About this document

The module is delivered over a six-week period.

The aim of this module is to introduce the value of entrepreneurship management to the
students and show to them how important it is in an economy or society. It is hoped that you
will find inspiration with the success stories that will be discussed in the module, as well as
your own personal encounter with real-life entrepreneurs. This module encourages you to
be future entrepreneurs who will make a difference, inspire others, and the change the
landscape of doing business in the Philippines.

Introduction. This will give you an overview of the entire unit, a description of the
nature of the lesson that will be covered, and the expectations of the unit so that you have an
idea of what you need to accomplish.

Unit Learning Outcomes. Presented in this part are the specific outcomes (what
we need to achieve), which are also the bases of the activities that you will find in the unit.

Timing. Scheduling your time to study is very important so that you know how
you can manage your coursework efficiently. This part contains a description of the timeline
of the unit, particularly the span of time or number of hours that you shall devote for the unit.

Warm Up. Jumpstart the lesson right! Our brains work like any muscle in our body,
we need a good warm up before doing an energy-draining task (don’t worry your energy will
not be drained literally!). This part contains short and simple brain warm-up activity to get
those neurons running. It’s fun and useful at the same time. This may also have a short pre-
check or pre-work activity that will enable you to assess what you already know about the
topic. It may contain questions or short quizzes to help you get started.

Getting Started. In this section, you will find a discussion of the concepts and
skills that will help you gain the learning outcome for the unit. The contents are varied
because I understand that dealing with a lot of texts can be pretty boring and sleep-inducing.
The presentation is specifically designed for different types of learners.

Notes. This is like me telling you what to do next after reading. This section
contains instructions on how you can manage to transition from reading to working on your
activities and special points of interest, things to be aware of, or extra information which you
may wish to follow-up if you have time.

Self-Check. This contain short tests or activities which you can complete in
your own time and at your own pace, to check or extend your understanding of particular
topics. We recommend that you complete these when suggested, and if you find them
difficult or still don’t understand particular concepts afterwards, re-read the preceding
section and try again.
These are short tests or activities which you can complete in your own time and at
your own pace, to check or extend your understanding of particular topics. We recommend

1
that you complete these when suggested, and if you find them difficult or still don’t
understand particular concepts afterwards, re-read the preceding section and try again.

Unit Summary. What else does this mean? Yes, a bulleted enumeration of the
key point in the unit. This is to review you of the concepts and skills before doing your unit
activity.

Paulinian at Work. Don’t frown yet; the activity is simple and doable, I promise!
This is to help you achieve the learning outcome for the unit. The activities are task-based,
which means that they are what you usually do in terms of making decisions in the business.
There are worksheets attached and contains detailed directions so that it’s easier to
accomplish.

Unit Activity: You will see the Unit Activity instructions in this box. To further
your grasp on the lesson, you will see some extra readings, which you can access online. Don’t
worry, these readings are not required if you don’t have internet access, but this will be very
helpful!
These are activities which take place within Canvas/HBL, either as an
individual task or as a group activity with fellow students on your course. For some of the
activities, you will receive feedback from your teacher; and these therefore become an
important way for you to check and extend your understanding of the topics covered.

Readings: You will find the suggested readings in this box on any part of the
unit discussion. One of the proven ways for effective studying is PREVIEWING. So, I invite
you scan through the pages of the module; go to the units to get the hang of what kind of
material you will be dealing with. No reading, just scanning!
Readings: references to articles, set texts or online resources which are essential for
developing your understanding around a topic. Read them where indicated in the text.

2
WELCOME
To ENTREPRENEURIAL MANAGEMENT Class!
SPSPS welcomes you to an exciting but challenging course in Business Management, a core
module on the BSBA Programme. The Entrepreneurial Management course deals with the
concepts, underlying principles, processes, and implementation of a business plan. At the
end of this course you should appreciate the value of establishing and running a business as
well as the right methods to do so. Many of our entrepreneurs failed in their business
ventures because they did not prepare a logical business plan and did not research well; thus,
they did not succeed. Aside from discussing ways and means to establish a business, this
course is also applicable to those who will lands jobs in corporations, and other institutions.
Because whatever department or unit this person will be assigned, they will also undergo
intrapreneurship, wherein they manage the business internally.
This module will provide you with the conceptual and practical entrepreneurship
techniques on how to establish your own future business, whether you will sell a product,
offer a service, or do both in your town or locality. This course will be divided into five units
or parts. Each unit is good for one week. The conceptual and theoretical framework of
building a comprehensive business plan will be tackled and prepared in this course because
this is mandatory in setting up business plan. Therefore, this course also aims to teach you
how to effectively and sustainably run your future business based on the business plan
prepared.

COURSE/MODULE LEARNING OUTCOMES:

At the end of the course, you should be able to prepare a simple Business Model Plan with
the following parts: Key partners, key activities, key resources, value propositions, customer
relationships, channels, customer segments, cost structure, and revenue streams.

Learning activities include:

• Guided reading (Journal Articles

and Textbook)
• Case Studies
• Electronic Learning Resources

Timing and organizing your study

Attached to this module is a STUDY PLANNER. The planner contains guides and checklists to
help you organize your coursework and hopefully prevent, as much as possible,
procrastination. There are daily and weekly goals in the planner that you need to accomplish.
There are also helpful tips on how you can efficiently do your requirements.

Study skills
Having successfully completed this module you will be able to:
 Demonstrate understanding of key concepts, underlying principles, and core
competencies in entrepreneurship.
 Demonstrate understanding of concepts, underlying principles, and processes of
developing a business plan.
 Demonstrate understanding of the environment and market in one’s locality or town.
 Demonstrate understanding of operating a simple business

3
Assignments
UNIT ACTIVITY DATE OF
COMPLETION
UNIT I. INTRODUCTION Activity 1 Reflection
TO ENTREPRENEURSHIP Activity 2 Quiz
Activity 3 Case study TBA
UNIT II. RECOGNIZING Activity 4 Quiz TBA
THE POTENTIAL MARKET

UNIT III. DEVELOPING A Activity 5 Simple Research TBA

BUSINESS PLAN Activity 6 Simple Research
UNIT IV. OPERATIONS Activity 7 Simple Research TBA
AND FINANCIAL PLAN
UNIT V. Final Output TBA
IMPLEMENTATION OF
BUSINESS PLAN

Getting help
We understand that it’s a great adjustment shifting to the new normal. That’s why, we need
to be as cooperative as much as possible, help each other in the pursuit of learning. If you
have any concerns regarding the module and the subject or if you want to connect and
collaborate with your classmates, you may join this Facebook page and Messenger Chat
Group (ENTRMAN_2020). You can post your concerns and connect with the class and your
teacher through the said platforms.

You can contact your teacher through any of the following platforms:
Email : [email protected]
Mobile Number: 09125324040

For academic issues: Dean, Faculty of Business and Accountancy (053) 323-5439
Basic and General Education Department (053) 323-2338

For administrative issues: School President’s Office (053) 323-7778

Registrar’s office (053) 323-7758
Finance Office (053) 323-5439
Student Affairs Office (053) 323-8810
Using this document
This course module is designed for your home-based learning. Most of the contents here are
linked to online resources, which you can access if you shall have some internet connectivity.
You may also see suggested, but not necessarily required, reading materials in the module.
The purpose of which is only to accompany your curiosity on particular topics. After all,
learning never ends; our thirst to learn is just insatiable, right?
To make your 6-week study more convenient, worksheets and activities are attached in the
appendices. You also have a study planner, which contains all the assignments and activities

4
organized based on the timeline. This is to help you set your priorities at every given time
period.
Do not hesitate to interact with this book. You can annotate and highlight certain pages if it
helps you study better. This module is for you, use it in the most productive way.

Happy learning, Paulinian!

5
 UNIT I. INTRODUCTION TO ENTREPRENEURSHIP

LEARNING OBJECTIVES:
At the end of this unit, you should be able
to demonstrate appreciation on the
relevance of entrepreneurship in general,
and explore opportunities for
entrepreneurship as a career.

INTRODUCTION
Many of us Filipinos see education as a means of becoming successful. You often hear
your parents reminding you of being a diligent student in school and working hard so you
can land a reputable position in a company or in the government, as these equate to
“success.” Some even view living abroad as a measure of success. Living abroad has been a
traditional notion for all of us. Nowadays, however, there are some Filipinos who see another
path to success-entrepreneurship.

How did entrepreneurship become a path to

success? There have been many cases in the Philippines
where entrepreneurship has helped transform
ordinary Filipinos into millionaires because of running
their own business. And some of the biggest
corporations were initially established as small startup
companies. This course or subject is helpful tool to help
you become financially successful as a manager of your
own business.
Tony Tan Caktiong is one of the many successful
Filipino entrepreneurs who started from a small
business (ice cream parlor) but now he owned one of
the biggest fast food chain in the Philippines with more
than 1,500 stores, 1,150 of this is here in the Philippines
while 234 stores are situated in foreign countries.
According to Mr. Caktiong, owning and running a
business have its own challenges. You are in charge of
all the operations in your business; therefore, you need
to know all of the risks involved, including the operations, human resources, and problems
in the economic market. You need to have a sound business plan. Most of the failures are
caused by the owner’s inability to see the details of the internal and external affairs of the
business. Running a business entails research, testing, proper execution, and the monitoring.

6
OVERVIEW OF ENTREPRENEURSHIP

Timing. Scheduling your time to study is very

important so that you know how you can manage your
coursework efficiently. Unit I is good for a week only. After reading this chapter, make sure
to answer the three activities.
Attached to this module is a STUDY PLANNER. The planner contains guides and checklists to
help you organize your coursework. There are daily and weekly goals in the planner that you
need to accomplish.

Getting Started
Before you prepare a business plan, you need to understand first the macro view of
entrepreneurship. This topic will teach you the basics of entrepreneurship beginning with
what role it plays in society and the economy. You will also know the key concepts of
common and core competencies which are required skills to become a successful
entrepreneur. You will be able to understand the pros and cons of being an entrepreneur as
compared to being an employee. A total persona of an entrepreneur will be inculcated to you,
including the characteristics, behaviours, activities, values, and mind set. We will discuss
some various and exciting career opportunities in line with being an entrepreneur.

What Is Entrepreneurship?
Entrepreneurship is a proactive process of developing a business venture to make a
profit. It involves seeking opportunities for a market, establishing and operating a business
out of the opportunity, and assessing its risks and rewards through close monitoring of the
operations. With this definition, being an entrepreneur may seem difficult, but it can be
rewarding if the enterprise flourishes. Creating a sound business plan, along with the
efficient and effective operation of the business, will not only benefit the entrepreneur but
also the entire society and the economy.
An entrepreneur is successful if the business that he or she envisioned has materialized
into a thriving industry with regular customers and financial gain. He or she either decides
to maintain his or her business or expand. This eventually reflects on the society and the
economy as a whole. Here are the societal and economic benefits of entrepreneurship.
1. Entrepreneurship produces more jobs that equate to an increase in national
income. The Covid-19 pandemic rendered millions jobless Filipinos due to the effect
of lockdown that shutdown our economy but because of entrepreneurship many of
our unemployed people have given the opportunities to have a decent occupation and
source of income. Many Filipinos are into selling using the online platform it maybe
food, plants and pots for the growing numbers of plantitas and plantitos, and many
more.

2. Entrepreneurship amplifies economic activities of different sectors of society. A

simple eatery in a rural area and a coffee shop in an urban are both ignite economic
activity regardless of their business scale.

3. Entrepreneurship introduces new and innovative products and services. New

products and services are always available in the market because of ingenuity of
entrepreneurs to seek opportunities and improve of them.

7
 4. Entrepreneurship improves people’s living standard. You can look good because
of the services of your nearby salon or barber shop where they offer not only haircuts
but other beauty services. The nearby eatery or fast food that complete our day
especially when we are tired and have no time to cook food.

5. Entrepreneurship disperses the economic power and creates equality. it balances

the economy by distributing national income to more businesses rather than to only
few monopolies.

6. Entrepreneurship controls the local wealth and balances regional development.

It makes sure local resources are used properly and that every area has an
appropriate allocation of resources.

7. Entrepreneurship reduces social conflicts and political unrest. Imagine if there are
no or only few sari-sari or supermarket stores in your area. All of you will then fight
for the food supplies because the store cannot supply all our needs and worst the
price are high due to high demand.

8. Entrepreneurship elicits economic independence and capital formation. A

country with more entrepreneurs is highly likely to become financially independent
and will less likely need the help of other countries. This also applies to families,
barangays, and cities. Entrepreneurship creates wealth instead of borrowing wealth.

Activity 1

REFLECT UPON

1. What do you think are the factors that drive Filipinos to become entrepreneurial?
2. Name three and describe entrepreneurial trends that you observe in your environment
during this Covid-19 pandemic. Why do you think these entrepreneurs venture into
these businesses?

WRITE OR TYPE YOUR ANSWERS IN A WHITE SHORT PAPER. PLEASE REFER TO APPENDIX C
FOR THE RUBRICS OF THIS ACTIVITY.

Who is an Entrepreneur?
An entrepreneur is a unique individual who has the ability and extraordinary
dedication in establishing and managing a business, acknowledging all the risks and reaping
its rewards. Like other vocations, being an entrepreneur is also a calling. It is not a career
that one can just jump into when he or she decides so. It entails a holistic business talent to
be considered one, ranging from product and marketing expertise to operations agility, and
to financial proficiency.
An entrepreneur will only expect returns once he or she already added or created value
out of an opportunity. An entrepreneur’s natural talent is being perceptive for opportunities
in his or her surroundings that normal people don’t give importance to or often neglect. He
or she sees existing problems about a certain product or service as prospects rather than
threats. Leadership is the core of every entrepreneur. He or she is always excited about his
or her business and bravely take risk. He or she innovates, executes his or big ideas, and
rarely procrastinates.

8
 The definition of entrepreneur only provides you with a general description of shows
you what is expected from an entrepreneur. However, entrepreneurship is composed of
varying degrees or levels of intensity. According to Action Coach, there are five levels of
entrepreneurial development.
1. The self-employed. Self-employed persons are, simply put, not comfortable with the
routines of a desk job. They do not want to conform to a fixed working schedule.
Working on their own way is what they want, very self-sufficient, too reliant on
themselves which leads to exhaustion.

2. The manager. In this level, entrepreneurs feel the need to step up or get some help
from the people around them. Hire potential employees and delegate jobs but
sometimes you get frustrated because the business does not go as planned, or some
potential problems arise from the wrong implementation of the employees. Once
they experienced this that’s the time they will realize the need of knowing your
employees, assessing their strengths and their areas of improvement, in order to
match the requirements of the business and employees’ expertise.

3. The leader. In this level, the entrepreneur has already enjoyed seeing his people
improved, stepping up, and producing great results with minimal supervision. The
entrepreneur has more time for himself/herself because she already recognize key
leaders in the organization that can be trusted and satisfied with the outcome. The
job of the entrepreneur in this stage is to focus on the big picture and the strategic
direction of his business rather than the sales and operation of the business.

4. The investor. The next level, entrepreneurs become investors who look for
opportunities for his business to grow. Purchasing one or more businesses that can
potentially add value to the company is an example, or sell his established business
(as franchise) to potential entrepreneurs.

5. The true entrepreneur. The final stage, entrepreneurs aim for quality and excellence
in their work. From his experience, he has fully learned, and continue to practice, a
four-step process of thinking, starting with idealization, visualization, verbalization,
and materialization.

Core Competencies in Entrepreneurship

Entrepreneurship is a career that requires a common and core competency that are
needed for business sustainability and management.
1. Proactive. Entrepreneurs are reactive rather than passive. They address issues,
problems, and challenges before they come rather than when they already happened.
They ensure that proper research is done, the risk factors are assessed, and plans are
executed on a timely and most efficient way.

2. Risk takers. Entrepreneurs will not be successful if they do not take the risks. By
taking risks, entrepreneurs do not just grab opportunities left and right; they have to
take into consideration the potential various threats they may encounter.
Entrepreneurs calculate risks; if they think that there is a big chance of succeeding,
they push through with the venture and don’t let the opportunity pass.

3. Agents of change. Entrepreneurs are innovation champions. They see opportunities

in hopeless and complex situations. They are always obsessed to improve and
develop new products and services and introduce them to the market. They don’t
settle for mediocrity and the status quo.

9
 4. Have a sharp eye for opportunities. Entrepreneurs have a talent for recognizing an
opportunity even by using the macro level data only. They know how to assess the
net cause and effect of an opportunity and decide intelligently if a venture should be
considered or not.

5. Sociable. Soft skills are one of the most important competencies of entrepreneurs as
these establish the relationship with the most important assets of the company-its
people and its customers. Relationship management is the key for employee and
customer retention, which can be achieved by a sociable entrepreneur.

6. Networkers. A networker knows the key people to connect with. Networking can be
very intimidating task for it takes a lot of guts to pull it off. Successful entrepreneurs
gain trust of their valuable network and maintain a long-lasting relationship with
them.

7. Decisive. Entrepreneurs always have a decision about their business. They do not
settle for gray areas or unclear solutions. They do not leave an issue unsolved without
disposition. They make sure that all aspects of their business have clear objectives
and strategies. Last, they base their decisions on scientific calculations backed up by
their experience and technical knowledge.

8. Balanced. The minds of entrepreneurs should have a balance between the analytical
and the creative side. Their brains are always playing with “unique ideas” that no one
has ever thought of yet. Entrepreneurs always have “Eureka!” moments and enjoy
them.

9. Innovative. The minds of entrepreneurs are rich with big ideas that can add value to
their existing business or could become a game changer in the industry or business
where they belong. They do not stop improving and thinking of new and worthwhile
ideas for business.

Core Traits that Entrepreneurs Must Develop in Managing and Running the Business

Leaders. Successful entrepreneurs always have the heart of a leader. To

be successful leaders, they must be a source of inspiration for their
employees. Leaders act on their responsibilities that were given to them.
They use their strengths and limitations to make the best of a situation.
They must also be decisive and know how to own up to their decisions.
They know how to unite the team and bring the best in every employee.

Communicators. Entrepreneurs know how to use all forms of

communication to effectively share ideas and address certain concerns
with their customers or employees. Effective communication not only
provides people with a clear view of what the business offers.
Communication channels between entrepreneurs and their employees or
customers should always be open to ensure the smooth flow of operation
in their business.

10
 Specialists. Entrepreneurs are experts in their chosen business. They are
tactical and are very keen with details. When asked about the specifics of their
product or service, they can easily answer without heavily relying on their
people. They understand the totality and specificity of their business. As a
result, they can easily think of innovating and improving the product or service
offerings because they know their intricacies. They enjoy being in action instead
of being behind the scenes.

Problem solvers. Entrepreneurs process critical thinking skills and look at

problems as challenges or puzzle that they need to solve. They know how to
handle issues in any area of the business, be it finance, operation, or marketing.
They listen to the plight of their employees on certain problems and come up
with strategic solutions. Entrepreneurs are able to solve problems by
immersing themselves in the daily operations.

Entrepreneurship or Employment?
Entrepreneurship and employment are two different career paths that a person can
choose depending on his or her personal aspirations and work characteristics. It is really up
to the person at the end of the day on what career trail he or she will follow, considering all
compelling career factors that are important to him or her. In the table below, it shows a
comprehensive list of the perks and the downsides of being an entrepreneur as compared to
being employed.
Pros and cons of entrepreneurship vs. employment.
Important Career Factors Entrepreneur Employees
1. Income Income generated passively Income generated actively
even when the entrepreneur but no work = no pay.
is resting.

Income is usually fixed per

Opportunity income month and increases
unlimited depending on the depending on the employer
success of the business. and the performance of the
employee.

Income only earned when

the business is successful. Income earned whether the
business is successful or not.

2. Hiring and Firing Entrepreneur provides jobs. Employees apply for the
jobs.

Fully responsible in serving

customers, making the Has the goal of satisfying
business profitable and only the employer or the
sustainable, and providing direct supervisor.
employee satisfaction.

Dependent on the
Has the power to disengage employer’s performance; is
nonperforming employees at risk of losing his or her
but applying the due job if the company does not
process. perform well.

11
 3. Daily task Performs all necessary Has routine tasks and works
variable to establish and on regular or normal hours.
manage a startup business,
which usually takes most of
the entrepreneur’s time;
spend more hours on work
than a regular employee and
sometimes gets no sleep.
4. Leisure Time and Has a flexible and can take Has a limited number of
Vacations unlimited number of vacation days imposed by
vacation days (applicable the employer.
only to established business
already).
5. Taxation Taxed on the income; can Taxed on the gross income;
claim taxable income cannot use the expenses
deductions for allowable incurred related to the job
expenses incurred by the such as food and
business. transportation expenses to
claim for deductions from
taxable income.
6. Comfort Level at The entrepreneur is Comfortable with routines
Work comfortable in doing and minimal risks; may also
multiple and challenging be comfortable in working
tasks and takes for the company itself.
accountability with the risks
and profits of the business;
does not want to be confined
in a box. Thinks outside the
box or sometimes thinks
there is no box.

Now that I have enumerated the pros and cons of entrepreneur and being employed,
what is your choice of career after graduation?

12
Activity 2

What Have I Learned So Far?

INSTRUCTIONS: Identify which among the following descriptions refer to entrepreneurs and which refer
to employee. On the space or blanks, write EN for entrepreneur and EM for employee.
1. Income is earned whether the business is successful or not.
2. He or she is usually comfortable with routines and minimal risks.
3. He or she is fully responsible for serving customers, making the business profitable and
sustainable, and providing employee satisfaction.
4. He or she prepares policies, procedures, and memoranda for the business.
5. He or she is fully dependent on the employer’s performance. If the company does not
perform well, he or she is at the risk of becoming jobless.
6. He or she is comfortable in doing multiple and challenging tasks and tales accountability
with the risks and profits of the business.
7. Income is generated on working hours only.
8. He or she is flexible schedule and can tale unlimited number of vacation days.
9. He or she is taxed on the gross income. Expenses inciurred related to the job such as food
and transportation expenses cannot be used to claim for deductions from taxable income.
10. He or she has the power to disengage nonperforming employees, applying the due process
policy of disengaging personnel.

CUT THIS PORTION AND SUBMIT TOGETHER WITH YOUR OTHER DELIVERABLES.

GOING BEYOND THE WALLS (LET’S GO ONLINE)

Entrepreneurship in Education
Watch https://www.youtube.com/watch?v=nhsaGCXvzQk, this is the interview to “Nanay”
Socorro, the woman behind the success of our favorite place, the National Bookstore. Learn
from her rags to riches stories, take note of the qualities and characteristics that an
entrepreneur must have to become successful, and the roles of entrepreneurs in the national
economy. I hope you get inspired from her story and consider entrepreneurship as a good
career alternative after graduation.
(Only to those who have internet access.)

In case you consider entrepreneurship as a good career option after

graduation, here is the list of the most common businesses in the
Philippines.

1. Online business
Signing in your social media pages will take you to a variety of posts that offer online
business opportunities. In this nation, online and home-based business opportunities are
among the most lucrative.

13
 This includes online retail, blogging, selling online courses, photography, and affiliate
marketing, etc. Various testimonials show how people have become successful in these types
of setup especially during the Covid-19 pandemic.
Starting your first online business in the country is very easy. You must be able to
identify your target market, find out about which product you are going to sell, create a
business plan, determine profitability, and look for suppliers. Of course, the list will also
include setting up your finances and building a website.
2. Small business
How about launching a start-up? Around 70 percent of Filipino entrepreneurs are
able to start their businesses at home. The top industries are business services, food and
restaurant, health and fitness, general retail, and home services.
A prime option would be a mobile phone loading business. It is one of the easiest
businesses that you can put up even within your residential spaces. For as low as P500, you
can get started as a load retailer.
Cake shops are also making their way in the local landscape as a recommended small
business to try. Others in the list include bill payment business, outdoor equipment rental, t-
shirt printing, water refilling stations, and more.
3. Franchising
Franchising refers to a contract between two parties, the company and the individual,
given the rights and the privileges to promote products under the trademark of the business.
You can earn in these types of business especially if you invest in the Philippines, with
projected returns at around 15 percent. However, it will depend on how much you will
invest.
It is also important to choose the best franchise company to work with. There is less
risk investing in this type of business because you do not have to build a brand and a market
since they are already prepared for you.
Enjoy perks that include working on an established brand, having a good business
model foundation, training support, pre-launching assistance, great location, marketing
support, and faster return on investment.
4. Classic sundry or ‘sari-sari’ store
Whenever the locals need to buy vinegar as ingredient to their kitchen cooking, they
head over to a sundry store that also sells several consumer products without the buyer
traveling to a grocery shop.
“Sari-sari store” is the term used by Filipinos to refer to a neighborhood shop that
sells everything you need from kitchen ingredients, hygiene products, biscuits and chips,
cigarettes and spirits, and more. All of these without traveling outside their neighborhood.
It still remains a classic choice for many Filipinos and foreigners alike who want to
start their own business. It does not require a huge capital to get started, and you can earn
as much as $300 a day or even more. It also does not fade in popularity because millions of
Filipinos are in need of these products for daily use.
5. Food cart business
It does not have to be named after a huge company. Aside from franchising
businesses, among the new business opportunities in the Philippines would be the food cart
business.
A booth can sell dumplings, burgers, fries, coffee, snacks, and even full meals and
other food on sticks. It is a good strategy since they are more affordable compared to visiting
fast food chains or ordering from a casual dining restaurant.

14
 Among the market include students and professionals working in business districts.
You can find several of these lined up in Makati City, Ortigas, and Quezon City, three of the
largest commercial urban spaces in the Philippines.
6. Insurance
If you want to work for a multinational but at the same time, do business at your own
pace and time, or independently, you can find opportunities selling life insurance.
In the Southeast Asian nations, these insurance agents earn around 15 to 30 percent
commissions from the premiums of their clients. Not only that, they also are given all-
expense paid travels, allowances, and the potential to earn more than P100,000 a month or
more depending on the number of your clients.
The product you will sell is also something that spans a lifetime, protecting the wealth
of your clients and their loved ones. Interested agents are offered free training, access to
events, and exclusive discounts to various retail shops, as well as special deals from the
company’s products.
7. Thrift shop
Thrift shops, or stalls that sell second-hand goods including dresses, shoes, and bags,
are the go-to stores of Filipinos who want to save money on these items.
A thrift shop owner in the country earns anywhere between P1000 to P3000 a day.
They call it “ukay-ukay” or a term that refers to several choices. To get started, you will have
to prepare the necessary government registration and permits, as well as the finances to rent
a space in a good location. You will also need suppliers for your racks, shelves, hangers, and
storage boxes.
Plus, you’ll have to set up a budget for the wages of the sales personnel. Store
equipment like air conditioning units will be needed, considering the climate in the
Philippines.
8. Rice retail
Being a staple food and a primary source of income among Filipinos, rice is the most
consumed food in the country. Business people would think of having this as the product of
their ventures.
Starting a rice retail store requires a capital of around $2,000. Plus, entrepreneurs
should also be able to secure a permit and registration documents from the National Food
Authority. It has offices in the capital city, Manila and in the provinces.
Location is a major consideration for your rice retail shop. Choose main roads and
nearby landmarks, and developing buildings. However, experts advise that there is a
downside to selling rice.
Be informed that rice can spoil easily in around a span of three months. To mend this,
it is important to implement an efficient inventory method, not to mention maintaining a
clean storage area.
9. Airbnb rental
Property rental applications like Airbnb, which started in 2008, took the world by
storm and since then have been well-loved by tourists and travelers, their prime markets.
In the Philippines, local business-minded individuals have tried posting their
properties and real estate units on Airbnb and offering them to the general public. This
sources out from the massive real estate market that the country has, with several of its
people purchasing properties and more buildings being constructed even until today.

15
10. Pawnshop
Pawn Shops are companies and establishments that offer collateral-based loans or
those that are secured by something of value. It is where many Filipinos head to if they need
emergency funds.
Among the mostly pawned items include jewelry, home audio equipment, cameras,
and more. Pawnbrokers keep the item until the person has repaid the loan. The amount of
the loan will be from a small fraction of the actual value of the item.
Starting a pawnshop business in the Philippines may be categorized under
franchising, but with the rising demand for their services, it will be a big deal if you miss this
opportunity.
Source: https://e3hubs.com/blog/business-opportunities-philippines

If anyone of you is interested to have and start a business in the future here are the
entrepreneurial process that will guide you during your business journey. Remember what
“Nanay” Socorro said on her interview, you don’t need a big capital to start a business, all
you need to have is, “diskarte, sipag, at tiyaga”.

The Entrepreneurial Process

Step 1 Opportunity Spotting and Assessment (Unit II)

Step 2 Developing a Business Plan (Unit III)

Step 3 Determining the Capital (Unit IV)

Step 4 Implementing the Business (Unit V)

The entrepreneurial process is a step-by-step procedure in establishing any kind of

business that an entrepreneur has to undergo. It is composed of four aspects.
Opportunity spotting and assessment. This is the beginning of the process and is
considered the most difficult. Entrepreneurs at this point take note of interesting trends in
their environment. Consumers are reliable sources of opportunity information because
market needs originate from them. Other major sources of opportunity are the glaring
problems in the environment, problems encounter by entrepreneurs, new trends, processes,
and development in the environment. During this stage, entrepreneurs must carefully assess
the opportunity through estimation the length of opportunity, the capitalization
requirement, threats, profitability of the business idea, and the calculation of the real and
perceived value. The entrepreneur in this stage must start thinking in advance how they will
position the product or service in the market and how they will showcase its unique selling
propositions.
Developing a business plan. Entrepreneurs should formulate a business plan when they
have already spotted and assessed the opportunities for a market. A business plan, is a
comprehensive paper that details the marketing, operational, human resource, financial
strategic direction, and tactics of the business. The business plan will be the core guide and
direction of the entrepreneur in calculating the resources needed, assessing how to obtain
these resources efficiently, and running the business sustainability.
Determining the capital needed. A big idea can never be translated into a reality if the
entrepreneur’s resources are limited. Therefore, it is mandatory in the entrepreneurial
process to calculate the resources needed to establish the business and compare this against

16
the entrepreneur’s current resources. Caution must be applied in computing the complete
set of resources and include only those items that are considered as the real needs in venture
creation.
Running the business. This is the part where entrepreneur should use the resources
allocated for the new venture. The business plan prepared in step 2 should have been
implemented. All aspects of the business plan should be critically observed from operations,
marketing and sales, human resources, finance, and strategy implementation. The
entrepreneur should have a control and monitoring system to serve as a check and balance
of the formulated plans.
Below are the summarized components and steps in the entrepreneurial process (Hisrich,
2010)
Components and steps in the entrepreneurial process.
1.Opportunity 2.Developing a 3.Determining the 4.Running the
Spotting and Business Plan Capital Needed Business
Assessment
Evaluate the Come up with a Calculate the Practice leadership
identified business intrinsic and as a way of life.
opportunity. description and extrinsic capital
analysis. needed.
Conceptualize and Perform industry Calculate the existing Recognize critical
measure the analysis. capital. success factors.
opportunity.
Identify the Come up with the Calculate the Identify existing
perceived value of marketing plan. difference between and foreseeable
the opportunity to the needed capital problems and
the company and the and the existing issues.
customers. capital. Choose the
most cost-efficient
suppliers or service
providers.
Do cost-benefit Prepare the Develop contact and Employ risk
analysis of the operations plan relationship with mitigating controls
opportunity including the suppliers and service and monitoring
including risk organizational plan. providers. systems.
analysis.
Match the Come up with the Devise an
opportunity with the financial plan. expansion/sustaina
entrepreneur’s skills bility strategy.
and objectives.
Scan with the Identify strategies
strengths and and tactics.
weaknesses of
competitors
Perform monitoring
and control.

17
 Unit 1
 Entrepreneurship is an activity that assures the viability and growth of the economy.
Through entrepreneurship, goods and services are produced, employment is
provided to many people, taxes are paid to the government, the products and services
are bought, and future entrepreneurs are provided with venues for training.
 Entrepreneurship plays a big role in nation building and that it fuels a country’s
economy. It also balances the country’s resources and distribution of income.
 Being an entrepreneur is a calling, and entails numerous characteristics to be
considered successful and sustainable. These characteristics are classified under
common and core competencies. Common competencies are the skills required of a
promising entrepreneur, whereas core competencies are needed in managing and
sustaining the business.
 There are a lot of opportunities if you pursue entrepreneurship. Indeed,
entrepreneurship is an exciting path to choose as long as you have all the qualities
needed to establish your own venture.
 The entrepreneurial process is a helpful scientific process that will guide future
entrepreneurs to follow the right way of establishing a new venture.

Unit Activity (Activity 3)

Case 1: Rose Restaurant: What Now My Love?

On any given day, Rose Restaurant is full of customers. It is not surprising because of two factors:
first, its location in the center of the commercial district of Santiago City, and the second, the dynamism of its
owner and manager, Ms. Rosemarie Ginez. She is more than happy because she was able to realize her dream
of becoming a successful in the food business. She now owns the building and the lot she used to rent. Served
in the large air-conditioned function hall are native and Chinese delicacies. The place has ample parking space
for 20 cars.
It was the restaurant where she first met her future husband. He is a government employee and is
assigned to work in nearby town. Rose’s husband is a native of San Jose City and his widowed mother is
operating a big palay trading firm. Apart from owning 10 cargo trucks, his mother also owns one and a half
hectares of commercial land in the city’s business district.
Just as Rose was considering opening a branch of her restaurant in Cauayan City her mother-in-law
died. Two weeks later, her husband informed her that being the heir, he needs to move quickly to San Jose
City and manage his mother’s business and other properties.
Even if her husband operates her mother’s business. Rose could still continue managing her
restaurant. Both of them. However, are aware of the difficulty of maintaining the two businesses which are
four hours away of the difficulty of maintaining the two businesses which are four hours away by a car from
each other. They will miss each other for days every week if they decide to keep both businesses. Her husband
is indifferent, however, on whatever Rose’s decision will be.
Rose is now mulling over her family’s chances of succeeding in business if she decides on maintaining
only the palay trading firm. Her decision-making is made more complicated when her assistant reported a
49% increase in last year’s profits of her restaurant.
GUIDE QUESTIONS:
1. Should Rose stop operating her restaurant? Support your answer.
2. If you were Rose, what additional information would you need before making a decision?
3. What are the characteristics of Rose that make her business successful?

WRITE OR TYPE YOUR ANSWERS IN A WHITE SHORT PAPER. SUBMIT THIS ACTIVITY
TOGETHER WITH THE OTHER DELIVERABLES. PLEASE BE GUIDED WITH THE RUBRICS FOR
CASE STUDY IN APPENDIX B.

18
 Step 1 Opportunity Spotting and Assessment (Unit II)

Step 2 Developing a Business Plan (Unit III)

Step 3 Determining the Capital (Unit IV)

Step 4 Implementing the Business (Unit V)

UNIT II. OPPORTUNITY SPOTTING AND ASSESSMENT

LEARNING OBJECTIVES:
Timing. Scheduling your time to study At the end of this unit, you should be able to
is very important so that you know how you can do the following:
manage your coursework efficiently. Unit II is good 1. Identify the market problem to be
for a week only, after reading this chapter, make sure solved or the market to be met by
to answer the simple research on spotting for conducting environmental scanning
possible business opportunities in your place and an from your own locality.
2. Propose solutions in terms of
interview as your activity for this chapter. products and services that will meet
Attached to this module is a STUDY PLANNER. The the need using the techniques on
seeking, screening, and seizing
planner contains guides and checklists to help you
opportunities.
organize your coursework. There are daily and
weekly goals in the planner that you need to
accomplish.

INTRODUCTION
As what most people say, the most difficult part of every task is where and how you
start. The same with entrepreneurship. You may have all the resources needed to operate a
new venture, but it will never be easy to start one. This unit will discuss the proper and
efficient ways of starting a business. You will be introduced to the entrepreneurial process,
which starts with identifying and evaluating the opportunity. The heart of this module is the
scanning of the marketing environment where you can formulate a product or service
solution applying the techniques of seeking, screening, and seizing opportunities. As a
result, you will deal with analyzing the need of the market, think of the potential set of
products or services that will meet the need, assess the feasibility of the solution, and select
the best product or service that will address the need.

19
 Getting Started
Scanning the Business Environment

Find the opportunity first

before coming up with a
new product or service

Scanning the business environment is the starting point of any new venture that
involves understanding and knowing the intricacies of the macroenvironment,
microenvironment, and the voice of the customers. With this process of scanning the general
environment, an entrepreneur can recognize various opportunities and at the same time
understand thoroughly the arena where the future business will operate. The process of
seeking, screening, and seizing is adapted to create the most suited product or service for an
opportunity. The general rule is to find the opportunity first before coming up with a new
product or service, not the way around. This one of the mistakes that budding entrepreneurs
commit in starting a new venture.
Opportunity is an entrepreneur’s business idea that can potentially become a commercial
product or service in the future. The entrepreneur serves as the catalyst of creating a value
for the customers through the new or innovated product or service. As a reward, the
entrepreneur earns profits when the customers are satisfied and delighted.
The S1: Seeking the Opportunity
Opportunity seeking is the first step and is the most difficult process of all due to the
number of options that the entrepreneur will have to choose from. This is the process of
spotting, evaluating and pursuing relevant and sustainable revenue and profit generating
activities in the market place. It involves the development of new ideas from various sources
like the Voice of the Customers and Voice of the Enterprise.
But seeking for new opportunity or business ideas requires understanding of your
customers and make sure it is aligned with their needs, which is especially important when
introducing a new product.
Voice of Customers (VOC)
Voice of the customers is a research process used to capture the changing needs of
consumers and customers. A key voice of customers is identifying and undertsanding pain
points, barriers and its root casue to trigger greater demand in an industry.
Pain Point Process (Table 2.1)
Step 1 PAIN HUNTING
Step 2 PAIN POINTS IDENTIFICATION
Step 3
PAIN POINTS UNDERTSANDING
Step 4
PAIN POINTS HEALING

Pain Hunting is the first step where entrepreneurs must choose a specific group of
people as their targer market. Same as what you did in market segmentation one of the topics
in your Marketing 1, you will divide the market based on the bases of: demographic,

20
geographic, psychorgaphic and behavioral segmentation. And select which market to serve,
the target or the group of market or customers must behave in a homegenous way like having
common traits and seeking the same or common benefits. While choosing your target
market or customers, your company must make sure that you are capable of serving the
group well which is large enough to be profitable when you do business with them.
Once you have chosen your target group for pain hunting, the target group is your
focus. Look for their unmet needs along their consumer decision journey. Remember that
different group of customers will be looking for different benefits, and you should carefully
identify, analyze, and understand these information because these are important to better
understand the pain of your customers. Here are some of the consumer benefits that
customers look for to a product or service.
Table 2.2 Consumer Benefits
Types of Consumer
Benefits What is it? Examples
Functional benefit Customers look for products Customers prefer to buy
and services that perform IPhone over Cherry mobile
well and with high quality. because of its quality, the price
of the first brand maybe be a bit
higher than the second brand,
customer’s choice is the first
one because he or she is after
the functional benefits.
Economic benefit Customers look for products Why do girls prefer Ever Bilena
and services that offers the products than imported
least price compaired to cosmetics? Because Ever
competing brands. Bilena offers good quality
products but cheaper than
Revlon and other imported
cosmetics brand.
Emotional benefit The kind of benefits are Why do some customers prefer
looking for is related on how to buy a cup of expensive
the cutomer will feel when starbucks coffee than a cheap
owning or using the product. 3n1 coffee? It’s because it gives
them high self worth when they
are holding a cup of Starbucks
coffee.
Social benefit This benefit is related how Professionals and
others will percieve and think entrepreneurs will choose to
about the owner of the own and ride on BMW, Volvo or
product or service. Benz so that people will think
that they are financially
successful.

Pain Points Identification or to know consumer pain points, your chosen target market can
be asked why they dislike a particular product or brand. These dislikes information can be
the bases of entrepreneurs to capture consumer buying journey. The best time to know their
pain points is when customers are conscious of these not so good experience while they are
using the product or service
It was also suggested that the best way to understand what really customer needs and
wants is to know and list of what your target market dislikes and their wish list. Here’s an
example of how are you going to do it:

21
Situation: Customer when buying a furniture.
Table 2.3
What customer Before the purchase During the purchase After the purchase

a. Dislikes Going to the store Buying the display No specific schedule

without the unit with some of delivery, they will
assurance that there minor scratches at just inform you that
is available stocks of the same amount or it will be delivered
the specific designs, price. within the week
color, and type of once the delivery
furniture that I want. team is available.
When the design is
not available, they
will ask you to order
the item and pay for
it and wait for weeks
until your order
arrived.

Need to fall in line

when paying and it
turned out that its
offline for card
payments.

Long waiting and

process of releasing
your order.
b. And their Available online Something Friendly and
wish list sites of the store interesting to watch accomodating
where there are and read while delivery personnel.
catalogues of waiting for your
available stocks of order and while
the store and the waiting for your turn Should send a text
online site must be to pay. message or call the
updated. customer before the
delivery to make
Free cold water or sure that the
juice maybe that will customers are at
refresh the customer home to receive the
while waiting. product.

You will notice that there is a long list of dislikes and wishlist of your target customers
and this gives you the opportunity to create a better satisfaction of your target market using
the information above.
Pain Points Understanding
Not all pain points have the same level of importance. You must undertsand the
frequency, and depth then choose the key pain point priorities that must be solved due to
relative higher impact that can be felt by the customers. This is where critical processes need
to be identified and prioritized based on which we can solve more of customer’s problems,
or cretae greater value for the customers. For example, going back to the information of

22
customer’s dislikes with regards to buying furnitures, falling in line to make payment. This
could be very annoying and tiring to the customers because it takes a lot of time and energy
before a customer finally decides which furnitures to buy because you will consider the
designs, color and style not the same buying process that you go through when you are
buying basic goods like rice, fish, and other basic commodities that we buy in daily basis.
Pain Healing
What do you think is the solutions to the customers’ problem above (Table 2.3)?
Online shopping has been gaining ground as it allows consumers to avoid the pain points in
Table 2.3. Do you think online store can also be used by furniture store? Yes, Mandaue foam
furniture store has online stores, the first consumer pain which is “no assurance that there
is available stocks in-store”. They have a devoted staff who is in charge of answering, handle
customers’ inquiries whithout the customers having to queue at the customer service
section. This saves consumers time, enabling them to do more things.
Another practical way to spot opportunity is by looking at your macrenvironmental.

Macro environmental Sources

1. The general environment where the entrepreneur can identify business opportunities
from and where the future business is about to operate. Any external factors or a
combination of external factors from these environmental forces like sociocultural,
economy environment, political. Legal, ethical, technological, and demographic
factors can have a direct effect in opportunity generation and business sustainability.
Example of environmental forces that affects the business environment today:
Natural forces:
Covid-19 has affected almost all businesses, some big companies have decided to stop
operations after years of doing business and the results, many are left unemployed.
Looking at the situation, which environmental forces is greatly affected of this
pandemic? The economic environment suffers, people are jobless so that means the
purchasing power of the people will decrease, so as to the demands for products and
services. But despite of the situation, some have discovered business opportunities in
this time, they started cooking food, post them in the social media, and deliver them
to their houses for free or for a fee.
2. The current trend in the industry where the future business will belong to. For
example, what is the trend now when it comes to food business? What is the choice
of the kids today? The entrepreneur should fully know what is happening with the
food industry if he or she wants to establish a food business.
3. New discovery or knowledge or new trends that can be a core business model to a new
venture.
4. Futuristic opportunities for example, who could have thought that even a simple sari-
sari store can also cater cashless transactions like gcash, paymaya and the likes like
other big businesses and these all because of technology advancement.

23
 What Have I Learned so far!
Activity 4

Instructions: Do an opportunity spotting and assessment in your own locality or

barangay. Identify three possible or potential business opportunities in your macro
environmental and voice of customers sources that you can possibly start as a business
especially during this pandemic. Write your answers in the provided worksheet
found in the Appendix and submit your output together with your other
deliverables.
Format:
Opportunity Source Findings Potential Product or
Service
Environmental One of the safety measures that Pasabuy, padala or the like
(Covid19) the government implemented services.
to lessen and stop the spreading
of the virus is to impose
lockdown to the entire
Philippines. People are not
allowed to go out especially the
senior citizens and minors,
making it difficult to them when
they need to buy outside some
essentials like food and
medicines.

PLEASE BE GUIDED WITH THE RUBRICS FOR ESSAY AND SIMPLE RESEARCH IN
APPEDIX C.

S2: Screening the Opportunity

By now you already feel overwhelmed with how vast S1(opportunity seeking) is, but you
don’t have to worry much that much. This concept has been inculcated to you see the
universe of opportunities an entrepreneur can derive from the macro environmental and
micro environmental sources. The key here is in the effective choosing or careful diligence.
Entrepreneurs should start with the big picture. This is the best way in ensuring that
entrepreneur has scanned the best potential business to venture into. Once the compelling
opportunities are identified, S2 will be the next crucial step.
Opportunity screening is the process of cautiously selecting the best opportunity. The
selection will depend on the entrepreneur’s internal intent, the main objective that the
business will accomplish in the entrepreneur’s life, and the external intent, which will
address the compelling needs of the target market. The entrepreneur should apply due to
diligence and independent judgment in selecting the opportunities that have a potential and
eliminate those that are not within the scope of the entrepreneur’s risk appetite. Risk
appetite refers to the entrepreneur’s tolerance of business risks.
Entrepreneurs must be wise enough to shortlist their opportunities carefully. Not all
opportunities will give them the same return on their investment and impact, so they should
not launch all that is listed.
Time must be considered by the entrepreneur in screening the opportunities at hand, as
it is considered one of the most critical resources of an entrepreneur. Time should only be

24
devoted to worth. Therefore, entrepreneurs must be wise enough to shortlist their
opportunities carefully. Not all opportunities will give them the same return on their
investment and impact, so they should not launch all that is listed. Entrepreneurs must
always be a sharp-eyed for real opportunities. They must be able to intelligently already said
no to many opportunities and said yes to one forceful opportunity, to which they will
devotedly say no to low-compelling opportunities and proceed with sensible ones. The
crafting of a business plan starts only when entrepreneurs already said no to many
opportunities and said yes to one forceful opportunity, to which they will devote their time
and resources.
Detailed here are the most important elements that are always present in a
compelling opportunity. The entrepreneur should say no to an opportunity if it does not
contain to any of these business opportunity elements:
1. Is the market or customers real and big enough?
2. Can we be profitable?
3. Can we differentiate? and
4. Can we win?
Is the market or customers real and big enough?
Entrepreneur must have a sense making skill to determine that a market gap or
market problem truly exists, be practical enough to do business with those willing to transact
with them, and know whether or not your company has the capacity to satisfy the unmet
needs of the customers.
Can we be profitable?
Entrepreneurs must know the breakeven point of the company as well as the
recovery period of their investment, so they can plan to gain critical mass of volume to have
superior financial returns.
Can we differentiate?
Differentiation is about uniqueness, but uniqueness can only be considered if there is
relevance to the customer’s problem. Entrepreneurs must not just think about making
money but also make sure that our products or services will create an impact to the
customers because your product or service is effective and efficient.
Can we win?
Stiff competition can be our problem in the business. Do we have the capacity to win
over our competitors? For example, coffee shops, plain and ordinary coffee shops will not
interest the customers today especially the younger markets. Your store must offer not only
coffee drinks but a different kind of experience to them. Here’s a short list that coffee lovers
want to their coffee shop store; The Perfect Atmosphere, good baristas, comfortable
furnishings, and really good coffee.

Table 2.4

25
 Table 2.4 above is an example of opportunity matrix of the company by scoring itself
for the enterprise’s prediction on how the customers shall react upon seeing the product. By
being a relevant and a responsive company can affect consumer’s loyalty to the company’s
product and to the company itself.
The enterprise ensures to do all things to keep the good relationship of the loyal
customer by keeping these qualities lived within all times. As a good entrepreneur, the
company and the man power make sure to reinforce entrepreneurial at a very high level.

S3 – Seizing the Opportunity

Opportunity seizing is the last step in opportunity spotting and assessment. This is
the “pushing through” with the chosen opportunity. Entrepreneurs should make the best out
of this opportunity, and they should exert effort and full dedication for the success of the new
venture. Entrepreneurs should have an innovation mindset so they can stand out in the
market place The entrepreneur’s idea can be any type of innovations listed here.
Innovation is the process of positively improving an existing product or service. It is
a key driver for economic growth. Innovation is inevitable as the world constantly changes.
Therefore, products and services must also adapt to these changes. There are three types of
innovations according to the degree of distinctiveness.
1. Breakthrough innovation. These innovations, which may also include inventions,
occur infrequently as these establish platform on which future innovations in an area
are developed. Breakthrough innovations must be protected by a patent, a trade
secret, or a copyright. Examples of breakthrough innovations include the internet, the
computer, or the airplane.
2. Technological innovation. These innovations occur more frequently than
breakthrough innovations. These innovations are technological advancements of an
existing product or service. These innovations need to be protected, too. In relation
to the examples given, technological innovation includes the wireless fidelity or Wi-
Fi, the laptop, and the jet airplane.
3. Ordinary innovation. These innovations occur ordinarily and they are commonly
originating from the market analysis and technology pull instead of a technology
push. This means that the market has a strong influence in the implementation of an
innovation. Relating again to the given examples, examples of ordinary innovations
are unlimited internet plans of telecommunications companies, a wireless mouse, and
an airbus for economical travelers.
Entrepreneurs often encounter a problem in defining a “new” product or service, or
identifying its components or features. Examples of these include drastically improving the
packaging and not the product itself, adding one extra in the service. The “newness” is also
independent on the eyes of the market and the company. The entrepreneur must the
establish that the new product or service offered will provide true value to the customers
and influence their behavior. Further, the new product or service should increase the
profitability potential of the enterprise.
Product or Service Planning and Development
In the seeking process, one opportunity stood out from a number of sources. This
opportunity was tested according to its attractiveness and feasibility in the screening
process. The last process, called the seizing process, involves refining and developing this
opportunity. The refining process is called product or service planning and development
process. It has five key stages: idea generation, screening, concept development, product
development and, finally, commercialization.
Phase One: Idea Generation
This is the initial stage the entrepreneur where a business sources for ideas regarding
a new product. Some of the sources for new product ideas include the business customers,

26
competitors, newspapers, journals, employees and suppliers. Small businesses may be
limited when it comes to technical research-based idea generation techniques. This stage is
crucial as it lays the foundation for all the other phases, the ideas generated shall guide the
overall process of product development.
Phase Two: Screening
The generated ideas have to go through a screening process to filter out the viable
ones. The business seeks opinions from workers, customers and other businesses to avoid
the pursuit of costly unfeasible ideas. External industry factors affecting small businesses,
such as competition, legislation and changes in technology, influences the enterprise's
decision criteria. At the end of the screening process, the firm remains with only a few
feasible ideas from the large pool generated.
Phase Three: Concept Development
The entrepreneur undertakes research to find out the potential costs, revenues and
profits arising from the product. The business conducts a SWOT analysis to identify the
strengths, weakness opportunities and threats existing in the market. The market strategy
is set out to identify the product's target group, which facilitates segmentation of the
product’s market. Market segmentation is important as it enables the firm to identify its
niche. The identified niche influences most of the marketing decisions.
Phase Four: Product Development
Before commercializing a new product or service, the entrepreneur must focus first
on refining the product or service and validate its market acceptability. This new product
does not have to be totally a new product, it can be enhancement, new product line or just
an extension, or repositioning an existing product.
Product development is the process of developing, testing, and commercializing a
product or service with the objective of solving the problem of your primary target market.
It is composed of four sequential steps: 1) developing a product or service description, 2)
creating a prototype, 3) testing the prototype, and 4) validating the market. Based upon the
results of the tests, the entrepreneur decides on whether to undertake large-scale
production or not.
1) Developing a product or service description
The product or service description simply describes how a product or service works and
how it benefits the customers. A clear product or service description is important because
this will serve as the blueprint of all business operations. Therefore, the entrepreneur has to
take note that your product description should focus and highlight the features that will cater
to the customer’s needs or address their problem.
2) Creating a Prototype of the Product or Service
After defining the product or service, you may now proceed with one of the most exciting
but also very challenging parts of product or service development: the creation of prototype.
A prototype is a preliminary model or sample of a new product or service that is created to
test a product concept or service process. The entrepreneur’s creativity and ingenuity will
be used in creating the prototype.
3) Testing the Product Prototype
All the efforts exerted in the creation of a prototype will be put to waste if it will not be
wasted. Testing the prototype is a vital process before an actual product or service is
launched to the market. It will uncover the final loopholes that need to be fixed before
commercialization. It will give you a leeway to examine and scrutinize the prototype and
provide feedback as to what can be improved before the launch. These improvements and
changes must be completed first before moving forward to next step or phase five which is
commercialization and rollout.
Here are some of the testing methods that an entrepreneur can apply for this stage:

27
  Focus group discussion- if you will use this method, you will provide relevant
insights about the product or service to your participants. Your objective is to identify
errors, deficiencies, issues, and things that needs to be improved that may impede the
success of the product or service. Participants also need to provide suggestions and
practical solutions on how to improve these deficiencies.
 Safety test- you must ensure that the product is safe to use, safe to be consumed (food
and beverages), and safe to be applied (cosmetic products). The product should not
in any way harm the customer in peculiar situations. In service, you must ensure that
the processes to be performed by the service provider must not be detrimental to the
safety and health of the customer.
 Product costing test- you must examine every stage of the manufacturing process in
order to evaluate and finalize the cost involved. This is the time when the
entrepreneur can match the expected costs versus your budget. Modification in the
manufacturing process can still be made at this point in order to align with your cost
objectives.
 Competitor’s product/service test- You must test a similar line of products or the
competitor’s product or service itself to compare and get the best practices to be
applied to the new product or service.
Testing the product prototype is mandatory to ensure that the product or service will not
fail the customers and will deliver its main purpose. This will elicit customer satisfaction and
eventually create customer loyalty and satisfaction.
4) Validation of Market Acceptability
Validation of market acceptability is the process of finding out if the intended primary
target market will be buying the product or availing the service. Market acceptability is a
critical factor that the entrepreneur must validate before launching the product or service,
because this can strongly suggest if the business will be successful or not. This is the time
where you can deeply understand the value that product or service brings to the customer
and their prospective purchase behavior, because it helps the entrepreneur build a more
relevant and meaningful product or service can be introduced to the market. Your objectives
to this whole process is to know the answers to these questions that will help you validate
the market acceptability:
 Will the primary target market like my product or service?
 Will the primary target market buy my product or service once its out in the market?
These questions can easily be answered if you will perform the following activities:
 The interview
The interview is one of the most reliable and credible ways of getting relevant from
the target customers. It is a face-to-face contact between the researcher/entrepreneur and a
respondent where the researcher asks pertinent questions that will give him significant
pieces of information about the problem that he will solve. It is a credible way of getting
information because the researcher will be able to capture not just verbal but also the
nonverbal answers such as facial expressions, character of words used, or body language.
The interview is also helpful even when the business has already started because the
customers’ feedback provides the entrepreneur a glimpse of what customers think about the
business. The drawback though is that the interviews are often expensive, especially if the
number of respondents is large. The solution is to apply sampling which is the selection of
respondents that statistically represent the total population.
 The Focus Group Discussion
The focus group discussion or FGD is commonly used by market researchers to
capture qualitative results from target customers. It is a process of mining customer and
noncustomer experience and insights about a specific product or service. Through FGD, the
researcher will be able to generate relevant concerns and issues of customers such as their
views and inclinations toward a product or service models, innovations of the older product

28
or service, incentive concepts on promotion, price elasticity, and initial feedback of
customers on marketing tactics and advertisements.
 Observation
Observation is one preferred and practical methods of generating ideas because the
researcher documents the behavioral patterns of people or of objectives or events without
necessarily requiring them to participate in the research process. One method is to watch
and examine the customers’ behavior in their raw state biases and pretentions, thereby
providing more accurate results and faster process.
Observation is reliable because it allows the researcher to see the real and actual
behavior of customers rather than hearing what they need to say (which may sometimes be
biased, incomplete, sugarcoated, or exaggerated). Therefore, it is not as pushy as the
interview and the FGD.
 Survey
A survey is very simple and practical to run because it requires preparation of
predetermined questions answerable by definite responses using equitable scales. This
advantageous to the researcher because not only is it systematized and easier to analyze, but
there is also a definitive quantitative result to be interpreted.
Some of the traditional ways to conduct a survey are via telephone, face-to-face
interaction, or snail mail. The emerging and more efficient way of conducting a survey is
through the Internet-through e-mails, Web sites, or social media sites. It is more efficient
because the results can be derived in real-time depending on the availability of the
respondents. Also it will not require the researcher to travel physically or spend on
telephone calls or mails.
Phase Five: Commercialization and Rollout
Favorable results in the development stage precede large-scale production and
commercialization. Here, the entrepreneur launches its promotion campaign for the new
product. The market research conducted during the conception stage influences the timing
and location of the product launch.
Recognizing the potential market is really one of the most difficult tasks to do. It
involves tedious research and analysis to ensure success. This process is very critical,
especially for budding entrepreneurs whose capitalization comes from hard-earned money.
They will not just let their fruits of labor be put to vain. Once the 3S of opportunity spotting
and assessment have been diligently done, the entrepreneur should now be ready to prepare
a comprehensive business plan that covers marketing, operations, and financial plans.

29
 What Have I Learned so far!
Activity 5
INSTRUCTIONS:
1. Schedule a telephone interview with an entrepreneur (if possible a family member)
who sells goods or an entrepreneur who provides services. Validate from them if they
did the five stages mentioned above. If they did, ask them how they did it and if the
five stages were helpful in their business. If they don’t go through the five stages, ask
them what alternatives they used. If none, ask why they didn’t follow the process.

2. Write your conclusions about this interview, focus on the results or outcome of doing
or not doing the five steps before starting a business. What important entrepreneurial
lesson did you learn from this interview.

3. Write or type your answers on a white short paper (bond paper) and submit your
output together with your other deliverables at the end of block schedule.

PLEASE USE THE ACTIVITY SHEET FOUND IN THE APPENDIX AND BE GUIDED WITH
THE RUBRICS FOR SIMPLE RESEARCH IN APPENDIX A.

Unit 2
The importance of the entrepreneurial process as a helpful scientific process to follow
the right way of establishing a new venture
Scanning the market environment or spotting the opportunities is the first step in the
entrepreneurial process. This process is one of the most difficult tasks in entrepreneurship,
as the entrepreneur needs to apply so many disciplines to understand the influencers in the
environment and how these will affect the new venture. In fact, these influencers are the
compelling sources of opportunities.
The 3S (seeking, screening, and seizing) of opportunity spotting, which is a
procedural approach to finally come up with an attractive and refined product or service.
The seeking process is vast and requires macroenvironmental, voice of customers, and
internal scans. This process identifies what is the most compelling opportunity out of million
opportunities. The screening process validates the attractiveness of the opportunity based
on specified factors. And last, the seizing process is the refinement of the opportunity
supported by customer insights. The opportunities in entrepreneurship are countless, but
the entrepreneur should always apply due to diligence to understand the risks and ensure
the success of the new venture chosen.
After going through the 3S of opportunity spotting and assessment, the entrepreneur
need to be ready to prepare for a business plan. When you have your own venture in the near
future, you will realize the importance of these 3S of opportunity spotting, and that these are
practical and methodical approaches to ensure business success, instead of just purely
relying on your guts and emotions.

30
 UNIT III. DEVELOPING A BUSINESS PLAN

Step 1 Opportunity Spotting and Assessment (Unit II)

Step 2
Developing or Writing a Business Plan (Unit III)
Step 3 Determining the Capital Requirements (Unit IV)
Step 4 Implementing the Business (Unit V)

LEARNING OBJECTIVES:
Timing. Scheduling your time to
study is very important so that you know how At the end of this module, you must be able to:
you can manage your coursework efficiently. Unit 1. Define and identify the parts of business
III is good for a week only after reading this plan, and
chapter, make sure to answer the quiz as your 2. Write and prepare the key components
of a business plan for your business
unit activity for this chapter. opportunity identified in your place or
Attached to this module is a STUDY PLANNER. locality.
The planner contains guides and checklists to
help you organize your coursework. There are daily and weekly goals in the planner that you
need to accomplish.

INTRODUCTION
The number of problems that may be felt when the small business is already in
operation may just overwhelm the entrepreneur. If he is good enough, he may be able to
handle them successfully if they happen one at a time. However, it will be very difficult for
him if problems occur simultaneously.
Entrepreneurs who plan to enter any business endeavour must have a business plan
on hand to guide them throughout the process. The benefits afforded by business planning
may help achieve his objectives. When problems occur, some of them require immediate
solution, leaving no sufficient time for the entrepreneur to think clearly. Effective business
planning is used to eliminate this difficulty. This alone justifies engagement in business
planning.

Getting Started
What is a Business Plan?
A business plan is a written document that describes in detail how a business is going
to achieve goals. For new businesses, new product, new markets or when there is major shift
in directions, a business plan is most useful. It forces the entrepreneurs to know all aspects
of the business.
For entrepreneurs with business partners, a personal plan must also be defined if the
direction is to keep growing the business or to exit by selling the business eventually.

31
 Writing a business plan is compulsory if the entrepreneur needs partners and funding
support. It is optional if the entrepreneur is alone and has no partners and no need in
funding. However, a business model map that will outline all key ideas help provide clarity
and how the company will operate, together with goals, milestones, and financial projections
that is necessary.
To make it easier to do a business plan, a fill-in-the-blank business plan template
complete with definition of terms as well as real business examples.
Tips to ace Your Business Plan
1. Start simply. Don’t get overwhelmed.
Start by writing your ideas in bullet points and just keep on creating outlines.
2. Learn to do research.
Find out from reading books and online articles, or from asking questions or
conducting interview, is the key to complete your business plan.
3. Be a disciplined strategist.
When you create your business strategies, remember the two principles:
a. Law of Foolish Fellowship is your greatest enemy, as this means you are
following what everybody else is doing, without understanding and asking why
they do it in the first place.
b. Principle of Selectivity is your greatest ally, as this means you are considering
possible alternatives, shortlisting then choosing the best combination of
marketing mix elements, as well as the business model.
4. Write it down.
 When your outline is complete, you can start converting bullet points into
sentences, paragraphs then visuals.
 Keep it short but concise.
 Know who will read the business plan and highlight their interest.
 Identify who are the key team members, their background and their
responsibilities.
 Write the general outlook if there is a right to win in your chosen industry like;
a. Trends
b. Industry and competitor analysis
c. SWOT analysis
 Write the business plan in detail like what are you offering and how it will
operate.
 Complete the plan with the following details:
a. Financials
b. Timeline
c. Potential hurdles and solutions
Illustration 3.1 presents a template for a business plan. There is no standard format
for business plan and this illustration 3.1 shows a simple and most practical format for a
start-up business.

32
Illustration 3.1

BUSINESS OVERVIEW
OUR VISION A vision statement is what do you want your business to be at some point in
the future, based on your goals and aspirations. Example, Facebook’s Vision Statement:
“People use Facebook to stay connected with friends and family, to discover what's going
on in the world, and to share and express what matters to them.”
OUR MISSION A mission statement is a simple statement that explains your company's
goals. It's a summary of what your company does for its customers, employees, and owners.
It explains how you do what you do. And, it focuses on why your company does what it does.
Example, Facebook’s Mission Statement: "To give people the power to build community
and bring the world closer together."
OUR PRODUCT/SERVICES The product description section is where you'll describe your
product in terms of several characteristics, including cost, features, distribution, target
market, competition and production concerns. The product description statement should be
complete enough to give the reader a clear idea of your intentions. You may want to
emphasize any unique features or variations from concepts that can typically be found in the
industry. Example: Facebook is defined as an online social networking website where people
can create profiles, share information such as photos and quotes about themselves, and
respond or link to the information posted by others.

This section is for the list of your employees with their position, job description, and
qualifications needed for the business operations.
TEAM MEMBER NAME ROLE RELEVANT EXPERIENCE
Manager The manager is an employee who Manager:
is responsible for planning,
directing and overseeing the
operations and fiscal health of a

33
 business unit, division, •Bachelor's Degree in
department, or an operating unit Business, Management, or
within an organization. The related field.
manager is responsible for •More education or
overseeing and leading the work experience may be preferred
of a group of people in many or required.
instances.
•Strong understanding of
business management,
financial, and leadership
principles.
•Excellent communication,
interpersonal, leadership,
coaching, and conflict
resolution skills.
Sales person/ Sales The salesperson or sales Salesperson or Sales
representative representative serves customers representative:
by selling products and meeting •Bachelor's degree in
customer needs. Services existing business, marketing,
accounts, obtains orders, and economics or related field.
establishes new accounts by
planning and organizing daily •Experience in sales.
work schedule to call on existing •Understanding of the sales
or potential sales outlets and process and dynamics.
other trade factors.
•A commitment to excellent
customer service.

The third section is the Market Analysis. A market analysis forces the entrepreneur
to become familiar with all aspects of the market so that the target market can be defined
and the company can be positioned in order to garner its share of sales. A market analysis
also enables the entrepreneur to establish pricing, distribution and promotional strategies
that will allow the company to become profitable within a competitive environment. In
addition, it provides an indication of the growth potential within the industry, and this will
allow you to develop your own estimates for the future of your business.
MARKET ANALYSIS
OUR TARGET MARKET The target market is the type of customers you target
within the market. You need to identify the different
segments in your market and explain who you are going
after and why. One way to identify the segments is to
group customers by buying pattern or demographics. For
example, in the fashion market you could have:
•men vs. women
•low price vs. premium clothing
•online vs. in store
•shoes, accessories, and outfit
MARKET SIZE Once the target market has been detailed, it needs to be
further defined to determine the total feasible market.
This can be done in several ways, but most professional
planners will delineate the feasible market by
concentrating on product segmentation factors that may
produce gaps within the market.
Example:

34
 Company Sales
A 50,000 units
B 65,000 units
C 80,000 units
Other companies 10,000 units
THE TOTAL MARKET FOR
PRODUCT X 205,000 units

ALTERNATIVES/COMPETITION The aim of this section is to give a fair view of who you
are competing against. You need to explain your
competitors' positioning and describe their strengths
and weaknesses.
The idea here is to analyze your competitors angle to the
market in order to find a weakness that your company
will be able to use in its own market positioning.
One way to carry the analysis is to benchmark your
competitor against each of the key drivers of demand for
your market (price, quality, add-on services, etc.) and
present the results in a table.
Example of competition analysis:
Key
Assets Our Competitor Competitor
and company A B
Skills
Superior Strength Weaknesses Strength
product
Good Weaknesses Strength Weaknesses
business
location
Strong Weaknesses Strength Weaknesses
sales
team
Strong Strength Weaknesses Strength
financial
capacity

The aim of the competitor analysis is to determine how

the firm stands against competition.
OUR COMPETITIVE A competitive advantage is strategic development where
ADVANTAGE customers will choose a firm’s product or service over its
competitors based on significantly more favorable
perceptions or offerings.

The Marketing Plan will let you understand and identify what makes a product or
service stand out from the competitors through defining the unique selling proposition of
the product or service. You will understand the behavior, attitude, and psychology of the
entrepreneur’s customers through various ways of customer validation. You will understand
in detail and apply the 4Ps of marketing or the marketing mix in instigating awareness and
driving sales of the business venture.

35
MARKETING PLAN Marketing Mix
HOW OUR Promotion
CUSTOMERS WILL The marketing communication strategies and techniques all fall
LEARN ABOUT US under the promotion heading. These may include advertising, sales
promotions, special offers and public relations. Whatever the
channel used, it is necessary for it to be suitable for the product,
the price and the end user it is being marketed to.
List of possible Marketing strategies you can use for your business:
•Advertising. A non personal form of communication using the
different platforms like television, radio, printed like posters,
flyers, and more. Creative message(s) and creative delivery is the
key to capture the attention of the target audience.
•Packaging. Provides a description of the packaging strategy. If
available, mockups of any labels, trademarks or service marks
should be included.
•Public relations. A complete account of the publicity strategy
including a list of media that will be approached as well as a
schedule of planned events.
•Sales promotions. Establishes the strategies used to support the
sales message. This includes a description of collateral marketing
material as well as a schedule of planned promotional activities
such as special sales, coupons, contests and premium awards.
•Personal sales. An outline of the sales strategy including pricing
procedures, returns and adjustment rules, sales presentation
methods, lead generation, customer service policies, salesperson
compensation, and salesperson market responsibilities.
HOW WE’LL Price
ENCOURAGE OUR Price covers the actual amount the end user is expected to pay for
CUSTOMERS TO a product. How a product is priced will directly affect how it sells.
BUY OUR This is linked to what the perceived value of the product is to the
PRODUCT? customer rather than an objective costing of the product on offer.
If a product is priced higher or lower than its perceived value, then
it will not sell. This is why it is imperative to understand how a
customer sees what you are selling.
Here are some of the pricing strategies that entrepreneurs can
choose from:
•Competition-based pricing, you can price your products slightly
below your competition, the same as your competition, or slightly
above your competition.

Example:
•Cost-plus pricing strategy focuses solely on the cost of
producing your product or service. It’s also known as mark-up
pricing since businesses who use this strategy “mark-up” their
products based on how much they’d like to profit.
Example:

36
 •Penetration pricing strategy companies enter the market with
an extremely low price, effectively drawing attention (and
revenue) away from higher-priced competitors.
Price of your competitor Price of your company
P 25.00 P 20.00

•Skimming pricing strategy is when companies charge the

highest possible price for a new product and then lower the price
over time as the product becomes less and less popular.
•Bundle pricing strategy is when you offer (or "bundle") two or
more complementary products or services together and sell them
for a single price. You may choose to sell your bundled products or
services only as part of a bundle, or sell them as both components
of bundles and individual products.

•Psychological pricing is what it sounds like — it targets human

psychology to boost your sales. For example, according to the "9-
digit effect", even though a product that costs P99.99 is essentially
P100, customers may see this as a good deal simply because of the
"9" in the price.

HOW WE WILL GET Place

OUR Place or placement has to do with how the product will be provided
PRODUCT/SERVICE to the customer. Distribution is a key element of placement. The
TO OUR placement strategy will help assess what channel is the most suited
CUSTOMERS to a product. How a product is accessed by the end user also needs
to compliment the rest of the product strategy.

37
 1. Indirect Channels (Selling Through Intermediaries)
When a manufacturer involves a middleman/intermediary to sell
its product to the end customer, it is said to be using an indirect
channel. Indirect channels can be classified into three types:
One-level Channel (Manufacturer to Retailer to Customer):
Retailers buy the product from the manufacturer and then sell it to
the customers.
Two-Level Channel (Manufacturer to Wholesaler to Retailer to
Customer): Wholesalers buy the bulk from the manufacturers,
breaks it down into small packages and sells them to retailers who
eventually sell it to the end customers.
Three-Level Channel (Manufacturer to Agent to Wholesaler to
Retailer to Customer): Three level channel of distribution involves
an agent besides the wholesaler and retailer who assists in selling
goods.

2. Direct selling is one of the oldest forms of selling products.

It doesn’t involve the inclusion of an intermediary and the
manufacturer gets in direct contact with the customer at the
point of sale.

The section Key objectives and Success Business metrics, also called KPIs (key
performance indicators) display a measurable value that shows the progress of a company's
business goals. They're usually tracked on a KPI dashboard. Business metrics indicate
whether a company has achieved its goals in a planned time frame. Here’s an example of how
you are going to prepare this section.
OBJECTIVE SUCCESS METRIC GOAL DATE
Increase customers Number of customers (new, After a year of operation
acquisitions and retention repeat, and referrals)
through by being present in
social media.
Improve customer Customer satisfaction After a year of operation.
satisfaction. survey where customers as
your respondents are asked
to weigh their satisfaction
on a scale from 1 to a
predetermined number
(usually 3, 5, or 10).
Use social media
monitoring.

38
Note:
Your business objectives create the guidelines that become the foundation for your
business planning.
A business metric is a quantifiable measure that is used to track and assess the status
of a specific business process and objectives.
Your time frame or goal time represents how far out into the future you want to
plan for your business. A good business plan covers a time frame that has a realistic start and
finish, with a number of measurable checkpoints in between.
The next section represents your financial plan; it is one of the most difficult parts of
the business plan. This is the portion of the business plan that speaks of the product or
service performance. It also provides the entrepreneur financial data such as liquidity, cash
flow, and financial standing of the business. The financial plan also gives the entrepreneur
bases for his or her decisions on financial matter such as offering credit terms to customers,
applying for a bank loan, expand, or sell the business. Without proper accounting of business
activities and transactions, the entrepreneur will be at a loss on where his or her business is
leading him or her.
FINANCIAL PLAN
COST STRUCTURE SOURCES OF REVENUE/ HOW WE’LL STAY
REVENUE STREAM PROFITABLE
Cost structure refers to the A revenue stream is a source Write your plans and
various types of expenses a of revenue of a company or strategies on how you will
business incurs and is organization. Considering make your business more
typically composed of fixed you being new in the profitable in order to attract
and variable costs. One of business and having more customers, investors
the most popular methods is competitors as well, what and of course to sustain your
classification according to will be your plan strategies business.
fixed costs and variable in order to maximize your Here are some of possible
costs. revenue? strategies you can do to stay
In this section, all you have Revenue stream can be: profitable:
to do is to list your most
 Sales  Hire the Right
important and priority  Rent revenue People.
costs during this stage of  Interest revenue  Focus on Finding and
your business. Like, cost of
Retaining New
the building of your stall or
Customers Daily.
stall rental, your
 Advertise Your
ingredients, raw materials,
Brand Wisely.
supplies, your staff,
 Use Resources Well
advertising cost, and more.
and Cut Costs.
 Motivate and
Empower Your
Employees.
 Analyze Your
Competition and Be
Creative.
 Provide Great
Customer Service
and Be consistent.

39
 Unit 3

The business plan is a very useful document in managing an entrepreneurship or

small business. It provides information on how the owner will undertake the various
activities necessary in operating the business.
The plan enumerates the various decisions made after careful analysis. As such, it
relieves the owner of spur-of-the-moment decisions when the business is already in
operation.
The business plan also provides important information for prospective investors and
lenders.
The plan should be a useful piece of reading material as it contains information about
the business, its product or service, market strategies, competitors, operations, and
management, financial data, and supporting documents.

Unit Activity (Activity 6) Let’s check what you have learned so far!
Instructions: Put a ( ) on the blank before the letter of your choice to indicate your answer.
Cut this page and submit together with your other deliverables.

1. A document that helps the SBO determine what resources are needed to achieve the
objectives of the firm, and the like:
a. Financial plan
b. Marketing plan
c. Human resources plan
d. Business plan
2. The part of the business plan that indicates the name of the business, proponents, address,
and others.
a. Title page
b. Executive summary
c. Description of the business
d. Description of the product or service
3. The part of the business plan which contains information on the capital needs of the business,
how the money will be spent, what benefits will be derived by the business from the loan or
investment, among others.
a. Executive summary
b. Description of the business
c. Description of the product or service
d. Market strategies
4. When SBO is determining which part of the total potential market will be served by the firm,
he is actually developing a market strategy referred to as:
a. Definition of the market
b. Determination of the market share
c. Position strategy
d. Pricing strategy
5. When the SBO wants to know the customers really want to buy from the firm, he is starting
to develop a:
a. Pricing strategy
b. Positioning strategy
c. Distribution strategy
d. Promotion strategy
II. Fill in the blanks with the correct answer.
__________________________is a sort of a business blueprint and it keeps the entrepreneur on the
1. right track.

40
2.
__________________________ is that portion of a business plan indicating the capital needs of the
business, how the money will be used among others.
3.
Market strategies are formulated after undertaking ___________________________________.
4.
____________________________ is one where the firm identifies a target market segment and
develops a unique strategy mix to address the desire of the segment.
5.
____________________________ is that pricing method that covers all cost, plus an extra increment
to deliver profit.
III. ESSAY. How important the business plan to the business owner?

How important is the business plan to investors?

41
 Step 1 Opportunity Spotting and Assessment (Unit II)
Step 2 Developing a Business Plan (Unit III)
Step 3
Determining the Capital (Unit IV)
Step 4 Implementing the Business (Unit V)

UNIT IV. DETERMINING THE CAPITAL

(OPERATIONS AND FINANCIAL REQUIREMENTS)

LEARNING OBJECTIVES:

At the end of this unit, you must be able to

prepare the 4Ms (method, manpower, machine,
and materials) of operations in the preparation
of your business plan as your final requirement.

Timing. Scheduling your time to study is very important so that you know how
you can manage your coursework efficiently. Unit IV is good for two weeks only and after
reading this chapter, make sure to write your Business Model Plan as your final requirement
for this course.
Attached to this module is a STUDY PLANNER. The planner contains guides and checklists to
help you organize your coursework. There are daily and weekly goals in the planner that you
need to accomplish.

INTRODUCTION
The business plan will not be complete if the operations and financial plan are not
included. These two play a crucial role in ensuring that the business is operationally feasible
and financially viable. Even if the marketing plan looks like promising, the business will not
be successful without a detailed operations and financial plan. These two will tell if the big
idea generated through product development process is realistic (Unit II, Seizing
Opportunity).

42
 Let’s Get Started
The 4Ms of Operation
The operations plan is an important part of the business plan because it simply states
the details in operating the business. Operation management, on the other hand, controls the
implementation of the business plan. A strong operations plan should have the four
operational aspects-called the 4Ms of operation: the methods; the processes to be followed
in effectively manufacturing or delivering a product or service; the manpower or the right
human resources who will handle a specific position for the operations; the machines or the
technology used in efficiently operating the business, and the materials to be used in
creating a product or performing a service, which includes supply chain management.

Methods
The methods aspect represents the day-to-day operations of a business. It describes
how an entrepreneur will run the business from all facets of the business such as the
manufacturing of goods, service delivery process, distribution of goods and services, logistics
for delivery of goods, and inventory management, to name a few. The entrepreneur has to be
very detailed in formulating these processes and must ensure that the customer experience
will be pleasant and seamless.
The entrepreneur must always ensure the quality in the operating procedures both
in the manufacturing and rendering of services because this will affect the quality of the
products and services which is very important to customers.

The illustration above is an example of manufacturing process of coffee product

before it goes to their business partners or retailers used in the making of our favorite coffee
products in many coffee shops. Procedures makes the work easier for our workers and
employees, it also ensures the quality of outputs we give to our customers. Remember, the
very essence of any business is to cater needs of customer by providing services and goods,
and in process create value for customers and solve their problems.
Manpower
At the beginning of the entrepreneur’s business, he or she usually maximizes himself
or herself, his or her partner or his o her family members to handle all aspects of the business.
But as it grows, the entrepreneur will need the expertise of qualified employees that can
handle operational functions, so that he or she will be free from daily activities and can focus

43
more on the strategic and management functions of the business. The entrepreneur needs to
plot a table of organization based on his business objectives. Each position is and should be
relevant. To know if a certain position is really important, the entrepreneur must prepare a
detailed job description and job qualifications of the future employee. This will be the
entrepreneur’s basis in deciding whether to hire an employee or not. The entrepreneur must
be very keen in selecting and hiring an employee. The entrepreneur must ensure that due
diligence is performed to check the background of the applicant. Manpower is one of the
highest costs of operating a business but is also the most instrumental to its success. Having
the right people encompasses a bunch of advantages.
Here are the steps or things to prepare in designing your manpower plan:
Step 1: Create a table of organization or organizational chart to show a graphical description
of the manpower complement of the business.

Organizational Chart

Organizational charts (or hierarchy charts) are the graphical representation of an

organization's structure. Its purpose is to illustrate the reporting relationships and chains of
command within the organization. The organizational chart helps build and design the
organization structure to meet the business' objectives. An organizational chart can guide
the employees to know their rights and responsibilities. Make everyone clear within their
organizations and improve employee performance.
Step 2: Prepare a job description for each member of the organization so that everyone is
aware of what is expected of him or her.
Job Description

The manager is an employee who is responsible for planning,

directing and overseeing the operations and fiscal health of a business unit, division,
department, or an operating unit within an organization. The manager is responsible for
overseeing and leading the work of a group of people in many instances.

44
 The salesperson or sales representative serves customers by selling
products and meeting customer needs. Services existing accounts, obtains orders, and
establishes new accounts by planning and organizing daily work schedule to call on existing
or potential sales outlets and other trade factors.

The cashiers accept payments from customers in the form of cash,

credit or debit card, check or other forms of payment. They issue customers' receipts and
return the correct change as necessary for cash payments.
Step 3: List the qualifications of employees needed and decide where to source them.
Manager:
 Bachelor's Degree in Business, Management, or related field.
 More education or experience may be preferred or required.
 Strong understanding of business management, financial, and leadership principles.
 Excellent communication, interpersonal, leadership, coaching, and conflict resolution
skills.
Salesperson or Sales representative:
 Bachelor's degree in business, marketing, economics or related field.
 Experience in sales.
 Understanding of the sales process and dynamics.
 A commitment to excellent customer service.
 Excellent written and verbal communication skills.

Cashier:
 High School Diploma or equivalent.
 Customer service or Cashier experience.
 Ability to handle transactions accurately and responsibly.
 High level of energy with strong customer service skills.
 Basic math and computer skills.

Step 4: Decide on where to source candidates, for example, from friends, relatives, employment
agencies, referrals, manpower agencies, newspapers, social media, walks-ins.

Step 5: Interview the potential candidates and ask them relevant questions about the job.

Step 6: Choose the best candidates and provide a job offer. The job offer should contain the
following details:
1. List of responsibilities or deliverables and its scope and limitations.
2. Salary and benefits including vacation and sick leaves.

45
 3. Work schedule.
4. Probationary period if any and qualifications to become a regular employee.
5. Duration of contract
6. Resignation procedure.

Step 7: Ensure there is an employee training and development program for the business.

Machines
Most businesses would not be able to operate without the aid of machines. Machines
can be described as the “best friend” of manpower in producing goods and offering services.
They go hand in hand. Sometimes, machines cab even replaces employees. Machines are very
important aspect of goods and service production, and they have changed the way
entrepreneurs conduct business. Machines are not only limited to physical equipment but
can also pertain to new technologies that help the business operations become standardized
and seamless. Without machines, business operations will be cumbersome, costly, and with
low quality.
In Unit I we enumerated the top ten list of common start up business here in the
Philippines and one of them is water refilling station. Here are some of the list of machineries
and equipment’s you need to purchase if you want to start a water refilling station.
Equipment Used by Water Refilling Stations:
 Multimedia Sediment Filter. This type of filter has replaced the conventional
sand filter for water refilling stations.
 Active Carbon Filter
 Water Softener Tank
 Reverse Osmosis Membrane
 Polishing Carbon
 Ultraviolet Lamp/Sterilizer
 Ozone Generator

You also need to identify not only the equipment used in the production but as well
as the machines, furniture’s, office supplies, and vehicle you will use for the delivery. The
brand, specifications, and the price should be identified because the amount for your
machines and supplies will constitute majority of your total investment or capital
requirements to start your business.

Materials
Whether the entrepreneur will offer products or cater services, he or she has to
pinpoint a number of dependable suppliers of quality materials and supplies. The supplier
must have a consistent and sufficient amount of raw materials and supplies that can
accommodate the demand of the entrepreneur. In short, the selection of the suppliers
depends largely on how the suppliers will not cause interruptions in the production of goods
or serving the customers. From the onset, the entrepreneur should decide on what route to
choose when it comes to materials requisitioning. Options include the following:
1. Manufacturing own products or offer services,
2. Outsourcing of manufacturing or service activities to a third party, and
3. Purchasing own product or service from present suppliers.
In manufacturing the entrepreneur’s own products or services, a huge amount of capital
must be prepared because all the expenses in manpower, machines, and materials will be
borne by the entrepreneur. The entrepreneur has studied the business feasibility
thoroughly, as the risk is larger with this option. A set of competent employees must be
employed to handle the machines or service the customers. But these challenges can be
augmented because the entrepreneur can be very specific in the details that he or she wants

46
for the product or service. He or she can also closely monitor the quality of products or
services, strategically design the production or service blueprint, as well as its schedule, and
be more flexible in deciding on the production quantity. On the marketing side, the
entrepreneur will also have the opportunity to build his or her own brand identity. Most
importantly, the profits will all go to the entrepreneur or the manufacturer.

The Financial Plan

One of the most difficult parts of the business plan is the financial plan. Not all
entrepreneurs are adept with accounting procedures, rules, and reporting policies. However,
there is no choice for the entrepreneur but to be familiar with numbers. The sustainability
of a business depends on a meticulous monitoring of finances. This is the portion of the
business plan that speaks of the product or service performance. It also provides the
entrepreneur financial data such as liquidity, cash flow, and financial standing of the
business. The financial plan also gives the entrepreneur bases for his or her decisions on
financial matter such as offering credit terms to customers, applying for a bank loan, expand,
or sell the business. Without proper accounting of business activities and transactions, the
entrepreneur will be at a loss on where his or her business is leading him or her.
Financial management begins when an entrepreneur starts to raise capital for the
business venture. Capital is the money that will be allocated by the entrepreneur to establish
a business. It shouldn’t be mixed with the personal money of the entrepreneur.
The collateral refers to a high value asset that is submitted by the business to the bank
when applying for a loan and will be subject for repossession if the business defaults.
Regardless of where the capital was sourced, putting this capital at risk is one of the major
reasons that most entrepreneurs are afraid to engage in a business venture. But those who
take the risk also gain the experience and use this experience to succeed. Not all
entrepreneurs became successful the first time they ventured into business. All of the,
experienced failures and used these failures to their advantage.
Here are some of the financial documents that entrepreneur needs to prepare to measure
whether the business is doing well in terms of its financial aspect no matter what type of
business you are in. These are the tools that will help the entrepreneur direct their business
decisions to be strategic and effective.
 Income statement – a financial statement that details the computation of net
revenue by deducting cost of sales, expenses, and taxes from the gross revenues
generated.

47
 Balance sheet – is a core financial statement that describes the financial position of
the business. The entrepreneur must separate his or her personal assets and
liabilities and only account for what assets are attributable to the business. It is
composed of three elements: 1) assets, 2) liabilities, and 3) owner’s equity or capital.
Assets represent the sources of the business that are expected to have future
economic value. Liabilities are what the business owes to another person, a financial
institution, or any creditor. Owner’s equity or capital is the funds allocated by the
entrepreneur to run the business. The accounting equation should always be
balanced as presented by the formula below:
Assets= liabilities + owner’s equity

 Cash flow statement

Another very important financial statement is the statement of cash flow.
Because cash is the most important asset of a business, the entrepreneur must be
vigilant in monitoring its whereabouts. It may look as if the business is earning
enough as seen in the income statement, but it doesn’t mean that the business has no
cash flow issues. One issue is that the business could have many pieces of equipment
but doesn’t have enough cash to pay its creditors on time. Another issue is that the
business can be selling on credit instead of cash; thus, it is not liquid enough to pay
its suppliers.
The stable financial position indicated in the balance sheet and the
profitability reflected in the income statement will be in vain if cash flow is not
managed well. Creditors and suppliers will tag the business negatively and will not be
able to renew their loans or buy supplies or materials on credit. The entrepreneur
must allocate cash to pay suppliers and creditors as well as its employees. If the
business runs out of cash, the entrepreneur should have an option to borrow from the
bank or a reputable financial institution provided he or she has a good track record
in paying his or her obligations.

48
 Unit 4
The operations plan represents the feasibility of a business idea. It will be very risky
for the entrepreneur to pursue a business without an operation plan, because the content of
this plan is all about the details of the business represented by the 4 Ms of operations-
methods, manpower, machines, and materials. The entrepreneur must be detailed with these
operational factors because these directly affect the internal and external parties of the
business. The success of a business largely depends on how smooth and seamless the
operations will be.
Lastly, the financial plan shows us that numbers really do matter. The entrepreneur
has to account everything that has something to do with his or her business whether
originating from operating, financing, or investing activities.
The basic financial statements that aid entrepreneurs on how to manage their
finances. All entrepreneurs must be hand-on with financial standing of the business, and they
must not delegate this function completely to an account.
For future entrepreneurs, you must remember that the big product or service idea
that you generated from the opportunity spotting process will only be feasible if you have an
effective product development, operations, and financial plan.

49
 Step 1 Opportunity Spotting and Assessment (Unit II)

Step 2 Developing a Business Plan (Unit III)

Step 3 Determining the Capital (Unit IV)

Step 4
Implementing the Business (Unit V)

UNIT V. IMPLEMENTING THE BUSINESS

LEARNING OBJECTIVES:
Timing. Scheduling your time to study is At the end of this unit, you must be able to
very important so that you know how you can prepare your business plan by including the
manage your coursework efficiently. Unit V is
important requirements before starting your
good for two weeks only and after reading this
business as part of your things to do first before
chapter, make sure to write your Business Plan
the business operations and as part of your
as your final requirement for this course.
budget in your operations cost.
Attached to this module is a STUDY PLANNER.
The planner contains guides and checklists to
help you organize your coursework. There are
daily and weekly goals in the planner that you need to accomplish.

INTRODUCTION
After you have learned how to formulate a simple business plan, you will now be
given the chance in this unit to implement a simple business plan. This experience will
hopefully open doors for you to carry out your fresh ideas and put them into action.
The implementation of the business plan, however, is a tough endeavor for most
entrepreneurs. Plans can easily be designed on paper. Ideas and concepts for a good business
plan are easy to come up with, but the appropriate implementation is a more of a challenge.
The realization of the entire business plan will be, to a great extent, dependent on a well-
timed. Effective, and efficient execution. A reexamination is needed to assess whether or not
enough research has been done so that your strategies will go as planned. There are
instances that plans do not materialize themselves perfectly because the entrepreneur did
not prepare for the uncertainties that often arise. Thus, the entrepreneur must develop a
positive attitude and employ a flexible approach to face sudden changes in the business
environment.
The entrepreneur must aim for the execution of the business plan at the right time
and using the right methodology. Measurement of progress should be based on actions and
not words. At the end of the day, the entrepreneur has to reflect on how to be better by fine-
tuning business strategies and adjusting to sudden changes regularly.
As a new entrepreneur, the execution of ideas is always a trial-and-error undertaking.
As part of creative process, the more time you will try, the more that you will learn, and the

50
better you get at bouncing back from failures. Remember what Henry Ford said, “Failure is
simply the opportunity to begin again, this time more intelligently... A business absolutely
devoted to service will have only one worry about profits. They will be embarrassingly
large.”
Because business is a risky endeavor, you have to mage all the business
implementation risks. In Unit I, you were able to interview via phone an entrepreneur and
inquire from them how they started and manage their business. You have learned the most
of them did not experience success on their initial attempt. For you at the same time because
you will be tasked to implement.
This unit will be very exciting and very challenging at the same because you will be
tasked to implement a small business in your locality. This will also validate if you really have
a calling for entrepreneurship.

Let’s Get Started

Here are some of the requirements that you need to accomplish before the operation
of your business.
Registering the Business Legally
Entrepreneurs need to register their companies legally. Below is a list of essential
requirements you need to comply with to ensure that you’re operating your business legally:
Department of Trade Registration (DTI):
The first step to becoming a sole proprietor is registering a business name with DTI.
Registering with DTI gives you the sole right to use your business name. You can register by
visiting DTI Regional or provincial office. If you’re filing at the DTI office nearest you,
download the business name registration forms prior to your visit.
Securities and Exchange Commission Registration (SEC):
You can register your business as a Partnership or Corporation. A partnership is a
business that includes two persons to agree to contribute money, property, or industry. A
corporation has stockholders who invested capital into the business, and expect to get
returns on that investment.
Mayor’s business permit
All businesses are required to get a mayor’s business permit from the local
government or municipality where the business is located. Obtaining a business permit from
the Mayor’s office can be done if your business is registered with the DTI for sole
proprietorship or SEC for corporation and partnership.
BIR Registration
All business are required to register with Bureau of Internal Revenue (BIR) before
business operations start. Registering with BIR gives you the authority to print your official
receipts and invoices. It also provides you a Tax Identification Number (TIN).
SSS, PhilHealth, and Pag-Ibig Fund Registration
All businesses that have employees should register with these three government
agencies. Upon registration with SSS, PhilHealth, and Pag-Ibig, an employer shall be given an
employer number. Employers can register their business with PhilHealth through the
Philippine Business Registry (PBR).
Many of these activities can be handled by companies specializing in registration-
lawyers for start-up papers while administrative companies help you register for a small fee.

51
Entrepreneurs should these resources so you can focus on getting their products into the
hands of your customers as soon as possible.
Relevant Company Brand
A brand refers to the identity of a company, of product, of a service, or of an
entrepreneur himself or herself. A brand is a symbol of promise or assurance from the
entrepreneur that what it implied to the customers will happen. A good brand not just
entices customers to try the product but makes them loyal to it. Moreover, the brand sets the
image of the business to the public. The challenge now to you as the entrepreneur is to
understand how to craft the brand, how to market the brand, and how to make this brand
deliver the entire message of brand management.
Ensure you have a company name that can help you position what you present. Avoid
combining names of founders or something that is hard to pronounce names or name with
negative association. A company name like V Cargo (short for Vintel Cargo) already starts
brand positioning in the mind of the consumers, clearly signifying cargo products, unlike
JoPer (or Jose and Petra) Enterprise, which leaves people guessing.
As an important element of a brand, the brand name is a major differentiator of the
entrepreneur against competitors. To be different and catchy, a brand name must possess
the following characteristics:

Unique Can be converted to other dialects or

languages in case entrepreneur expands to
other countries
Extendable Can describe a product category
Easy to remember Can describe concrete qualities
Can describe the benefits of the product or Positive and inspiring
service

Government Support and Legal Requirements

Entrepreneurs must know employee’s rights like minimum wage by region,
individual income tax exemptions to those earning Php 250,000 and below a year,
compulsory benefits, while avoiding unnecessary contractualization of employees.
There are also tax benefits for micro businesses in barangays, as well as cooperatives
those in renewable energy, tourism and business process outsourcing companies located in
special zones. And sales below Php 3 million a year is not subject to value-added tax (vat).
Check out Republic Act No. 9178 on the Barangay Micro Business Enterprise (BMBE) law.

Some government offices also offer incentives and assistance to small entrepreneurs.
 The Department of Trade and Industry report shows that small enterprise and
development has attained the status of a national movement, participated in by more
than 50 government agencies, each of which offers support services to the small
businessman. The private sector has also joined the “small beautiful” bandwagon-
including industry chambers, trade associations, schools and universities, civic, and
non-government organizations, and church-based groups. The Small and Medium
Enterprise Development (SMED) Council was created in 1991 to integrate and
synchronize the various efforts. The SMEDC has an array of programs to assist small
businesses. The areas of assistance cover finance, marketing, training, and human
resource development, and product development and technology assistance. These
are support services they provide.

52
  Government banks, like the Development Bank of the Philippines (DBP), Land Bank
of the Philippines (LBP), Small Business Corporation (SBCorp), Quedan and Rural
Credit Corporation, Philippine Export-Import Bank, and the national Livelihood
Support Fund, have agreed in 2003 to simplify and standardize lending procedures,
lower interest rates, and facilitate loan releases to small enterprise under a unified
scheme called SULONG.
For micro enterprise, countless micro finance institutions now proliferating
throughout the country are doing a good job of providing small but quick and no-
hassle loans that require no collateral. They provide an alternative to the so called
“five-six” lenders known as “bombay” lenders, who are actually loan sharks.

Tax Requirements and Responsibilities for Small Business

Below are some of the taxes that should be filed with their corresponding details and
payment deadlines so you will not become a delinquent tax payer. Remember, not paying the
necessary taxes are punishable by law and is a criminal offense and the government can issue
business closure.

53
 This is the business tax imposed on persons or entities and or transactions who (1)
sells or lease goods, properties or services in the course of trade or business and are exempt
from value-added tax (VAT) under Section 109 of the National Internal Revenue Code, as
amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who
are not VAT-registered; and (2) those who are engaged in the identified industries by the
BIR.
Below is the summary of the monthly and quarterly payments with deadlines, forms
used and documentary requirements for percentage tax.
Quarterly Percentage Tax BIR Form 2551Q- Quarterly Percentage Tax Return.
Filed within twenty-five (25) days after the end of each
taxable quarter. This reports the three months’ income
of a particular quarter.
Computed as gross sales or receipts tax that is
equivalent to 3% per quarter.
Quarterly Income Tax BIR Form 1701Q, also known as Quarterly Income Tax
Return for Self-Employed Individuals, Estates and
Trusts (Including those with both Business and
Compensation Income) is a tax return intended for
professionals and self-employed individuals who are
engaged in a sole proprietorship business.
How to Calculate Quarterly Income Tax? The income
you generate from your business is subject to a
graduated income tax that range from a minimum of
5% to a maximum of 32% which is payable every
quarter. Income tax for the quarter should be filed on
or before the 60th day after the close of each quarter.
Annual Income Tax This based on your net income for the preceding year.
The form is BIR Form 1701- Annual Income Tax Return
and is due every April 15 or each year.
Annual Registration Fee All businesses in the Philippines are required to pay an
Annual Registration Fee of P500 to the BIR. This fee
must be paid by 31 January of the current year.
Remember, the Annual Registration Fee is forward
looking.

Penalties and Fees

Take note that penalties are automatic as soon as you have not complied with all the
taxes due mentioned above. The details of these penalties are as follows:
1. A surcharge of 25% for failure to file and /or pay any internal revenue tax at the time
required by law or regulation
2. A surcharge of 50% in case a false or fraudulent return is willfully made.
3. Interest rate of 20% per annum on any unpaid amount of tax from the date prescribed
for the payment until it is fully paid.
4. Compromise penalty.

To ensure a smooth business operation, you have to be conscious and mindful of the taxes
that are going to be filed so business will be good. But you can always hire a bookkeeper who
will do bookkeeping tasks and prepare all these BIR tax forms including other financial
statements for your business.

54
Financial Control
Financial controls play an important role in ensuring the accuracy of reporting,
eliminating fraud and protecting the organization's resources, both physical and intangible.
These internal control procedures reduce process variation, leading to more predictable
outcomes.
Here are some recommendations to institute basic internal financial control in business:
 Regular reconciliation to prevent cash shortage.
 Physical count to prevent missing inventories.
 Delivery verification and independent confirmation for uncollected receivables
 Purchasing control, proper register and semi-annual count to account for usable

Here’s more to consider before you start your business:

8 Golden Rules for Starting a Small Business in the Philippines
Published: May 29, 2019 | Updated: October 5, 2020 | Posted by: Moneymax

To start a business, you need to be driven, patient, hardworking, and knowledgeable.

But it takes more than that to succeed as an entrepreneur.
There’s no definite formula for success. However, there are rules that beginning
entrepreneurs live by. Here are the eight golden rules on how to start a small business to
guide you through this tough yet rewarding journey:
1. Create a New Market or Benchmark
2. Validate Your Small Business Idea
3. Plan Your Business Finances
4. Pick the Right People
5. Choose the Best Name for Your Small Business
6. Apply for Licenses and Permits
7. Take Advantage of Social Media and Free Website Builders
8. Be Resilient
Create a New Market or Benchmark
Be innovative! You have two choices for deciding what business you want to venture
in.
 First, offer something that is not yet in the market. How can you make your business
stand out? Think creatively and identify an innovative product or service that can
satisfy the needs or provide a solution for your target customers.
 Second, benchmark successful businesses. Observe what they’re doing right and
create something greater.
Validate Your Small Business Idea
You may have something in mind that you believe will be a big hit. But does your
business idea really have the potential to succeed?
Conduct market research before you start a small business. Find out if the product or
service you’re considering to sell is something people need and would be willing to pay for.
Check also if other businesses in your area are offering the same product or service and how
the competition is like.
You can search from the internet small business ideas in the Philippines you can start
with small capital.

55
Plan Your Business Finances
While starting a small business in the Philippines doesn’t generally require a lot of
funds, it will involve some capital. You need money to buy equipment, tools, supplies, and
materials, as well as to cover ongoing costs for six to 12 months before you make a profit.
Start with listing down all the required expenses for starting your business. Group
them into two categories:
 One-time startup costs: Market research, branding, licenses and permits, initial
inventory, grand opening event, etc.
 Ongoing costs: Rent, marketing, employee salaries, taxes, etc.
It’s also important to have backup funds. When you start a business, you have to allocate
backup funds (aside from your initial capital) that will sustain your business. It will take time
for your product to be known. When you’re starting out, it’s normal to suffer some loss. If
you don’t have backup funds, how will you sustain your business?
Pick the Right People
You need a pool of talented, hardworking, and trustworthy people driven to grow your
business. They are your greatest asset, so you have to also take care and grow them. With
the right people, you can serve your customers better.
Identify the positions to fill and the core skills, competencies, and responsibilities for
each. These will guide you through screening applicants and hiring the right ones.
If you’ll run your small business alone without any employee or contractor, you still need
people you can run to for support. These could include your family and friends, a trusted
mentor, or a fellow entrepreneur who can provide you with advice and motivation during
the highs and lows of managing your startup.
Choose the Best Name for Your Small Business
Your business branding starts with a name. Make sure to pick a name that not only
describes what you have to offer but also will have an easy recall among consumers.
Once you’ve come up with at least three potential names for your business, verify if
it’s trademarked or another business is already using it. If there’s none, register your
business name with the Department of Trade and Industry (DTI) if you’re a sole proprietor.
Apply for Licenses and Permits

In the Philippines, small business owners still need to acquire documents to prove
that they’re running a legitimate enterprise. This is one rule you shouldn’t ignore before
starting your business, lest you’ll get into trouble with the law later on.
After your DTI business registration, you need to get the following permits from the
local government where you plan to build your business:

 Barangay clearance issued by the barangay hall

 Mayor’s permit/Business permit issued by the municipal or city hall
 Tax Identification Number and BIR registration documents

56
  SSS, PhilHealth, and Pag-IBIG registration as an employer and for new employees
Special permits depending on the nature of your business, such as registration with the
Food and Drug Administration for food businesses and with the Bangko Sentral ng Pilipinas
for pawnshops, remittance centers, and other financial institutions.
Take Advantage of Social Media and Free Website Builders
You can cut down on your marketing costs by tapping social networks and free
website builders such as Wix and Shopify to promote your small business. This rule is
especially important if you’ll start an online business. You have to be where your target
clients are. So if they’re frequently on a particular social networking site, you have to build
your presence there.
Be Resilient
As a beginning entrepreneur trying to propel your business forward, expect several
bumps along the way. There will always be setbacks to deal with. But these should not
discourage you. Instead, have the resilience needed to get back on your feet after any
challenge that comes your way.
A lot of Filipinos nowadays want to start a small business of their own. However,
many disregard the importance of the science of business. Instead, we rely solely on
intuition. Before you start a business, you need to carefully study and forecast a lot of factors
to ensure that your business will succeed.

Unit 5
In this unit, you were able to understand through different examples that it takes a
detailed entrepreneur to operate even a simple business. The entrepreneur must be detailed
with these factors because these directly affect the internal and external parties of the
business. The success of a business largely depends on how smooth and seamless the
operations will be.
You were able to understand from the point-of-view of an actual entrepreneur how
to implement a business plan in the real world. Don’t forget all legal requirements that you
need to accomplished before you start the business in order to avoid problems in the future
and to avoid paying penalties and surcharges in the future.
The eight (8) golden rules in opening a business in the Philippines is also a very
helpful article that gives us a heads up future entrepreneurs.
For future entrepreneurs, you must remember that the big product or service idea
that you generated from the opportunity spotting process will only be feasible if you have an
effective product development, operations, and financial plan.

57
 FINAL OUTPUT (BUSINESS PLAN)

Evaluate the identified business opportunities in your locality (Activity 4 output)

using the Opportunity Screening Matrix below and prepare a simple business plan for your
choice of business idea with the highest rate based on your evaluation. Please go back to the
discussions in Unit II for the meaning of each criterion in the matrix.

Example:
Business opportunity 1 Criteria 5 4 3 2 1 Score
Relevance
Resonance
Reinforcement
of
Entrepreneurial
Interest
Revenues
Responsiveness
Total score

Conclusions: Choose the best business opportunity that gives the highest ratings or score
based on the criteria in Opportunity Screening Matrix and explain why you believe its the
best option among the choices.
Now that you have your business idea, you can prepare your Simple Business Plan using the
template below.

58
 REFERENCES:

 Josiah Go and Chiqui Escarel-Go, Entrepreneurship, Starting An Enterprise Having An

Innovation Mindset.
 Roberto G. Medina, Entrepreneurship and Small Business Management
 Kotler & Keller, (Global edition) Marketing Management

59
 Appendix A

RUBRICS FOR BUSINESS MODEL PLAN

INDICATOR Very strong evidence Moderate evidence Strong evidence Points

of skill present 10-7 of skill present 6-4 of skill not Earned
points points present 3–0
points
Description of The plan contains The plan describes Little to no
product details of the the information is
products/services; products/services; provided on the
from the customer’s however, detail on product /service,
point of view, and the features, its features and
identifies key benefits, and benefits, or its
competitors and how competitors is competitors.
the product/service is lacking.
positioned to compete.
ANALYSIS
Industry Describes how major Describes major Gives a brief
trends trends and trends that could history of the
information helped impact this industry industry, but
identify immediate in the near future. does not
opportunity. demonstrate
understanding of
trends.
Buyer profile Describes in-depth the Briefly describes the The buyer profile
and behavior buyer in the customer buyer in the section is
profiles buying roles, customer profiles incomplete.
buying behavior, and buying roles, buying
buyer decision making behavior, and buyer
process. decision making
process.
Competition’s A thorough SWOT SWOT analysis is SWOT analysis is
SWOT analysis is provided, provided, but there provided, but
analysis and reasoning for each are some missing there are missing
item in the SWOT is points and reasoning points and there
provided and logical. for each item is not is no reasoning
always thoroughly provided for the
provided and/or items.
logical.
Target market Clearly identified by Somewhat identified Not identified by
demographics and by demographics demographics
product/service meets and product/service and
needs/wants of target may meet product/service
group. needs/wants of does not meet
target group. needs/wants of
target group.

MARKETING
TACTICS
Product Clearly evident what Somewhat evident Unclear what
product/service is being what product/ service
provided. product/service is is being provided.
being provided.
Price Includes the pricing Includes the pricing Does not provide
structure and explains structure but does complete pricing
why/how these prices not explain how the structure; some
were determined. prices were products or
determined. services are
missing. No
rationale for the

60
 pricing strategy is
given.
Place Location is very Location is accessible Location is not
convenient for target for target market. very convenient
market. for target market.
Promotions Promotional material Promotional material Promotional
makes target market makes target market materials does
clearly aware of what somewhat aware of not make target
the product/service is, what the product/ market aware of
what it does and where it service is, what it what the
is available. does and where it is product/service
available. is, what it does
and where it is
available.
Positioning Unique selling position Unique selling Unique selling
(USP) in the market position (USP) in the position (USP) in
clearly determined. market is somewhat the market is not
determined. determined.
Conclusions
Evaluates data or Evaluates data or Has difficulty
criteria in a way that criteria in a way that evaluating
reflects an in-depth reflects some basic important data or
understanding of the understanding of the criteria, which
product/service. product/service. demonstrate a
lack of
understanding of
the
product/service.

61
 Appendix B

RUBRIC FOR CASE STUDIES (20 points)

INDICATORS 5 4 3 2
Identification of the Identifies & Identifies and Identifies and Identifies and
Main Issues/Problems understands understands understands understands
all of the main most of the some of the few of the
issues in the main issues in main issues in main issues
case study. the case the case study. in the case
study. study.
Analysis of the Issues Insightful and Thorough Superficial Incomplete
thorough analysis of analysis of some analysis of
analysis of all most of the of the issues in the issues.
the issues. issues. the case.
Presentation on Well Appropriate, Superficial or Little or no
effective documented well thought inappropriate action
solutions/strategies reasoned and out comments solutions to suggested,
(Taken from the case pedagogically about some of the and/or
or proposed by you) appropriate solutions, or issues in the inappropriate
comments on proposals for case study. solutions to
solutions, or solutions, to all of the
proposals for most of the issues in the
solutions, to issues in the case study.
all issues in case study.
the case study.
Links to Course Excellent Good research Limited Incomplete
Readings and research into and research and research and
Additional Research the issues documented documented links to any
with clearly links to the links to any readings.
documented. materials readings.
read.

62
 Appendix C

RUBRICS FOR SHORT ESSAY AND SIMPLE RESEARCH

CRITERIA RATING
10.0 pts 6.0 pts 4.0 pts 2.0 pts
Needs
Excellent Good Fair Improvement
Ideas and Writing is clear You answered
Your answer There is no
Content and well the question
has no real clear or
expressed, but some
evidence of specific
including supports may
learning. More explanation in
specific be lacking.specific answer to the
examples to information is question.
demonstrate needed or you
what you have need to follow
learned. the direction
more closely.
Sentence Sentences are Sentences are Some Sentences are
Fluency complete and complete and sentences are incomplete or
Range they connect to able to be complete and too long. It
one another understood. easy to makes reading
easily. understand, them difficult
others require to understand.
some work.

63
 Appendix D
An
Name:
ANSWER SHEET

64
 Unit Activity (Activity 4) Let’s check what you have learned so far!
Instructions: Put a ( ) on the blank before the letter of your choice to indicate your answer.
Cut this page and submit together with your other deliverables.

1. A document that helps the SBO determine what resources are needed to achieve the
objectives of the firm, and the like:
e. Financial plan
f. Marketing plan
g. Human resources plan
h. Business plan
2. The part of the business plan that indicates the name of the business, proponents, address,
and others.
e. Title page
f. Executive summary
g. Description of the business
h. Description of the product or service
3. The part of the business plan which contains information on the capital needs of the business,
how the money will be spent, what benefits will be derived by the business from the loan or
investment, among others.
e. Executive summary
f. Description of the business
g. Description of the product or service
h. Market strategies
4. When SBO is determining which part of the total potential market will be served by the firm,
he is actually developing a market strategy referred to as:
e. Definition of the market
f. Determination of the market share
g. Position strategy
h. Pricing strategy
5. When the SBO wants to know the customers really want to buy from the firm, he is starting
to develop a:
e. Pricing strategy
f. Positioning strategy
g. Distribution strategy
h. Promotion strategy
II. Fill in the blanks with the correct answer.
1.
__________________________is a sort of a business blueprint and it keeps the entrepreneur on the
right track.
2.
__________________________ is that portion of a business plan indicating the capital needs of the
business, how the money will be used among others.
3.
Market strategies are formulated after undertaking ___________________________________.
4.
____________________________ is one where the firm identifies a target market segment and
develops a unique strategy mix to address the desire of the segment.
5.
____________________________ is that pricing method that covers all cost, plus an extra increment
to deliver profit.
III. ESSAY. How important the business plan to the business owner?

How important is the business plan to investors?

65
Name:
Activity 4
Instructions: Do an opportunity spotting and assessment in your own locality or barangay.
Identify the potential business opportunities in your macro environmental and micro
environmental sources that you can possibly start with especially during this pandemic.
Type or write your answers in a white and short paper. And submit your output
together with your other deliverables.
Format:
Opportunity Source Findings Potential Product or
Service

66
Name:
Activity 5
INSTRUCTIONS:
Schedule an interview with an entrepreneur who sells goods or an entrepreneur who
provides services. Validate from them if they did the five stages in Product or Service
Planning Development. If they did, ask them how they did it and if the five stages were
helpful in their business. If they don’t go through the five stages, ask them what alternatives
they used. If none, ask why they didn’t follow the process.
Write or encode your answers on a white short paper (bond paper) and submit your output
together with your other deliverables at the end of block schedule.
Name of Respondent:
Name of Business:
Location:
Questions: Answers
1. Ask him/her if they did
the 5 stages on Product
or Service Planning and
Development. Make
sure to give them the
idea and explain what
are those 5 stages?
2. If they did, ask them
how they did it and if
the five stages were
helpful in their
business.
3. If they don’t go through
the five stages, ask them
what alternatives they
used.
4. If none, ask why they
didn’t follow the
process.

Conclusions: Write your conclusions about this interview, focused on the results or
outcome of doing or not doing the five steps before starting a business. What
entrepreneurial important lesson did you learn from this interview.

67
 COURSE CODE: ENTRMAN

COURSE TITLE: Entrepreneurship Management

COURSE DESCRIPTION:

This course introduces students to the theory of entrepreneurship and its practical
implementation. It focuses on different stages related to the entrepreneurial process,
including business model innovation, monetization, small business management as well
as strategies that improve performance of new business ventures. Centered around a
mixture of theoretical exploration as well as case studies of real-world examples and
students will develop an understanding of successes, opportunities and risks of
entrepreneurship.

COURSE/MODULE LEARNING OUTCOMES:

At the end of this course,

1. The student shall be able to create and exploit innovative business ideas and
market opportunities by writing a business proposal for an entrepreneurial start-up
venture.
2. The student shall be able to formulate a business plan incorporating consumers
pain, product concept, marketing mix and strategies, operations and financial plan
and evaluation criteria.

LEARNING PLAN:

UNIT LEARNING OUTCOMES TOPICS TIME FRAME

Understanding basic concepts Unit I Week #1

in the area of entrepreneurship.
A Framework for Entrepreneurship
Understanding the role and  What Is Entrepreneurship
importance of entrepreneurship  Who Is the New Entrepreneur?
for economic development. Dimensions of Entrepreneurship

Understanding the stages of the

entrepreneurial process and the Unit II
resources needed for the
successful development of Developing a Business Plan Week #2
entrepreneurial ventures.  Recognizing the Potential Market
 The Marketing Plan
 Product Development, Operations,
and Financial Plan

Demonstrate understanding and Unit III Week #3

application of the process how
Recognizing Potential Market

68
to seeking, screening, and
seizing opportunities.
Demonstrate the understanding Unit IV Week 4 & 5
and application of the marketing Marketing Plan & Strategies
mixes or 4Ps in creating
competitive from competition
Demonstrate understanding and Unit V Week 6
application of the tools necessary Implementing a Business Plan
to create sustainable and viable  Operations Plan
businesses  Financial plan

COURSE DELIVERABLES:

DELIVERABLES DUE DATE

Case studies TBA

Opportunity Analysis TBA
Business Plan TBA

ASSESSMENT/GRADING POLICY:

OUTPUTS PERCENT

Exercises/Quiz 30%
Case Studies 20%
Course Outputs 50%
Total 100%

● RUBRICS FOR CASE STUDIES (20 points)

5 4 3 2
Identification of the Identifies & Identifies and Identifies and Identifies and
Main understands all understands understands understands
Issues/Problems of the main most of the some of the few of the
issues in the main issues in main issues in main issues
case study. the case the case study. in the case
study. study.
Analysis of the Issues Insightful and Thorough Superficial Incomplete
thorough analysis of analysis of analysis of
analysis of all most of the some of the the issues.
the issues. issues. issues in the
case.
Presentation on Well Appropriate, Superficial or Little or no
effective documented well thought inappropriate action
solutions/strategies reasoned and out solutions to suggested,
(Taken from the case pedagogically comments some of the and/or
or proposed by you) appropriate about issues in the inappropriate
comments on solutions, or case study. solutions to
solutions, or proposals for all of the
proposals for solutions, to

69
 solutions, to all most of the issues in the
issues in the issues in the case study.
case study. case study.

Links to Course Excellent Good Limited Incomplete

Readings and research into research and research and research and
Additional Research the issues with documented documented links to any
clearly links to the links to any readings.
documented materials readings.
links to read.
readings.

RUBRICS FOR BUSINESS PLAN

INDICATOR Very strong Moderate evidence Strong Points

evidence of skill of skill present 3–2 evidence of Earned
present 5–4 points points skill not
present 1–0
points
Description of The plan contains The plan describes Little to no
product details of the the information is
products/services; products/services; provided on the
from the customer’s however, detail on product /service,
point of view, and the features, its features and
identifies key benefits, and benefits, or its
competitors and how competitors is competitors.
the product/service is lacking
positioned to
compete.
MARKET
ANALYSIS
Industry Describes how major Describes major Gives a brief
trends trends and information trends that could history of the
helped identify impact this industry industry, but
immediate opportunity in the near future. does not
demonstrate
understanding of
trends.
Buyer profile Describes in-depth Briefly describes the The buyer profile
and behavior the buyer in the buyer in the section is
customer profiles customer profiles incomplete.
buying roles, buying buying roles, buying
behavior, and buyer behavior, and buyer
decision making decision making
process. process.
Competition’s A thorough SWOT SWOT analysis is SWOT analysis
SWOT analysis is provided, provided, but there is provided, but
analysis and reasoning for are some missing there are
each item in the points and missing points
SWOT is provided and reasoning for each and there is no
logical. item is not always reasoning
thoroughly provided provided for the
and/or logical. items.
BUSINESS
PROPOSAL
Mission Useful mission Mission statement is Irrelevant use,
statement statement that is not totally relevant not matching
relevant to the to the business. business use
business.
Short and Short- and long-term Short- and long- Goals are
long-term business goals are term business goals missing or are
goals attainable and time may not be irrelevant to the
bound. attainable or they’re business.
not time-bound.

70
 Target market Clearly identified by Somewhat identified Not identified by
demographics and by demographics demographics
product/service meets and product/service and
needs/wants of target may meet product/service
group. needs/wants of does not meet
target group needs/wants of
target group.
STRATEGIES
AND ACTION
PLAN
Product Clearly evident what Somewhat evident Unclear what
product/service is what product/ service
being provided. product/service is is being
being provided. provided.
Price Includes the pricing Includes the pricing Does not provide
structure and explains structure but does complete pricing
why/how these prices not explain how the structure; some
were determined. prices were products or
determined. services are
missing. No
rationale for the
pricing strategy
is given.
Place Location is very Location is Location is not
convenient for target accessible for target very convenient
market. market. for target market.
Promotions Promotional material Promotional Promotional
makes target market material makes materials does
clearly aware of what target market not make target
the product/service is, somewhat aware of market aware of
what it does and what the product/ what the
where it is available. service is, what it product/service
does and where it is is, what it does
available. and where it is
available.
Positioning Unique selling Unique selling Unique selling
position (USP) in the position (USP) in the position (USP) in
market clearly market is somewhat the market is not
determined. determined. determined.
Evaluation
Evaluates data or Evaluates data or Has difficulty
criteria in a way that criteria in a way that evaluating
reflects an in-depth reflects some basic important data
understanding of the understanding of the or criteria, which
product/service. product/service. demonstrate a
lack of
understanding of
the
product/service.

ACADEMIC HONESTY POLICY & PROCEDURES:

All Saint Paul’s students are expected to be academically honest. Cheating, lying
and other forms of immoral and unethical behavior will not be tolerated. Any student shall
be subject to disciplinary actions for any of the following acts:

A. SPECIFIC MISCONDUCT

1. Any form of cheating in examinations, whether On-line or HBL, or any act

of dishonesty in relation to his/her studies;

2. Since On-line and HBL modality of learning are adopted, the Philippine
Cybercrime Law, Copyright Law, Intellectual Property Law shall be
applicable;

71
 3. On-line educational resources such as Merlot, etc. shall not be plagiarized,
nor infringement of the Copyright Laws shall be allowed.

4. Cybercrime violations are:

a. Computer-related Identity Theft
b. Computer-related Fraud
c. Computer-related Forgery
d. Offenses against confidentiality, integrity and availability of computer
data and systems, to include:
1. Illegal access
2. Illegal interception
3. Data interference
4. Systems interference

B. STUDENT’S DISCIPLINARY TRIBUNAL

The SPSPS approved Student’s Handbook on Disciplinary Investigation,

Preliminary Inquiry, Hearings and Decisions, as well as taking of an Appeal shall be
followed for both On-Line learners and HBL learners.

72