QUARTER 1 – WEEK 3

LEARNING MATERIALS in ENTREPRENEURSHIP

The Business Plan

At the end of this learning material, you are expected to:

1. Recognize a potential market (TLE_ICTAN11/12PC-Ia-1)
a. identify the different sources of business opportunities;
b. analyze the market need;
c. determine the possible product/s or service/s that will meet the market need;
d. define a business plan;
e. determine the importance and parts of a business plan.

PRE-TEST

Read and answer each question. Write your answers on your notebook.
1. Which of the following does not describe a socio-cultural environment source of opportunity?
a. beliefs c. taste
b. customs d. licenses

2. Which of the following is characterized by the income level of a region or area?

a. economic c. technological
b. ecological d. political

3. Which of the following is not true?

a. The income level of a region dictates the purchasing power of the customers.
b. In the Philippines, beliefs, traditions, and customs are the same from one area to another.
c. The use of technology in a business venture is inevitable nowadays.
d. Environmental issues open doors for business opportunities.

4. What refers to a specific group of consumers at which a company aims its products and services?
a. customers c. consumers
b. target market d. investors

5. What refers to integrated characteristic of a group of people or ethnic group?

a. cultural forces c. ecological forces
b. social forces d. economic forces

6. Which of the following elements belong to the social force?

a. climate c. physical resources
b. wildlife d. literacy level

7. Which of the following parts of the business plan is done last??

a. Financial Plan c. Executive Summary
b. Product/Service Plan d. Market and Sales Plan

8. Environmental awareness on the harmful effects of single-use plastics are common nowadays. What
particular environment is represented by this situation?
a. economic c. ecological
b. social d. political

9. What does SWOT stand for?

a. Strengths, Weaknesses, Opportunities and Traits
b. Systems, Weaknesses, Opportunities and Threats
c. Strengths, Weaknesses, Opportunities and Threats
d. Strengths, Weaknesses, Observations and Threats

10. Which of the following is the process of dividing the whole market into smaller groups that the business
wants to serve?
a. Market Segmentation c. Market Division
b. Market Positioning d. Market Analysis

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11. What opportunity environment includes the demographic and cultural factors including beliefs, tastes,
customs and traditions?
a. political c. economic
b. technological d. socio-cultural

12. Which of the following is not a reason for writing a business plan?
a. Avoid borrowing money from investors
b. Minimize risks
c. Avoid costly mistakes
d. Anticipate financial requirements

13. What includes the strategies of the company, the target market, value proposition of the product or services
to increase the company sales.
a. Executive Summary c. Market Plan
b. Financial Plan d. Management Plan

14. Which of the following is not included in the Management and Organizational Plan?
a. Break-even Analysis c. Company Name and Logo
b. Vision and Mission Statements d. Key Personnel

15. What are business situations that must be exploited due to their potential in terms of profit and growth.
a. Strengths c. Opportunities
b. Weaknesses d. Threats

ACTIVITY NO.1
Odd Man-Out!

Analyze the following set of words. Identify which does not belong to the group.

1. STEM ABM ICT HUMSS

2. Lamao Orion Abucay Bagac

3. January February March May

4. square rectangle pentagon rhombus

5. tinapa kalamay bagnet kasuy

Answer the following questions.

1. What was your basis in choosing the “odd man-out” in each set of words?
2. What is common among the remaining words in each group?
3. How are you going to apply the same concept in deciding on your own business venture?

LESSON INFORMATION NO.1

Identifying your entrepreneurial traits, skills and competencies is a significant factor before you start a
business venture but having been able to identify these, can you start an enterprise right away? The answer is NO.
An entrepreneurial venture starts with an opportunity that an entrepreneur needs to exploit. The ways
for you to uncover or discover these opportunities are limitless: from noble ideas through utilization of new
technologies or ideas to observing emerging trends and patterns and identifying specific customer segments.
Market refers to a group of people or organizations that has an interest on a product or service (satisfying their
needs and wants), has resources and, permitted by law and other regulations to purchase the given product or
service.
One way to recognize a potential market is to analyze the market need and opportunities through its
environment.

Macro Environmental Sources of Opportunities

This refers to the big (external) forces that affect the area, the industry, and the market which the
enterprise belongs to. This is categorized as follows (Morato, 2016):
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1. Socio Cultural Environment
This includes the demographic and cultural factors including beliefs, tastes, customs and traditions.

a. Social forces – These are elements of the society resulting from human interactions that can influence
the thoughts, behaviors, attitude, actions, and even the beliefs and customs of the people. This may include values,
traditions, literacy level or consumer psychology.

Feminism, the advocacy of gender equality that supports giving women significant tasks in the community.
Subsequently, some religious groups which follow certain doctrines such as non-consumption of blood or pork
may affect the customers’ purchase of products.

b. Cultural forces – These basically refer to the integrated characteristics of a group of people or ethnic group in
a particular society.

Cultural diversity is clearly manifested in the Philippines due to the presence of different ethnic groups with
different languages and traditions. A certain practice of one group might be unacceptable with another group.

Pinikpikan of the Cordillera region is a chicken dish wherein during the preparation, the chicken is slightly hit
on its neck and wings for its blood to coagulate. This process is considered a tribal ritual that their people use to
identify the fate of their tribe regarding a particular course of action. However, this preparation might not be
acceptable to some animal advocates.

2. Political Environment
This depicts the governance system of an area or the local region of the business enterprise. It includes but not
limited to laws, rules, and regulations that control their business practices along with permits, approvals, and
licenses required to manage a business.

In some cases, voluminous documentary requirements in every government office and the amount of fees and taxes
in processing them may contribute to the loss of interest of the entrepreneur on opening a venture.

3. Economic Environment
This is characterized by the income level of a region which in turn dictates the purchasing power of the customers.
Competitiveness of its industries and enterprises also defines this type of environment.

Bataan is known to be an industrial province with all the industries that can be seen here: from garments to fuel
to power plants. This in turn creates employment to its citizens, improving the quality of their lives. This opens
opportunities for business such as food, transportation, house rentals or laundry services.

4. Ecological Environment
This includes living and non-living things around us. A growing environmental awareness for taking care of our
planet and prolonging of lives opens opportunities for business. Drives for a clean and green earth and healthier
living gives birth to ideas such as air filters, energy saving devices and the likes.

Envirotech Waste Recycling gathers plastic trash such as chips packaging, plastic straws, shampoo sachets,
plastic bags, candy wrappers and the likes and transform them into building materials and even furniture.

a. Climate

This refers to the average weather in a particular area over a long period of time. Philippines as a tropical-maritime
country has a climate characterized by relatively high temperature, high humidity and abundant rainfall visited by
several typhoons in a year.

Batanes is frequently visited by typhoons making it difficult for farmers to grow crops such as corn or rice. Instead,
they grow root crops like ube, gabi, garlic, ginger and onions that have lower destruction risk.

b. Physical Resources

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These include tangible items that are necessary and available for a business to function.

Abundance of seafoods in Bataan gives birth to business opportunities such as fish trading, bagoong, dried fish
and smoked fish (tinapa) making and similar products.

c. Wildlife

This pertains to flora (plants) and fauna (animals). Wildlife preservation must also be taken into consideration
during opportunity seeking. Continuous cutting of trees and hunting animals cause imbalance in the ecosystem.

Paper, as simple as it seems, brings damage to the environment. Trees are being cut down to be used as material
for paper production. Even after use, it emits carbon dioxide in the atmosphere when burned and releases methane
when rotten. Business enterprise such as Countryside Trading manufactures newsprint (recycled papers) as an
alternative to the usual papers that we use for printing and writing.

5. Technological Environment

One of the nightmares of entrepreneurs is to be left behind by the newest trends and technological discoveries
that will make their own products obsolete. Thus, technological offerings for the improvement of their own
ventures is unavoidable for them. From upgrading of systems, processes or new equipment integrated in your
product, it will surely be a blast.

Online applications Paymaya or GCash are widely used for cashless payments. Brought about by the current
situation we are in (You might have experienced washing money you received when you went to a grocery store,
right?) and the ease it brings on transacting with online stores, utilization of these apps is a huge advantage
among businesses nowadays.

Let us analyze the example below.

Relevant Opportunities and Threats

to a Small-Scale Food Enterprise Opportunities Threats
Factors
1. Social
Pandemic brings about Increase in the demand of Health of entrepreneurs might be
awareness on healthy living to healthier food. at risk.
improve body resistance.
Community quarantines obliged Food to be delivered at doorsteps
people to stay at home. is attractive to the customers.

2. Political
Tax exemption to online sellers Exempted amount may be Increased competition since the
with earnings not exceeding ₱ 250 utilized for other expenses of the exemption is attractive to other
000 yearly enterprise budding small-scale enterprises

3. Economic
Fast growing community of Ease of access to online market Increased competition
online sellers for purchase of raw materials

4. Ecological
Environmental awareness on the Opportunity to start a “greener” Increased risk in product
use of ecobags and the removal of advocacy handling. New packaging might
plastic straws and utensils affect profitability in terms of cost
incurred on the use of new
packaging

5. Technological
Increased usage of gadgets Utilizing social media platforms Potential for customer
to increase market reach in terms of disappointments and bashing of
marketing and food delivery netizen’s on poor product and
services service quality

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Now that you have an idea of the different sources of business opportunities that you may explore, you are ready
to plan your own business venture.
“If you fail to prepare, you are preparing to fail”. This is a famous statement of Sir Benjamin Franklin,
one of the Founding Fathers of the United States. Our “Pambansang Kamao”, Manny Pacquiao prepares for
months before any fight for him to be ready with no other goal in mind but to win. This is also true in starting any
business venture. This can be done through writing a business plan.

A business plan is a formal written description of your business future by defining your goals, strategies
to meet the goals, and the timeframe for the achievement of those goals. Is it necessary for you, as an entrepreneur,
to write your own business plan? As cited by Edralin (2016), the Department of Trade and Industry through the
Bureau of Small and Medium Enterprise Development mentioned the following reasons of writing a business
plan.

1. Minimize or remove risk of losing money. Investment on poorly researched business that may result to
financial instability should be avoided. You must see all sides of the venture before letting go of any resources.

2. Avoid costly mistakes. Unplanned decisions may result to negative outcomes that may hurt the business.

3. Anticipate the financial requirements. Futuristic view of the increase or decrease of demand on the given
product/service will prepare you in meeting business obligations.

4. Organize the activities beforehand. Thinking in advance, you must look at the near and distant future.
Contingency plans must be present for anticipated concerns that may arise.

5. Assess actual performance against set goals. Having a clear goal will help you achieve your target in terms of
sales, revenues or even expenses.

6. Apply for financing from lending institutions. There are cases that financial assistance from other people or
organization is needed to start a business. A good business plan may encourage investors to entrust you their
resources but remember to be wise whenever you are lending money and make sure to use the money for its
intended purpose for the growth of the business.

In writing a business plan, you must have a specific audience in mind and answers to possible important
questions that may arise. To start, you may follow the format below (Edralin, 2016).

Parts of a Business Plan

I. Executive Summary

II. Management and Organization

III. Product/Service Plan

IV. Market Plan

V. Financial Plan

Let us discuss the individual parts and its contents.

I. Executive Summary
This part can be found at the beginning of the plan but is the last to be accomplished since this synthesizes the
whole plan. This contains a brief introduction and summarizes everything that is relevant and important to the
prospect business audience.

These are the information needed to guide you:

description of your proposed business and business model
description of the market opportunity you want to capture or market problem the business solves
reasons why this is an attractive business opportunity
key distinctions or differentiators of your business versus competitors
overview of the sales, marketing, and operations strategy and plan
description of your executive planning timeline
overview of the projected financials containing revenues, cost, profits, and assumptions of your business

II. Management and Organization

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This part includes all the basic information of your business. This also describes the workflow (organizational
structure; the background, experience and role of each) of your business from the highest position up to the
lowest.
These are the information needed to guide you:
Company Name, Logo, and Address

Vision and Mission Statements

Key Personnel
Organizational Chart
Ownership Capitalization, Compensation, and Incentives
External Management Support

III. Product/Service Plan

This part describes the highlight of the product or service offered to the customers so that they will be
encouraged to patronize your product or service. It also explains how the products or services will be accepted
and carried by the distribution channels.

These are the information needed to guide you:

Purpose of your Product or Service
Product’s/Service’s Unique Features
Material Requirements and Sources of Supply
Processing Equipment that will be Used to Manufacture the Product or Render the Service
Production or Service Process and Controls
Distribution Logistics
Regulatory and Other Compliance Issues

IV. Market Plan

This includes your business strategies, the target market, value proposition of your product or services that may
increase the company sales (Chen, 2019).

These are the information needed to guide you:

Market Analysis
Marketing and Sales Strategies
Product or Service Characteristics
Pricing Policy
Sales Projection

Market Analysis
This includes the process of how you divide the total market into smaller groups seeking similar needs and
wants (market segmentation) and the characteristic analysis of the business in relation to internal and external
factors. (SWOT Analysis)

An example of market segmentation is shown below.

Food is a physiological need, but the cravings depend on each consumer. Chicken wings offered by The Wing
Hub of Limay even come in different flavors. Consumers who crave for samgyupsal may turn to Super Boink of
Balanga City while those who want to have a taste of Vietnamese food would probably go to Loleng’s Hu Tieu-
An in Morong.

SWOT Analysis, on the other hand, is a popular tool to evaluate the internal environment pioneered by George
Albert Smith Jr. and Ronald Christensen, two Harvard business professors (Aduana, 2016). SWOT stands for
Strengths, Weaknesses, Opportunities and Threats.

Strengths refer to strong attributes or capabilities of the business that provide great
advantage in exploiting the business opportunity. Weaknesses are poor attributes
or deficiencies that give disadvantage to the business. Both strengths and
weaknesses are considered internal origins, meaning they are attributes inside the
business venture.

On the other hand, opportunities are business situations that must be exploited due
to their potential in terms of profit and growth. Threats are possible external factors
that may harm the business. Both opportunities and threats are outside origins and are attributes outside the
business.

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Below is a sample SWOT Analysis of a Small Online Bakeshop.

Marketing and sales strategies

These are also known as the product PUSH. These have three key characteristics that allow to perform
marketing function of persuading customers to buy right away. (Go, 2010)
1. Temporary – Sales promotions are conducted at short periods creating a sense of urgency on the part of the
customers.
2. Better value – Sales promotions are used to create short-term differentiation by offering a better product
value.
3. Beneficial – Sales promotions promote growth sometimes even at artificial level.

7-11 stores offer promotional sales, such as “Buy1-Take1” of products at particular period. At the same time,
they offer Cliqq Rewards to loyal customers by getting Cliqq points in every purchase which in turn can be
exchanged to free or discounted items.

Product/Service Characteristics
This includes value proposition of the product/service. Value proposition answers the question, why should
your customers buy from you and not from other similar businesses? These contain the convincing reasons that
buyers should see that will make them purchase your products/services.
BDO: “We find ways”. Before this pandemic, while other banks operate from 8AM-3PM Mondays to Fridays,
BDO offers services until 6PM and even operates during weekends fulfilling their promise of “finding ways” for
the customers.

Pricing Policy
This part specifies the price of the product/service. It must be noted that quality and price cannot be separated in
marketing (Aduana, 2016). You must be careful in setting the price of your product/service considering the costs
of production, competitors’ pricing, and customers’ perception.
Filipinos are generally price conscious. We tend to check the price tag of a product first before whether to buy
or not to buy a commodity. “SALE” and “PROMO” tags are consumer magnets. In cases wherein the prices of
the product cannot be decreased, the entrepreneur should be able to give emphasis on the benefits of his/her
product to convince the customer of its value.

Sales Projection
This is also called sales forecast or the prediction of the amount of revenue your company expects to earn at
some point in the future. This shows the quantity of product sold or service rendered and its corresponding
amount within a given period.

V. Financial Plan
This is a document containing your current financial situation as an entrepreneur and long-term monetary goals,
as well as tactics to attain those objectives. You may create a financial plan on your own or with the assistance
of someone who is knowledgeable about handling finances such as certified financial planner.
These are the information needed to guide you:

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 Start-up costs requirements – These are expenses that you will be needing during the course of creating a new
business.

Financial projections – These are estimates of your future profits and expenses.
Break-even analysis – This is a financial tool that will help you determine at what stage (or period) your
company will start gaining profit.
Budget – This includes the amount needed for business operations as well as sources of such funds (equal
shares or through a creditor).

ACTIVITY NO. 2
A. Puzzle Time
Would you believe that the first known entrepreneurs can be tracked back to nearly 20,000 years ago
where first ever known transaction between individuals took place. Do you know who are these first
entrepreneurs?
Find the answer by solving puzzle by supplying the corresponding letter in each number below. Match the term
on the left with the group of words or clues on the right. Best of luck!

B. Identify the part of the business plan defined in each item below. Choose your answer from the choices in the
box. Write the letter that corresponds to your answer in your notebook.

1. This includes your business strategies, the target market, value proposition of your product or services that
may increase the company sales.
2. This synthesizes the whole plan and though found at the beginning, this is done last.
3. This part describes the highlight of the product or service offered to the customers so that they will be
encouraged to patronize your product or service
4. This is a document containing your current financial situation as an entrepreneur and long-term monetary
goals, as well as tactics to attain those objectives.
5. This part includes all the basic information of your business. This also describes the workflow of your
business from the highest position up to the lowest.

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ACTIVITY NO.3
The current situation we are in cause unemployment to a large population of the country. Social Amelioration
Program (SAP) implemented the Emergency Subsidy Program (ESP) granting an amount of ₱ 5000 to ₱ 8000 to
the beneficiaries who suffered the greatest impact of the implementation of the quarantine.
Given that you are one of the beneficiaries, how will you utilize the given amount to start a small business?
List at least three opportunities that can be found in your area. For each opportunity, provide two business
proposals and state the reason for choosing such proposals.
You may brainstorm with your family members for the possible opportunities that you have in mind.
Use the format below to present your answer.

Answer the given question briefly and comprehensively.

Prior to COVID 19, the world witnessed different outbreaks that caused fear and anxiety among nations: from
SARS in 2002, H1N1 in 2009, MERS in 2012, and Ebola in 2018. Among these, COVID 19 has the widest
range affecting almost 66 countries and territories with almost 10 million cases worldwide at present. In the
country, the number of cases increases each day. This caused businesses, schools, and even churches to stop
operations and communities to be under quarantines. Strict precautionary measures are implemented as to stop
the spread of the virus. What do you think are the opportunities posed by this threatening condition?

ASSESSMENT
Read and answer each item. Write your answer on a separate sheet.

B. Fill in the blanks with words that will make each concept about advantages of learning Entrepreneurship
correct.

1. Entrepreneurship is an ______ and not a science thus, there is a constant change.

2. Although ______ is a good indication of wealth, improving the life of an entrepreneur are also priceless
outcomes of entrepreneurship.
3. Products and services are considered valuable when they satisfy the ______ and wants of the customers.
4. Businesses which are managed by other people for the benefit of the owner falls under ______.
5. ______ is a part of any entrepreneurial endeavor.

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C. Read and analyze each item.
A. Write TRUE if the statement is correct. Otherwise, write FALSE.
1. Income levels of a community affects the buying capability of its citizens.
2. Contingency plans must be included in a business plan for anticipated concerns that may arise.
3. Poorly researched business poses lower risk.
4. Once entrepreneurial skills and competencies are identified, one can start a business venture right away.
5. Business profit includes the quantity needed for business operations as well as sources of such amount.
6. Executive summary is found at the beginning of the plan but is done last.
7. A business plan is also written for the sake of the investors from whom the entrepreneur may ask for financial
assistance.
8. Market segmentation is a process of analyzing the internal and external factors that affect a business
enterprise
9. A financial plan must be written solely by someone who is knowledgeable about handling finances such as
certified financial planner.
10. Weaknesses and threats are both harmful and external factors that may affect the business.

D. Identify the macro environment source of opportunity shown in each situation. Choose your answer from the
box below and write its corresponding letter on your paper.

11. Miss Macy Pag hired a website developer to create an online website for her business to expand her market.
12. Ms. Dee S. Carte started investing in a candle making business since she knows that months from now it will
be in demand as “All Souls Day” is fast approaching. This is the day of the year wherein people including Filipinos
visit their dead loved ones.
13. Mr. Matt T. Pid registered his business to Department of Trade and Industry (DTI) for legal purposes. In
return, he received free workshops and trainings and had easier transactions in government offices. DTI also
helped him market his products thus, making his products known in the province.
14. Based on what he learned about electronics and the desire to help lessen their energy consumption as to help
in issues regarding taking care of the environment, Mr. Lou Dy made a DIY (do-it-yourself) solar charger made
up of low-cost materials. Eventually, this does not only help him achieve his goals as an environment enthusiast
but also gives him an opportunity to earn.
15. Different industries and companies can be found in Bataan such as FAB in Mariveles, Bataan Petron Refinery
in Limay, and EcoPark in Hermosa which create employment for its residents. Ms. Paz Centia saw an opportunity
to start a laundry business due to the large population of workers who do not have time to wash their own clothes.

Additional Activities
Label the entrepreneur on the left with the sections of the business plan that can be
associated with his body part. Justify your answer by giving concrete examples.
(Example: Hands – Financial plan. The hands are used for handling things. In
business, the hands are responsible for giving and receiving resources such as
money.)

NOTE: this Learning Material will be

used for 3 weeks. Additional
worksheets will be given.

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