STARTING A NEW BUSINESS Mr. Angelo Marco U. Lacson DLS-CSB Resident Faculty
Just Where do you Begin . . .Are you ready forentrepreneurship?What kind of business willyou enter into?How do you start?How much capital do youneed?
BRAINSTORMING FOR BUSINESS Create a NEW product Improve an EXISTING or service product or service
BRAINSTORMING FOR BUSINESS Create a NEW product Improve an EXISTING or service product or service SUPPLIER DISTRIBUTOR SELLER / RETAILER
CONCEPT DEVELOPMENT Your concept must have a solid foundation otherwiseeverything else will be confused.
CONCEPT DEVELOPMENTCompany NameTrade NameMissionStatementVision StatementTrade Logo
QUALITIES OF A GOOD BRAND It must be legally protectable It must be easy to pronounce It must be easy to remember It must be easy to recognize It should attract attention It may suggest product benefits or suggest product usage It may suggest the company or product image It may distinguish the products positioning relative to the competition
Brand Management• Ali Baka (Shawarma)• Anita Bakery• Aristoback (Resto behind Aristocrat)• Bali Gulp (Drinking Place beside Valley Golf)• Crispy per Minute (Crispy Pata Eatery)• Caintacky Fried Chicken (Resto in Cainta)• Mercy Buko (Fresh Coconut Roadside Shop)• Cooking ng Ina Mo (Carinderia in Boni Avenue)• Cooking ng Ina Mo Rin (A competitor)
Do you think these names arefunny? Maybe . . . But as a future entrepreneur, do you honestly think you will be able to build an empire of 100 branches of “Cooking ng Ina Mo”?
ASSIGNMENTDefine the following marketing terms related to brand management. (Due next mtg.) 1. Brand Awareness 2. Top-of-Mind Awareness 3. Brand Association / Brand image 4. Brand Preference 5. Brand Loyalty
CONCEPT DEVELOPMENTBusiness TypeOperating HoursTarget MarketConcept/ThemesMenu / Menu ofServices
LOCATION! LOCATION! LOCATION! Will your location bring in the greatest number of customers at the lowest cost to you?
TOTAL COST OF INVESTMENTJust how much moneyare we talking about?
CAPEX & OPEXCAPEX (CAPital EXpenditures)Refers to the cost of developing aproduct or systemOPEX (OPerating EXpenditures)Refers to the on-going costs for runningit. For Example: the purchase of a printer is the CAPEX, and the annual paper and ink cost is the OPEX.
TOTAL COST OF INVESTMENTRenovation or Smaller Items (e.g.Construction Costs Utensils, Menu Cards,Consultant’s Fees (e.g. etc.) and RelatedArchitect, Interior Supplies (e.g. Office,Designer, Financial Dining, Kitchen, andConsultant, etc.) Cleaning, etc.)Rent Advances & Revolving Fund - SalariesDeposits & Wages, Stock Inventory, and UtilitiesBusiness Permits Funds - Loose ChangeFurniture, Fixtures, &Equipment Fund & Petty Cash Funds Uniform Expenses
TOTAL COST OF INVESTMENTCAPEX + OPEX (plus 10% contingency)
PROJECTED INCOME STATEMENT 12-month Projection How muchmoney will you be making?
PROJECTED INCOME STATEMENT Sales Less: Cost of Goods Sold Gross Profit / Income Less: Operating Expenses Net Profit / Income Less: Income Tax Net Profit after Tax
PROJECTED INCOME STATEMENTREVENUES OPERATING EXPENSES Food Sales Rent Beverage Sales Utilities Salaries & WagesCost of Goods Sold Government Payables Food Cost 13th month Pay Beverage Cost Dining Supplies Kitchen SuppliesIncome Tax Cleaning Supplies Income Tax 32% Depreciation Expense Transportation Expenses Marketing Expenses
PROJECTED INCOME STATEMENTBE CONSERVATIVE WITH YOUR REVENUEPROJECTIONS AND EXAGERATE ALITTLE WITH YOUR STATEMENT OF EXPENSES
RETURN ON INVESTMENT ROI is a measure of profitability; the higher the ROI, the better.
RETURN ON INVESTMENT Annual Net Income x 100 = ROI (%)Total Cost of Investment Php180,000 x 100 = 36% Php500,000
PAYBACK PERIOD The amount of timetaken to break even on an investment. It can provide only a partial picture ofwhether the investment is worthwhile.
PAYBACK PERIODTotal Cost of Investment = PAYBACK (Months)Average Monthly Income Php500,000 = 34 months Php15,000 (2 years and 10 months)