Start.

COOP
MODULE 3
Preparing the Business Plan

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 YOUR BUSINESS PLAN
SESSION 1: BUSINESS PLAN
1A. Structure of a basic business plan
SESSION 2: BUSINESS PROFILE

SESSION 4:
2A. Writing your business profile
SESSION 3: MARKETING PLAN
3A. Product and/or service description 3B: Market description

OPERATIONS PLAN 3C: Marketing strategy

SESSION 4: OPERATIONS PLAN
4A: Physical resources: facilities and equipment
4B. Work process and system

Session Overview SESSION 5: MANAGEMENT PLAN

5A: Preparing the organization chart 5B: Job description
SESSION 6: FINANCIAL PLAN
6A: Preparing the income statement 6B. Preparing your cash flow projection 6C: Preparing your balan
5 minutes 7A: Writing the executive summary

The operations plan describes how you will make your product or carry out the
service. It also provides details on the physical location, facilities, and equip-
ment that would be needed to produce the product or deliver the service. Last
but not least, the operations plan presents how the business will ensure product
or service quality and productivity and safety of the whole operations. Most of
the information that you will need in completing your operations plan can be
found in your outputs in Module 2.

Activity 4A:
Physical resources: facilities and equipment
25 minutes

Physical resources include land, building and other structures, machinery, and equipment. These are
the tangible assets that the cooperative will use to produce the product or deliver the service.
Do the steps together. Listen to all the ideas of your group members.

STEP 1 10 minutes

Location: Where the business will be

located
Basic considerations in choice of location

Electricity/Power Supply Water Supply

Communication
Accessible Near buyers Allowed by
Facility
and suppliers ordinance or
law

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 Read the guiding questions in Column 1 and the examples in Column 2, and write down your answer
in Column 3.

Column 1 Column 2 Column 3

Guide Question Example: Cassava Farmers Coop Your Answer
Where will the It will be located in South Cotabato,
busi- ness be which is the top producer of
located? cassava in the country.

What are the The proposed location is near

advantages and the cassava farms and the
disadvantages of potential buyers. It is also
the location? accessible by
4-wheel drive vehicles. The area is
connected to the power grid. A
clean water supply is also
abundant. The proposed location is
not prone to floods.
The area, though, does not have
landline phone or internet connec-
tion. However, it can be reached
via cell phone.

STEP 2 15 minutes

Physical resources:
Facilities and equipment needed to produce product or provide service
We need an open working area for the manual
Ok.chipping.
I will askThe
thecyanide that to
carpenters is released during the
give a quotation forcutting is harmful.
both the shed and storage area.

You will identify the equipment and facilities that the cooperative will need and how the group plans
to acquire these. By now, the group should have already validated whether the planned mode of
acquisition identified during the feasibility study is feasible. Remember, you can also make use of
existing assets and facilities of members to lower investment cost.
Example: Cassava Farmers Cooperative

Equipment/Facility Description How Coop will Acquire

Land 250 square meters Member will allow coop to use her land
Building 150 square meters; design and layout Grant from local government
will be compliant with Good
Manufacturing Practices
Open working area About 50 square meters; for To be constructed; materials will
manual chipping be donated by members
Slicing machine 2 units Purchase
Weighing machine 2 units Purchase
Moisture tester 1 unit Purchase
Raised platforms For drying of chips Construction; materials will be
donated by members
Stainless washing vats 2 units Purchase
Truck For delivery of chips Rental

Complete the table below for your own cooperative.

Equipment/Facility Description How Coop will Acquire

 Activity 4B:
Work process and system
40 minutes

This part of the Operations Plan will describe how the business will be operated from sourcing of
inputs to after sales services. The process will vary depending on your business. You will also need
to show how you will ensure product or service quality and the health and safety of workers.

Work together to complete each of the steps outlined below. Use the examples and illustrations as
your guide in answering the questions.

Steps
STEP 1 (15 minutes)

Procurement of inputs/raw materials needed to produce product or service

Promotional campaign to recruit Receiving, quality inspection, Weighing and

suppliers Training of suppliers and sorting payment

Column 1 Column 2 Column 3

Guide Question Example: Cassava Farmers Coop Your Answer
What are the key inputs/ Fresh cassava tubers – 375 MT per month
raw materials needed to
produce the product or
service? How many do
you need per month?

From whom will you Members and non-members

source these inputs?

How will you ensure Members will be required to allocate at least

that you will have an 60% of their harvest for the cooperative
adequate supply of raw
Cooperative will regularly conduct promotional
materials?
campaigns to attract cassava farmers to
supply to the plant and eventually become
members
We will promote modular farming. We will
also conduct training to help farmers
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 improve
productivity and comply with quality standards

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 Column 1 Column 2 Column 3
Guide Question Example: Cassava Farmers Coop Your Answer
What are the key Zero to very minimal use of chemical
requirements to inputs; cassava with zero chemical inputs
become a supplier? should be appropriately labelled
No child labour in their
farms Basic work safety is
observed
What are the terms of Members enjoy guaranteed price of US$ 0.05
payment? per kilo. If market price is higher than US$
0.05 at the time of delivery, members will
get the higher price
Non-members will be paid based on
prevailing market price
Price discount of 10% will be applied
to immature tubers
Cash on delivery

STEP 2 (25 minutes)

Production /work process

Cleaning and washing of tubers Moisture content testing Packing and storage of chips

Manual chipping Drying of chips Delivery of chips

Measures to ensure quality and safety

Pallets arranged properly

Pallets cleaned
Workers wear
regularly
protective clothing

Use of clean water

Illustration by: Esteban Idrovo
In Column 1, list the key activities involved in making the product or delivering the service. In
Column 2, identify the key measures to ensure product quality and workers’ safety. In Column 3,
identify the person or people responsible for performing the activity.

Example: Cassava Farmers Cooperative

Activity Measures to ensure quality and safety Responsible

Cleaning and Clean water will be used for washing Washers
washing of tubers

Chipping Thickness of chips will be about ¼ inch to ensure high granules Chippers
recovery
Chippers will only use sharp knives to avoid crushing the cassava,
reduce physical strain (workers), and minimize risk of injury
(workers)
Prior to using a mechanical chipper, operator will ensure that: (i)
blades and funnels are clean; (ii) blades are properly calibrated
to desired thickness; and (iii) motor is in good running condition.
Checking and service maintenance of mechanical chipper will be
done monthly. At all times, operator will wear personal protective
equipment
Chipping will be done in a clean and dry place that is protected
from animals and pests
Area for manual chipping will be well ventilated, shaded, and open
to minimize risk of workers inhaling cyanide

Weighing of chips Clean pails will be used to weigh chips. Content of pail will not be Chipper team leader/
more than 15 kilograms to reduce physical strain on haulers chippers
Drying of chips Chips will be dried in clean platforms without soil and dust Workers/Driers
particles. Chips will be spread evenly at approximately 12 kg. per
square meter
Chips will be turned every two hours to have uniform drying
Workers will be provided with appropriate sun protection
Testing for moisture The thickest chip cut from among the dried chips will be tested for Receiving staff
content moisture content using a tester
Packing of chips Only chips that pass the 12% - 14% moisture content will be Workers/Driers
packed
Chips will be packed in clean sacks without holes and rips
Sacks will be sealed via sewing to avoid entry of pests
Weighing of chips Chips will be weighed using calibrated weighing scales. Each sack Receiving staff
will contain 50 kg. of chips
Weight and number of sacks including date of processing will be
recorded in inventory logbook. Date processed will be indicated on
the sacks

Storage of chips Chips will be stored in clean, well-lit storage areas. The sacks Receiving staff
will be placed on top of pallets, off the floor and away from the
walls
Proper stacking will be observed to facilitate easy monitoring,
minimize risk of falling off, and proper ventilation
“First In, First Out” will be observed in the release of cassava
chips

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 Hauling and The vehicle for delivery will be inspected for cleanliness. Vehicles Warehouse staff
delivery of used for the transport of animal manure, fertilizers and harmful
chips pesticides will not be used for the delivery of cassava chips
Trolleys will be used for the (un)loading of the sacks to protect
both product and workers

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Complete a similar table for your cooperative. To facilitate the identification of measures to ensure
quality and safety, let’s first identify the quality and safety risks in each of the major activities.

Activity Quality and safety risks Measures to ensure quality and safety Responsible