Reviewer in Entrepreneurship
1st Quarter
CHAPTER 1: PLANNING THE ENTERPRISE
I. Introduction
A. The Business Concept and Business Model
B. The Business Goals: Vision, Mission,
Objectives, and Performance Targets
C. The Business Offering and Justification
II. Executive Summary
III. The Business Proponents: Organizers with
their Capabilities and Contributions
IV. The Target Customers and The Main Value
Proposition to the Customer
V. The Market, Market Justification based on
the Industry Dynamics and the Macro
Environmental Factors Affecting the
Opportunities and Threats in the Market, the
Size, Potential and Realistic Share of the Market
VI. The Product and Service Offerings
VII. The Enterprise Strategy and Enterprise
Delivery Systems: Business Competitiveness
VIII. The Financial Forecasts and Expected
Returns, Risks, and Contingencies
IX. Environmental and Regulatory Compliance
X. The Capital Structure and Financial Offering:
Return and Benefits to Investors, Financiers, and
Business
Contents of the Business Plan
The Business Concept and the Business Model
Business Concept – contains the essence of
the enterprise in a concise but powerful
manner
- An idea for a business that includes
basic information such as service or
product, target demography, and
unique selling proposition, that gives
company a competitive advantage
Business Model – a formula on how the
enterprise exactly plans to make money out of
the business
Unique Selling Proposition – a factor the
differentiates a product from its competitors as
the lowest cost, the highest quality or the first
ever product of its kind
The Business Goals: Vision, Mission, Objectives
and Performance Targets
Business goals – show the future and long-term
prospects of the enterprise
Key result areas – must be rendered into
quantified performance measurements,
otherwise called performance indicators
Performance indicators – serves as the
aspirational scorecard of the enterprise
managers and the motivational results of the
investors
Vision – what an enterprise foresee/want to
achieve
Mission – broad statement of the business
general direction and aspirations
Objectives – are much more precise and
operational
Main Value Proposition – Marketing statement
that a company uses to summarize why a
customer should buy the product and service
The Executive Summary
- Contains everything that is relevant and
important to the business audience
- A synthesis of the entire plan
- Contains the major argumentations of
the business proponent n why the
business will work and succeed
- Should introduce an highlight the good
qualities of:
1. The business proponents ad their
partners
2. The enterprise organization and its
capabilities
3. The technology providers and their
expertise ad experience
4. The suppliers and all the major service
providers
Enterprise Strategy – builds and develops the
game plan for attaining competitiveness
Enterprise Delivery System – the entire process
of converting input (resources) into output and
these output into outcomes
  Place
The Business Proponents  People
 Promotion
Four Types of Stakeholders:  Price
1. Resource mobilizers and financial backers
2. Technology providers and applicators 6Ms (Inputs)
3. Governance and top management
4. Operating and support team  Money
 Men
The Target Customers and the Main Value  Machines
Proposition  Materials
 Methods
MVP – unique selling proposition of the  Management
enterprise
Financial Forecasts: Expected Returns, Risks
USP – distinction and Contingencies

Market Demand and Supply, Industry Important return calculations:

Dynamics, and Macro Environmental Factors
SPEET
 Social Environment – includes the
demographics and cultural dimensions
that govern the relevant entrepreneurial
behavior
 Political Environment – defines the
governance system of the country or the
local area of business
 Economic environment – mainly driven
by supply and demand forces
 Ecological environment – includes all
natural resources and the ecosystem
that defines the habitat of man, animals,
plants, and minerals
 Technological environment – makes or
breaks competing participants in any
industry
Enterprise Strategy and Enterprise Delivery
System
EDS
1. Input – resources mobilized
2. Throughput – the transformation process
where input are converted to output
3. Output – the products or services and are
then marketed to the customers or
experienced by the customers
7Ps (Marketing)
 Positioning
 Product
 Packaging
1. Expected return on sales
2. Expected return on assets or investments
3. Expected return on stockholders’ equity
CHAPTER 2: OPPORTUNITY SEEKING,
SCREENING, AND SEIZING
Opportunity Seeking
Entrepreneurs have endless curiosity to
discover new or different ideas and see
whether these ideas will work in the
marketplace.
Introducing new products or services or finding
better ways of making them may include
innovation. They may also tinker on improving
them operational capability by employing new
technologies.
Entrepreneurial mind frame – allows the
entrepreneur to see things in a very positive
and optimistic light in the midst of crisis or
difficult situations
Crisis – in Chinese writing, is composed of two
characters
- The first character means danger
- The second character means
opportunity
Entrepreneurial heart flame – surging passion 2. Political Environment – defines the
that causes them to be drawn to find fulfillment governance system of the country or the
in the act and process of discovery local area of business
- Commonality between inventor and an - Includes all the laws, rules, and
entrepreneur regulations that govern business
practices as well as the permits,
Passion – the great desire to attain a vision or approvals, and licenses necessary to
fulfill a mission operate the business
- Wanting something so much that a - Regulates the use of natural resources;
person would be willing to totally the disposal of wastes; the taxation of
devote one’s self to the quest income; the importation of goods and
services; the accounting and reporting
Heart flame- about emotional intelligence or of business financial statements; public
EQ and private education; health
programs; use of public funds; and other
Entrepreneurial gut game – ability of the such concerns
entrepreneur to sense without using the five - Establishments of infrastructures,
senses logistical access, and interventions that
- Also known as intuition affect the costs of doing business
- The entrepreneur just knows whether 3. Economic environment – supply and
something will work or not without demand forces mainly drive the macro
necessitating logical, systematic, and environment, which also drive the
sequential thinking interest and foreign exchange rates that
- Also connotes courage o “lakas ng fluctuate with the movement of the
loob” (strong intestinal fortitude”) market forces
- Confidence in one’s self and the firm 4. Ecological Environment – includes all
belief that everything is within reach so natural resources and the ecosystem,
long as you aspire for it habitat of men, animals, plants, and
minerals
Many Sources of Opportunities 5. Technological Environment – new
scientific and technological discoveries,
Macro environment – “big or macro forces” which often lead to the launch and
that affect the area, the industry, and the commercialization of new products with
market, which the enterprise belongs to superior attributes invokes the
- Influence how businesses should be entrepreneur to invest in new
conducted, how consumers will technologies in order to keep up with
behave, and how supply and demand competition
will move, how different competitors Examples of Relevant Opportunities and
would position themselves, and how the Threats to a Fast Food Chain
cost of doing business will proceed Factors Opportunities to the Threats to the
Enterprise Enterprise
1. Social Increased
Five categories of Macro environment (SPEET): Increasing double customer base for
income earners in the fast food chain
the family More healthy
1. Socio-Cultural Environment – includes Trend toward product offerings
the demographics and cultural healthier food are demanded by
choices customers
dimensions that govern the relevant
2. Political Increased
entrepreneurial endeavor Tax exemption for purchasing power
- Helps the entrepreneur assess the trends 13th month pay and of the consumer
other bonuses up leading to higher
and dynamics of the bigger consumer to Php 70 000 retail sales
population, their beliefs, tastes, customs, passed by
and traditions Congress
3. Economic
ASEAN Integration
in 2015
4. Ecological - Follows the product chain but
Increased usage of
eco bags and concentrates on the ‘value’ added from
environment- one stage of the product to the other – a
friendly containers value that is given by the market price
5. Technological Greater usage of Potential for online
Increases usage of apps to place customer differential between the stages of
smartphones to delivery orders via disappointments production
disseminate smartphones which and netizens
important may help increase bashing due to
Example: A cup of designer coffee
information market reach poor product/ by
intermittent Relationship Between Product Chain and
technical glitches
Value-Added Chain
Industry Sources of Opportunities
PRODUCT CHAIN VALUE-ADDED CHAIN
Industry and market – next biggest sources of Raw Material Raw Material’s Prices and
Additional Cost and Profits
opportunities
Semi-Processing Semi-Processing
Participants in an industry include: Semi-Processed Goods Prices
and Additional Cost and Profits

1. Rivals or competitors in a particular type Fully Processed Products/ Services

Price of Processed Goods
of business
True rivals or competitors – are those
Market Sources of Opportunities
competing for the same or similar markets
Market sources of opportunities can be
2. Suppliers of input to rivals as well as
discovered from increased or decreased
suppliers of machinery and equipment,
demand as well as higher or lower supply
suppliers of manpower
Example: Value/combo meals or “more for
3. Consumer market segments being
less” strategy
served by rivals or competitors
4. Substitute products or services, which
Micromarket – refers to the specific target
customers shift or turn to
market of a particular enterprise
5. All other support and enabling industries
- Are the target customers that represent
the immediate customers of an
The most common way of defining an industry
enterprise, meaning those who are
is:
currently buying the goods or services
offered by the enterprise and its
1. According to product types or
competitors
according to the functions of the
- Pertains to a clearly defined location or
product or service
specific customer group that an
2. By tracing the industry from its most
enterprise wishes to serve
basic raw material down to its various
- There is a need for segmentation
consumer applications (Product or
because the definition of value for
Value-added Chain)
money differs from group top group
- Narrow down your estimation to the
Product chain – focuses on the volume
relevant population or target customers
produced or converted at each link of
in the area where you want your
the chain
business (Micromarket)
Example: Coconut industry - coconut
tree is regarded as “the tree of life”
Consumer Preferences, Piques, and
Perceptions
Value-added chain – focuses on the
economic rather than the volume
Consumer Preference – refers to the tastes of a
aspect of the chain
particular groups of people
Examples: clothes people wear, the food they
eat, the music they listen to, and the movies
they watch
Consumer dislikes – the things that irritate
customers
Other sources of Opportunities:
- Unexpected success
- The entrepreneur’s own set of skills or
expertise, or hobby
1. Customer preferences change over
time
2. People’s tastes in clothes, music, shoes,
entertainment, dance, sports, hobbies,
and even careers have evolved over
the years
3. What piques customers is a great source
of opportunities
4. Before the customer is win over, there is
first a battle of the mind. Next, there is a
battle for the heart. Finally there is a
battle for the wallet
5. The longer the customer wants to use
the product, the greater the chances of
creating a lasting loyalty
6. Opportunities abound in shaping
consumer perceptions or occupying
spaces in their minds or places in their
hearts that have not yet been filled
7. New inventions, new systems and work
processes, new insights about the
human psyche, new applications for old
knowledge, new revelations about how
the physical world works, new
interpretation, new outlooks about how
life should be led, and host of other new
things are tremendous sources of
opportunities
8. Determining personal preferences and
competencies lay the foundation for a
business venture
9. Unexpected occurrences in both the
external and internal environment of the
enterprise indicate that significant
changes are happening and
opportunities are sprouting
Opportunity Screening
The Personal Screen
The 12 Rs of Opportunity Screening
1. Relevance to the vision, mission, and
objectives of the entrepreneur. The opportunity
must be aligned with what you have as your
personal vision, mission, and objectives for the
enterprise you want to set up.
2. Resonance to values. Other than mission,
vision, and objectives, the opportunity must
match the values and desired virtues that you
have or wish to impart
3. Reinforcement of entrepreneurial interests.
How does the opportunity resonate with the
entrepreneur’s personal skills, talents, and
interests?
4. Revenues. In any entrepreneurial endeavor,
it is important to determine the sales potential
of the products or services ypu want to offer Is
there a big enough market out there to grab
and nurture for growth.
5. Responsiveness to customer need and
wants. If the opportunity that you want to
pursue addresses the unfulfilled or undeserved
need and wants of customers, then you have
a better chance of succeeding
6. Reach. Opportunities that have good
chance of expanding through branches,
distributorships, dealerships, or franchise outlets
in order t attain rapid growth are better
opportunities.
7. Range. The opportunity can potentially lead
a wide range of possible product or service
offerings, thus, tapping many market segments
of the industry
8. Revolutionary Impact. If you think that the
opportunity will most likely be the “next big
thing” or even a game-changer that will
revolutionize the industry, then there is a big
potential for the chosen opportunity
9. Returns. It Is a fact that products with low
costs of production and operations but are
sold at higher prices will definitely yield the
highest returns on investments. Returns can also
be intangible; meaning, they come in the form
of high profile recognition or image projection
10. Relative Ease of Implementation. Will the
opportunity be relatively easy to implement for
the entrepreneur or will there be a lot of
obstacles and competency gaps to
overcome?
11. Resources Required. Opportunities requiring
fewer resources from the entrepreneur may be
more favored than those requiring more
resources.
12. Risks. In an entrepreneurial endeavor, there
will always be risks. However, some
opportunities carry more risks that others, such
as those with high technological, market,
financial, and people risks.
The Pre-Feasibility Study
Factors
 Market Potential and prospects
 Availability and appropriateness of
technology
 Project investment and detailed cost
estimates
 Financial Forecast and determination of
financial feasibility
Market Potential and Prospects
Several factors before buying:
1. Their purchasing power or disposable
income
2. Their proximity or accessibility to the goods or
services
3. Their individual desires and preferences
4. Their age or generational groupings
5. Their social, cultural, or ethnic background
6. Their peer group preferences
7. Their gender
8. The season of the year
9. Their personal identification with trend setters
10. Their educational attainment
11. Their lifestyle preferences
12. Their motivational impetus
13. Their lifestyle preference
14. Their susceptibility to certain advertising
and promotional appeals, and many others
Estimating Market Share and Sales
To quantify the market potential:
1. Define the market coverage or reach he or
she wants to serve
2. Determine the broad market segments
within this area or total targeted population
3. Determine what slice or share of the
targeted market segment he or she wants to
carve out
Sales Forecast = Estimated Sales Volume x
Estimated price
Technology Assessment and Operations
Viability
Four Target Customer Expectations:
1. Quantities demanded – determine the
needed capacity of operations
2. Quality specifications demanded – would
dictate the ff:
a. Quality of input or raw materials
b. Quality assurance in transforming
input to output
c. Quality output that meet the
operations, standards set
d. Quality outcomes for the customers
3. Delivery expectations – knowing, how much,
how frequent, and when to deliver to
customers
4. Price expectations - the selling price of the
product or service of the product or service
would be evaluated by the customers
according to the value they would receive (in
terms of quality, delivery, and quantity) and
this value added should be matched against
competitors
Investment Requirements and Production/
Servicing Costs
Three Investments that need to be funded:
1. Pre-operating costs – costs related to the
presentation for the launch of the business
2. Production/Service Facilities Investment – the
long-term investment for the actual business
establishment
3. Working Capital Investment – the investment
needed to operationalize the business,
composed of cash, accounts receivable, and
inventories
Financial Forecasts and Determination of
Financial Feasibility
Financial forecast – the monetary transactions
that the business is expected to engage in
- The end result will indicate the feasibility
of the enterprise
Four Critical Financial Statements:
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Funds flow statement
Income statement:
 Marketing strategy and action program
– revenue or sales forecasts
 Operations strategy and production or
service delivery program – forecasts of
costs of goods produced
 Rest of Enterprise Delivery system –
forecasts of operating and non-
operating expenses
Balance sheet:
 Resources mobilized and held by the
enterprise – forecasts of the balance
sheet (which show the investments in
the form of assets and their
corresponding financing in the form of
liabilities)
Funds flow statements
 Flow of resources – funds and cash
statements
Income Statement – measures an enterprise’s
performance in terms of revenues and
expenses over a certain period
Revenues-Expenses = Income or Profit (Loss)
Balance Sheet
Assets – represent all the investments in the
enterprise including the initial investments that
you considered in the pre-feasibility study
Liabilities – represent the enterprise’s debts to
suppliers, to banks, to government, to
employees, and other financiers
Stockholders’ equity – represents the investors’
investments in the stock of the business
Assets = Liabilities + Equity
Retained Earnings – the accumulated profits or
losses of the enterprise over the years, which
have not yet been given back to investors as
dividends
Financial Ratios and Measurements
Payback Period – How long will it take for an
entrepreneur to get back what he or she has
invested in the enterprise
𝑷𝒂𝒚𝒃𝒂𝒄𝒌 𝒑𝒆𝒓𝒊𝒐𝒅 =
𝑻𝒐𝒕𝒂𝒍 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕
𝑨𝒏𝒏𝒖𝒂𝒍 𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆 𝒂𝒇𝒕𝒆𝒓 𝑻𝒂𝒙𝒆𝒔
Return on Sales (ROS) ratio – calculate how
much profit the enterprise is earning for each
peso sold
𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕 𝑨𝒇𝒕𝒆𝒓 𝑻𝒂𝒙𝒆𝒔
𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑺𝒂𝒍𝒆𝒔 =
𝑺𝒂𝒍𝒆𝒔
Return of Investment (ROI) or Return on Assets
(ROA) – to know the return on the investments
made
𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕 𝑨𝒇𝒕𝒆𝒓 𝑻𝒂𝒙𝒆𝒔
𝑹𝑶𝑨 𝒐𝒓 𝑹𝑶𝑰 =
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔 𝒐𝒓 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕𝒔
The Feasibility Study
- Is prepared to convince bankers and
investors to put money into the business
opportunity
Opportunity Seizing
- The Final stage
- The entrepreneur has an idea as to
where he or she will locate the business
and how he or she will market the
product or service
- The entrepreneur must be able to
determine the critical success factors
that enable other players in the same
industry to succeed while be vigilant
about those factors that cause failure
- “Will I be able to manage, to my
advantage, the critical success factors
and avoid the critical failure factors?”
Crafting a Position Statement
In order to craft a positioning statement, the
entrepreneur is advised to look at other
competitors (or subtitles) in the marketplace
- Details such as their major buyers,
attributes or features that make the
competitor’s products attractive should
give the entrepreneur an idea
Grids for competitor analysis:
Grid 1: Quality versus Price Positioning of
Competitors
- Arranges the products according to
their quality levels along the horizontal
plane and according to their prices
along the vertical plane
Grid 2: Sales Volume versus main Value
Proposition
- Arranges the products according to
their sales volume along the vertical
plane and according to their main
value propositions in the horizontal
plane
Conceptualizing the Product or Service
Offering
Concept – an idealized abstraction of the
product or service to be offered to the
preferred market of the entrepreneur
- Must be compelling and unique to the
customers targeted, meaning that the
products should contain he attributes or
features desire by the targeted market
that make up the product’s main value
proposition
Directions to come up with the product or
service concept:
1. Create a concept similar to the winning
products and ride with all the obvious market
trends
2. Find a market niche that has not been filled
by the competition
Market Niche – means small segments of the
market where discriminating customers are
searching for special product/service features
and attributes
3. Conceptualize a product in a positioning
category where the participants are rather
weak
4. The fourth is to conceptualize a product that
would change the way customers think,
behave, and buy, thus making existing
products “obsolete” and “old-fashioned”
Designing, Prototyping, and testing the Product
Designing – means that the entrepreneur must
render the concept and translate it into its very
physical and very real dimensions
(measurements)
- This entails building of a prototype that
will be ready for actual testing by the
entrepreneur and by potential
customers
Implementing, Organizing, and Financing
- Good planning and good programming
are essential to have good
implementation
- The entrepreneur must begin with the
end in mind, or his or her desired end
results, for the chose opportunity
End results – the final outcomes of the business,
such as highly satisfied customers, huge sales
realized, large profits generated and etc.
Choices of a good planner and programmer:
1. Choose the correct technology that
produces the output that would meet quality
specifications
2. Choose the right people who can perform
the technical and the managerial functions
necessary
3. Design the operating flow that would assure
effective, economical, and efficient
production
4. Specify systems and procedures that would
govern the enterprise
5. Design the organizational architecture that
would allow the people to function at their
best