Calatrava Senior High School

Brgy. Bantayanon, Calatrava, Negros Occidental

ACCOUNTANCY, BUSINESS AND MANAGEMENT
ABM 12-A

ENTREPRENEURSHIP

Business Plan
Competencies:
4. Demonstrate understanding of the 4Ms of operations
4.1 Describe the 4Ms (Manpower, Method, Machine,
Materials) of operations in relation to the business
opportunity:
4.1.1 Develop a product description;
4.1.2 Create a prototype of the product;
4.1.3 Test the product prototype
4.1.4 Validate the service description of the product
with potential customers to determine its market
acceptability
4.1.5 Select/pinpoint potential suppliers of raw
materials and other inputs necessary for the
production of the product or service;
4.1.6 Discuss the value/supply chain in relation to the
business enterprise; and
4.1.7 Recruit qualified people for one’s business
enterprise.
4.2 Develop the business model;
4.3 Forecast the revenues of the business;
4.4 Forecast the costs to be incurred;
4.5 Compute for profits; and
4.6 Create the company’s five (5) year projected financial
statements.

Submitted by:

Reporter 4 Group 2

Members:
1. Krizah Marie C. Caballero
2. Angel T. Bugias
3. Chris Jane L. Antenero
4. Jessalyn C. Cabañog
5. Dymea B. Berdote
6. Mae Ann P. Dacumos
7. Joianne Life R. Tapangan

Submitted to:

MRS. CUPID B. BAHAN

Subject Teacher
Competency 4 Demonstrate understanding of the 4Ms of operations

The four Ms of the operations function cover the input portion of the
Enterprise Delivery System (EDS) Design Framework. To better illustrate how the
four Ms work across the EDS Design Framework.

The input is composed of four Ms: Manpower, Method, machine and Material.
These four are transformed into the right output through a highly productive system,
meaning one with high efficiency, economy, and effectiveness. The transformation
process is called the Throughput System.

Competency 4.1 Describe the 4Ms (Manpower, Method, Machine,

Materials) of operations in relation to the business
opportunity

1. Manpower – this refers to the workforce, whom will help a business to produce more
products. An entrepreneur needs to hire good and competent people to produce
quality products. Manpower enables the entire transformation process to operate by
manning the machines2 or rendering the services required.
2. Method – this refers to the ways of producing a particular product from raw
materials.
3. Machine – this refers to the devices and equipment used to perform specific type of
work and usually uses energy (electricity) to perform task.
4. Materials – pertains anything used as inputs to production or manufacturing. It can
be a finished product or an unprocessed raw material. Materials are the input that
must be converted to the final output.
Competency 4.1.1 Develop a product description
The secret to writing seriously seductive product descriptions is to follow a proven
process to engage, persuade, and sell.
To get started, you need to know exactly who it is that you want to buy your product.
The secret to writing seriously seductive product descriptions is to follow a
proven process to engage, persuade, and sell. To get started, you need to know exactly
who it is that you want to buy your product.
1. Define Your Buyer Persona.
2. Create a Comprehensive List of Features and Benefits.
3. Define Your Tone of Voice.
4. Create a Scannable Format Research suggests that people read only 16% of the words
on the average web page.
5. Write a First Draft
6. Edit Your Text to Boost Your Persuasiveness.
7. Optimize Your Copy for Search Engines.
Competency 4.1.2 Create a prototype of the product

4 Steps to Build Your Product’s First Prototype

Here are four steps to get your first prototype built so you can turn your idea into
a patented, profitable product.
1. Create a Concept Sketch.
2. Develop a Virtual Prototype.
3. Build a Physical Prototype.
4. Locate a Manufacturer.
Competency 4.1.3 Test the product prototype
Prototype testing is the process of testing the original model on which a physical
product will be based. While many businesses believe that a prototype needs to be perfect
before testing, the truth is that it’s wise to evaluate market response at an early stage.
By testing a physical product with users now, you can avoid having to make expensive
changes down the line while ensuring that the end results meet the user’s goals and desires.

Steps for Market Testing a Product

The following steps are crucial when testing a physical product in the marketplace.
1. Assessing the Market
2. Define Expectations
3. Select Your Audience
4. Create a Presentation
5. Suggest Solutions

Physical Product Testing Services Businesses often assume that online testing companies
only assess web-based products. But some sites also offer testing services for hardware
products. Understanding that physical products must be distributed to beta testers,
businesses like Centercode handle the distribution and tracking of prototypes for testing.
Centercode also manages tester recruitment and assists companies in collecting the most
valuable feedback. It’s not enough to create a product that sounds good on paper; savvy
developers must also ensure their products hold up to customer expectations and the rigors
of daily usage. Testing your physical product helps ensure that your prototype has a market,
and that the final product will meet your customers’ expectations.

Competency 4.1.4 Validate the service description of the product with

potential customers to determine its market
acceptability

5 Ways to Validate Your Product or Service

The key to creating digital products that fit into the sweet spot between what you love
to create and what your audience really needs is to validate your product. This may sound
incredibly boring, but it is actually a part of the process that is insanely useful in checking that
your product will really fly.
There are so many ways to validate your product or service. Here are a few to make
sure that what you are creating is both what you will really love, what fits in your zone of
genius, and is also something that your customers will love, pay for and refer to again and
again.
You can validate your product by using a number of means.
1. Surveys
2. Beta Test
3. Early Bird Offer
4. Be Yourself
5. Stay Passionate

Competency 4.1.5 Select/pinpoint potential suppliers of raw materials

and other inputs necessary for the production of the
product or service

Supplier selection process

Choosing the right supplier involves much more than scanning a series of price lists.
Your choice will depend on a wide range of factors such as value for money, quality, reliability
and service. How you weigh up the importance of these different factors will be based on your
business' priorities and strategy.
A strategic approach to choosing suppliers can also help you to understand how your
own potential customers weigh up their purchasing decisions.
This guide illustrates a step-by-step approach you can follow that should help you make the
right choices. It will help you decide what you need in a supplier, identify potential suppliers
and choose your supplier.
 However, it's important to have a choice of sources. Buying from only one supplier
can be dangerous -where do you go if they let you down, or even go out of business?
Equally, while exclusivity may spur some suppliers to offer you a better service, others may
simply become complacent and drop their standards.
What you should look for in a supplier?
 Reliability
 Quality
 Value for money
 Strong service and clear communication
 Financial security
 A partnership approach
 Identifying potential suppliers
 Recommendations
 Directories
 Trade associations
 Business advisors
 Exhibitions
 Trade press
 Get a quotation
 Compare potential suppliers
 Negotiate terms and conditions
 Drawing up a shortlist of suppliers

When considering the firms on your shortlist, ask yourself the following questions:
 Can these suppliers deliver what you want, when you want it?
 Are they financially secure?
 How long have they been established?
 Do you know anyone who has used and can recommend them?
 Are they on any approved supplier lists from trade associations or
government?

Getting the right supplier for your business

 Know your needs
 Spend time on research
 Ask around
 Credit check potential suppliers
 Price isn't everything
 Agree on service levels before you start
 Don't buy from too many suppliers
 But don't have just a single supplier

Competency 4.1.6 Discuss the value/supply chain in relation to the

business enterprise

Value Chain
The value chain is a process in which a company adds value to its raw materials to
produce product eventually sold to consumers.
The concept of the value chain comes from a business management perspective. Value
chain managers look for opportunities in which to add value to the business. They may look
for ways to cut back on shortages, prepare product plans, and work with others in the chain
to add value to the customer.
There are five steps in the value chain process. They give a company the ability to
create value exceeding the cost of providing its good or service to customers. Maximizing the
activities in any one of the five steps allows a company to have a competitive advantage over
competitors in its industry.

The five steps or activities are:

1. Inbound Logistics: Receiving, warehousing, and inventory control.
2. Operations: Value-creating activities that transform inputs into products, such as
assembly and manufacturing.
 3. Outbound Logistics: Activities required to get a finished product to a customer.
These include warehousing, inventory management, order fulfillment, and shipping.
4. Marketing and Sales: Activities associated with getting a buyer to purchase a
product.
5. Service: Activities that maintain and enhance a product's value, such as customer
support and warranty service.

In order to help streamline the five primary steps, Porter says the value chain also
requires a series of support activities. These include procurement, technology development,
human resource management, and infrastructure.
A profitable value chain requires connections between what consumers demand and
what a company produces. Simply put, the connection or sequence in the value chain
originates from the customer's request, moves through the value chain process, and finally
ends at the finished product. Value chains place a great amount of focus on things such as
product testing, innovation, research and development, and marketing.

Supply Chain
The supply chain represents all the steps required to get the product to the customer.
The concept of the supply chain comes from an operational management perspective. Every
step in the process—including creating a good or service, manufacturing it, transporting it to
a place of sale, and selling it—is part of a company's supply chain.
The supply chain includes all functions involved in receiving and filling a customer
request.
These functions include:
 Product development
 Marketing Operations
 Distribution
 Finance
 Customer service

Supply chain management is an important process for most companies and

involves many links at large corporations. For this reason, supply chain management requires
a lot of skill and expertise to maintain.
While many people believe logistics—or the transportation of goods—to be
synonymous with the supply chain, it is only one part of the equation. The supply chain
involves the coordination of how and when products are manufactured along with how they
are transported.
The primary concerns of supply chain management are the cost of materials and
effective product delivery. Proper supply chain management can reduce consumer costs and
increase profits for the manufacturer.
The main stakeholders in value chains are shareholders and investors, while supply
chain partners are crucial stakeholders in the supply chain.
The value chain gives companies a competitive advantage in the industry, while the
supply chain leads to overall customer satisfaction.

Competency 4.1.7 Recruit qualified people for one’s business enterprise

Employees are the most important assets to any company. Good employees can help
grow your business, foster amazing culture, and become leaders. Bad employees can hurt
your brand, waste time, and create a negative atmosphere. Finding and investing in
employees is an important measure for ensuring the long-term success of your organization.
However, before you can hire and benefit from great employees, you need a streamlined
recruiting and hiring system.
Recruiting stellar workers is multifaceted and comes with several challenges, and is
an art as much as it is a science, and must be treated as such. Done inefficiently, finding the
right people, getting them in the door, and on-boarding them can be an exhausting, resource-
intensive experience.

Fortunately, by embracing these ten strategies you can optimize your ability to recruit
top talent with minimal hassle.
1. Promote Your Brand
 2. Make a Personal Connection
3. Filter your candidates having a plethora of candidates isn't always a good thing
4. If you want someone, reach out
5. Create a talent pool
6. Get Mobile Recruiting is a full-time commitment.
7. Get referrals
8. Drive Candidates to your Webpage
9. Ask for the best
10. Use a targeted search

Competency 4.2 Develop the business model

Your strategy for making your start-up work for you will decide its competitiveness
in the market. You want to gain a sustainable advantage over your competitors and that starts
with the right business model. Now that you know what a business models, it’s time to learn
what key elements constitute a business model and how to develop a perfect sustainable
business model for your company. A great business model focuses on creating and delivering
great value to the customers while simultaneously delivering great margins. A great business
model should also look to avoid customer dissatisfaction or dissonance and funding
problems. It should also incorporate plans and methods to achieve and maintain market
leadership. Developing the right business model requires similar efforts as developing the
right product. Here’s how you can have an ideal business model:

How to develop business model?

 Size your product’s value in the market
 Acquire high-value customers
 Ensure sufficient high margins
 See if your product is the best solution available
 Ensure customer satisfaction
 Decide on the channel and distribution strategy
 Maintain market position
 Formulate funding strategy

Competency 4.3 Forecast the revenues of the business

Your business revenues forecast is an essential part of future business planning. You need
to know approximately how much you can make throughout the year, your expected cash
flow and how much growth your business may experience. Revenue forecasting is not
intended to give you exact figures for yearly earnings. Instead, it does provide several
methods that will help you forecast your revenue as accurately as possible.
Here are three things to keep in mind to assist you in forecasting your company’s
revenue.
1. Research thoroughly
2. Provide a thorough breakdown of expenses
3. Review your company’s cash flow history

Competency 4.4 Forecast the costs to be incurred

Forecasting business expenses during the start-up stage is really more art than
science. Many entrepreneurs complain that building forecast with any degree of accuracy
takes a lot of time. Time that could be spent selling rather than planning. But few investors
will put money in your business if you’re unable to provide a set of thoughtful forecasts. More
important, proper financial forecasts will help you develop operational and staffing plans that
will help make your business a success.

Here’s some detail on how to go about building financial forecasts when you’re just
getting your business off the ground and don’t have the luxury of experience.
1. Start with expenses, not revenues.
2. Forecast revenues using both a conservative case and an aggressive case
3. Check the key ratios to make sure your projections are sound
Competency 4.5 & 4.6 Compute for profits and create the company’s five (5)
year projected financial statements.

Whether you are already running a business, or making plans to start one up, financial
planning is a vital part of ensuring your success. Not knowing your expected income and
expenditure will make it difficult to plan, and hard to find investors.
This 5 – year financial plan spreadsheet will make it easy for you to calculate profit
and loss, view your balance sheet and cash flow projections, as well as calculate any loan
payments you may have. Whilst the wording on this spreadsheet is focussed around products,
it can just as easily be used for businesses who largely provide services to their customers.