BUSINESS PLAN: AN OVERVIEW 2.

It should include a market research that

identifies competitors, the share of the market
THE BUSINESS PLAN and the range of the products produced. By
• A Business Plan is a written document that
learning how competitors conduct their
operations, tricks of the
defines the goals of your business and describes how
trade in the business may be learned
you will attain those goals.
and entered to be used as a basis to
• A Business Plan sets objectives, defines excel.
budgets, engages partners, and anticipates problems 3. It needs to have a list of everything needed
before they occur. which comprises the equipment, technology,
• It serves better as a roadmap, a guide to keep
raw materials, financial and other resources
needed when starting and running a business
you on track according to your purpose and your
venture. Having all these listed will give an
mission.
idea on how much capital is needed before
• Potential investors are not likely to consider the start-up and how much money should
investing in a new venture until the business plan has made in a day to make the business survive.
been completed 4. It also needs to be written in formal format
and style since a business plan is something
• The business plan helps the entrepreneur that have to be presented to business partners,
maintain perspective as to what needs to be financial firms and banks.
accomplished. 5. A business plan should be error – free. This is
important because the business plan defines
CONCEPT OF A BUSINESS PLAN the business person.
- A business plan is a written document prepared
by the entrepreneur that describes all the
WHY DO WE NEED A BUSINESS PLAN
relevant external and internal elements involved 1. A business plan is an effective tool for
in starting a new venture. It is often an defining the existing realities. It prompts
integration of functional plans such as to analyze the business project or the
marketing, finance, manufacturing, and human existing situation objectively and
resources. critically, define a focus and set realistic
COMPONENTS OF BUSINESS PLANNING goals. It may also constitute the basis for
1. Sales and Marketing control and evaluation.
- Any sales and marketing decision made must be 2. A good business plan will reveal
based on a realistic sales estimate over the weaknesses or omissions in planning.
period. Because good business plans require
2. Operations a guesstimate of risk calculation, it helps to
- Operational decisions cover Production, reduce risks.
Engineering, Distribution, Human Resources, 3. It provides a valuable communication tool
and Information Communication and presented in an organized, credible manner,
Technology. which allows lenders, outside directors,
3. Technology investors, banks and employees to obtain a
- The use of Technology can generate a significant complex view of the business. Even if, in
market advantage that competitors find difficult some cases, a business plan format is not
to match. officially required when applying for a loan,
although most lenders will ask for one, the
CHARACTERISTICS OF A SOUND very existence of a plan constitutes a plus, a
BUSINESS PLAN step forward in obtaining the loan.
1. A business plan should be detailed. In listing
products and services for example, it should
not stop by just enumerating them, it should
include the descriptions and scope of the
products and services.
 OUTLINE OF A BUSINESS PLAN 2. Market Analysis
The Executive Summary -This section assesses the customer segment(s)
- The Executive Summary provides a concise that the company serves. In this section, the company
synopsis of the business plan, and highlights the key must convey the needs of its target customers. It must
points raised within. The Executive Summary must then show how its products and services satisfy these
communicate to the prospective investor the size and needs to an extent that the customer will pay for
scope of the market opportunity, the venture’s them.
business and profitability model, and how the
resources/skills/strategic positioning of the
• The market analysis breaks the industry into
segments and zeros in on the specific segment (or
Company’s management team make it uniquely
target market) to which the firm will try to
qualified to execute the plan. The Executive
appeal.
Summary must be compelling, easy-to-read, and no
longer than 2-4 pages. • Items to include in this section:
- Market segmentation and target market
OUTLINE OF A BUSINESS PLAN selection.
1. The Industry - Buyer behavior.
-This section evaluates the playing field in - Competitor analysis.
which the company will be competing, and includes
well-structured answers to key market research 3. Competitive Analysis
questions such as the following: -An investigation of direct and indirect
• What are the sizes of the target market segments? competitors, with an assessment of their competitive
advantage and an analysis of how it will overcome
Growth rate? & Sales Projection?
any entry barriers to the chosen market.
• What are the trends for the industry as a whole?
• With what other industries do your services 4.Marketing Plan
-A detailed explanation of the sales strategy,
compete?
pricing plan, proposed advertising and promotion
• What is the industry structure, the nature of activities, and product or service's benefits.
participants & key success factors?
5.Management Plan
COMPANY DESCRIPTION -An outline of the business's legal structure and
-This section begins with a general description of management resources, including the internal
the company. management team, external management resources,
Items to include in this section: and human resources needs.
-The Management Team section demonstrates
• Company description. that the company has the required human resources
• Company history. to be successful. The business plan must answer
questions including:
• Mission statement.
• Products and services. • Who are the key management personnel and
what are their backgrounds?
• Current status. • What management additions will be required to
• Legal status and ownership. make the business a success?
• Key partnerships (if any). • Who are the other investors and/or shareholders,
if any?
Outline of a Business Plan • Who comprises the Board of Directors and/or
Board of Advisors?
• Who are the professional advisors (e.g., lawyer,
accounting firm)?
6.Operations Plan MARKETING PLAN
-A description of the business's physical -The marketing plan details the strategy for
location, facilities and equipment, kinds of penetrating the target markets. Key components
employees needed, inventory requirements and include the following:
suppliers, and any other applicable operating details,
such as a description of the manufacturing process.
•A description of the company’s desired
strategic positioning
-These sections detail the internal strategies for
building the venture from concept to reality, and • Detailed descriptions of the company’s
include answers to the following questions: product and service offerings and potential
• What functions will be required to run the product extensions
business? • Descriptions of the company’s desired
• What milestones must be reached before the image and branding strategy
venture can be launched? • Descriptions of the company’s promotional
• How will quality be controlled? strategies
-Outlines how your business will be run and how • An overview of the company’s pricing
your product or service will be produced. strategies
-A useful way to illustrate how your business
will be run is to describe it in terms of “back stage”
•A description of current and potential
strategic marketing partnerships/ alliances
(unseen to the customer) and “front stage” (seen by
the customer) activities.
PRODUCTION PLAN
-Items to include in this section:
- A production plan is that portion of the
• General approach to operations. intermediate-range business plan that the
• Business location. manufacturing / operations department is responsible
for developing. The plan states in general terms the
• Facilities and equipment. total amount of output that the manufacturing
department is responsible to produce for each period
7.Financial Plan in the planning horizon.
-A description of the funding requirements, - The output is usually expressed in terms of
detailed financial statements, and a financial pesos or other units of measurement (e.g. tons, liters,
statement analysis. kgs.) or units of the aggregate product (this refers to
the weighted average of all the products in the
8. Appendices & Exhibits company). The production plan is the authorization
-Any additional information that will help of the manufacturing department to produce the
establish the credibility of the business idea, such as items at a rate consistent with the company's overall
marketing studies, photographs of the product, corporate plan.
and/or contracts or other legal agreements pertinent - This production plan needs to be translated into
to the business. a master production schedule so as to schedule the
-The Appendix is used to support the rest of the items for completion promptly, according to
business plan. Every business plan should have a full promised delivery dates; to avoid the overloading or
set of financial projections in the Appendix, with the under loading of the production facility; and so that
summary of these financials in the Executive production capacity is efficiently utilized and low
Summary and the Financial Plan. Other production costs result.
documentation that could appear in the Appendix
includes technical drawings, partnership and/or
customer letters, expanded competitor reviews
and/or customer lists.
ORGANIZATIONAL PLAN ORGANIZING THE ENTERPRISE
-An organizational plan is basically a “to do” list for -Common structural and operating components
an organization. It lists out the plan of work, and all businesses include a series of jobs to be done
programs and organizational growth over a period of and a specific overall purpose. Each organization
time. The tasks involved, who is responsible for must develop the most appropriate organizational
them, and when they’ll be done. structure -- the specification of the jobs to be done in
An organizational plan helps to: the ways in which they relate to one another.
• Set priorities for work -Firms prepare organization charts to clarify
structure and to show employees were they fit into a
• Make sure tasks get done on time firm's operations. Each box represents a job, and
• Focus on one thing at a time solid lines define the chain of command, or reporting
relationships. The charts of large firms are complex
• Share work among staff, board members & and include individuals and many levels. Because
volunteers size prevents them from charting every manager,
they may create single organization charts for overall
• Make goals clear to investors corporate structure and separate charts for divisions.
• Get a handle on big projects by breaking
them down
• See the big picture of what an organization
is doing.

FINANCIAL PLAN
-The Financial Plan involves the development of
the company’s revenue and profitability model. It
includes detailed explanations of the key
assumptions used in building the model, sensitivity
analysis on key revenue and cost variables, and
description of comparable valuations for existing
companies with similar business models.

-In addition, the financial plan assesses the

amount of capital the firm needs, the proposed use of
these funds, and the expected future earnings. It
includes Projected Income Statements, Balance
Sheets and Cash Flow Statements, broken out
quarterly for the first two years, and annually for
years 1-5. Importantly, all of the assumptions and
projections in the financial plan must flow from and
be supported by the descriptions and explanations
offered in the other sections of the plan. The
Financial Plan is where the entrepreneur
communicates how he/she plans to “monetize” the
overall vision for the new venture.
REGISTERING YOUR BUSINESS WITH THE - Department of Labor and
GOVERNMENT AGENCIES Employment (DOLE) – for businesses
with five workers or more, register your
HOW TO REGISTER YOUR BUSINESS business with DOLE
- Home Development Mutual Fund
How to register your Business in the Philippines (HDMF) – as required by RA 7742, SSS
• There are a number of government agencies members earning at least P4,000 a month
must be registered with HDMF. This
you must register with in addition to opening
agency administers the Pag-Ibig Fund.
a bank account when starting a business in
- Philippine Health Insurance Corp.
the Philippines and hiring employees.
(PhilHealth) – all employers of are
• It is essential to register your business to required to register their employees to
avoid any legal problems once business this agency as stated in the New National
operations begin. Health Insurance Act (RA 7875 / RA
9241). PhilHealth manages and
• How to Register Your Business In The administers the government health care
Philippines system.
• Depending on the structure of your business, Other Registering Agencies
your first step is to get a certificate of
registration for your business name in one of
• Furthermore, there are certain businesses that
are required to secure a special clearance,
these agencies:
permit or license from selected government
- Department of Trade and Industry agencies as follows:
(DTI) – for single proprietorship
- Animals, animal products, animal
- Securities and Exchange Commission facilities, veterinary drugs: registration
(SEC) – for partnerships or corporations
certificate from the Bureau of Animal
- Cooperative Development Authority
Industry
(CDA) – for cooperatives
- Aquatic animals, importation, fishpond
• After getting your certificate of registration, lease agreement: permit from the Bureau
you will need to visit the following offices: of Fisheries and Aquatic Resources
- Homeowners Association – for (DA-BFAR)
businesses inside villages and - Fertilizer products, pesticide products:
subdivisions, you need to get a registration certificate from the Fertilizer
homeowner’s clearance and Pesticide Authority (DA-FPA)
- Barangay Hall – secure a barangay
clearance to operate your business
• Fiber, fiber products processing and trading:
registration certificate and commodity
- Local Government Unit (LGU) – visit
clearance from the Fiber Development
the municipality or city hall office and
Authority (DA-FIDA)
process your business permit
- Bureau of Internal Revenue (BIR) – • Film and television production and
apply for a business taxpayer distribution: registration certificate from the
identification number (TIN), register Movie & Television Review and
your books of accounts, point-of-sales Classification Board (MTRCB)
(POS) machines and receipts
• Firearms, ammunition and explosives: permit
• At this point, you may now legally start your from the Firearms and Explosives Division
business operations, but you’ll need to then of the Philippine National Police (FED-
register your employees (which may include PNP)
yourself) to the following agencies:
- Social Security System (SSS) – secure
• Food, chemicals, health related business:
registration certificate from the Bureau of
an SSS number for yourself and your
Food and Drugs, Department of Health
employees
(DoH-BFAD)
• Flour, corn and grains related business: • Real estate projects: register with the
operations and license from the National Housing and Land Use Regulatory Board
Food Authority (DA-NFA) (HLURB)
• Pawnshop, lending and finance related • Sugar, muscovado, sugar-based products and
businesses: registration certificate from the related businesses: registration certificate
Central Bank of the Philippines, from the Sugar Regulatory Administration
Department of Finance (DoF-BSP) (DA-SRA)
• Plants and plant products: nursery • Telecom business: license from the National
accreditation, registration, seed and Telecommunication Commission,
phytosanitary certificates from the Bureau of Department of Transportation &
Plant Industry (DA-BPI) Communication (DOTC-NTC)
• Recruitment or placement agency for foreign • Tourism-related projects: registration and
employment: registration certificate from the accreditation certificate from the
Philippine Overseas Employment Department of Tourism (DOT)
Administration, Department of Labor
(DOLE-POEA)
• Transportation: permits from the Land
Transport Franchise & Regulatory Board
• Recruitment or placement agency for local (DOTC-LTFRB) or Maritime Industry
employment: registration certificate from the Authority (DOTC-MARINA)
Bureau of Local Employment (DOLE-
BLE)
• Video production, sales and rental:
accreditation from the Optical Media
• Schools, technical-vocational and other Board, Office of the President (OPOMB)
educational institutions: registration, Additional information . . .
accreditation and permits from the
Department of Education (DepEd), BIR (Bureau of Internal Revenue)
Commission on Higher Education (CHEd) Who Needs to Register?
or from the Technical Education Skills
Development Authority (DOLE-TESDA)
• Individual
• Security agency business: permit from the • Sole Proprietorship
Philippine National Police, Department of • Corporation/Partnership
Interior & Local Government (DILG- -It all starts with the BIR. You cannot operate your
PNP) business without your business tax identification
• Meat plant and slaughterhouse operations: number(TIN).
You need to do these at the BIR:
accreditation and registration certificate from
1. Register your business establishment and all its
the National Meat Inspection Commission
branch offices, if any. You do this at the BIR
(DA-NMIC)
Revenue District Office (RDO) in the place where
• Mining, quarrying, logging, waste your business is located. Once you obtain your
management and related businesses: permit Certificate of Registration, you must display it in a
from the Department of Environment and conspicuous place within your business
Natural Resources (DENR) establishment.
• Motor vehicles, automotive & heavy
2. Register your books of accounts. You accomplish
this at the same RDO.
equipment, engineering, electronics,
3. Request for permit to print and issue receipts and
electrical, office & data equipments, medical
invoices. You must thereafter post a notice in your
& industrial equipment, appliances &
business premises stating that your establishment
devices: accreditation license from the
issues receipts; and that if no receipt is issued by the
Bureau of Trade Regulation and
cashier, then the customer must ask for one.
Consumer Protection (DTI-BTRCP)
 -In relation to no. 3 above, you must also request City Hall
for a permit to use a cash register and point of sale Who Needs to Register?
(POS) machines, as well as a permit to use loose-
leaf books of accounts, accounting records or a
• Sole Proprietorship
computerized accounting system. If your business • Corporation/Partnership
has branches, each branch must have its own books
of accounts.
• A Business Permit is sometimes also referred
to as a Mayor’s Permit because it is processed
at the City Hall – the office of the mayor.
DTI (Department of Trade and Industry)
Securing a business permit from the Mayor’s
Who Needs to Register?
Office can only be done after accomplishing
• Sole Proprietorship two other registrations:
-Before you can conduct business in the country, 1. The registration of your business with the
you need to register a name associated to your Department of Trade and Industry or DTI (for
business. This is called business name registration single proprietorship) or with the Securities
(BNR). This is required if a person will use a name and Exchange Commission or SEC (for
other than his true name. partnership or corporation)
2. Securing a Business Barangay Clearance
SEC (Securities and Exchange Commission)
Who Needs to Register? SSS/PHILHEALTH/PAG-IBIG
• Corporation/Partnership Who Needs to Register?
- The SEC is an agency under the Philippine • Individual
Department of Finance that is responsible for
regulating the securities industry.
• Sole Proprietorship
- It supervises all registered business entities in • Corporation/Partnership
the country (with the power to suspend and -The term “employee” denotes any person
revoke registrations), investigate violations legally employed in the Philippines, any person
of securities laws and impose sanctions, and compulsorily covered by the GSIS under the
make policies with regard to the market in Commonwealth Act 186, or any person
securities. compulsorily covered by the SSS under Republic
- It also supervises stock and bond brokers as Act 1161. Such employee is automatically
well as the stock exchanges. covered for these government-mandated
employee benefits. This includes self-employed
Local Barangay individuals or freelancers.
Who Needs to Register?
• Sole Proprietorship
• Corporation/Partnership
• You need to secure a company barangay
clearance first in the barangay where your
business will be operating. It is also a
requirement when registering for a Mayor’s
Permit.