Republic of the Philippines

Department of Education
PUBLIC TECHNICAL-
VOCATIONAL

Unit of Competency: Develop a Business Plan

Module no.6 Module Title: Developing a Business Plan

LESSON 1

ORGANIZE AND CONSTRUCT THE MAIN PARTS OF A BUSINESS

PLAN

WHAT IS THIS LESSON ABOUT?

This lesson presents concepts on how to organize the main parts of a

business plan.

WHAT WILL YOU LEARN?

At the end of the lesson, you should be able to:

1. organize the main parts of a business plan;
2. use survey instruments to gather data;
3. analyze and interpret survey results; and
4. construct preliminary parts of a business plan based on the organized
main parts

LET US STUDY

Words to study

• Sustainability is the support for a business on environmental

issues.
• Addendum is a document or information attached or added to
clarify, modify or support the information in the original
document or written work.
• Target Market refers to a group of persons who use and
patronize the products/services that specifically fit their
needs/wants.
• Market Trends are used to provide strategic information and
leads that will aid and sustain business development. 
Market size is the number of buyers and sellers in a particular
market.
• Business Risk is the probability inherent in a firm’s operations
and environment (such as competition and adverse
economic conditions) that may impair its ability to provide
returns on investments.
MAIN PARTS
Section 4

Business Plan Proper

I. THE PROBLEM/NEED

This pertains to the description of the problem/need

being addressed to, as well as the reasons/rationale why the
problem/need must be addressed by the business and the
descriptions on how the business has solved the
problem/need.

II. STATEMENT OF VISION, MISSION AND VALUES

VISION
It is a description or statement of what the proponent sees if the
problem/need is solved.

MISSION
It is a clear description of goals and objectives that presents practical
steps to achieve the vision.

VALUES
It is a clear statement of values critical to the culture, integrity and
activities of the business.

III. THE MARKETING PLAN

A. Research and Analysis

It is a description of the target market, market size, competition,
market share and market trends.

B. Marketing Strategies
This includes the Four P’s – price, promotion, product
and place. The Four P’s all work together to reinforce the
positioning strategy which is based upon what your target
customer wants or needs.
IV. PRODUCTION AND TECHNICAL PLAN

The Production Paradigm

Transformation
Process
Inputs Outputs
ASSEMBLING
LABOR CANNING FINISHED PRODUCTS:
LAND CONSTRUCTING BAGS
MACHINE CULTURING T-SHIRTS
RAW MATERIALS DRAWING FURNITURE
CANNED GOODS
SEWING
PASTRY
MILLING
PRINTING
BAKING

V. ORGANIZATIONAL/MANAGEMENT PLAN

This plan includes the members of the team and the team’s
contribution to the business.

Here is an example of an organizational/management chart:

Manager/Owner

Supervisor

Clerk

Maintenance
SECTION V
I. SUSTAINABILITY

I. Financial Plan
“Where the money comes from and where it goes.”
This section of the business plan is the key area,
where people will judge how competent you are as an
entrepreneur. It must be well written, concise and
sufficiently documented.

Example of financial plan:

A. Anong Sarap Bakery, the initial capital is P 40,000.00.

There will be five members. Each of the members shall
share Php 8,000.00.

B. Monthly Expenses
Table 1
MONTHLY EXPENSES

FIXED COST
Rental PhP3,000.00
Salaries:
Baker 3,500.00
Helper 3,000.00
Roller 450.00
Mixer 900.00
Slicer 200.00
Tools & Utensils 175.00
(A)TOTAL FIXED COST PhP 11,225.00

VARIABLE COST (Month)

Raw Materials
Flour PhP 3,000.00
Butter/Lard 550.00
Yeast/Leavening 120.00
Egg 1,000.00
Flavoring 500.00
Sugar 1,000.00
Telephone Bill 600.00
Electricity 1,000.00
 LPG 1,000.00
Water 500.00
Transportation 1,000.00
Miscellaneous 2,000.00
(B)TOTAL VARIABLE PhP 12,370.00
COST
(A+B) TOTAL MONTHLY Php 23,595.00
COST

Table 1 shows the projected expenses per month during the

initial year of operation. It is noted that fixed cost is greater that
the variable costs.

Table 2
PROJECTED REVENUE

Projected Projected Yearly

Types of Daily Monthly
Costing Volume Volume Projected
Bread Revenue Revenue
Daily Monthly Revenue
C – P 1.50
Peter
M - 50¢ 200 P 400.00 6000 P 12,000.00 P144,000.00
Pandesal
SP – P 2.00
C – P 4.00
Monay
M – P 1.00 100 P 500.00 3000 P 15,000.00 P180,000.00
Lisa
SP – P 5.00
C – P 4.50
Mama
M – P 1.50 50 P 300.00 1500 P 9,000.00 P108,000.00
Empanada
SP – P 6.00
C – P 1.75
Hopia Like
M - .75¢ 150 P 375.00 4500 P 11,250.00 P135,000.00
Ko
SP – P 2.50
C - P 22.00
Tasty ang
M – P 5.00 25 P 675.00 750 P 20,250.00 P243,000.00
Bread ko!
SP – P 27.00
Total 525 P 2,250.00 15750 P 67,500.00 P810,000.00
Cost – C
Mark-up - M
Selling price - SP
Table 3
MONTHLY PROJECTED COST REVENUE

Jan Feb Mar Apr May Jun

Revenue P67,500.00 P69,187.50 P72,646.88 P79,911.56 P87,902.72 P96,692.99
Cost P23,595.00 P24,184.88 P25,394.12 P27,933.53 P30,726.88 P33,799.57
Projected P43,905.00 P45,002.63 P47,252.76 P51,978.03 P57,175.84 P62,893.42
Net Profit
 Table 4

Jul Aug Sep Oct Nov Dec Total

P99,110.32 P94,154.80 P91,800.93 P87,210.88 P104,653.06 P125,583.67 P1,076,355.31
P34,644.56 P32,912.33 P32,089.52 P30,485.05 P36,582.06 P43,898.47 P376,245.98
P64,465.75 P61,242.47 P59,711.40 P56,725.83 P68,071.00 P74,878.10 P700,109.33

Table 4 shows that the months from August to October are

considered non-peak months. It is assumed that the business
grows by its monthly profit because of old and new consumers of
the products. According to the table shown above, August to
October are non-peak months (5% loss from previous month is
computed) whereas June, November and December are peak
months (for June, 10% increase of sales from previous month and
20% for the latter months).

Break-Even

Total Revenue (TR) = Fixed Cost (FC) + Variable Cost (VC)

When TR is greater than FC and VC means the business is earning profit.

When TR is less than the FC + VC means the business is losing.

When TR = then FC + VC, the business is break-even.

Tables 2 & 3 showed the projected cost and revenue by month.

Based on the table the Total Revenue is greater than the combined
fixed and variable cost. It indicates that Anong Sarap Bakery has
the great potential of generating profit.

Examples of Projected Income Statement and Cashflow

Table 4
ANONG SARAP BAKERY
PROJECTED INCOME STATEMENT
FOR THE YEARS ENDED 2008 AND 2009

2008 2009
REVENUE PhP 1,076,355.31 PhP 1,237,808.60
Cost /Expenses PhP376,245.98 Php432,682.87
Projected Net Income PhP700,109.33 PhP805,125.73
Projected Income for the year is expected to by at least rise by 15%
 Table 5
CASH FLOW 1ST QUARTER OF 2008
January February March
Beginning Cash Balance P 40,000.00 P 60,310.00 P 81,127.75
Cash Inflows
Net Income P 43,905.00 P 45,002.63 P 47,252.76
P 83,905.00 P 105,312.63 P 128,380.51
Cash Outflow
Fixed Cost P 11,225.00 P 11,225.00 P 11,225.00
Variable Cost P 12,370.00 P 12,959.88 P 14,169.12
P 23,595.00 P 24,184.88 P 25,394.12
Ending Cash Balance P 60,310.00 P 81,127.75 P 102,986.39

I. For the initial operation of Anong Sarap Bakery, the

investments shall come entirely from its 5-member team
sharing equally. Each will have 20% capital share.
II. The initial source fund may be generated by special fund -
raising activities from the school. This can also be coursed
through the YECS for the students to invest.
III. Based on our projection the business will earn 2.5% on the
first month and 5% on the second month. Having this as a
continuing trend, it is expected that after a year, the 15%
return on investment is highly feasible.

II. SOCIAL IMPACT

This part should enumerate the impact of the

business activity to its employees, consumer and the
community as well. Social impact should also emphasize
social responsibility to sound environment and sanitation
practices.
The impact should be stated in a clear and concise
statement that is anchored on the mission, vision and values
of the business.

Social Impact Sample Form

1. Anong Sarap Bakery aspires to be the most admired

cooperative bakeshop in Marikina City. Its unique
feature is the cooperative spirit among its incorporators.
In the next years to come we want this bakery to be
operative inside the ERVHS Campus, where students can
have their on-the-jobtraining (OJT) and they can invest
in the future.
 2. Anong Sarap Bakery will conduct activities that would
promote spirit of entrepreneurship through active
participation in community and school activities since
they are the number one clientele of the bakeshop.
3. Our target is to have a bakeshop where students through
their on-the-job-training (OJT) program can work with.
It vows to support the training needs of the school in
terms of baking, marketing, back office operations and
food service. Anong Sarap Bakery considers itself as
partner in progress of the community and school.

LET US REMEMBER

A workable business plan maximizes the chances

of starting a viable and sustainable business.

HOW MUCH HAVE YOU LEARNED?

ACTIVITY
Prepare your own business plan according to your chosen business
following the given format.

Business Name :
Location :
Name of Owner :

Introduction :
is a registered business
engaged in owned by
.

Business goals are as follows:

a. The operation started on

b. The location could be reached

by

c. The business could be expanded

by

Table of Contents
Section I : The Business

1. Description of the Business

The business is engaged in the distribution of or production,
or of servicing customers.

2. Product/Service
The product/service is
3. Market
Production will be distributed in (mention primary and
secondary market) The clients belong to (description of the
socio-economic level). The product is bought by clients for
the following reasons:
 4. Location of the Business
The business is located at
It can easily be reached by .
5. Competitors are as follows:

(State the name of the company and other relevant facts such
as size and possible sales)
A competitor’s profile includes price, quality, location, image projected,
strategies of selling and operations.
6. Price
The current price is _____. It is derived from the following factors:
(production cost and marked up costs) .

7. Marketing strategies
The product will be distributed in the following manner:

8. Management
The management group is composed of the following (name,
position, responsibility and qualification)

9. Personnel
The personnel needed are the following (enumerate the type of
work and their qualifications)

Summary of Section One

Section II: Financial Data

1. Sources and application of funding:

Secure financial assistance from
 For the following purposes

Using the following collaterals

2. Capital Equipment List

The capital and equipment lists are the following:

Briefly describe the equipment and their uses. Include processes

employed in the production)

Post-test

Let us find out how much you already know.

B. Read and understand the items being described below.

Choose the letter of the correct answer and write it in your
quiz notebook.

a. Addendum d. Target Market

b. Market Trends e. Sustainability
c. Mission f. Vision

1. It refers to a group of persons who use and patronize the

products/services that specifically fits their needs/wants.
2. These are documents or information attached to clarify or support the
information in the original document.
3. It is a clear description of goals.
4. It is a description of what the proponent sees if the problem is solved.
5. It means support for business in environmental issues.

B. Multiple Choice. Read and understand the following statements

then select the letter of the correct answer and write it
in your quiz notebook.

1. It is the detailed description on how the business is implemented.

a. evaluation plan
 b. management plan
c. operational plan
d. organizational plan
2. It is the process of setting goals for a particular business
undertaking done through a step-by-step process.
a. Business planning
b. Feasibility planning
c. Marketing plan
d. Production plan
3. It gives the information on financial concerns and stability of the
plan.
a. Financial Plan
b. Marketing Plan
c. Organizational Plan
d. Production Plan
4. Business production and services are varied based
on____________.
a. innovation
b. lifestyle of the people
c. needs and wants
d. science and technology
5. This is the center of interest in a given garment.
a. balance
b. emphasis
c. harmony
d. proportion
6. It is part of a business plan which can be both within or beyond the
control of the entrepreneur.
a. mission
b. objectives
c. risk
d. vision
7. This plan is a course of action for obtaining and using the money
that is needed to implement the goals of the business organization.
a. Financial
b. Marketing
c. Organizational
d. Production
8. It is the place where we can buy different goods from one or a
number of vendors.
a. church
b. market
c. pack
d. school
9. The 4 P’s of a good marketing plan are.
a. Package, Place, Plan, Price
b. Plan, Place, Product, Price
c. Place, Price, Product, Promotion
d. Price, Place, Promotion, Purchase
10. It is an outline of your business.
a. Business Plan Proper
b. Executive Summary
c. Overview of the Business
d. Personal Details