BUSINESS PLAN Flashcards by Camyl Franz Balboa

the art of observing correct
practices in managing and operating
a self-owned wealth-creating
business enterprise by providing
valuable goods and services to the
customers.

Entrepreneurship

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s the process of identifying
opportunities, developing innovative
ideas, and taking the initiative to
create, manage, and grow a business
or venture to address needs, solve
problems, or provide value, often
while taking on financial and personal
risks.

Entrepreneurship

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-refers to a business or enterprise that correctly adopts
and practices the principles of entrepreneurship.
-it is owned by one person with a limited workforce of
not more than 20 persons.
-includes the small and medium enterprises (SMEs) that have
been strongly promoted by both government and non
government organizations (NGOs) in their desire to improve the
lives of the Filipino people through entrepreneurship.

Small Business

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It can encompass a range of industries and business
models, including startups, innovative businesses, or
businesses operating in niche markets.

Many small businesses aim for growth and innovation,
possibly expanding their operations or introducing new
products or services over time.

Small Business

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pertains to a business enterprise managed and
operated by an owner who is not an advocate of and
does not practice the concepts and principles of
entrepreneurship.

Ordinary Small Business

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prepared using a scientific approach in
determining possible business situations considering the different
perspective of people who are interested in the business

business plan

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actually the road map of the new business it is the
road map of the entrepreneur it is the only single written document that
must be prepared before opening a new business or expanding an
existing business. It provides a clear direction to any uncertain business
endeavor.

business plan

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defined as a detailed integrated written
document that describes the various activities involved in
opening and operating a new entrepreneurial venture. In
case the business project is relatively large in terms of
financing or funding requirements, the entrepreneur
usually seeks the assistance of consultants.

business plan

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presents the general perspective of
the business. It includes, among others, the following
sections:
Proposed name of the business1. Address of the business2. Name of the owner or owners3. Description of the business4. Location of the business5. Funding requirement and source6.

Introduction

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In case the consulting team prepares the business
plan for prospective owners or investors, the section
_________________ is added as the last
section.

Statement of Confedentiality

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reflect the business identify and images.
promotes the philosophical values and culture
that the business values the most.
profess the brand identity of the product, and
attract or influence the target consumers4.

Proposed Name of the Business

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It is important that the address of the business is
correctly written because all business
correspondence is mailed to the business address.
Raw materials and other manufacturing supplies are
shipped by the seller to the designated business
address.

Address of the Business

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The _____________ must be properly stated. In a
SOLE PROPRIETORSHIP, there is only one owner. In case
the venture is a PARTNERSHIP, the names of the partners,
including the extent of their liabilities, must be
indicated.

For BUSINESS VENTURES 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.

Name of the Owner

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must include
information about the type of product or service that
the business intends to produce or provide. It may
include brief information about the ultimate mission,
vision, and objectives of the business. The other
Product or services that the business plans to produce
or provide must also be mentioned in the description of
the business.

Description of the Business

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There are no rigid rules in the selection of the business
location since several variables affect the selection of
the business location. The basic entrepreneurial
consideration is to place the proposed business in a
strategic location that will assure competitive
advantage

Location of the Business

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The following factors should be considered when
deciding on the location of the proposed business:
1. Proximity to the target consumers
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 climatic conditions

Location of the Business

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Funding Requirement and Source

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The estimated total initial costs of the business venture
must be indicated. It should include the projected
breakdown or allocation of the total costs e.g., how
much will be for building, equipment, supplies, and
working capital. This section also presents the source
of funds. The initial costs 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.

Funding Requirement and Source

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a concise overview of your business plan,
typically one to two pages long. It’s the first thing potential
investors, lenders or partners will read, so it needs to be
compelling and informative.

Executive Summary

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Sections Included in the Executive Summary:
1. Vision, mission, goals, and objectives of the
business
2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business

Sections Included in the Executive Summary:

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At the very outset, the business plan must depict the
fundamental characteristics, nature, philosophical values,
identity, and images of the business. These important
concerns are embodied in the VMGO of the business.

Vision, Mission, Goals, and Onjectives

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defines the perspective of the business
in terms of its structure, production, operation, and financial
activities that will lead to the achievement of the VMGO.
There is no standard model that will exactly fit all types of
business because they have different strengths and
weaknesses, infrastructures, networks, and value
propositions.

Business Model

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will help
determine how the business defines its course
and the process and accumulating wealth. It tells
the size of the market and the target market
share of the business and product.

Business and Product Position

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it describes the methodologies or approaches that will
be taken by the business in order to:
maintain a competitive advantage,1.
position the business in the market,2.
improve the market share, and3.
maximize the utilization of resources.4.

Wealth Improvement Approaches
it describes the methodologies or approaches that will
be taken by the business in order to:
maintain a competitive advantage,1.
position the business in the market,2.
improve the market share, and3.
maximize the utilization of resources.4.

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It is the description of the parties that strongly support the business.

Parties Supporting the Business

Parties that have direct relationships with the business:

1. CONSUMERS Creditors2. Suppliers3. Employees and staff4.

Relevant information about individuals and parties that support the business is important since the proposed business may conduct transactions with them later

true

is a strategic tool that helps determine the external and internal factors affecting the performance of the business. -is a crucial element of a comprehensive business plan. It provides foundation for understanding the market landscape, identifying opportunities, and mitigating potential threats.

ENVIRONMENTAL ANALYSIS

may begin with a description of the global business situation to provide enough knowledge about the global perspective or horizon of the business.

global analysis

After describing and possibly convincing the reader of the bright business prospects in the world market, the next step is to present the societal analysis and determine the different variables affecting the societal environment.

societal analysis

examines social trends, values, demographics, and cultural shifts that influence consumer behavior and business operations. It helps businesses understand how societal expectations and behaviors impact demand, branding, and corporate responsibility

societal analysis

Businesses operate in an environment influenced by various factors like economic trends, competition, government regulations, and technological changes

The Impact of External Forces

External factors (such as market shifts, consumer preferences, or economic downturns) do not occur at a constant rate. Some changes happen frequently, while others are rare but significant.

The Frequency of Environmental Changes

involves three important related tasks as follows: Conducting a critical evaluation of the forces in the industry that affect the proposed business 1. Evaluating the probable position of the business in the industry2. Determining the most appropriate strategy that may be adopted by the proposed business 3.

INDUSTRY ANALYSIS

most delicate, tedious, and difficult tasks in the industry and analysis. There are some business plans that do not even show any indications that a critical analysis has been conducted, but rather the evaluation appears to be mere play of words. The industry analysis in all instances must not fail to evaluate and describe the target consumers and the competitors. Data and information on these two important forces in the industry are usually the results of research work.

conducting a critical evaluation

After conducting a critical analysis of the factors in the industry environment that primarily affect the proposed business, the next step is to evaluate the possible business position in the industry. This deals with market share and growth. Entrepreneurs may use a perceptual map, also called positioning map, to help them understand their position against their competitors in the market. It shows how the consumers responds to their product or services.

Evaluating the Business Position

The last important tasks in the industry analysis is to describe the most ________________ that may be adopted by the business. The strategy is highly influenced by the analysis of the business strengths, weaknesses, opportunities, and threats (SWOT). The reason for the selection of the strategy must likewise be clearly indicated.

Determining the Most Appropriate Business Stratgy

, is the backbone or foundation of all other analyses. Where there are no consumers or buyers of the product, the business will never be created. The presence of the consumers is the ultimate reason for the existence of any business endeavor.

The demand and supply analysis, also called the consumer and competitor analysis

presents the nature and form of the business to be undertaken and may cover two or three pages. As to nature, the business may be a merchandising, service, manufacturing, or a hybrid. The description must include the innovative features of the businee. as to form, it may either be a sole proprietorship, a partnership, or a corporation. The reason/s for the selection of the form must also be indicated. In case the study is about an already existing business, the present status of the business must be provided, including the intended innovation.

BUSINESS DESCRIPTION

Administrative operation6.Product or service that its plans to produce or serve1. Various plants and office equipment2. Size of the proposed business3. Future parties with whom contracts may be necessary4. Personal requirement5. Administrative operation

BUSINESS DESCRIPTION

rovides a detailed description of the business in terms of the following: Form of the business organization1. Liability of the owner or owners2. Organizational structure3. Roles and responsibilities4. Salary requirements5.

Organization Plan

can come in the form of a sole proprietorship, a partnership, or a corporation. There must be a purpose for the selection of the most appropriate business form. Factors affecting the selection of the most appropriate business form: Capital requirement1. Liability of the owner or owners2. Management and supervisory skills3. Tax implications4. Government interventions5. Nature of the business6. External financing requirement7.

Form of the Business Organization

describes the extent of the owner’s financial obligations with creditors. The extent of financial liability can either be limited or unlimited

Liability of the Owner or Owners

means that in the case of business dissolution and there still remains unsettled financial obligation of the business, the creditor cannot go after the personal property o the business owner. The liability of the owner is only up to extent of his/her financial contributions to the business

Limited liability

means that the creditors can run after the personal property of the owner in the event that the business fails to fully settle its financial obligation during business dissolution

Unlimited liability

The extent of liability of the owners in a sole proprietorship and a partnership is usually unlimited. In corporate form of business organization, the shareholders have limited liability. They are only liable to the extent of their investments in the corporation. The investments of the shareholders are represented through ownership of shares or stocks

true

sually shown or reflected in the organizational chart. -outlines how your business is structured, detailing the hierarchy, roles, and responsibilities within the company. It helps investors, partners, and stakeholders understand how the business operates and who is responsible for key functions.

Organizational Structure

defines the key positions within the company and outlines their duties. This helps establish clear leadership, accountability, and efficient workflow.

Roles and Responsibilities

Provides overall vision and strategic direction. Makes major business decisions. Oversees company operations and growth

1. Founder/Owner/CEO (Chief Executive Officer)

Manages daily business operations. Ensures smooth workflow across departments. Implements company policies and strategies.

2. COO (Chief Operating Officer) – If applicable

Handles financial planning, budgeting, and forecasting. Manages cash flow and financial risk. Ensures compliance with tax and regulatory requirements.

3. CFO (Chief Financial Officer) – If applicable

Develops and executes marketing strategies. Oversees branding, advertising, and customer outreach. Analyzes market trends and customer needs.

4. Marketing Manager

Develops sales strategies to drive revenue. Manages the sales team and tracks performance. Builds relationships with key clients and partners

5. Sales Manager

Oversees production, logistics, and supply chain. Ensures product/service quality and efficiency. Manages vendors and suppliers.

6. Operations Manager

Manages recruitment, training, and employee relations. Oversees company policies and workplace culture. Handles payroll, benefits, and compliance with labor laws

7. Human Resources (HR) Manager

Manages company technology and systems. Ensures cybersecurity and data protection. Supports technical needs of employees and operations.

8. IT Manager (if applicable)

Oversees new product design and innovation

Product Development Manager

Ensures excellent customer support

Customer Service Manager

Provides legal guidance and compliance oversight.

Legal Advisor

presents or describes activities related to the production of goods. the production plan is the result of the industry analysis, particularly the study of supply and demand and consumer behavior. The production plan includes the following: Production schedule1. Production process2. Processing plant and equipment3. Sources of material4. Production cost5.

Production Plan

presents the total number of goods to be produced and the expected time to produce them. The total number of units to produce, however, is usually affected by the following factors: Demand for the product1. Availability of resources2. Capacity of the plant3.

Production Schedule

different process or stages involved in the production of goods must be clearly spelled out in this section, as well as the description of the following: Exact processing procedure1. Materials, parts, or ingredients required2. Expected time to process the product3.

Production Process

escribes the manufacturing plant, the machinery and equipment, and the various tools to be used in the production of goods, including respective estimated costs. In the selection of the machinery and other equipment, the entrepreneur must consider the following factors: Capacity of the plant or machinery1. Model of the machinery or equipment2. Availability of spare parts3. Cost and terms of payment

Processing Plant and Equipment

possible sources of raw materials and manufacturing supplies must be described in terms of the following: Proximity of the source to the processing plant1. Payment terms and conditions2. Discounts and damages3. Terms of shipment4.

Sources of Materials

to the total expenses incurred in the process of manufacturing a product or delivering a service. It includes all direct and indirect costs necessary to create and bring the product to market.

Production Cost

Components of Production Cost:

direct and indirect costs, variable and fixed cocts

Expenses directly tied to production, such as: Raw materials – The components or ingredients used to make the product. Labor costs – Wages paid to workers involved in production. Manufacturing supplies – Tools and consumables used in production

direct costs

Expenses that support production but aren’t directly linked to a specific product, such as: Factory rent or utilities – Electricity, water, and maintenance for the production facility. Depreciation of equipment – The loss of value over time of machines used in production. Administrative expenses – Salaries of management and staff overseeing production.

indirect costs

Costs that change based on production levels, such as: Cost of raw materials (higher production = more materials needed). Worker wages (if paid per unit produced).

Variable Costs

Costs that remain constant regardless of production output, such as: Factory rent or lease. Salaries of permanent employees.

Fixed Costs

within a business plan outlines how you'll reach and attract customers, detailing strategies, tactics, and budget for promoting your product or service to achieve specific goals.

Marketing plan

details how the proposed business will sell its product to the target consumers Sections: Product1. Place2. Price3. Promotion4. 5. People 6. Packaging 7. Positioning

Marketing plan

tangible good or intangible service offered by the business to the target consumers

Product

the place where the target consumers are.

place

the amount a customer is willing to pay for a product or service

price

refers to the mode of conveying the presence and attributes of the product to the target consumers.

promotion

individual employees or workers who are directly involved in the production, marketing, and sale of the product or service

people

process of putting the product in a package or container.

packaging

how a brand, product, or service is perceived in the minds of consumers relative to competitors.

positioning

describes the factors of the marketing mix in its various sections, such as product and people in the business description sections, place or location in the introduction, and positioning in the environmental section.

true

It accumulates and describes all the data expressed in monetary units from other sections of the business plan. For example, the amount of salaries that appears in the projected statement of comprehensive income comes from the organization plan, and the cost of machineries and equipment that appears in the noncurrent asset of the projected statement of financial position comes from the production plan.

financial plan

s an asset that a company expects to hold for more than one year and is not intended for immediate sale or conversion into cash. These assets help a business generate revenue over the long term.

non-current asset (also called a long-term asset) i

hysical assets such as: 1. Property, Plant, and Equipment (PP&E) (e.g., buildings, machinery, land, vehicles) Land and land improvements Furniture and fixtures 2. Intangible Assets – Non- physical assets with long-term value, such as: Patents (grants the exclusive legal right) Trademarks Copyrights Goodwill Brand recognition

tangible Assets

Non- physical assets with long-term value, such as: Patents (grants the exclusive legal right) Trademarks Copyrights Goodwill Brand recognition

Intangible Assets

Long-term investments that do not involve physical substance, including: Stocks and bonds held for investment Long-term loans and receivables Investments in subsidiaries or associates

Financial Assets

Key Characteristics of Non-Current Assets:

Long-Term Use: They provide benefits beyond the current financial year. Depreciation or Amortization: Most non-current assets (except land) lose value over time due to wear and tear or obsolescence. Not Easily Converted to Cash: Unlike current assets (e.g., inventory, accounts receivable), non-current assets are not intended for quick sale.

simply collates and describes the various sets of information derived from the other sections in the business plan. It is composed of the following important areas: Major assumptions1. Projected statement of comprehensive income2. Projected statement of cash flow3. Projected statement of changes in equity4. Projected statement of financial position5. Financial statement analysis

financial plan

BUSINESS PLAN Flashcards

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