Service offering: Description,
Evolution, and Justification
The products/services must be described by
highlighting the features and attributes that would
most appeal to the target customers. The
business plan should also prove that the
products/services would be accepted and carried
by the distribution channels.
32. Enterprise Strategy and Enterprise
Delivery System
The business plan should expound on the
enterprise strategy (ES) by mapping the competitive
landscape and by situating the enterprise and its
competitors as to their strategies and chosen
positioning's.
The business plan should then show how the
enterprise delivery system (EDS) would enable the
business to implement the enterprise strategy
The enterprise delivery system starts from the
Input (resources mobilized), and the output ( the
products/services).
33. The output are then marketed to the customers
or experienced by the customers. Customer
satisfaction level, profit generated, and the
performance of people from the transaction are
the outcomes of the EDS.
36. References:
Book
Dr. Eduardo A. Morator, jr. Entrepreneurship, First Edition,
2016. Rex Book Store, Inc.
Websites:
Retrieved from:
www.businessdictionary.com/definition/entrepreneur.html
www.econlib.org/library/Enc/Entrepreneurship.html
