Republic of the Philippines

Department of Education
MODULE IV
PUBLIC TECHNICAL-VOCATIONAL
HIGH SCHOOLS
COURSE: ENTREPRENEURSHIP III

UNIT OF COMPETENCY: PLAN A BUSINESS

MODULE TITLE: PLANNING A BUSINESS

SUGGESTED DURATION: 8 HRS

WHAT IS THIS MODULE ABOUT?

This module covers the knowledge, skills attitudes and values

needed in discussing the importance of a business plan and
enumerating the steps in preparing a business plan.

WHAT WILL YOU LEARN?

At the end of this module, you should be able to:

a. discuss the importance of a business plan;

b. determine the types of business plan; and
c. identify and describe the steps in preparing a business
plan.

You are required to go through a series of learning activities in

order to complete each of the learning outcomes of the module. Follow
Unit of Competency: Plan a Business these activities on your own and answer the Self-Check at the end of
Module no. 4: Module Title: Planning a Business each learning activity.
If you have questions, don’t hesitate to ask your teacher for
assistance.

HOW TO USE THIS MODULE

Welcome to the Module “Planning a Business”. This module
contains instructional materials and activities for you to complete.
The unit of competency “Plan a Business” contains the
knowledge, skills and attitudes required for the course
Entrepreneurship.

2
 5. _____ serves as your guide in managing your enterprise.
WHAT DO YOU ALREADY KNOW? a. actual business
b. business plan
Pre-test: c. capital
d. bloodstream
Let us find out how much you already know about planning a
business. 6. A business plan is anticipated before _____is assumed.
a. actual business
A. Direction: Choose the best answer. Write only the letter of b. business plan
the correct answer. c. capital
d. bloodstream
1. Which of the following is the most basic of all management
functions? 7. Lack of _____is one of the entrepreneur’s problems to finance
a. controlling business.
b. directing a. actual business
c. organizing b. business plan
d. planning c. capital
d. bloodstream
2. What are considered as positive factors of a business
venture? 8. _____ is the parallel effect of lack of planning in business.
a. opportunities and weaknesses a. costs of productions
b. strengths and opportunities b. goals
c. strengths and threats c. poor management
d. strengths and weaknesses d. risks

3. Which is not true in a business plan? 9. _____is the number of volume of intended production on a
a. It does not detect the defect. specific period of time.
b. It eliminates risk. a. costs of productions
c. It forecasts future situations. b. goals
d. It minimizes costs. c. poor management
d. risks
4. What is the most likely the cause of failure of Filipino
entrepreneurs? 10. ____ is one of the components of business planning.
a. crab mentality a. Actual business
b. failure to meet deadline b. Business Plan
c. weaknesses c. Capital
d. bahala na attitude d. Production plan

3 4
11. A marketing plan is considered the _____of the office because 17. Aside from minimizing / eliminating risks, and minimizing the
it gives life to business. cost of production, a benefit of planning a business is
a. actual business _________.
b. air a. Identify defects of business operations
c. bloodstream b. Identifying future needs of the client
d. requirement c. Identifying goals of the business
d. Identifying the amount of profit
12. An organizational plan is responsible on how to execute plans,
objectives and _____of an enterprise. 18. Minimizing the cost of production includes how each of the
a. costs of productions resources of production such as ___________ are used.
b. goals a. battery, equipment, product and materials
c. poor management b. goal, risks and costs
d. risks c. manpower, money, materials, and machines
d. time, energy, costs, and product
13. Planning can minimize ______.
a. costs of productions 19. This is created in order to minimize risk and to ascertain the
b. goals viability of a project:
c. poor management a. Actual study
d. risks b. Feasibility study
c. Project proposal
14. In business, time is ________. d. SWOT
a. goals
b. gold 20. ALL of the following are part of the components of a feasibility
c. inevitable study, EXCEPT:
d. risk a. Community study
b. Marketing study
15. All of the following are Basic Principles in Running a Small c. Social desirability
Enterprise, EXCEPT: d. Financial study
a. Planning must be realistic
b. Planning must be based on the needs of the 21. This component of feasibility study includes the assessment
community of total capital requirements.
c. Planning must not be flexible a. Cost study
d. Planning must start with simple projects b. Marketing study
c. Social desirability
16. This Basic Principles in Running a Small Enterprise pertains d. Financial study
to fit the needs of the people in a community through
observations, personal interviews and questionnaires. 22. It is measured by economic benefits to the people living in the
a. Planning must be realistic community and its vicinities.
b. Planning must be based on the needs of the a. Cost study
community b. Marketing study
c. Planning must not be flexible c. Social desirability
d. Planning must start with simple projects d. Financial study

5 6
 23. This pertains to the document that stems from an idea or LET US STUDY
policy into the details of a potential project or business.
a. Actual study
b. Feasibility study Words to study
c. Project proposal
d. SWOT v micro means very small/limited in quantity
24. Jonalyn is assigned to write a part of their business proposal
v endeavor means an effort to do a task
that defines the goals or targets of the business. Which of the v business planning is the process of setting
following Essential Part of a Business Proposal should she up goals for a particular business
work on? v business plan means any plan that works for
a. Budget a business to look ahead.
b. Executive summary
c. Justification
d. Objectives

25. In order to complete their concept paper, Jennifer writes the To start a small enterprise , you must have a foresight.
recommendation which discusses: Anticipate what may happen to your business. Any endeavor,
a. The advantages of putting a certain business particularly the desired form or type of business, sets the direction of
b. The details of the business the enterprise.
c. The economic benefits to the people in the community
d. How the project can be improved in the future A. The Benefits Derived from Planning a Business.

v Making a business a plan can minimize or eliminate risks.

LESSON 1 It involves a careful study of the competence, interest and
resources of the entrepreneur against the needs of the
consumers. A feasibility study is necessary because
DISCUSS THE IMPORTANCE OF A BUSINESS PLAN through this, an entrepreneur can determine whether
his/her choice is profitable or not.
WHAT IS THIS LESSON ABOUT?
v A business plan can also minimize the cost of production.
This lesson deals with planning for a business or enterprise. This includes how each of the resources of production
such as manpower, money, materials and machines are
At the end of the lesson you should be able to: used. Every aspect of the business operations is
a. discuss the importance of business planning; monitored and controlled which prevents unnecessary
b. appreciate certain benefits in business planning; and waste of resources that will result to economy and
c. follow the basic principles of business planning. efficiency.

v A business plan can also identify the defects of the

business operations. Goals and objectives are formulated.
Procedure, strategies and techniques are planned.
Reevaluation may be done to avoid encountering the same
problem.

7 8
 LET US REMEMBER
B. The Basic Principles in Running a Small Enterprise
must consider in running a business/enterprise are the
following:
Planning is important to ensure a
1. Planning must be realistic. It must be based on available profitable and successful business.
human, financial and physical resources. Planning without
enough resources may result to the failure fail of an
enterprise.
2. Planning must be based on the needs of the community. It HOW MUCH HAVE YOU LEARNED?
should fit the needs of the people in a community which
can be known through observations, personal interviews Directions: Write only the letter of the correct answer.
and questionnaires.
3. Planning must be flexible. You, as the entrepreneur should
be able to adjust and to plan if development changes occur
or changes in government laws or policies happen.
Planning should respond to the trends in consumer’s tastes a. what to expect e. business plan
and preferences. b. time management f. projects
4. Planning must start with simple projects. This requires c. strengths
simple management and technology, thus, the micro d. micro
business is advised.
1. _______eliminates risks.
2. The positive factors of planning is called _____.
3. Planning is what to do it, how to do it, when to do
LET US APPLY WHAT YOU HAVE LEARNED it and ______in the future.
4. Planning must start with simple _____.
You are planning to get into t-shirt printing service business. 5. In business, time is gold. For this reason, an
Conduct a market survey if the service will become successful. Entrepreneur must be efficient in _____.
Directions: Divide yourselves into two big groups. Simulate RESOURCES:
conducting a market survey in your group. Then, present a report on
the market survey done by answering the following questions: Computer with Internet Access
1. How did you conduct the market survey? Journals
2. As a result of the survey, do you think your proposed Magazines
business will be successful? Why/why not?
3. What principle did you follow in conducting the market REFERENCES:
survey as part of your business plan?
4. Why do you consider this activity (market survey) as an Villanueva, et. al., Business Management III,
important tool in planning a business? Adriana Publishing Co. Inc., pp. 74-76, Cubao,
Quezon City
http//articles.bplans.com/

9 10
LESSON 2 A feasibility study contains five major components, namely:

a. Marketing study
DETERMINE THE TYPES OF BUSINESS PLAN – The sufficient demands for the product as well as
the competitive position of the firm in the industry
WHAT IS THIS LESSON ABOUT? must be
determined.
This lesson deals with the different types of business plan.
b. Technical study
At the end of the lesson you should be able to: – In this study, you must consider the
manufacturing process, plant size, production
a. enumerate the components of a business plan; and schedule, machinery, plant location and layout
b. determine and describe the different types of business structure, raw materials, utilities and waste
plan; disposal.

LET US STUDY c. Management study

- This involves on how the project shall be managed
Words to study such as the business organization including the
organization chart and function of each unit
v Component is a constituent part of the business plan. management personnel, skills and numbers of
v Feasibility study is an analysis and evaluation of a labor required.
proposed project to determine its profitability.
v Marketing deals with the selling and buying activities d. Financial study
of the business. - You should include the assessment of total capital
v Project summary deals with the introduction requirements break-even outputs, sales and prices,
statement of the problem. amount of sales required to earn a certain amount
of profit and the cash payback period.

After having learned about the importance of business d. Social desirability

planning, you must know the different types of business plan. - This is measured by economic benefits to the
people living in the community and its vicinities.
1. Feasibility study
– It is created in order to minimize risk and to ascertain the 2. Concept Paper
viability of a project.
- It is not merely an investigation but a frame work on how It is a written plan for a business on how it will be
the operation of a business project shall be accomplished. managed. It is a tool to represent a certain venture
- It is used to determine the potential success of a proposed anticipating its future.
business venture.
A feasibility study has a project summary which deals with
The different parts of the concept paper are the following:
the introductory statement of the problem, the business name, the
business logo, the business location, descriptive definition of the
project and objectives.

11 12
 a. Introduction – This is the part that discusses the significant
details of the product/service and why the 4. Project Proposal
product/service is needed by the community. This is the initial document that converts an idea or
policy into the details of a potential project.
b. Objectives - This part gives the details of the business
both specific and general. The Essential Parts of a Business Proposal.

c. Rationale – This part focuses on the advantages of putting a. Executive Summary

a certain business. The overview of the proposal from beginning to end
should be stated in the project proposal.
d. Terms & conditions - In this part, specific agreement from b. Justification
particular to general things are clarified.
This emphasizes the need of the proposal.
c. Procedure
e. Recommendations – This part is very important because it The steps are being explained where to start and to
helps to improve the project in the future. end.
d. Objectives
3. Business Plan The goals or targets of the business are defined.
e. Project Organization and Management
A business plan describes the nature of the business, the The manpower and function of each are clearly stated.
sales and marketing strategy, the financial background, f. Budget
containing a projected profit and loss statement. You should determine the source for the input and
output, the profits and the loss of the business.
Components of Business Plan:

a. The environment –The needs of the people in the LET US APPLY WHAT YOU HAVE LEARNED
community should be identified.
b. Behavior of the product – You should know the market Directions: Think of a service type of business which
trends, product demand in the community, the you feel is a good venture to invest on.
resources, quantity and quality goods in buying, Part 1: Make your own concept paper to support your
c. Location of the business – You should consider the place business ideas and plans. Share it to your
where customers prefer to buy. classmates.
d. Organizational plan – The needed workers in the business
must be listed in the organizational chart.
e. Production plan – This involves the manpower, money, TITLE OF YOUR CONCEPT PAPER:
machinery, materials and methods to be able to
produce the desired output based on anticipated
profit.
f. Financial plan – You as an entrepreneur need to determine INTRODUCTION:
the fiscal needs of the business and the sources of
needed funds.

13 14
 OBJECTIVES: LET US REMEMBER

A business plan unifies the different

parts and activities of the business to
RATIONALE: achieve its goals and objectives.

HOW MUCH HAVE YOU LEARNED?

TERMS AND CONDITIONS: Directions: Choose the letter of the attribute/attributes being
described/ asked:
1. The component of a business plan which identifies the
available raw materials in your community.
RECOMMENDATIONS: a. behavior of the product
b. environment
c. location of the business
d. organizational plan
2. Why is an organizational plan needed in planning a business?
Part 2: Using your data in the concept paper, conceptualize a a. To find out what products and services are available
Business Plan. Fill in the data regarding the Components of a and which of these can be improved
Business Plan. b. To coordinate the activities of the work force towards
the company’s goals
ENVIRONMENT: c. To determine the needs of the community
d. To identify the market trends in the community
3. It is the process of setting up goals for a particular business
endeavor and taking up steps to achieve these.
LOCATION OF THE BUSINESS: a. business enterprise
b. business planning
c. business operation
d. business expertise
BEHAVIOR OF THE PRODUCT: 4. The component of a business plan which identifies the
available raw materials in your community.
a. behavior of the product
b. environment
ORGANIZATIONAL PLAN: c. location of the business
d. organizational plan
5. There are several factors to consider in selecting the location of
your business. Which of these factors is not included?
FINANCIAL PLAN: a. the cost and availability of land
b. the quality of the product
c. the availability of transportation facilities,
communication, water, electricity and labor
d. behavior of the product

15 16
RESOURCES: If you already know the type of business you are planning to
engage into, the following are the steps which can help you in
Computer with Internet Access preparing a business plan that you must follow:
Journals
Magazines 1. Make an evaluation of your personal resources, interests,
available raw materials and available specialized technical
REFERENCES: skills in your community. Create a name of your business.
Does it tell well about what you are selling? Is it easy to spell
Villanueva, et. al., Business Management III, and remember?
Adriana Publishing Co. Inc., pp. 74-76, Cubao,
Quezon City These are guide questions to help you evaluate your personal
http//articles.bplans.com/ resources:
http//retail.about.com
Teneza et.al, Business Management IV, v Are you interested in the business?
Shekinah Publishing and Printing Press, pp. 116, v Do you have sufficient funds?
171-172; Las Pinas, City v Do you possess management skills?
v Are raw materials available?
v Does the government give financial and technical
LESSON 3 assistance?
v Do you have good personal relations with other people?

IDENTIFY AND DESCRIBE 2. Conduct an analysis or survey of your market.

THE STEPS IN PREPARING A BUSINESS PLAN v Who are your customers?
v What product or service will you offer?
v Is there a good demand for your product or service?
WHAT IS THIS LESSON ABOUT? v Are the customers interested in the existing product or
services?
This lesson deals with the Steps in Preparing a Business Plan v How many competitors are there in the market?
v How much is your estimated share in the market?
At the end of the lesson you should be able to: v Could you possibly offer a better quality product or
service at a lower price?
a. identify and describe the steps in preparing a business v Is there a reasonable profit?
plan; and 3. Select a proper business location.
b. follow the steps in preparing a business plan. v Is the location clean, decent and peaceful?
v Are there customers in the place?
LET US STUDY v Are facilities such as electricity, water, transportation
and communication available?
v Is the place accessible to raw materials and other
Words to study
supplies?
v In case your first choice is not available, do you have a
v scheme deals with the design of a project. good alternative?
v adequate means enough supply of the product. 4. Make a financial plan.
v management involves the administration of a v Determine your objective.
business enterprise.

17 18
 v How much money will you need?
v What are your sources of funds?
v Does your budget determine how you will spend your Introduction :
money?
v How soon can you recover your investment? is a registered business engaged in
5. Make a production plan. owned by ________________.
v Determine whether to buy or lease the production
equipment Business goals are as follows:
v Will you improve the quality of an existing product?
v Can your production scheme meet market demand? a. The operation started on
v Do you have a proper scheduling of production?
6. Make an organizational plan. b. The location could be reached by
v Find out what type of organization is most suitable
v Are you acquainted with the laws, policies and c. The business could be expanded by
requirement of your business organization?
v Who will be your workers?
v What will be the duties and responsibilities of each? Table of Contents
7. Make a management plan. Section I : The Business
v Write down your goals and objectives.
v Determine your strategies. 1. Description of the Business
v What customer policies will you adapt? The business is engaged in the distribution of or production, or
v What human resource development program will you of servicing customers.
undertake?
v What will be your program of social responsibility? 2. Product/Service
The product/service is
Being an entrepreneur, you must have an effective business 3. Market
plan. You should follow the steps in preparing a business so that the Production will be distributed in (mention primary and
data must be accurate and adequate. This will help you to choose the secondary market) The clients belong to (description of the
appropriate and effective strategies to ensure success in your business socio-economic level). The product is bought by clients for the
venture. following reasons:

LET US APPLY WHAT YOU HAVE LEARNED

ACTIVITY: Think of a simple business you want to engage 4. Location of the Business
in. The business is located at
Make a sample business plan of that business using the
format below: It can easily be reached by .

Business Name :
Location :
Name of Owner :

19 20
 5. Competitors are as follows: For the following purposes

(State the name of the company and other relevant facts such
as size and possible sales) Using the following collaterals

A competitor’s profile includes price, quality, location, image

projected, strategies of selling and operations. 2. Capital Equipment List
The capital and equipment lists are the following:
6. Price
The current price is _____. It is derived from the following
factors: (production cost and marked up costs) Briefly describe the equipment and their uses. Include
. processes employed in the production)

7. Marketing strategies
The product will be distributed in the following manner:
3. Balance Sheet
_______________________ This is a statement of the financial condition of an enterprise
8. Management at a given point in time usually only a focus, quarterly, semi-
The management group is composed of the following (name, annually or annually. It shows the owner how money has been
position, responsibility and qualification) invested and the accrued profit or losses.

1. Break-even Analysis
(It is a tool used by an entrepreneur in solving managerial
problems). It compares the total resources (TR) with the total
cost (TC)
9. Personnel
The personnel needed are the following (enumerate the type of TR represents income while TC represents expenses of the
work and their qualifications) enterprise. When TR is greater than TC, there is profit. But
when TR equals TC it is break even. There is no profit, nor loss.

2. Income Projection (Profit-Loss Statement)

Summary of Section One a. Detailed by month(for the first year)
b. Detailed by quarter (for the 2nd, 3rd, 4th, 5th)

Section II: Financial Data

1. Sources and application of funding:

Secure financial assistance from

21 22
LET US REMEMBER Post-Assessment:

Business planning is needed to Let us find out how much you have learned about planning a
business.
guide the entrepreneur in the
management and other aspects of A. Direction: Choose the best answer. Write only the letter of the
the business process to ensure correct answer.
profit.
1. Which of the following is the most basic of all management
functions?
HOW MUCH HAVE YOU LEARNED? a. controlling
b. directing
A. Directions: Choose the answer in column B to the questions in c. organizing
column A. Write the letter only in your test notebook. d. planning
A B
2. What are considered as positive factors of a business venture?
1. Who will be your workers? a. organizational plan a. opportunities and weaknesses
2. How much money will you b. financial plan b. strengths and opportunities
need? c. strengths and threats
3. How many competitors are c. survey of your market d. strengths and weaknesses
there in the market? d. management plan
4. Are there customers in the e. business location 3. Which is not true in a business plan?
place? a. It does not detect the defect.
5. What customers policy will b. It eliminates risk.
you adapt? c. It forecasts future situations.
d. It minimizes costs.
B. Choose a partner. Exchange Business Plans that you have 4. What is the most likely the cause of failure of Filipino
prepared in the application portion. Check if all the parts are entrepreneurs?
complied with. Rate the Business Plan using the following descriptive a. crab mentality
ratings: b. failure to meet deadline
c. weaknesses
d. bahala na attitude
Descriptor Rating 5. _____ serves as your guide in managing your enterprise.
Complete 5 a. actual business
Incomplete 3 b. business plan
c. capital
Needs Improvement 1
d. bloodstream

6. A business plan is anticipated before _____is assumed.

a. actual business
b. business plan
c. capital
d. bloodstream

23 24
 13. Planning can minimize ______.
7. Lack of _____is one of the entrepreneur’s problems to finance a. costs of productions
business. b. goals
a. actual business c. poor management
b. business plan d. risks
c. capital
d. bloodstream 14. In business, time is ________.
a. goals
8. _____ is the parallel effect of lack of planning in business. b. gold
a. costs of productions c. inevitable
b. goals d. risk
c. poor management
d. risks 15. All of the following are Basic Principles in Running a Small
Enterprise, EXCEPT:
9. _____is the number of volume of intended production on a specific a. Planning must be realistic
period of time. b. Planning must be based on the needs of the community
a. costs of productions c. Planning must not be flexible
b. goals d. Planning must start with simple projects
c. poor management
d. risks 16. This Basic Principles in Running a Small Enterprise pertains to fit
the needs of the people in a community through observations,
10. ____ is one of the components of business planning. personal interviews and questionnaires.
a. Actual business a. Planning must be realistic
b. Business Plan b. Planning must be based on the needs of the community
c. Capital c. Planning must not be flexible
d. Production plan d. Planning must start with simple projects

11. A marketing plan is considered the _____of the office because it

gives life to business. 17. Aside from minimizing / eliminating risks, and minimizing the
a. actual business cost of production, a benefit of planning a business is _________.
b. air a. Identify defects of business operations
c. bloodstream b. Identifying future needs of the client
d. requirement c. Identifying goals of the business
d. Identifying the amount of profit
12. An organizational plan is responsible on how to execute plans,
objectives and _____of an enterprise. 18. Minimizing the cost of production includes how each of the
a. costs of productions resources of production such as ___________ are used.
b. goals a. battery, equipment, product and materials
c. poor management b. goal, risks and costs
d. risks c. manpower, money, materials, and machines
d. time, energy, costs, and product

25 26
19. This is created in order to minimize risk and to ascertain the 25. In order to complete their concept paper, Jennifer writes the
viability of a project: recommendation which discusses:
a. Actual study a. The advantages of putting a certain business
b. Feasibility study b. The details of the business
c. Project proposal c. The economic benefits to the people in the community
d. SWOT d. How the project can be improved in the future

20. ALL of the following are part of the components of a feasibility RESOURCES:
study, EXCEPT:
a. Community study Computer with Internet Access
b. Marketing study Journals
c. Social desirability Magazines
d. Financial study
REFERENCE:
21. This component of feasibility study includes the assessment of
total capital requirements. Villanueva, et. al., Business Management III,
a. Cost study Adriana Publishing Co. Inc., pp. 105-110,
b. Marketing study Cubao, Quezon City
c. Social desirability
d. Financial study

22. It is measured by economic benefits to the people living in the

community and its vicinities.
a. Cost study
b. Marketing study
c. Social desirability
d. Financial study

23. This pertains to the document that stems from an idea or policy
into the details of a potential project or business.
a. Actual study
b. Feasibility study
c. Project proposal
d. SWOT

24. Jonalyn is assigned to write a part of their business proposal that

defines the goals or targets of the business. Which of the following
Essential Part of a Business Proposal should she work on?
a. Budget
b. Executive summary
c. Justification
d. Objectives

27 28
7
KEY TO CORRECTIONS 5. B OR D

Pre and Post Assessment Lesson 3

1. D 1. A
2. B 2. B
3. A 3. C
4. B 4. E
5. B 5. D
6. A
7. C
8. C
9. A
10. D
11. C
12. B
13. D
14. B
15. C
16. B
17. A
18. C
19. B
20. A
21. D
22. C
23. C
24. D
25. D

Lesson 1
1. E
2. C
3. A
4. F
5. B

Lesson 2

1. B
2. B
3. B
4. A