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2. INTRODUCTION TO BUSINESS PLAN
PREPARATION
Chapter 6
Lesson 1
PREPARED BY:
-ALJEAN MAE ROSELL
-NICOLE JOY DAGUIA

3. BUSINESS PLAN
The business plan is the roadmap of the new business and the
entrepreneur. Business plan is defined as a detailed and integrated written
document that describes the various activities involved in opening and
operation a new entrepreneurial venture.
The business plan is prepared using scientific approach in determining
possible business situations considering the different perspectives of people
who are interested in the business.
Though the perspective of the entrepreneur has the major influence on the
business plan, he/she nonetheless must still consider the views of the
customers, creditors, and even the employees and staff.

4. In general, two major tests are conducted every time a new business idea is
created, the test of possibility and the test of feasibility. The test of possibility
on the new business idea should have positive results, so that the next test,
which is the test of feasibility or viability, can be conducted.
Feasibility study serves as the forerunner of the business plan. The primary
objective of the feasibility study is to determine whether the proposed
business is feasible or not in all areas. If the outcome of the feasibility study is
positive, then the entrepreneur prepares the business plan.
The content and structure of the business plan are almost the same as
those of the feasibility study. The data shown in feasibility study are the same
set of data presented or used in the business plan. Nonetheless, the business
plan presents a more detailed discussion of how the business will be
undertaken and operated.

5. MAJOR PARTS OF THE BUSINESS PLAN
1. INTRODUCTION
2. EXECUTIVE SUMMARY
3. ENVIRONMENTAL ANALYSIS
4. BUSINESS DESCRIPTION
5. ORGANIZATIONAL PLAN
6. PRODUCTION PLAN
7. OPERATING PLAN
8. MARKETING PLAN
9. FINANCIAL PLAN
10. APPENDIX

6. • The introduction presents the general perspectives of the
business. It may consist of one to two pages.
• It includes the following sections:
1. Proposed name of the business
2. Address of the business
3. Name of the business
4. Description of the business
5. Location of the business
6. Funding requirement and source
In case the consulting team prepares the business plan for
perspective owners or investors, the section Statement of
Confidentiality is added as the last section.
I. INTRODUCTION

7. PROPOSED NAME OF THE BUSINESS
-- The formulation and drafting of the proposed business name is not as
simple as it sounds. It is a delicate and important entrepreneurial task.
-- Remember that the name of the business may exist in the market for
many years. Careful and in-depth planning is of prime importance.
The proposed business name must
1. Reflect the business identity and image,
2. Promote the philosophical values and culture that the business value the
most,
3. Profess the brand identity of the product, and
4. Attract or influence the target consumers.
A least three suggested trade names must be submitted to the
Department of trade and Industry for approval and registration.

8. ADDRESS OF THE BUSINESS
-- It is important that the address of the business is correctly written because
all business correspondence are mailed to the business address.
-- Raw materials and other manufacturing supplies are also shipped by the
seller to the designated business address.
-- Nowadays, it is also necessary for the business to have an email address to
facilitate electronic communication between the business and the
customers, suppliers, creditors, and other significant parties.

9. NAME OF THE OWNER
-- Name of the owner must be properly stated. In a sole proprietorship, there
is only one owner.
-- In case of a partnership, the names of the partners, including the extent of
their liabilities, must be indicated. For example, if a partner’s contribution
takes the form of a service, a description like industrial partner or limited
partner must be properly mentioned.
-- For business venture that will operate as a corporate entity, the names,
nationalities, and addresses of the incorporators must be given.
Incorporators are persons who originally formed the corporation.

10. DESCRIPTION OF THE BUSINESS
-- A brief description of the business must include information about the type of
product or services that the business intends to produce or provide.
-- It may include a brief information about the ultimate mission, vision, and
objectives of the business
-- The other products or services that the business plans to produce or provide
must also be mentioned in the description of the business.

11. LOCATION OF THE BUSINESS
-- The basic entrepreneurial consideration is to place the proposed business
in strategic location that will assure competitive advantage.
What is the difference between the sections Address of the
Business and Location of the Business?
The former simply states the exact business address. No additional
description is provided to highlight the exact business address. The latter
indicates the reason/s for the selection of the location.
-- In case the processing plant is not within the vicinity of the business, its
exact location must also be described.

12. LOCATION OF THE BUSINESS
-- The following factors should be considered when deciding on the location of
the proposed business:
1. Proximity to the target customers
2. Distance from the sources of raw materials, labor, and utilities
3. Availability and cost of transportation
4. Peace and order situation
5. Presence of direct competitors
6. The geographic and climate conditions

13. FUNDING REQUIREMENT AND SOURCES
-- The estimated total initial cost of the business venture be clearly indicated. It
should include the projected breakdown or allocation of the total cost, e.g.,
how much will be for building, fixtures, equipment, supplies, and working
capital.
-- This section also presents the source or sources of funds. The initial cost of
the investment may be provided solely by the owner or owners or partly by
the owner and creditors. The estimated period to settle the funding source
provided by creditors must also be mentioned.

16. END OF LESSON