Module 9: The Business Plan: Learning Objectives

MODULE 9: THE BUSINESS PLAN
Learning Objectives:
By the end of this module, students have completed the following objectives:
1. Understand the reason for writing a business plan
2. Learn the principles of business planning
3. Identify the stages of business planning
4. Able to make/prepare a business plan
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What Must Be Learned:
Why write a business plan?

Here is a quick guide as to why a company needs a well-researched business plan.
1. More companies stay in business
Studies by organizations show that companies that are in business and generate higher than
average profits mostly have a business plan to follow.
2. You can understand what to do

Not knowing why:
a. why things go wrong,
b. why customers don’t buy or return,
c. why your competitors are better or more respected than you are a recipe for disaster.
Your plan help you analyze your business
3. You can allocate finite resources better

No company can do everything. You will need to prioritize the work required in the coming year.
4. You will understand your finances

If you are always overdrawn at the bank or find it difficult to get new finance then you’ll need to
forecast your sales and costs. But what are they? Work all of this out with your plan.
5. Everyone is aware of your plan.
You and your staff, bank manager and other interested parties all need to know the direction the
company is going. This is important to pull everyone into the same direction and develop teamwork
Principles of Planning
1. Planning must be realistic- it must be based on available resources- human, financial, and physical
resources. If these are not enough, then it would be impossible to implement successfully the
project. Any planning which is not supported by adequate resources is likely to fail.
2. Planning must be based on felt needs- The objectives of the entrepreneur should fit the needs of the
people in a community. Such needs can be known through observations, personal interviews and
questionnaires.
3. Planning must be flexible- resources, needs and economic conditions change. Planning should be
adjusted to such changes to be effective and relevant.
4. Planning must start with simple projects. In the Philippines are poor and have no business
experiences. The most appropriate business for them is the micro business. This requires very
simple management and technology. It also needs simple and few resources in terms of funds,
materials and equipment. Simple business enterprise has a greater possibility of success. More
importantly, it provides a good training experience for operating a business.
Stages of Business Planning

1. Unplanned Stage- At the start of business, the owner-manager is busy looking for funds, customers,
materials and equipment. He has no time for planning. His entire attention is devoted to the daily
operations of the business in his intense desire to survive.
2. Budgeting System Stage- Eventually, the owner-manager realizes the need to develop and use a
budgeting system. Estimated income from sales and expected expenditures are made. This is done
to facilitate the orderly functions of the growing enterprise.
3. Annual Planning Stage- The growing manager drafts an annual plan. He can use either the top-
down planning, or bottom-up planning.
In top-down approach, the owner-manager provides the goals and let the employees comply with
them.
In the case of the bottom-up approach, he encourages his employees to participate in planning the
goals and strategies of the enterprise. The first approach in planning is autocratic while the other one
is democratic.
4. Strategic Planning Stage- as the business enterprise become bigger, a long-range planning is
needed. This is a three- or five-year plan. Such plan has flexibility to be able to adjust to changing
conditions.
Criteria for Effective Planning.

The Plan should:
1. State clearly its objectives. Such clear statement is necessary so that those who will be involved in
the execution of the plan will:
a. understand,
b. believe,
c. accept, and
d. support it.
2. Provide measures for a satisfactory accomplishment of the objectives in terms of:
a. quantity,
b. quality,
c. time and
d. cost.
These help in delegating responsibility and measuring results.
3. State the policies which should guide people in attaining the objectives.
4. Indicate what department or unit will be involved in accomplishing the objectives. It may or may not
spell out the procedures for performing the required work.
5. Indicate the time which should be allowed for each activity. It may be necessary to establish a target
data for completing the activity.
6. Specify the required resources and their corresponding costs.
7. Designate the officers who will be held accountable for the accomplishment of the objectives.
Sufficient authority should be delegated to such officers/executives.
Traditional business plan format
 Executive summary. Briefly tell your reader what your company is and why it will be successful. ...
 Company description. ...
 Market analysis. ...
 Organization and management. ...
 Service or product line. ...
 Marketing and sales. ...
 Funding request. ...
 Financial projections
An executive summary is a brief introduction and summary of your business plan. It should describe
your business, the problem that it solves, your target market, and financial highlights. A good executive
summary grabs your reader’s attention and lets them know what it is you do and why they should read the
rest of your business plan or proposal
Example:
Jollibee Food Corporation is a Filipino fast food retail chain that was started in 1975 and from then on
the company was on an expansion trend. It capitalized the changes in the political scenario in the country
and thrived the competition from global players like McDonalds
A company overview/description (also known as company information or a company summary) is an

essential part of a business plan. It's an overview of the most important points about your company—your
history, management team, location, mission statement and legal structure.
Example:
Jollibee Foods Corp. is engaged in developing, operating, and franchising fast food stores under the
trade name Jollibee. ... The Food Service segment operates quick service restaurants and the manufacture
of food products to be sold to Jollibee Group-owned and franchised QSR outlets.
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of
the market both in volume and in value, the various customer segments and buying patterns, the
competition, and the economic environment in terms of barriers to entry and regulation.
Example:
Jollibee's product market stakeholders include its customers locally and globally, as well as suppliers of

its food sources. Jollibee has been able to capture the market share of the fast food going customers due to
its understanding of locals' preferences and it quality and competitive pricing of its food.
Organization management refers to the art of getting people together on a common platform to make
them work towards a common predefined goal. Organization management enables the optimum use of
resources through meticulous planning and control at the workplace.
Example:
Jollibee is the largest fast food chain in the Philippines, with over 1,150 stores nationwide. A dominant
market leader in the Philippines, Jollibee enjoys the lion’s share of the local market that is more than all the
other multinational brands combined. The company has also embarked on an aggressive international
expansion plan in Vietnam, Brunei, Hongkong, Singapore, Macau, Malaysia, US, Canada, Saudi Arabia,
UAE, Qatar, Kuwait, Bahrain, Oman, Italy and the United Kingdom.
The products and services section of your business plan outlines your product or service, why it's

needed by your market, and how it will compete with other businesses selling the same or
similar products and services. Your product and services section should include
Future products or services you plan to offer. A product is a tangible item that is put on the market for
acquisition, attention, or consumption, while a service is an intangible item, which arises from the output of
one or more individuals.
Example:
Its flagship Jollibee chain features a menu of fast-food staples (hamburgers, hot dogs, and fried chicken)
along with Asian spring rolls, spaghetti, soups, and ice cream. The company also operates such chains
as Greenwich Pizza, Chowking and Yonghe King (quick-service Asian food), and Red Ribbon (bakery
items).
Sales and marketing are two business functions within an organization -- they both impact lead
generation and revenue. The term sales, refers to all activities that lead to the selling of goods and services.
And marketing is the process of getting people interested in the goods and services being sold.
Example:
Jollibee depends on high customer traffic and tight operations management. It offers great service to the
high volumes of people who patronize its outlets by functioning as a well-oiled machine with close tabs on
daily operations.
Jollibee focus:
USP:
The Unique Selling Porposition of the Jollibee brand is :
1) Fast, Good, Clean, Cheap food
2) Caters to local needs( Spicy patty)
3) Consistency, reliability over all its outlets.
Positioning:
Ensuring high traffic needs an emphasis on store location and positioning Jollibee in the minds of the
consumer as a place that they would enjoy eating fast food.
Product:
It went from being an ice cream parlor to serving hamburgers made with a homestyle recipe.
The product offered by Jollibee appeals to the Filipinos taste for spicy burgers. By concentrating its
resources on satisfying the Filipino palate, Jollibee has been able to serve localized dishes that are unlike
any found in the other fast-food chains in the Philippines. In addition to offering the usual French fries that
accompany the meals found in McDonald’s, KFC, Burger King, and so forth,
Jollibee also serves rice or spaghetti, Filipino style. Even the burgers are cooked exactly as Filipinos want
them done— sweeter and with more seasonings, often likened to what a Filipino mother would cook at
home.
Menus in outlets across the globe adjusted to local preferences to differentiate it from other standardized
players like Mc Donalds and KFC who maintain the same menus worldwide with minimal changes.
Jollibee even incorporated recipes from employees to truly capture local tastes.
Place:
The location of outlets is located at Central district where a large number of people gather.
Financial projections Estimates of the future financial performance of a business
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_Learning Activity:
A. Make your own business plan using the traditional business plan format. (Select/choose either
food, restaurant/canteen.
B. Think of any business name enough to capture many customers.
Submit your output either online (softcopy) or email it to [email protected] a week

before the final exam.
Essay:
1. In the annual planning stage, explain the top-down approach
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2. Explain why planning must be based from felt needs.

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Assessment: Quiz online

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MODULE 9: THE BUSINESS PLAN

Why write a business plan?

2. You can understand what to do

3. You can allocate finite resources better

4. You will understand your finances

5. Everyone is aware of your plan.

Stages of Business Planning

Criteria for Effective Planning.

A company overview/description (also known as company information or a company summary) is an

Jollibee's product market stakeholders include its customers locally and globally, as well as suppliers of

The products and services section of your business plan outlines your product or service, why it's

B. Think of any business name enough to capture many customers.

Submit your output either online (softcopy) or email it to [email protected] a week

2. Explain why planning must be based from felt needs.

Assessment: Quiz online

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