k12 Entrepreneurship Mar Apr 2017 PDF

ENTREPRENUERSHIP
PUNTA VILLA RESORT

STO. NIÑO SUR, VILLA AREVALO, ILOILO CITY
MARCH 30, 2017
REX DAGDAG, WVSU-CBM

BUSINESS BACKGROUND OF
PARTICIPANTS
•WHO AMONG YOU HAVE A BUSINESS?
•WHAT IS YOUR BUSINESS?
•HOW OLD IS THE BUSINESS OR HOW LONG HAVE YOU BEEN IN
THE BUSINESS?
•WHY DID YOU GO INTO THIS BUSINESS?

TRAINING OBJECTIVES
AT THE END OF THE SEMINAR, THE PARTICIPANTS SHALL HAVE THE
KNOWLEDGE AND/OR SKILLS TO:
•HAVE A BETTER UNDERSTANDING OF ENTREPRENEURSHIP;
•PREPARE A VIABLE BUSINESS PLAN; AND
•EFFECTIVELY MANAGE THE BUSINESS USING THE BUSINESS PLAN

ENTREPRENEURSHIP

ENTREPRENEURSHIP
A PROCESS OF CONTINUOUS OPPORTUNITIES IDENTIFICATION,
THE MARSHALLING OF RESOURCES, (OR THE CREATION OF THE
SAME, IF UNAVAILABLE), TO PURSUE THESE OPPORTUNITIES, AND
COMMITTING ACTIONS AND RESOURCES NECESSARY TO EXPLOIT
SUCH OPPORTUNITIES, FOR PROFITABLE LONG-TERM RESULTS.

OPPORTUNITIES OPPORTUNITIES
OPPORTUNITIES
OPPORTUNITIES
RESOURCES
PROFITABLE
LONG-TERM
ACTION RESULTS
OPPORTUNITIES
PROFITS
PROFITABILITY = GROWTH

ENTREPRENEURSHIP
IS THE ACT OF CREATING,

BUILDING AND GROWING
A BUSINESS ENTERPRISE.
ENTREPRENEURSHIP IS NOT
BEING AN INVESTOR IN A BUSINESS
BEING A SILENT PARTNER
GETTING INTO BUSINESS BECAUSE
THERE IS NOTHING BETTER TO DO
COMING UP WITH A CHEAP
SUBSTITUTE
PERSONAL ASSESSMENT

PERSONAL ASSESSMENT
COMMITMENT
MOTIVATION
TAKING RISKS
MAKING DECISIONS
FAMILY SITUATION
FINANCIAL SITUATION
TECHNICAL SKILLS
BUSINESS MANAGEMENT SKILLS
KNOWLEDGE OF YOUR LINE OF BUSINESS
2 KINDS OF ENTERPRISES
LIVELIHOOD-ORIENTED ENTERPRISES
VS
GROWTH-ORIENTED ENTERPRISES
LIVELIHOOD - KABUHAYAN
GROWTH - PAG-UNLAD

2 KINDS OF ENTERPRISES
LIVELIHOOD-ORIENTED GROWTH-ORIENTED
PURPOSE OF BUSINESS: PURPOSE OF BUSINESS:
TO AUGMENT INCOME TO GROW THE BUSINESS FOR GREATER

INCOME, TO GENERATE EMPLOYMENT, AND
TO BE ABLE TO HAVE SIGNIFICANT
INCOME IS USED IN: CONTRIBUTION IN THE COMMUNITY
PERSONAL OR FAMILY NEEDS INCOME IS:
ATTITUDE AND ABILITIES OF THE OWNER: PLOUGHED BACK INTO THE BUSINESS OR
PERSONAL SAVINGS
CONTENTED WITH WHAT HE/SHE KNOWS
AND WITH THE STATE OF THE BUSINESS ATTITUDES AND ABILITIES OF THE OWNER
DOES NOT HAVE PLANS OF IMPROVING ALWAYS LOOKING FOR OPPORTUNITIES TO

BUSINESS AND SELF GROW
FIND WAYS OF IMPROVING
HIMSELF/HERSELF AND HOW TO ENHANCE
PRODUCT/SERVICE
WHAT IS AN ENTREPRENEUR
•A DREAMER – MORE APTLY – A VISIONARY
•CAN FIND THE NEED TO FILL UP.
THERE WAS SOMEONE WHO SAID THAT TO
SUCCEED
IN BUSINESS:
“FIND THE NEED, AND FILL IT UP.”
•THE PERSON WHO HAS A POSITIVE ATTITUDE,
IN ADDITION TO DETERMINATION, HARD WORK,
EXPERIENCE AND PERSISTENCE.
WHAT IS AN ENTREPRENEUR
•IS AN ACTION-ORIENTED, HIGHLY MOTIVATED INDIVIDUAL
WHO TAKES RISKS TO ACHIEVE GOALS.
•IS INNOVATIVE:
WILLING TO CHANGE
WILLING TO ADAPT
WILLING TO GO AGAINST THE CURRENT OR WHAT IS NORMAL
(THINKING AND ACTING OUT OF THE BOX)
•ARE WEALTH CREATORS WITH CONVICTION.
•HAS MIND-SET OF A NATION-BUILDER
HELPS THE ECONOMY GROW
CREATES EMPLOYMENT
MAKES POSSIBILITIES INTO REALITIES
PAYS LICENSES AND TAXES
Entrepreneurs
do not just have
an idea,
but they have a
VISION!
VISIONING

A POWERFUL TOOL
VISIONING IS A VERY POWERFUL TOOL IN

ACHIEVING WHAT ONE WANTS. SOCIAL
SCIENTISTS HAVE SHOWN THAT SOMETHING
WHICH IS ALWAYS INJECTED INTO ONE’S
THOUGHTS WILL GUIDE YOUR ACTIONS
TOWARDS THAT THOUGHT OR IDEA OR
GOAL.
VISIONING
• IMPORTANCE OF DREAMS
• VISIONS START FROM DREAMS

VISIONING TO ACHIEVE
GET
DO SEE
VISION
A VISION IS A GUIDING THEME THAT ARTICULATES THE NATURE OF THE

BUSINESS AND ITS INTENTIONS FOR THE FUTURE.
THESE INTENTIONS ARE BASED ON HOW THE BUSINESS OWNER
BELIEVES THE ENVIRONMENT WILL UNFOLD AND WHAT BUSINESS
CAN AND SHOULD BECOME IN THE FUTURE.
VISIONS ARE NOT VAGUE EXPRESSIONS OF GOODWILL, BUT EXPLICIT
SYSTEMS ABOUT WHAT IT TAKES TO SUCCEED IN THE FUTURE.

VISIONING
VISIONING EXERCISE
DRAW YOUR BUSINESS 5 YEARS FROM

NOW.
(HOW DO YOU SEE YOUR BUSINESS 5 YEARS FROM
NOW?)
SWOT ANALYSIS

INTERNAL & EXTERNAL ASSESSMENT
(SWOT ANALYSIS)
• INTERNAL ASSESSMENT
S – STRENGTHS
W – WEAKNESSES
• EXTERNAL ASSESSMENT
O – OPPORTUNITIES
T - THREATS

(SWOT ANALYSIS)
• STRENGTHS
-WITHIN THE CONTROL OF THE ENTREPRENEUR

- OCCUR AT PRESENT
- SHOULD BE CAPITALIZED AND HARNESSED TO MAKE
WEAKNESSES REDUNDANT
• WEAKNESSES
- WITHIN THE CONTROL OF THE ENTREPRENEUR

- OCCUR AT PRESENT
- AS MUCH AS POSSIBLE, SHOULD BE ELIMINATED

(SWOT ANALYSIS)
• OPPORTUNITIES
-BEYOND THE CONTROL OF ENTREPRENEUR

- POSITIVE AND FAVORABLE FACTORS IN THE ENVIRONMENT
- SHOULD BE CAPITALIZED ON TO MAKE BUSINESS
PROFITABLE
• THREATS
- BEYOND THE CONTROL OF ENTREPRENEUR

- NEGATIVE & UNFAVORABLE FACTORS IN ENVIRONMENT
- SHOULD BE OVERCOME SO AS NOT TO ADVERSELY AFFECT
THE BUSINESS
INTERNAL ASSESSMENT
• PRODUCTION/OPERATIONS
• MARKETING
• FINANCE/ACCOUNTING
• MANAGEMENT

PRODUCTION/OPERATIONS
• THE PRODUCTION/OPERATIONS FUNCTIONS OF A BUSINESS CONSISTS
OF ALL THOSE ACTIVITIES THAT TRANSFORM INPUTS INTO GOODS AND
SERVICES. IN DOING SO YOU HAVE TO LOOK AT AND CONSIDER:
- PROCESS
- CAPACITY
- INVENTORY
- WORKFORCE
- QUALITY

MARKETING
• FUNCTIONS OF MARKETING:
- CUSTOMER ANALYSIS
- BUYING SUPPLIES
- SELLING PRODUCTS/SERVICES
- PRODUCT AND SERVICE PLANNING
- PRICING
- DISTRIBUTION
- MARKETING RESEARCH
- OPPORTUNITY ANALYSIS
FINANCE/ACCOUNTING
• FUNCTIONS OF FINANCE/ACCOUNTING:
- CAPITAL BUDGETING
- FINANCIAL OPERATIONS
- FINANCIAL RECORDS
- FUNDS SOURCING

MANAGEMENT/CONTROL
• FUNCTIONS OF MANAGEMENT
- PLANNING
- ORGANIZING
- MOTIVATING
- STAFFING
- CONTROLLING

EXTERNAL ASSESSMENT
• ECONOMIC FORCES
• SOCIAL, CULTURAL, DEMOGRAPHIC AND
ENVIRONMENTAL FORCES
• POLITICAL, GOVERNMENTAL AND LEGAL
• TECHNOLOGICAL FORCES
• COMPETITIVE FORCES

INTERNAL AND EXTERNAL
ASSESSMENT
SWOT ANALYSIS

PLANNING

PLANNING
• WE DO PLANNING THROUGHOUT OUR LIVES.

• IF WE ALWAYS DO PLANNING IN OUR LIVES, DO WE DO
PLANNING IN OUR BUSINESS?
• AFTER ASSESSING YOURSELF, YOUR INTERESTS AND
YOUR ENTREPRENEURIAL SKILLS…
• AFTER ANALYZING THE ENVIRONMENT OF YOUR
BUSINESS…
 IT IS NOW TIME TO COME OUT WITH A BUSINESS PLAN.

WHAT IS A BUSINESS PLAN?
• IT IS YOUR GUIDE AND ROAD MAP FOR MANAGING

YOUR BUSINESS.
• IT IS THE INDISPENSABLE BLUEPRINT THAT GIVES
SHAPE TO YOUR BUSINESS IDEA.
• IT IS A COMPREHENSIVE DOCUMENT THAT OUTLINES
YOUR BUSINESS GOALS AND INTENTIONS AND HOW YOU INTEND
TO REACH THEM.

BUSINESS
PLAN

USES OF THE BUSINESS PLAN
• TO PLAN FOR THE FUTURE

• TO MONITOR BUSINESS PERFORMANCE
• TO SECURE CREDIT FACILITIES
• TO ENTICE INVESTORS

OUTLINE OF THE BUSINESS PLAN
1. EXECUTIVE SUMMARY
2. BUSINESS CONCEPT
3. DESCRIPTION OF THE BUSINESS
4. VISION OF THE BUSINESS
5. MARKETING PLAN
A. PRODUCT
B. PRICE
C. PLACE
D. PROMOTION
6. SALES PLAN
7. BUSINESS REQUIREMENTS
A. STAFFING AND COSTS
B. BUSINESS ORGANIZATION
C. EQUIPMENT REQUIREMENT
D. SPACE REQUIREMENT
E. OTHER COSTS
F. BUSINESS INPUTS
G. MATERIAL COSTS
H. DEPRECIATION
I. INTEREST COST
8. SALES AND COSTS PLAN

9. CASH FLOW PLAN
10. CONCLUSION - INTENT
DESCRIPTION OF THE BUSINESS
• BRIEF HISTORY:
- NAME OF BUSINESS:
- HOW WAS IT CONCEIVED:
- HOW DID THE BUSINESS DEVELOP:
• BUSINESS FORM
• PRINCIPAL ACTIVITY
• OWNER(S) – SKILLS AND EXPERIENCE
• PRODUCTS OR SERVICES
• SALES/MARKETING GEOGRAPHICAL AREA
• CUSTOMERS
• SELLING METHODS OR TECHNIQUES
• WORKFORCE COMPLEMENT
• CUSTOMERS’ NEEDS BEING SATISFIED
DO:

DEFINING GOALS
• SWOT ANALYSIS
VISION
• BUSINESS DESCRIPTION

DEFINING GOALS
DO:
VISION DETAILS

BUSINESS
THROUGHPUT CYCLE

BUSINESS THROUGHPUT CYCLE
• THROUGHPUT MEANS ALL RESOURCE INPUTS NEEDED

FROM START TO END OF THE BUSINESS CYCLE.
• THE BUSINESS THROUGHPUT CYCLE TEMPLATE
SHOWS ALL RESOURCE INPUTS YOUR BUSINESS WILL REQUIRE.
• IT WILL BE YOUR GUIDE IN DOING THE WORKSHEETS FOR THE
BUSINESS PLAN.

THE MARKET

ASSESSING THE MARKET
• ALL BUSINESSES NEED CUSTOMERS
• MARKET
- CURRENT CUSTOMERS
- POTENTIAL CUSTOMERS
• YOU ARE NOT THE ONLY SELLER

• TO SUCCEED IN BUSINESS, YOU NEED TO
UNDERSTAND THE CHARACTERISTICS OF:
- YOUR CUSTOMERS
- YOUR COMPETITORS
- SIZE OF THE MARKET
CUSTOMERS

KNOW YOUR CUSTOMERS
• MOST IMPORTANT PEOPLE OF YOUR BUSINESS
• YOU NEED TO PROVIDE:
- WHAT YOUR CUSTOMER WANTS
- AT THE PRICE THEY ARE WILLING TO PAY
- WITH RESPECT
• SATISFIED CUSTOMERS MEAN LARGER SALES
AND HIGHER PROFITS
• ALWAYS REMEMBER – NO CUSTOMERS, NO SALES,
AND THE BUSINESS WILL FAIL.
KNOW YOUR CUSTOMERS
• CUSTOMERS BUY TO SATISFY DIFFERENT KINDS OF NEEDS AND
WANTS.
- BICYCLE BECAUSE THEY NEED TRANSPORT OR AS A SPORT
- NICE CLOTHES BECAUSE THEY WANT TO LOOK ATTRACTIVE OR TO FEEL GOOD
- RADIOS BECAUSE THEY WANT ENTERTAINMENT OR INFORMATION
- DETERGENTS BECAUSE THEY WANT CLEAN CLOTHES OR WANT TO CLEAN
THE HOUSE
- HAIRCUT BECAUSE THEY WANT TO LOOK GOOD.
• IF YOU UNDERSTAND & CAN SUPPLY THE PRODUCTS AND SERVICES

THAT SATISFY THE NEEDS AND WANTS OF YOUR CUSTOMERS, THEN
YOUR BUSINESS WILL PROBABLY BE SUCCESSFUL.
MARKET RESEARCH
• GETTING INFORMATION ABOUT YOUR CUSTOMERS IS CALLED MARKET RESEARCH.
• VERY IMPORTANT FOR ANY BUSINESS.
• MANY QUESTIONS TO BE ASKED ABOUT YOUR CUSTOMERS.
-WHO ARE THE DIFFERENT CUSTOMERS FOR YOUR BUSINESS?
-WHAT PRODUCTS OR SERVICES DO THEY WANT?
-HOW MUCH ARE THEY WILLING TO PAY?
-WHERE ARE THEY AND WHERE DO THEY BUY?
-HOW OFTEN AND HOW MUCH DO THEY BUY?
-HAS THE NUMBER BEEN GROWING IN THE PAST?
-WILL IT STILL GROW IN THE FUTURE?
-WHY DO CUSTOMERS BUY PARTICULAR PRODUCTS AND SERVICES?
-ARE PEOPLE LOOKING FOR SOMETHING DIFFERENT?
-ARE THERE SIMILAR PRODUCTS AND SERVICES WHICH ARE NOT AVAILABLE
NEARBY?

MARKET RESEARCH TECHNIQUES
• MARKET RESEARCH CAN BE DONE IN MANY
PRACTICAL WAYS:
-CONDUCT A SURVEY
-TALK TO PEOPLE THAT YOU THINK WILL BUY FROM YOUR BUSINESS.
-LISTEN TO WHAT CUSTOMERS SAY OF YOUR COMPETITORS’
BUSINESSES
-ASK PEOPLE WHY THEY BUY FROM SOME BUSINESSES AND NOT
FROM OTHERS
-ASK YOUR SUPPLIERS WHICH GOODS SELL WELL.
-READ BUSINESS MANUALS, NEWSPAPERS, TRADE JOURNALS AND
MAGAZINES.
KNOW YOUR CUSTOMERS
DO:
CUSTOMERS OF THE BUSINESS

COMPETITION

KNOW YOUR COMPETITORS
• THERE ARE OTHER BUSINESSES WHICH OFFER THE SAME OR SIMILAR
PRODUCTS OR SERVICES.
THERE ARE YOUR COMPETITORS.
• WHEN YOU KNOW ABOUT YOUR COMPETITORS, YOU
WILL BE ABLE TO THINK ABOUT HOW YOU CAN MAKE
YOUR BUSINESS SUCCESSFUL.
• LEARN FROM SUN TZU.

• YOU SHOULD FIND THE ANSWERS TO THE FOLLOWING
QUESTIONS:
-WHAT PRICES DO THE COMPETITORS CHARGE?
-WHAT QUALITY OF GOODS OR SERVICES DO THEY OFFER?
-HOW DO THEY PROMOTE THEIR GOODS OR SERVICES?
-WHAT EXTRA SERVICE DO THEY OFFER?
-IS THEIR LOCATION EXPENSIVE OR CHEAP?
-IS THEIR EQUIPMENT MODERN?
-ARE THEIR EMPLOYEES WELL-TRAINED AND WELL-PAID?
-DO THEY ADVERTISE?
-HOW DO THEY DISTRIBUTE THEIR PRODUCTS OR SERVICES?
-WHAT IS THEIR MARKET STRATEGY?
-WHAT ARE YOUR COMPETITORS’ STRENGTHS AND WEAKNESSES?
DO:
COMPETITORS’ CHARACTERISTICS

MARKET SIZE

KNOW YOUR MARKET SIZE
• WHAT AREA DOES/WILL YOUR BUSINESS SERVE?
-YOUR NEIGHBORHOOD
-YOUR BARANGAY
-YOUR BARANGAY AND SURROUNDING BARANGAYS
-THE WHOLE TOWN OR CITY
-SEVERAL TOWNS OR CITIES
-THE WHOLE PROVINCE
-A REGION
-THE WHOLE COUNTRY
• A POTENTIAL CUSTOMER IS SOMEONE WHO HAS THE MONEY TO BUY
YOUR PRODUCTS OR SERVICES
• IT IS IMPORTANT TO KNOW THE NUMBER OF POTENTIAL CUSTOMERS.

• FIND OUT THE FOLLOWING INFORMATION:
-HOW MANY PEOPLE LIVE IN YOUR BUSINESS AREA?

-ESTIMATE THEIR INCOME
-HOW MANY HAVE STABLE EMPLOYMENT?
-HOW MANY ARE SELF-EMPLOYED?
-HOW MANY ARE UNEMPLOYED?
• ESTIMATE THE AVERAGE INCOME OF THE DIFFERENT GROUPS
OF POTENTIAL CUSTOMERS IN YOUR AREA.
• WITH THIS INFORMATION AND THE FINDINGS OF MARKET
RESEARCH, ESTIMATE THE SIZE OF YOUR MARKET.
• YOU MAY NOT BE THE ONLY ONE SELLING IN YOUR BUSINESS AREA.
• IT IS IMPORTANT TO ESTIMATE HOW BIG YOUR MARKET SHARE WILL BE
• YOU MUST WORK OUT HOW MANY PRODUCTS OR SERVICES YOU CAN
REALISTICALLY EXPECT TO SELL.
• A MARKETING PLAN WILL HELP YOU DETERMINE YOUR MARKET SHARE
AND SALES VOLUME.
• ONE WAY OF PREPARING A MARKETING PLAN IS TO FOLLOW THE 4PS OF
MARKETING.

4PS OF MARKETING

4PS OF MARKETING
•PRODUCT-THE PRODUCT OR SERVICES YOU SELL TO YOUR CUSTOMERS
•PRICE-WHAT YOU CHARGE FOR THE PRODUCTS OR SERVICES YOU SELL TO
YOUR CUSTOMERS
•PLACE-WHERE YOUR BUSINESS IS LOCATED
•PROMOTION-HOW YOU TELL YOUR MARKET ABOUT YOUR BUSINESS AND
HOW YOU ATTRACT CUSTOMERS TO BUY YOUR PRODUCTS OR SERVICES

PRODUCT
•PRODUCT MEANS THE PRODUCTS OR SERVICES YOU SELL TO YOUR
CUSTOMERS.
•YOU HAVE TO DECIDE WHAT KIND OF PRODUCTS OR SERVICES TO OFFER,
AND ALSO WHAT COLOR, WHAT SIZE, AND SO ON.
•PRODUCT ALSO INCLUDE OTHER FEATURES, SUCH AS:
HOW EACH PRODUCT IS PACKAGED
IF YOU INCLUDE AN INSTRUCTIONAL MANUAL
WHAT SERVICES YOU OFFER
WHAT REPAIRS AND SPARE PARTS YOU PROVIDE
MARKETING PLAN
DO:
MARKETING PLAN- PRODUCT

PRICE
• PRICE MEANS WHAT YOU ARE GOING TO CHARGE YOUR

CUSTOMERS FOR THE PRODUCTS AND SERVICES.
• IT ALSO INCLUDES DISCOUNTS AND ANY TERMS OF CREDIT.
• TO SET YOUR PRICES, YOU MUST
 KNOW YOUR COST
 KNOW HOW MUCH CUSTOMERS ARE WILLING TO PAY
 KNOW YOUR COMPETITORS’ PRICES

PRICE
COMMON PRICING METHODS

• COST PLUS (EXPENSES BASED)
• VALUE PRICING (MARKET-BASED)
• COMPETITION PRICING (COMPETITION BASED)
• WALL SYSTEM (UN-BASED)

MARKETING PLAN
DO:
MARKETING PLAN- PRICE

PLACE
PLACE
• PLACE MEANS WHERE YOUR BUSINESS IS LOCATED.
• FOR RETAIL OR SERVICE BUSINESS, YOUR BUSINESS MUST BE EASY TO REACH OR
PEOPLE WILL BUY FROM MORE CONVENIENTLY LOCATED COMPETITORS.
• BEING CLOSE TO THE CUSTOMERS IS NORMALLY NO THE MOST IMPORTANT
ASPECT OF LOCATION. OTHER FACTORS TO CONSIDER ARE:
 EASY ACCESS TO RAW MATERIALS
 COST OF RENT

PLACE
• FOR MANUFACTURERS, THE PLACE MEANS THE METHODS OF
DISTRIBUTION.
• THERE ARE DIFFERENT WAYS TO DISTRIBUTE YOUR PRODUCTS:
 DIRECT DISTRIBUTION-YOU SELL DIRECTLY TO YOUR CUSTOMERS
 RETAIL DISTRIBUTION- YOU GET RETAILERS TO SELL YOUR PRODUCTS
 WHOLESALE DISTRIBUTION- YOU GET WHOLESALERS TO SELL YOUR
PRODUCTS OR SERVICES
 NETWORK DISTRIBUTION- YOU DEVELOP A NETWORK OF INDEPENDENT
BUSINESS OWNERS TO SELL YOUR PRODUCT.
MARKETING PLAN
DO:
MARKETING PLAN- PLACE

PROMOTION
• PROMOTION MEANS INFORMING AND ATTRACTING CUSTOMERS TO BUY
YOUR PRODUCT OR SERVICES.
• MANY DIFFERENT WAYS OF DOING PROMOTIONS. MORE COMMON
METHODS:
 ADVERTISING
 PUBLICITY
 SALES PROMOTIONS
• PROMOTION WILL COST YOUR BUSINESS MONEY. FIND OUR PRICES FROM
ARTISTS, PRINTERS, AND OTHER BUSINESS PEOPLE.
• FINDREXOUT WHAT PROMOTION COMPETITORS EMPLOY, AND DECIDE WHICH
DAGDAG, WVSU-CBM
PROMOTION METHOD WOULD BE BEST FOR YOU.

MARKETING PLAN
DO:
MARKETING PLAN- PROMOTION

MARKETING PLAN
• THE DECISION OF THE 4PS ARE INTER-RELATED. CHANGES IN ONE P

MAY NEED CHANGES IN OTHER PS
• THE COMBINATION OF STRATEGIES FOR THE 4PS IS CALLED
MARKETING MIX.
• DEVELOPING THE RIGHT STRATEGIES FOR THE MARKETING MIX MAY
DECIDE THE SUCCESS OR FAILURE OF YOUR ENTERPRISE.

SALES FORECASTING

SALES FORECASTING
• WHEN YOU HAVE ALL INFORMATION IN YOUR MARKETING PLAN,

YOU CAN WORK OUT A SALES PLAN FOR YOUR GOODS, PRODUCTS
OR SERVICES FOR THE NEXT 12 MONTHS.
• SINCE YOU HAVE BEEN IN THE BUSINESS FOR SOMETIME ALREADY,
YOU CAN ESTIMATE YOUR SALES MORE EASILY

FORECASTING SALES
DO:
SALES PLAN

ORGANIZATION

BUSINESS ORGANIZATION
• FOR THE BUSINESS TO RUN SMOOTHLY, EFFICIENTLY AND

SUCCESSFULLY, IT HAS TO BE ORGANIZED.
• THIS MEANS KNOWING:
 WHAT NEEDS TO BE DONE
 HOW AND WHERE IT IS TO BE DONE
 THE PEOPLE TO DO THE WORK

BUSINESS ORGANIZATION
• ALSO YOU HAVE TO CALCULATE:

 WHAT STAFF YOUR BUSINESS WILL NEED?
 HOW MUCH SPACE YOUR BUSINESS NEEDS FOR SHOP, WORKSHOP,
STORE ROOM, OFFICES AND PUBLIC FACILITIES?
 WHAT MACHINES AND EQUIPMENT ARE NECESSARY?

PEOPLE IN YOUR BUSINESS
• THE MOST IMPORTANT PEOPLE INVOLVE IN A SMALL BUSINESS ARE:

 THE OWNER
 THE BUSINESS PARTNERS
 THE BUSINESS STAFF
 THE OWNERS FAMILY
 BUSINESS ADVISERS

YOU AS THE MANAGER
• THERE ARE TASK THAT ONLY THE MANAGER CAN PERFORM:
 DEVELOPING IDEAS, GOALS AND ACTION PLANS FOR THE BUSINESS
 ORGANIZING AND MOTIVATING PEOPLE TO CARRY OUT THE ACTION PLANS
 MAKING SURE THAT THE ACTION PLANS ARE CARRIED OUT AND THE BUSINESS
GOALS RE ACHIEVED
 ANY ADAPTATIONS REQUIRED ON THE PREMISES OR MACHINERY TO ALLOW FOR
GENDER AND DISABILITY RELATED NEEDS.

YOU AS THE MANAGER
• AS YOUR PREPARE YOUR BUSINESS PLAN, YOU SHOULD THINK ABOUT YOUR
BUSINESS SKILLS.
• DECIDE WHICH WORK YOU WILL DO AND WHICH TASK YOU WILL NOT HAVE TIME
OR THE SKILLS TO DO.
• IN HIRING MANAGERS, YOU SHOULD CONSIDER THE TYPE OF MANAGER YOU
WANT AND WHAT SKILLS AND EXPERIENCE THE MANAGER WILL NEED.

BUSINESS PARTNERS
• IN COOPERATIVE, THE PERSONS WHO OWN THE BUSINESS ARE CALLED THE
MEMBERS, WHO ELECT AMONG THEMSELVES BOARD OF DIRECTORS.
• THE BOD APPOINTS THE MANAGER AND ITS MANAGEMENT TEAM.
• IN A SINGLE PROPRIETORSHIP, ONLY ONE PERSON OWNS THE BUSINESS.
NORMALLY, MEMBERS OF THE FAMILY PARTICIPATES IN THE RUNNING OF THE
BUSINESS.
• IN PARTNERSHIP, TWO OR MORE PERSONS OWN THE BUSINESS, WITH ONE OR
BOTH RUNNING THE BUSINESS.
• AT LEAST FIVE PERSONS CAN FORM A CORPORATION. CLOSED CORPORATION
ARE NORMALLY RUN BY MEMBERS OF THE FAMILY.
BUSINESS PARTNERS
• IF THE BUSINESS IS TO BE SUCCESSFUL:
 CLEAR AND HONEST COMMUNICATIONS MUST EXIST BETWEEN ALL THE
MANAGEMENT TEAM
 A WRITTEN JOB DESCRIPTION CLEARLY STATING RESPONSIBILITIES AND
COMMITMENTS OF EACH MEMBER OF THE MANAGEMENT TEAM.
• DISAGREEMENTS AMONG PARTNERS CAN RESULT IN THE FAILURE OF THE BUSINESS.

YOUR FAMILY AND YOUR BUSINESS
• MANY SMALL BUSINESSES INVOLVE FAMILY MEMBERS, EITHER AS PARTNERS OR AS
EMPLOYEES.
• THOUGH THIS MAY BE GOOD TO THE ENTREPRENEURSHIP, THIS MAY BRING
SPECIAL PROBLEMS. FOR EXAMPLE:
 THEIR MAYBE CONFLICTS BETWEEN FAMILY AND NON-FAMILY EMPLOYEES OF PARTNERS IN
THE BUSINESS.
 IF YOU EMPLOY FAMILY MEMBERS AS STAFF MEMBERS, THEY MAY WANT SPECIAL
TREATMENT.
 IT MAYBE DIFFICULT TO SEPARATE FAMILY PROBLEMS FROM BUSINESS PROBLEMS.

 SUCCESSION IN THE BUSINESS MAY BECOME A PROBLEM.
YOUR FAMILY AND YOUR BUSINESS
• IF YOU WANT TO EMPLOY FAMILY MEMBERS AS STAFF OR AS PARTNERS, YOU

MUST THINK ABOUT POSSIBLE PROBLEMS AND MAKE CLEAR ‘RULES’. FOR EXAMPLE:
 ALL PERSONAL FAMILY MATTERS SHOULD BE KEPT SEPARATE FROM THE BUSINESS.
 MEMBERS OF THE FAMILY WHO ARE PARTNERS SHOULD BE TREATED THE SAME AS
ANY OTHER PARTNERS.
 MEMBERS OF THE FAMILY WHO ARE EMPLOYEES SHOULD BE TREATED IN THE SAME
WAY AS OTHER EMPLOYEES.

BUSINESS ADVISERS
• ADVICE IS ALWAYS IMPORTANT TO ANY BUSINESS OWNER.

• IT IS UNLIKELY THAT YOU WILL BE AN EXPERT IN ALL ASPECTS OF THE
BUSINESS.
• YOU WILL PROBABLY NEED ADVICE ON MANY MATTERS THAT WILL
AFFECT THE SUCCESS OF YOUR BUSINESS.
• WHAT AREAS OF MANAGEMENT YOU NEED ADVICE ON WILL DEPEND
ON YOUR SKILL S AND THE TYPE OF YOUR BUSINESS.

BUSINESS ADVISERS
• YOU SHOULD IDENTIFY PROFESSIONALS WHO CAN ASSIST YOU IN THE
FUTURE:
 ACCOUNTANTS
 BANKERS
 LAWYERS
 CONSULTANTS
 GOVERNMENT SPECIALIST
• YOU MAY ALSO CONSIDER GETTING ASSISTANCE FROM:
 BUSINESS AND TRADE ORGANIZATIONS

 EDUCATIONAL INSTITUTIONS
 GOVERNMENT AGENCIES
BUSINESS STAFF
• IF YOU DO NOT HAVE THE TIME AND SKILLS TO DO ALL THE WORK,
YOU WILL NEED TO EMPLOY STAFF.
• MANY SMALL BUSINESSES EMPLOY STAFF.
• FOUR STEPS TO FIND WHAT STAFF YOU NEED IN YOUR BUSINESS:
 LOOK AT THE BUSINESS AND MAKE A LIST OF ALL TASK THAT HAVE TO BE DONE.
 DECIDE WHICH TASK YOU WILL NOT HAVE TIME OR SKILL TO DO YOURSELF.
 DESCRIBE WHAT SKILLS AND OTHER REQUIREMENTS EMPLOYEES WILL NEED TO DO THIS
TASK
 DECIDE HOW MANY EMPLOYEES YOU WILL NEED EACH OF THESE TASKS
STAFFING
DO:
STAFF REQUIREMENTS

ORGANIZATIONAL STRUCTURE
• AFTER IDENTIFYING ALL THE PEOPLE WHO WILL BE INVOLVED, YOU

CAN PLAN THE STRUCTURE OF YOUR BUSINESS.
• IN A SMALL BUSINESS WHERE OWNER ACTS AS MANAGER AND ONLY
HAS FEW EMPLOYEES, ORGANIZATIONAL STRUCTURE IS VERY SIMPLE.
Owner
Staff
•Larger or more complex small businesses may need to
be organized into a number of departments.
Owner/Manager
Production Dept. Sales Dept. Admin. Dept.

(18 staff) (2 staff) (3 staff)
• THE OWNER MUST MANAGE ALL THE VARIOUS DEPARTMENTS AS

WELL AS BEING RESPONSIBLE FOR THE OFFICE.
• THIS MAKES MANAGEMENT MORE COMPLICATED.
• AS YOUR BUSINESS GROWS, YOU MAY NEED TO CHANGE THE WAY
YOU RUN YOUR BUSINESS AND ITS ORGANIZATIONAL STRUCTURE.

ORGANIZATION
DO:
BUSINESS ORGANIZATIONAL STRUCTURE

EQUIPMENT AND BUSINESS SPACE

• IN THE MARKETING PLAN, ONE OF THE 4PS STAND FOR PLACE
• IN A RETAIL BUSINESS, YOU WILL NEED A SHOP IN A GOOD
LOCATION.
• THE SPACE YOU WILL NEED DEPENDS ON THE TYPE AND
RANGES OF GOODS YOU WANT TO SELL.
• BASED ON YOU SALES PLAN AND YOUR BUYING POSSIBILITIES,
YOU NEED TO ESTIMATE HOW MUCH SPACE YOU WILL NEED;
TO PRESENT YOUR GOODS IN YOUR SHOP
TO SERVE YOUR CLIENTS IN YOUR SHOP
TO STORE
REX DAGDAG, YOUR
WVSU-CBM STOCKS OF GOODS
FOR YOUR OFFICE AND OTHER FACILITIES

• IN A WHOLESALE BUSINESS YOU NEED LESS SPACE FOR YOUR
SHOWROOM BUT MUCH MORE SPACE TO STORE YOUR STOCK.
• FOR A SERVICE BUSINESS, YOU WILL NEED OPEN AIR SPACES,
WORKSHOP SPACE, AND OPEN SPACE. THE AMOUNT OF SPACE YOU
NEED WILL DEPEND ON YOUR ESTIMATION OF YOUR SALES.

• FOR MANUFACTURING, THE BUSINESS SPACE REQUIREMENT WILL DEPEND
ON THE TECHNOLOGY TO USE AND THE EQUIPMENT REQUIRED.
• IN A MANUFACTURING BUSINESS, THE SALES PLAN IS ALSO THE
PRODUCTION PLAN. IT STATES HOW MANY ITEMS NEED TO BE
PRODUCED.

EQUIPMENT
DO:
EQUIPMENT REQUIREMENT

BUSINESS SPACE
DO:
SPACE REQUIREMENT

BUSINESS INPUTS

BUSINESS INPUTS
• EVERY BUSINESS HAS MANY OTHER INPUTS ASIDE FROM BUSINESS PERSONNEL,
SPACE AND EQUIPMENT.
• FOR RETAILERS AND WHOLESALERS- LIGHTING, WATER, FORMS, ETC.
• FOR REPAIR SHOPS AND MANUFACTURERS- MATERIALS, PARTS, ACCESSORIES,
SUPPLIES, LIGHTING, WATER, ETC.
• YOU PAY FOR ALL OF THESE ITEMS, THAT IT IS IMPORTANT THAT YOU KNOW
EXACTLY HOW MUCH YOU WILL NEED FOR YOUR BUSINESS

BUSINESS INPUTS
DO:
BUSINESS INPUTS

COSTING

COSTING
• EVERY BUSINESS HAS COSTS.
• COSTS ARE THE MONEY YOUR BUSINESS SPENDS TO MAKE
AND SELL PRODUCTS OR SERVICES
• COSTING HELPS YOUR BUSINESS TO:
 SET PRICES
 REDUCE AND CONTROL COST
 MAKE BETTER DECISIONS ABOUT WHAT TO DO IN YOUR BUSINESS
 PLAN FOR THE FUTURE

COSTING
• A BUSINESS OWNER NEEDS TO KNOW IN DETAIL THE COSTS OF RUNNING THE
BUSINESS BECAUSE IF YOU DO NOT KNOW YOUR COST, YOU CANNOT SET
PRICES.
• MANY SMALL AND EVEN LARGE BUSINESSES GET INTO FINANCIAL DIFFICULTIES
BECAUSE THEY DO NOT DO THEIR COSTING.
• FOR THE PURPOSE OF THE BUSINESS PLAN, YOU HAVE TO KNOW WHETHER THE
TOTAL COST OF YOUR BUSINESS WILL BE COVERED BY THE MONEY COMING
FROM YOUR EXPECTED SALES OR WHETHER LOSSES WILL BE INCURRED.

COST CATEGORIES
• COSTS CAN BE SEPARATED IN DIFFERENT WAYS.
• THE MOST COMMON WAY IS TO GROUP COSTS INTO
CATEGORIES ACCORDING TO THE DIFFERENT PRODUCTION
INPUTS:
 STAFF COSTS
 MATERIAL COSTS
 OTHER COSTS
 CAPITAL COSTS

STAFF COSTS

STAFF COSTS
• IF YOUR BUSINESS EMPLOYS STAFF, YOU HAVE TO FULFILL
YOUR RESPONSIBILITIES AS AN EMPLOYER. FIND OUT THE
GENERAL LABOR LAWS AND REGULATIONS AND CHECK IF
THERE ARE ANY SPECIAL REGULATIONS THAT APPLY TO YOUR
TYPE OF BUSINESS.
 MINIMUM WAGES
 WORKING HOURS
 HOLIDAYS
 OCCUPATIONAL SAFETY AND HEALTH
 REX
VACATION AND SICK LEAVES
DAGDAG, WVSU-CBM
STAFF COSTS
• KNOWING AND COMPLYING WITH YOUR LEGAL RESPONSIBILITIES CONCERNING
EMPLOYEES WILL MEAN THAT YOUR STAFF WILL BE BETTER MOTIVATED TO WORK
IN YOUR BUSINESS.
• ALSO IF YOU DO NOT FULFILL YOUR RESPONSIBILITIES AS AN EMPLOYER, YOU
COULD FACE SANCTIONS FROM REGULATORY AGENCIES.
• UNDER THE CATEGORY OF STAFF COST, YOU PUT ALL EXPENDITURES ON STAFF
AND STAFF BENEFITS

STAFF COSTS
• WHEN COMPUTING STAFF COSTS, INCLUDE BENEFITS.
 13TH MONTH PAY (=BASIC PAY X 1/12)
 SSS, PHILHEALTH, AND PAG-IBIG (=BASIC PAY X 12%)
• MONTHLY-PAID STAFF:
 BASIC PAY P10,000
 ADD: 13TH MONTH PAY (10,000/12=) 833
 SSS, PHILHEALTH, AND PAG-IBIG (=10,000X 12%) 1,200

 TOTAL MONTHLY STAFF COST P12,033
 ====
STAFF COSTS
• WHEN COMPUTING STAFF COSTS, INCLUDE BENEFITS.
 13TH MONTH PAY (=BASIC PAY X 1/12)
 SSS, PHILHEALTH, AND PAG-IBIG (=BASIC PAY X 12%)
• DAILY-PAID STAFF:
 DAILY WAGE P 300
 MULTIPLY: NO. OF WORK DAYS PER MONTH 26
 TOTAL BASIC PAY FOR THE MONTH P7,800
 ADD: 13TH MONTH PAY (7,800/12=) 650
 SSS, PHILHEALTH, AND PAG-IBIG (=7,800X 12%) 936
 TOTAL MONTHLY STAFF COST P9,386
 ======
STAFF COSTS
DO:
STAFF COSTING

MATERIAL COSTS

MATERIAL COSTS
• MATERIAL COSTS ARE ALL EXPENDITURES FOR MATERIALS WHICH YOU NEED
FOR THE BUSINESS.
• FOR RETAIL AND WHOLESALE BUSINESS, MATERIAL COSTS ARE COSTS OF
ALL THE FINISHED GOODS YOU BUY TO RESELL.
• FOR SERVICE BUSINESS OR MANUFACTURING BUSINESS, MATERIALS COSTS
ARE ALL COST FOR:
 RAW MATERIALS SUCH AS WOOD, METAL SHEETS, METAL BARS, TEXTILES, LEATHER, PLASTICS,
ETC.
 STANDARD PARTS LIKE NAILS, SCREWS, NUTS, BOLTS, ELECTRICAL APPLIANCES, PARE PARTS,
FITTINGS, ETC.
 OTHER MATERIALS LIKE GLUE, PAINT, WELDING ELECTRODES, SAW-BLADES, DRILLS, ETC.
MATERIAL COSTS
DO:
MATERIAL COSTING

OTHER COSTS

OTHER COSTS
• UNDER THIS CATEGORY, YOU CAN PUT ALL THE COSTS WHICH ARE NOT FOR STAFF, FOR MATERIALS, OR FOR
CAPITAL COSTS.
• THESE ARE MAINLY COSTS FOR:
 ELECTRICITY (FROM ELECTRIC BILL)
 WATER (FROM WATER BILL)
 TELEPHONE (FROM TELEPHONE BILL)
 GASOLINE (ESTIMATE BASED ON PREVIOUS EXPERIENCE)
 TRANSPORTATION AND TRAVEL (ESTIMATE BASED ON PREVIOUS EXPERIENCE)
 INFORMATION TECHNOLOGY COSTS (FROM ISP BILL)
 REPRESENTATION (ESTIMATE BASED ON PREVIOUS EXPERIENCE)
 OFFICE SUPPLIES (ESTIMATE BASED ON PREVIOUS EXPERIENCE)
 INSURANCE (FROM INSURANCE BILL)
 RENT (FROM LEASE CONTRACT)
 TAXES AND LICENSES (AROUND 3% OF PREVIOUS YEARS GROSS SALES)
 ETC.
OTHER COSTS
DO:
OTHER COSTS

CAPITAL COSTS

CAPITAL COSTS
• CAPITAL COSTS ARE ALL COSTS RELATED TO THE BORROWING OF MONEY, SUCH
AS INTEREST ON A LOAN.
• DEPRECIATION OF MACHINES AND EQUIPMENTS IS ALSO CONSIDERED AS A
CAPITAL COST.
• DEPRECIATION IS THE LOSS IN VALUE OF EQUIPMENT AND IS A COSTS TO YOUR
BUSINESS. THE TOTAL COST OF BUYING THE EQUIPMENT IS DIVIDED INTO THE
NUMBER OF YEARS YOU EXPECTED TO USE IT.
• IN GENERAL, ONLY CALCULATE DEPRECIATION FOR EQUIPMENT WHICH:
 HAS A HIGH VALUE, AND
 LASTS FOR MORE THAN 1 YEAR.

DEPRECIATION
DO:
DEPRECIATION COST

TOTAL COSTS
• THE TOTAL COST OF MAKING OR SELLING A PRODUCT OR PROVIDING A SERVICE
IS THE SUM OF ALL THE DIRECT COSTS AND INDIRECT COSTS.
Direct Direct Indirect Total

materials labor costs costs
costs costs
• YOU MUST UNDERSTAND THE DIFFERENT TYPES OF COSTS TO BE ABLE TO DO

COSTING FOR EACH OF THE PRODUCTS OR SERVICES YOU MAKE OR SELL
• NOW THAT YOU KNOW ALMOST ALL THE COSTS OF YOUR BUSINESS, YOU ARE
NOW ABLE TO MAKE YOUR SALES AND COSTS PLAN.

FUNDING THE BUSINESS

FUNDING YOUR BUSINESS
• ONCE YOU HAVE CALCULATED THE AMOUNT OF MONEY

FOR YOUR BUSINESS, YOU NEED TO DECIDE HOW TO
FIND THIS CAPITAL.
• THERE ARE A NUMBER OF WAYS YOU CAN FINANCE YOUR
RESOURCES FOR YOUR BUSINESS:
 YOU CAN USE YOUR OWN MONEY. THIS IS CALLED EQUITY FUNDS.
 YOU CAN BORROW MONEY. THIS IS CALLED DEBT FUNDS.
 YOU CAN RENT OR LEASE THE RESOURCES.

FINANCING COSTS
DO:
INTEREST COSTS

FINANCIAL PLANNING

FINANCIAL PLANNING
• FOR YOUR BUSINESS TO RUN EFFICIENTLY AND PROFITABLE, YOU MUST

UNDERSTAND HOW TO ORGANIZE AND CONTROL YOUR BUSINESS
FINANCES.
• BASIC TOOLS IN MANAGING FINANCES ARE FINANCIAL PLANNING AND
RECORDS-KEEPING.
• IF YOU CAN WORK OUT WHAT IS LIKELY TO HAPPEN IN THE FUTURE, YOU
WILL HAVE BETTER CONTROL OF YOUR MONEY.
• BUSINESS PLANNING HELPS YOU FIND OUT WHAT IS LIKELY TO HAPPEN
TO YOUR BUSINESS IN THE FUTURE.

FINANCIAL PLANNING
• FINANCIAL PLANNING WILL HELP YOU:

 ESTIMATE WHAT YOUR COSTS AND SALES ARE LIKELY TO BE DURING
THE YEAR;
 IDENTIFY FINANCIAL PROBLEMS YOUR BUSINESS MAY HAVE DURING
THE YEAR AND WORK OUT WHAT TO DO TO SOLVE THEM BEFORE
THEY HAPPEN; AND
 PRESENT A CLEAR PICTURE OF THE FINANCIAL WORKINGS OF YOUR
BUSINESSTO A BANK IF YOU APPLY FOR A LOAN.
FINANCIAL PLANNING - PROFIT
• YOU ARE IN BUSINESS TO MAKE PROFIT.

• PROFIT IS NOT JUST THE MONEY YOU WILL GET FROM SALES.
• YOUR BUSINESS COSTS YOU MONEY TO OPERATE.
• PROFIT IS WHAT IS LEFT AFTER SUBTRACTING ALL YOUR COSTS FROM
MONEY COMING FROM SALES.

FINANCIAL PLANNING - PROFIT
Total Direct
Sales - Costs Gross
(Direct Material Cost
+Direct Labor Cost)
Margin

FINANCIAL PLANNING-PROFIT
Total Indirect Costs Net Profit

Gross Margin - (Admin. And selling (before
staff cost + other financing
costs + depreciation) and taxes)

FINANCIAL PLANNING-PROFIT
Net Net Profit

Profit Interest from
(before - Operations
Costs (before taxes)
financing
and taxes)

FINANCIAL PLANNING-TAXES
• EVERY BUSINESS IS AFFECTED BY TAXES.
• TAXES ARE PART OF RUNNING A BUSINESS AND THEY APPLY
TO EVERYONE WHO EARNS MONEY.
• YOUR BUSINESS MAY HAVE TO COLLECT TAXES ON BEHALF
OF THE GOVERNMENT:
 EMPLOYEES’ INCOME TAX (WITHHOLDING TAX)
 SALES TAX
 VALUE ADDED TAX
 TAX ON DIVIDENDS
FINANCIAL PLANNING-TAXES
• ANOTHER TYPE OF TAX YOU MUST PAY ARE TXES ON BUSINESS

PROFITS.
Net Profit Provision

from for Net
-
operations
(before
Income
tax
Profit
taxes)

FINANCIAL PLANNING
• IN RUNNING A BUSINESS, TWO THINGS ARE VERY IMPORTANT:

 THAT THE BUSINESS MAKES PROFIT; AND
 THAT THE BUSINESS DOES NOT RUN OUT OF CASH.
• TO HELP YOU ESTIMATE AND CONTROL YOUR PROFIT AND
CASH FLOW, YOU SHOULD MAKE TWO FINANCIAL
DOCUMENTS:
 A SALES AND COST PLAN; AND
 A CASH FLOW PLAN

SALES AND COSTS PLAN

• NOW THAT YOU KNOW ALL YOUR BUSINESS INPUTS AND COSTS,
YOU NOW MAKE A SALES AND COST PLAN.
• THE SALES AND COST PLAN IS ALSO CALLED A PROJECTED INCOME
STATEMENT.

DO:

(PROJECTED INCOME STATEMENT)

• YOU CAN USE YOUR SALES AND COSTS PLAN TO MEASURE THE
FINANCIAL PERFORMANCE OF YOUR BUSINESS.
• YOUR COMPLETED SALES AND COSTS PLAN SHOWS SALES, COSTS,
AND PROFITS YOUR BUSINESS IS LIKELY TO HAVE EACH MONTH.

• YOUR SALES AND COST PLAN MUST SHOW THAT YOUR

BUSINESS CAN EXPECT A PROFIT.
• THE FORECAST PROFIT MUST BE HIGH ENOUGH TO
ALLOW FOR SOMETHING TO GO WRONG OR FOR
PROBLEMS TO HAPPEN. FOR EXAMPLE:
 YOUR SALES MIGHT BE LOWER THAN YOU EXPECT.
 A MACHINE MIGHT BREAK DOWN.
 YOU MIGHT RUN OUT OF MATERIALS

• IF, AFTER COMPLETING YOUR SALES AND COSTS PLAN, YOU
FIND THAT YOUR BUSINESS WILL BE RUNNING AT A LOSS OR
YOUR PROFIT WILL NOT BE HIGH ENOUGH, THINK ABOUT
THE FOLLOWING QUESTIONS:
 ARE YOUR SALES TOO LOW? CAN YOU INCREASE THE NUMBER OF ITEMS YOU
WILL SELL? ARE YOUR PRICES TOO LOW? YOU MAY NEED TO GO BACK TO YOUR
MARKETING PLAN
 ARE YOUR DIRECT MATERIAL COSTS TOO HIGH?
 CAN YOU REDUCE THEM?

 FOR EXAMPLE, CAN YOU BUY CHEAPER MATERIALS, GET DISCOUNTS FOR BULK
ORDERS,
REX OR KEEP LESS STOCKS?
DAGDAG, WVSU-CBM
 IF YOU ARE A MANUFACTURER OR SERVICE OPERATOR, WILL THERE BE A LOT
OF MATERIAL WASTED IN MAKING YOUR PRODUCTS OR PROVIDING YOUR
SERVICES?
 CAN YOU THINK OF WAYS TO REDUCE THIS WASTAGE?
 IF YOU ARE A MANUFACTURER OR A SERVICE PROVIDER, ARE YOUR DIRECT
LABOR COSTS TOO HIGH?
 CAN YOU USE DIFFERENT STAFFING ORGANIZATION TO REDUCE YOUR DIRECT
LABOR COSTS?
 FOR EXAMPLE, CAN YOU SUBCONTRACT WORK TO OTHER BUSINESSES?
 ARE YOUR INDIRECT COSTS TOO HIGH?
 REX
WHATDAGDAG,WILL BE YOUR MOST EXPENSIVE INDIRECT COSTS AND CAN YOU
WVSU-CBM
REDUCE THESE COSTS?

 FOR EXAMPLE, CAN YOU RENT CHEAPER PREMISES, CUT DOWN ON
ELECTRICITY OR PETRO COSTS, OR EMPLOY FEWER STAFF IN SELLING OR
OFFICE ADMINISTRATION?
 LOOK BACK AT YOUR INDIRECT COSTS FORECAST AND CONSIDER EACH.
 IS THE SALARY YOU PAY YOURSELF TOO HIGH?
 THE PROFITS FROM YOUR BUSINESS SHOULD BE SUFFICIENT TO PAY YOUR
SALARY.
 YOUR SALARY SHOULD BE BASED ON THE TIME THAT YOU PUT INTO THE
BUSINESS, YOUR SKILLS AND RESPONSIBILITIES.
 SET THIS SALARY EQUAL TO WHAT YOU WOULD HAVE TO PAY ANOTHER
PERSON TO DO THE WORK YOU DO IN YOUR BUSINESS.
• IF YOUR PLAN DOES NOT SHOW A REASONABLE PROFIT, YOU WILL

HAVE TO THINK HARD AND ANALYZE THE PROBLEM.
• THE SALES AND COSTS PLAN IS WHAT POTENTIAL INVESTOR AND
LENDING INSTITUTIONS WILL LOOK AT CAREFULLY. IT MUST BE
REALISTIC AND POSITIVE.
• IF YOUR SALES AND COST PLAN DOES NOT SHOW A REASONABLE
PROFIT, YOU SHOULD GO BACK TO YOUR BUSINESS IDEA AND
MODIFY IT.

CASH TRANSACTION CYCLE

• AS PREVIOUSLY LEARNED, TWO IMPORTANT THINGS IN
RUNNING A BUSINESS ARE:
 PROFIT
 CASH AVAILABILITY
• PROFITABILITY CAN BE SEEN FROM THE SALES AND COST PLAN

• CASH AVAILABILITY CAN BE SEEN FROM THE CASH FLOW PLAN

• IMPORTANCE OF KNOWING YOUR CASH

TRANSACTION CYCLE:
YOU WOULD KNOW YOUR CASH REQUIREMENTS;
YOU CAN PLAN FOR STRATEGIES TO COVER CASH
SHORTFALLS; AND
LENDERS CAN BETTER UNDERSTAND YOUR BUSINESS CYCLE
AND CASH REQUIREMENTS

CASH FLOW PLAN

CASH FLOW PLAN
• IN MOST BUSINESSES, CASH IS RECEIVED AND PAID OUT EVERYDAY.

• SUCCESSFUL BUSINESS OWNERS PLAN FOR THIS FLOW OF CASH IN
AND OUT OF THEIR BUSINESS.

CASH FLOW PLAN
• HOWEVER, CASH FLOW IS DIFFICULT TO PLAN BECAUSE:
 SOME SALES MAYBE ON CREDIT AND CASH RECEIVED FOR THESE COMES IN
MONTHS AFTER THE ACTUAL SALES.
 SOME BUSINESS COST MAYBE ON CREDIT AND THEREFORE CASH PAYMENT
FOR THESE COSTS MAYBE MADE IN FUTURE MONTHS.
 SOME BUSINESS COSTS ARE NON-CASH SUCH AS DEPRECIATION
 SOME CASH PAYMENTS DO NOT REPRESENT COST SUCH AS THE PAYMENT
FOR AN ASSET PURCHASED. THE ASSET WILL BE DEPRECIATED LATER AS A
COST OR THE REPAYMENT OF THE LOAN. HOWEVER, INTEREST ON THE LOAN
IS A COST.
 SOME CASH THAT YOU RECEIVED MAYBE AS A RESULT OF DISPOSING OF AN
ASSET.
REX DAGDAG,THIS TYPE OF CASH DOES NOT REPRESENT SALES BUT IT MIGHT BE AN
WVSU-CBM
IMPORTANT SOURCE OF CASH.

CASH FLOW PLAN
• IN RUNNING A BUSINESS, YOU HAVE TO ORGANIZE AND CONTROL

CASH FLOW.
• A CASH FLOW PLAN SHOWS HOW MUCH CASH YOU EXPECT TO
COME INTO YOUR BUSINESS AND HOW MUCH CASH YOU EXPECT TO
PAY OUT OF YOUR BUSINESS EVERY MONTH.
• THE CASH FLOW PLAN HELPS YOU TO MAKE SURE THAT YOUR
BUSINESS DOES NOT RUN OUT OF CASH

CASH FLOW
DO:
CASH FLOW PLAN

CASH FLOW PLAN
• YOUR CASH FLOW PLAN SHOWS YOU THE CASH THAT WILL BE
FLOWING IN AND OUT OF YOUR BUSINESS.
• IT IS IMPORTANT THAT YOU ALWAYS HAVE ENOUGH CASH TO PAY
FOR YOUR BILLS.
• YOU MUST REMEMBER THAT EVEN THOUGH YOUR BUSINESS MAYBE
MAKING A PROFIT, IF YOU DO NOT HAVE THE CASH TO PAY YOUR
BILLS, YOUR BUSINESS WILL HAVE PROBLEMS.

CASH FLOW PLAN
• IF YOUR CASH FLOW PLAN SHOWS YOUR BUSINESS IS LIKELY

TO RUN OUT OF CASH DURING ANY MONTH, THINK ABOUT
THE FOLLOWING QUESTIONS:
 CAN YOU INCREASE CASH IN FROM SALES DURING THAT TIME. FOR EXAMPLE, ARE
YOU GIVING TOO MUCH CREDIT?
 CAN THE BANK EXTEND YOUR LOAN PERIOD OR REDUCE THE AMOUNT YOU HAVE
TO PAY EACH MONTH?
 IS IT NECESSARY TO BUY NEW EQUIPMENT IMMEDIATELY? CAN YOU RENT OR
LEASE EQUIPMENT? CAN YOU BUY EQUIPMENT ON CREDIT OR GET A LOAN?

PLANNING FOR VISION REALIZATION

PROJECTING TO YOUR VISION
• NOW THAT YOU KNOW HOW TO PROJECT YOUR BUSINESS’ SALES,
COSTS AND PROFITS, EXTEND YOUR PROJECTIONS TO 3-5 YEARS
TOWARDS ATTAINING YOUR VISION.
• YOUR ASSESSMENT OF YOUR MARKET TO PROJECT INCREASES IN SALES
VOLUME.
• FOR THE 2ND TO THE 5TH YEARS, YOU CAN SALES AND COSTS PLAN AND
CASH FLOW PLAN ON A QUARTERLY OR YEARLY BASIS INSTEAD OF
MONTHS.

BUSINESS PLAN WORKFLOW

1.EXECUTIVE SUMMARY
2. BUSINESS CONCEPT
3. DESCRIPTION OF THE BUSINESS
4. VISION OF THE BUSINESS
5. MARKETING PLAN
A. PRODUCT
B. PRICE
C. PLACE
D. PROMOTION
6. SALES PLAN
7. BUSINESS REQUIREMENTS
A. STAFFING AND COSTS
B. BUSINESS ORGANIZATION
C. EQUIPMENT REQUIREMENT
D. SPACE REQUIREMENT
E. OTHER COSTS
F. BUSINESS INPUTS
G. MATERIAL COSTS
H. DEPRECIATION
I. INTEREST COST
8. SALES AND COSTS PLAN

9. CASH FLOW PLAN
10. CONCLUSION - INTENT
Rex Florencio Dagdag
WVSU-CBM
0928-688-8469

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ENTREPRENUERSHIP

PUNTA VILLA RESORT

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

IS THE ACT OF CREATING,

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

TO AUGMENT INCOME TO GROW THE BUSINESS FOR GREATER

PERSONAL OR FAMILY NEEDS INCOME IS:

DOES NOT HAVE PLANS OF IMPROVING ALWAYS LOOKING FOR OPPORTUNITIES TO

REX DAGDAG, WVSU-CBM

VISIONING IS A VERY POWERFUL TOOL IN

• VISIONS START FROM DREAMS

REX DAGDAG, WVSU-CBM

A VISION IS A GUIDING THEME THAT ARTICULATES THE NATURE OF THE

REX DAGDAG, WVSU-CBM

DRAW YOUR BUSINESS 5 YEARS FROM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

-WITHIN THE CONTROL OF THE ENTREPRENEUR

- WITHIN THE CONTROL OF THE ENTREPRENEUR

REX DAGDAG, WVSU-CBM

-BEYOND THE CONTROL OF ENTREPRENEUR

- BEYOND THE CONTROL OF ENTREPRENEUR

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

• WE DO PLANNING THROUGHOUT OUR LIVES.

REX DAGDAG, WVSU-CBM

• IT IS YOUR GUIDE AND ROAD MAP FOR MANAGING

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

• TO PLAN FOR THE FUTURE

REX DAGDAG, WVSU-CBM

8. SALES AND COSTS PLAN

DESCRIPTION OF THE BUSINESS

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

• THROUGHPUT MEANS ALL RESOURCE INPUTS NEEDED

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

• YOU ARE NOT THE ONLY SELLER

REX DAGDAG, WVSU-CBM

• IF YOU UNDERSTAND & CAN SUPPLY THE PRODUCTS AND SERVICES

REX DAGDAG, WVSU-CBM

CUSTOMERS OF THE BUSINESS

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

REX DAGDAG, WVSU-CBM

-HOW MANY PEOPLE LIVE IN YOUR BUSINESS AREA?