Module 2 - Lesson 1

Page |1
-------------------------------------------------------------------------------------
BUSINESS ENTERPRISE
SIMULATION
12
-------------------------------------------------------------------------------------
3RD Quarter
WEEK 3
Judith D. Piano
Subject Teacher
MODULE 2: Preparing the Business Plan
LESSON 1: What is Business Plan?

Source: DIWA Senior High School Series: (ABM) Business Enterprise Simulation Module
Author: Ronaldo S. Sebastian
Page |2
OBJECTIVES:
At the end of this lesson, you will be able to:
a. Define business plan;
b. Familiarize the structure of business plan
The business plan is a roadmap that details where the cooperative is going and how to get there.
It explains what the business is and how it will be operated. Having a good business plan will help
cooperatives minimize risks of failure. It can also be used by cooperatives in applying for support from
development programmes.
A business plan should be reviewed and updated regularly to reflect changes in the business
environment and status of the cooperative. In this session, you will familiarize yourselves with the
structure of the business plan.
Page |3
LESSON 2: Choosing the Right Product or Service for the Market

After scanning the external and internal markets for business opportunities, the
next step is to validate if, indeed, the initial business opportunities you have listed are
really feasible or doable. As you have learned in your entrepreneurship course, a
compelling business opportunity must contain four important elements:
l . Market potential — The business presents superior value to customers.

2. Financialfeasibility — The business is a potential cash cow,
3. Competitive advantage — The business solves a compelling problem, issue,
need or want.
4. Entrepreneur 's resources — The business matches the entrepreneur's skills,
resources, and risk appetite.
To find out if your potential business venture satisfies the four elements, you can make
an OAM. The OAM, as its title suggests, details the "attractiveness," feasibility, or
viability of an opportunity in terms of market potential, financial feasibility, competitive
advantage, and entrepreneur's resources. The term attractiveness is synonymous with
business feasibility or business viability. It is at this stage when you, the would-be
entrepreneur together with a partner checker (a person who will objectively assess your
data and eventual OAM), must research on the attractiveness of each element. The data
must be derived from reliable sources such as, among others, government Web sites,
scholarly research, business journals, news articles, and credible documentaries or
magazines. Data can also come from astute observation.
As mentioned previously, there should be another person—the checker aside from

the budding entrepreneur who will check this OAM to determine the real attractiveness
of an opportunity. There are times when the would-be entrepreneur gets too excited,
especially if he or she already has a decision in his or her mind; in such a case, the OAM
becomes prone to, among others, biased analysis, unreasonable expectations, and rushed
assessments. When this happens, the resulting OAM will likely be unreliable.
In preparing the OAM, all the important components must be listed and weighed
accordingly by the entrepreneur (and then checked and reassessed later on by the
designated checker). The components of the OAM differ from one type of business to
another, nevertheless, the high level opportunity attractiveness factors remain the same:
market potential, financial feasibility, competitive advantage, and entrepreneurial
Page |4
resources. The components must be graded based on the degree of its attractiveness as
follows:
5 — Highest Potential
4 — High Potential
3 — Neutral
2 — Low Potential
I — Lowest Potential
Refer to Case l. Try to verify if, indeed, the initial business opportunities listed are
really worth the while of the budding entrepreneur. The four elements of OAM have
equal weights of 25 percent each, but since competitive advantage and entrepreneurial
resources are linked to each other, these must be combined, thus giving them a shared
weight of 50 percent. These weights will be multiplied to the degree of attractiveness
specified in the previous paragraph to arrive at the potential score per element. Then to
arrive at the total attractiveness of the opportunity, just add the results per element.
Page |5
Page |6
Page |7
Page |8
Page |9
P a g e | 10
P a g e | 11
P a g e | 12
P a g e | 13
P a g e | 14
P a g e | and
The OAM results for Case I shows that between a smartphone distribution business 15 a
smartphone repair service center, the former is a more viable business venture because scored high in
market potential, financial potential, and competitive advantage and entrepreneurial resources potential.
The result is in-between neutral and high potential, so Mr. Castafieda has to come up with the necessary
risk mitigants, measures how to counter business risks, in order to counter the potential threats.
GROUP ACTIVITY:
Direction: Prepare OAM. Use Group Activity in Lesson 1 (Finding Potential Business Opportunity) as
your reference. Choose only top two business opportunities agreed by your group to venture in.

Module 2 - Lesson 1

Uploaded by

Copyright:

Available Formats

Module 2 - Lesson 1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Module 2 - Lesson 1

Uploaded by

Copyright:

Available Formats

Page |1

MODULE 2: Preparing the Business Plan

LESSON 1: What is Business Plan?

LESSON 2: Choosing the Right Product or Service for the Market

l . Market potential — The business presents superior value to customers.

As mentioned previously, there should be another person—the checker aside from

You might also like