Chapter 1 Planning the Enterprise

1. CHAPTER 1
PLANNING THE
ENTERPRISE
By: Mr. Mark G. Salvador

2. WHAT IS A
BUSINESS
PLAN FOR?

3. CONTENTS OF THE
BUSINESS PLAN
O THE BUSINESS CONCEPT- contains the
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.
O THE PRODUCT CONCEPT-must be then
translated into a business model. A
business model is a formula on how the
enterprise exactly plans to make money
out of the business.

4. Four Areas of Moneymaking
which Business Model Must
Address:
O 1. How will the business raise revenues?
Which critical factors will cause the
revenues to materialize?
O 2. What will be the costs of the enterprise
products and other costs of doing
business? How will these costs be
manages to ensure comfortable profits?
What critical factors will drive the costs?
How can these factors be controlled?

5. Four Areas of Moneymaking
which Business Model Must
Address:
O 3. what will be the major investments of
the enterprise? Why will these
investments give the enterprise a
competitive edge?
O 4. how will the enterprise finance the
investments? How will the enterprise fund
its growth?

6. The Business Goals: Vision,
Mission, Objectives, and
Performance Targets
O 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.

7. Case example 1: Double
HAppiness
O Vission
- “to establish a commanding presence and
market leadership as a food chain servicing
major terminals in Central Luzon withjin the next
five years.”
Business Goals
- Communicated by articulating the basic
purpose of setting up the enterprise in a mission
statement. Needless to say, all business
enterprises are established for the purpose of
making money for its investors.

8. O Mission
- “to provide quality food and passenger
convenience services that would generate
sufficient profits for the stockholders and
improve the lives of its employees.”

9. Objectives:
O For double happinnes, their stated objectives
are:
O 1. to establish a strong market presence in
Central Luzon;
O 2. to earn good financial returns for its
owners;
O 3. to delight customers with high quality food
and services; and
O 4. to make double Happiness a happy and
rewarding place to work in.

10. The Executive Summary
O The executive summary should introduce and
highlight the good qualities of:
O 1. the business proponents and their partners;
O 2. the enterprise organization and its
capabilities;
O 3.the technology providers and their expertise;
and
O 4. the suppliers and all the major service
providers.

11. The Business Proponents
O 4 types of stakeholders
O 1. resource mobilizers and financial
backrs
O 2. technology providers and applicators
O 3. governance and top management
O 4. operating and support team

12. 4th section: The Target
Customers and the Main Value
Proposition
O Target customers- must be of sufficient
size, sufficient paying capacity, and have
sufficient interest to purchase the products
being offered by the enterprise.
O Main Value Proposition- the unique selling
proposition of the enterprise.

13. 5th Section: Market Demand and
Supply, Industry Dynamics, and Macro
Environment factors
The business plan should discuss the
relevant industry dynamics:
O Who are the competing enterprise in the
industry and what are their comparative
advantages and disadvantages? What
business models and strategies are they
employing
O Who are the suppliers in the industry and
what are their capabilities and bargaining
power?
O What are the channels of distribution being
used by the industry? How effective are these
channels?

14. Macro Environment
includes: social, political, economic,
ecological, and technological ( SPEET)
O Social Environment includes the demographics
and cultural dimensions that govern the relevant
entrepreneurship behavior.
O Political Environment- defines the governance
system of the country or the local area of business.
O Economic environment- mainly driven by supply
and demand forces
O Ecological environment- includes all natural
resources and the ecosystem that defines the
habitat of man, animals, plants and minerals
O Technological Environment- makes or brakes
competing participants in any industry.

15. 6th Section: Product /Service
Offering: Description,
Evolution, and Justification
O The products/services must be described
by highlighting the features and attributes
that would most appeal to the target
customers.

16. 7th section: Enterprise strategy
and Enterprise Delivery
System
O The business plan should expound on the
Enterprise Strategy (ES) by mapping the
competitive landscape and by situating
the enterprise and its competitors as to
their strategies and chosen positionings.

17. 8th Section: Financial
Forecasts: Expected Returns,
Risks, and contingencies
O The important return calculations are the
following:
O 1. expected return on sales
O 2. expected return on assets or
investments
O 3. expected return on stockholders’ equity

18. 9th Section: Environmental
and Regulatory Compliance
O The business plan must articulate the
laws, rules, and regulations governing the
business, and the industry that the
enterprise is in.

19. 10th Section: Capital Structure and Financial
Offering: Returns and Benefits to investors,
Financiers, and Partners
O Finally, the business must appeal to its
target audience. It must highlight for them
the main features of the business plan
that they are looking for.