FROILAN D.

LOPEZ HIGH SCHOOL

SENIOR HIGH SCHOOL

Development of a
Business Plan
Entrepreneurship

Rafael Christian S. Aguilar

Learning Objectives:
• At the end of this chapter, the learner should be able
to:
• Identify the market problem to be solved of the market need
to be met (CS_EP11/12ENTREP-0a-1)
• Propose solution/s in terms of product/s and service/s that
will meet the need using techniques on seeking, screening,
and seizing opportunities (CS_EP11/12ENTREP-0a-2)
• Analyze the market need (CS_EP11/12ENTREP-0a-3)
• Determine the possible product/s or service/s that will meet the need
(CS_EP11/12ENTREP-0a-4)
• Screen the proposed solution/s based on viability, profitability, and
customer requirements (CS_EP11/12ENTREP-0b-c-5)
• Select the best product or service that will meet the market need
(CS_EP11/12ENTREP-0d-6)

Rafael Christian S. Aguilar

The Development of the Business Plan
Planning the Enterprise

Opportunity Seeking, Screening,

and Seizing

Getting to Know the Market

Let the Market Know You Better

The Right Product for the Right Market

Rafael Christian S. Aguilar

 FROILAN D. LOPEZ HIGH SCHOOL
SENIOR HIGH SCHOOL

Planning the Enterprise

Entrepreneurship

Rafael Christian S. Aguilar

Business Plan
• Guides entrepreneurs throughout the process of a
business endeavor
• Guides the entrepreneur on which strategies would be
most beneficial for the enterprise to take.
• Prefeasibility and feasibility study

Rafael Christian S. Aguilar

Business Plan
• Need for a business plan:
• To convince prospective business investors about the
soundness and potential of their business
• To convey the capabilities and competencies of their owners
and managers
• ‘Sell’ the proponent and the business proposition
• Bringing the enterprise to a higher level of growth
• Investing into another industry

Rafael Christian S. Aguilar

Business Plan
• Serves the entrepreneur who must set the navigational
course of the business.
• Serves the investors and cautious financiers.
• Serves the managers and staff of the organization so
that they will know the strategies and programs of the
enterprise.

Rafael Christian S. Aguilar

Contents of a Business Plan
I. Introduction
I. The Business Concept and Business Model
II. The Business Goals: Vision, Mission, Objectives, and
Performance Targets
III. The Business Offering and Justification
II. Executive Summary
III. The Business Proponents: Organizers with their
Capabilities and Contributions
IV. The Target Customers and the Main Value Proposition to
the Customer
V. The Market, Market Justifications based on the Industry
Dynamics and the Macro Environmental Factors
Affecting the Opportunities and Threats in the Market,
the Size, Potential and Realistic Share of the Market
Rafael Christian S. Aguilar
Contents of a Business Plan
VI. The Product and Service Offerings
VII. The Enterprise Strategy and Enterprise Delivery
Systems: Business Competitiveness
VIII.The Financial Forecasts and Expected Returns,
Risks, and Contingencies
IX. Environmental and Regulatory Compliance
X. The Capital Structure and Financial Offering: Returns
and Benefits to Investors, Financiers, and Business
Partners

Rafael Christian S. Aguilar

The Business Concept and the Business Model
• Business concept – essence of the enterprise in a
concise but powerful manner. It stresses the value of
the product offering to the target customers who would
most likely buy it.
• A business concept must be translated to a business
model.

Rafael Christian S. Aguilar

The Business Concept and the Business Model
• A business model is a formula on how the enterprise
exactly plans to make money out of the business.
• How will the business raise revenues? What critical factors
will cause the revenues to materialize?
• What will be the costs of the enterprise products and other
costs of doing business? How will theses costs be managed
to ensure comfortable profits? What critical factors will drive
the costs? How can these factors be controlled?
• What will be the major investments of the enterprise? Why
will these investments give the enterprise a competitive
edge?
• How will the enterprise finance the investments? How will the
enterprise fund its growth?

Rafael Christian S. Aguilar

The Business Goals: Vision, Mission, Objectives, and
Performance Targets
• The business goals show the future and long-term
prospects of the enterprise.
• It is composed of the vision, mission, objectives, key
result areas, and performance indicators of the
enterprise.

Rafael Christian S. Aguilar

Example: The Business Goals: Vision, Mission,
Objectives, and Performance Targets
Double Happiness – eatery located at 3 bus terminals in
Central Luzon
• Vision - To establish a commanding presence and
market leadership as a food chain servicing major bus
terminals in Central Luzon within the next five years
• Mission – To provide quality food and passenger
convenience services that would generate sufficient
profits for the stockholders and improve the lives of its
employees

Rafael Christian S. Aguilar

Example: The Business Goals: Vision, Mission,
Objectives, and Performance Targets
• Objectives:
• To establish a strong market presence in Central Luzon
• To earn good financial returns for its owners
• To delight customers with high quality food and services
• To make Double Happiness a happy and rewarding place to
work in

Rafael Christian S. Aguilar

Example: The Business Goals: Vision, Mission,
Objectives, and Performance Targets
Objectives
1. To establish a strong
market presence in Central
Luzon
2. To earn good financial
returns for its owners
3. To delight customers with
high quality food and services
4. To make Double Happiness
a happy and rewarding place
to work in
Key Result Areas
1a. Number of food outlets in major bus terminals in Central Luzon
1b. Sales volume attained
1c. Market share in Central Luzon
2a. Amount of net profits realized for the next five years
2b. Return of equity (ROE)
2c. Return on assets (ROA) or return on investment (ROI)
2d. Return on sales (ROS)
3a. Growth in sales per outlet
3b. Percentage of repeat customers
3c. Number of customer commendations or complaints
3d. Awards and recognition given by the community or the government for
excellent service
3e. Customer survey rating to ascertain customers’ degree of delight
4a. Compensation and benefits of managers and workers are above industry
rates
4b. Management and employee turnover
4c. Number of job applicants compared to other similar establishments
Rafael Christian S. Aguilar
Example: The Business Goals: Vision, Mission,
Objectives, and Performance Targets

Key Result Areas 2018 2019 2024

1a. Number of food outlets in major bus 3 5 20
terminals in Central Luzon
1b. Sales volume attained Php7,000,000 Php13,000,000 Php60,000,000
1c. Market share in Central Luzon 2% 3% 12%
2a. Amount of net profits realized for the Php1,000,000 Php2,000,000 Php10,000,000
next five years
2b. Return of equity (ROE) 30% 40% 60%
2c. Return on assets (ROA) or return on 15% 20% 30%
investment (ROI)
2d. Return on sales (ROS) 14% 15% 16%

Rafael Christian S. Aguilar

Example: The Business Goals: Vision, Mission,
Objectives, and Performance Targets

Key Result Areas 2018 2019 2024

3a. Growth in sales per outlet 20% 20% 20%
3b. Percentage of repeat customers 30% 40% 50%
3c. Number of customer commendations 4 out of 20 6 out of 20 10 out of 20
or complaints 1 out of 20 1 out of 50 1 out of 100
3d. Awards and recognition given by the None One by Two by Central
community or the government for excellent Bulacan Luzon
service Chamber Provinces
3e. Customer survey rating to ascertain 3.5 4 4.5
customers’ degree of delight (Scale of 1-5) (Scale of 1-5) (Scale of 1-5)

Rafael Christian S. Aguilar

Example: The Business Goals: Vision, Mission,
Objectives, and Performance Targets

Key Result Areas 2018 2019 2024

4a. Compensation and benefits of Same as 5% above 15% above
managers and workers are above industry industry industry industry
rates
4b. Management and employee turnover 3 out of 10/year 2 out of 10/year 1 out of 10/year
4c. Number of job applicants compared to 10% more job 20% more job 30% more job
other similar establishments applicants applicants applicants

Rafael Christian S. Aguilar

The Executive Summary
• The executive summary contains everything that is
relevant and important to the business audience.
• It must contain the major argumentations of the
business proponent on why the business will work and
succeed.
• Provides the audience all the arguments on why they
should participate in the business venture.

Rafael Christian S. Aguilar

The Executive Summary
• Introduce and highlight the good qualities of:
• The business proponents and partners
• The enterprise organization and its capabilities
• The technology providers and their expertise and experience
• The suppliers and all the major service providers
• Describe the products/services of the enterprise, their
features and attributes, and why they are the right ones to
deliver to the customers.
• Should contain the Enterprise Strategy and Enterprise
Delivery System
• Enterprise Strategy – builds and develops the game plan
• Enterprise Delivery System – entire process of converting input
into output and these output into outcomes

Rafael Christian S. Aguilar

The Executive Summary
• Should contain a section on the environmental and
regulatory compliance of the proposed business, as
well as the more proactive programs to become a more
responsible corporate citizen
• Should present the capital structure of the proposed
business and show how the enterprise will respond to
the investment programs and financial forecasts of the
enterprise
• Should be written last because it contains the summary
of the entire business plan

Rafael Christian S. Aguilar

The Business Proponents
• Contains information about the business proponents or
stakeholders.
• Four types of stakeholders:
• Resource mobilizers and financial backers
• Technology providers and applicators
• Governance and top management
• Operating support team

Rafael Christian S. Aguilar

The Business Proponents
• Resource mobilizers and financial backers
• They want to know who else are on board to share the
burden of raising money to see the whole thing through
• Technology providers and applicators
• They want to know if there will be sufficient funds to pay for
the technology
• Governance and top management
• They want to know what strategies and performance
indicators being proposed
• Operating support team
• They want to know what programs, activities, tasks, and
resources would be in place

Rafael Christian S. Aguilar

The Target Customers and the Main Value Proposition
• The business proponent must be very precise about
the target audience or target customers.
• Target customers must be of sufficient size, sufficient
paying capacity, and have sufficient interest to
purchase the products being offered by the enterprise.
• What the customers buy, how they buy, when to buy,
where to buy, and what convinces them to buy.

Rafael Christian S. Aguilar

Market Demand and Supply, Industry Dynamics,
and Macro Environmental Factors
• Forces affecting the business of the enterprise.
• The business plan should estimate the total market
supply and demand for the product offerings of the
enterprise.
• The business plan should determine the major critical
factors that influence this market demand and supply.

Rafael Christian S. Aguilar

Market Demand and Supply, Industry Dynamics,
and Macro Environmental Factors
• Who are the competing enterprises in the industry and
what are their comparative advantages and
disadvantages? What business models and strategies
are they employing?
• Who are the suppliers in the industry and what are
their capabilities and bargaining power?
• What are the channels of distribution being used by the
industry? How effective are these channels?

Rafael Christian S. Aguilar

Market Demand and Supply, Industry Dynamics,
and Macro Environmental Factors
• Macro environmental factors:
• Social environment – demographics and cultural dimensions that
govern the relevant entrepreneurial behavior
• Structure, social status, and dynamics of the population at large, as well
as people’s beliefs, tastes, customs and traditions that dictate the major
parameters of market behavior.
• Political environment – defines governance system of the country
or the local area of business.
• Includes all the laws, rules, and regulations on allowable and
disallowable business practices.
• Economic environment – supply and demand forces.
• Ecological environment – includes all natural resources and the
ecosystem that define the habitat of man, animals, plants, and
minerals.
• Technological environment – makes or breaks the competing
participants in any industry
Rafael Christian S. Aguilar
Product/Service Offering: Description,
Evolution, and Justification
• The product/service must be described by highlighting
the features and attributes that would most appeal to
the target customers.
• The business plan should also prove that the
products/services would be accepted and carried by
the distribution channels.

Rafael Christian S. Aguilar

Enterprise Strategy and Enterprise Delivery System
• Enterprise strategy – mapping the landscape and by
situating the enterprise and its competitors as to their
strategies and chosen positions
• Enterprise delivery system – enables to implement the
enterprise strategy
• Starts from the input (resources mobilized), proceeds to
throughput (transformation process where input are converted to
output), and produces the output (products/services)
• Output are then marketed to the customers (product)
• Output are then experienced by the customers (service)
• Customer satisfaction level, profits generated, and the
performance of people from the transaction are the
outcomes of EDS.

Rafael Christian S. Aguilar

Enterprise Strategy and Enterprise Delivery System
The Enterprise Delivery System
Desired
Input Throughput Output Marketing
Outcomes
• Harnessing of
human,
money, and
• Customer
physical • Conversion of • Positioning
satisfied
resources input into • Product
• Goods • Sales volume
• Resources output and the • Packaging
produces or attained
mobilized: transformation • Place
services • Profits
- Money process within • People
delivered generated
- Men the factory of • Promotion
• People
- Machines service shop • Price
performance
- Materials
- Methods
- Management

Rafael Christian S. Aguilar

Financial Forecasts: Expected Returns, Risks, and
Contingencies
• From the financial forecasts, the business plan should
then calculate the expected returns from the business/
• The important return calculations:
• Expected return on sales
• Expected return on assets or investments
• Expected return on stockholders’ equity
• The business plan should also calculate the long-term
returns, using the time value of money. This means
estimating the internal rate of return and expected net
present value
• The business plan should then evaluate both the
business risks and financial risks involved
Rafael Christian S. Aguilar
Environmental and Regulatory Compliance
• The business plan must articulate the laws, rules, and
regulations governing the business, and the industry
that the enterprise is in.
• Ascertain that all necessary permits, licenses, and
authority to use proprietary intellectual capital had
either been secured or would definitely be secured.

Rafael Christian S. Aguilar

Capital Structure and Financial Offering: Returns and
Benefits to Investors, Financiers, and Partners
• Discusses on who are the investors, the financiers, and
the partners of the enterprise.
• The business plan must appeal to its target audience
• Must highlight the main features of the business plan
they are looking for

Rafael Christian S. Aguilar

Activity: How Does Your Business Plan Look Like
• Prepare an initial outline of how you want your own
business plan to look like.
• Follow the contents discussed.

Rafael Christian S. Aguilar

 FROILAN D. LOPEZ HIGH SCHOOL
SENIOR HIGH SCHOOL

Opportunity Seeking,
Screening, and Seizing
Entrepreneurship

Rafael Christian S. Aguilar