Republic of the Philippines

Department of Education

PUBLIC TECHNICAL-
VOCATIONAL
HIGH SCHOOLS

Unit of Competency: Plan a Business

Module no. 4 Module Title: Planning a Business

 ACKNOWLEDGMENT

The Department of Education wishes to extend thanks and

appreciation to the representatives of the different Secondary
Technical-Vocational Schools who shared their expertise in developing
the Competency-Based Curriculum (CBC) and Competency-Based
Learning Materials (CBLM) on May 25-30, 2009 at the Marikina Hotel,
Marikina City.

This learning material was developed, enhanced and refined by

the following personnel:

Writeshop on the Development of CBC-CBLM

Writers:

MARYAN C. CABASAG
Solana Fresh Water Fishery School

MA. GENEFREDA M. CUANAN

Don Alejandro Roces Sr. Science – Technology High School

CECILIA C. BUNAO
Don Alejandro Roces Sr. Science – Technology High School

MA. JOSEFINA B. LUNA

E. Rodriguez Vocational High School

DAISY VILLANUEVA
Malolos Marine Fishery School

GAY BUENAVISTA
Muntinlupa Business High School

JEANNETH CUETO
Muntinlupa Business High School

OFELIA F. BERNARDO
Jones Rural School

ROLANDO M. CUBANGBANG
Jones Rural School
JESUSA C. IGLESIAS
San Jose National Agricultural And Industrial High School

LITO L. AGCAOILI
Alcala Rural School

Encoders:

WARREN LLOYD MANUEL

MARISOL E SALDIVAR

MIA LORAINE MANUEL

CARLO MAGPANTAY

Editor:

ESTRELLITA EVANGELISTA, Ed. D.

Facilitator:

ORLANDO MANUEL, Ph. D.

Cabaruguis National School of Arts and Trades

Writeshop on the Refinement and Enrichment of CBC-CBLM of

Entrepreneurship, June 5-7, 2009, Marikina Hotel, Marikina
City

MARYAN C. CABASAG
Solana Fresh Water Fishery School
Iraga, Solana, Cagayan
Region 02

MA. GENEFREDA M. CUANAN

Don Alejandro Roces Sr. Science – Technology High School
Roces Ave., Brgy. Obrero, Quezon City
NCR

CECILIA C. BUNAO
Don Alejandro Roces Sr. Science – Technology High School
Roces Ave., Brgy. Obrero, Quezon City
NCR
MA. JOSEFINA B. LUNA
E. Rodriguez Vocational High School
Nagtahan, Sampaloc, Manila

OFELIA F. BERNARDO
Jones Rural School
Jones, Isabela
Region II

ROLANDO M. CUBANGBANG
Jones Rural School
Jones, Isabela
Region II

JESUSA C. IGLESIAS
San Jose National Agricultural and Industrial High School
Alcala Cagayan
Region II

Encoders:

WARREN LLOYD MANUEL

Fairview, Quezon City

MARISOL SALDIVAR
Taguig City

EDUARDO PINEDA
Cauayan, Isabela

CARLO MAGPANTAY
Project 4, Quezon City

MIA LORAINE MANUEL

Fairview, Quezon City

Editor:

ESTRELLITA EVANGELISTA, Ed. D.

Facilitator:

ORLANDO MANUEL, Ph. D.

Cabaruguis National School of Arts and Trades
 Writeshop on the Finalization of CBC-CBLM of
Entrepreneurship
July 1-5, 2009, Marikina Hotel, Marikina City

MARYAN C. CABASAG
Solana Fresh Water Fishery School
Iraga, Solana, Cagayan
Region 02

MA. GENEFREDA M. CUANAN

Don Alejandro Roces Sr. Science – Technology High School
Roces Ave., Brgy. Obrero, Quezon City
NCR

Encoder:

MIA LORAINE MANUEL

Facilitator:

RENE GAOR DELFINO

Muntinlupa Business High School

Editors:

CAROLINA F. CHAVEZ
Principal II
Muntinlupa Business High School

AIDA T. GALURA – VSA II

Angeles City National Trade School

BEATRIZ A. ADRIANO
Principal IV
E. Rordiguez Vocational High School

CORAZON ECHANO, Ph.D.

Consultant
 TABLE OF CONTENTS

Module Title. Planning a Business............................................1

Pre-test...........................................................................................1

LO 1. Discuss the Importance a Business Plan ...............................3

Let Us Study....................................................................................3
 Benefits Derived from Planning a Business...........................3
How Much Have You Learned?........................................................4

LO 2. Determine the Types of Business Plan..................................6

Let Us Study....................................................................................6
 Feasibility Study....................................................................6
 Concept Paper.......................................................................8
 Business Plan.........................................................................8
How Much Have You Learned?........................................................9
Let Us Apply What You Have Learned.............................................10

LO 3. Identify and Describe the Steps in

Preparing a Business Plan ....................................................13
Let Us Study....................................................................................13
 Guide questions to help evaluate personal resources...........14
How Much Have You Learned?........................................................15
Let Us Apply What You Have Learned.............................................17

Key to Correction............................................................................19
 HOW TO USE THIS MODULE

Welcome to the Module “Planning a Business”. This module

contains instructional materials and activities for you to complete.

The unit of competency “Plan a Business” contains the knowledge,

skills and attitudes required for the course Entrepreneurship.

You are required to go through a series of learning activities in order to

complete each of the learning outcomes of the module. Follow these
activities on your own and answer the Self-Check at the end of each learning
activity.
If you have questions, don’t hesitate to ask your teacher for
assistance.
 MODULE IV

COURSE : ENTREPRENEURSHIP III

UNIT OF COMPETENCY : PLAN A BUSINESS

MODULE TITLE : PLANNING A BUSINESS

SUGGESTED DURATION : 8 HRS

WHAT IS THIS MODULE ABOUT?

This module covers the knowledge, skills attitudes and values

needed in discussing the importance of a business plan and
enumerating the steps in preparing a business plan.

WHAT WILL YOU LEARN?

At the end of this module, you should be able to:

a. discuss the importance of a business plan;

b. determine the types of business plan; and
c. identify and describe the steps in preparing a business plan.

WHAT DO YOU ALREADY KNOW?

Pre-test:

Let us find out how much you already know about planning a
business.

A. Direction: Choose the best answer. Write only the letter of the
correct answer.

1. Which of the following is the most basic of all management

functions?
a. controlling
b. directing
c. organizing
d. planning

1
 2. What are considered as positive factors of a business
venture?
a. opportunities and weaknesses
b. strengths and opportunities
c. strengths and threats
d. strengths and weaknesses

3. Which is not true in a business plan?

a. It does not detect the defect.
b. It eliminates risk.
c. It forecasts future situations.
d. It minimizes costs.
4. What is the most likely the cause of failure of Filipino
entrepreneurs?
a. crab mentality
b. failure to meet deadline
c. weaknesses
d. bahala na attitude

B. Choose the letter of the correct answer from the pool of words in
the box then write it in your answer sheet.

a. actual business f. production plan

b. business plan g. SWOT
c. capital h. goals
d. bloodstream i. costs of productions
e. poor management j. risks
k. gold

1. _____ serves as your guide in managing your enterprise.

2. A business plan is anticipated before _____is assumed.
3. Lack of _____is one of the entrepreneur’s problems to finance
business.
4. _____ is the parallel effect of lack of planning in business.
5. _____is the number of volume of intended production on a
specific period of time.
6. ____ is one of the components of business planning.
7. A marketing plan is considered the _____of the office because it
gives life to business.
8. An organizational plan is responsible on how to execute plans,
objectives and _____of an enterprise.
9. Planning can minimize ______.
10. In business, time is ________.

2
LESSON 1

DISCUSS THE IMPORTANCE OF A BUSINESS PLAN

WHAT IS THIS LESSON ABOUT?

This lesson deals with planning for a business or enterprise.

At the end of the lesson you should be able to:

a. discuss the importance of business planning;
b. appreciate certain benefits in business planning; and
c. follow the basic principles of business planning.

LET US STUDY

Words to study

micro means very small/limited in quantity

endeavor means an effort to do a task
business planning is the process of setting up goals
for a particular business
business plan means any plan that works for a
business to look ahead.

To start a small enterprise , you must have a foresight.

Anticipate what may happen to your business. Any endeavor,
particularly the desired form or type of business, sets the direction of
the enterprise.

A. The Benefits Derived from Planning a Business.

 Making a business a plan can minimize or eliminate risks . It

involves a careful study of the competence, interest and
resources of the entrepreneur against the needs of the
consumers. A feasibility study is necessary because through
this, an entrepreneur can determine whether his/her choice is
profitable or not.

3
  A business plan can also minimize the cost of production .
This includes how each of the resources of production such as
manpower, money, materials and machines are used. Every
aspect of the business operations is monitored and controlled
which prevents unnecessary waste of resources that will
result to economy and efficiency.

 A business plan can also identify the defects of the business

operations. Goals and objectives are formulated. Procedure,
strategies and techniques are planned. Reevaluation may be
done to avoid encountering the same problem.

B. The Basic Principles in Running a Small Enterprise

must consider in running a business/enterprise are the following:

1. Planning must be realistic. It must be based on available

human, financial and physical resources. Planning without
enough resources may result to the failure fail of an
enterprise.
2. Planning must be based on the needs of the community . It
should fit the needs of the people in a community which can
be known through observations, personal interviews and
questionnaires.
3. Planning must be flexible. You, as the entrepreneur should be
able to adjust and to plan if development changes occur or
changes in government laws or policies happen. Planning
should respond to the trends in consumer’s tastes and
preferences.
4. Planning must start with simple projects. This requires simple
management and technology, thus, the micro business is
advised.

LET US APPLY WHAT YOU HAVE LEARNED

You are planning to get into t-shirt printing service

business. Conduct a market survey if the service will become
successful.

Directions: Divide yourselves into two big groups. Simulate

conducting a market survey in your group. Then, present a report on
the market survey done by answering the following questions:
1. How did you conduct the market survey?
2. As a result of the survey, do you think your proposed business
will be successful? Why/why not?
3. What principle did you follow in conducting the market survey
as part of your business plan?

4
4. Why do you consider this activity (market survey) as an
important tool in planning a business?

5
LET US REMEMBER

Planning is important to ensure a profitable and

successful business.

HOW MUCH HAVE YOU LEARNED?

Directions: Write only the letter of the correct answer.

a. what to expect e. business plan

b. time management f. projects
c. strengths
d. micro

1. _______eliminates risks.
2. The positive factors of planning is called _____.
3. Planning is what to do it, how to do it, when to do it and
______in the future.
4. Planning must start with simple _____.
5. In business, time is gold. For this reason, an
Entrepreneur must be efficient in _____.

RESOURCES:

Computer with Internet Access

Journals
Magazines

REFERENCES:

Villanueva, et. al., Business Management III,

Adriana Publishing Co. Inc., pp. 74-76, Cubao, Quezon City
http//[Link]/

6
LESSON 2

DETERMINE THE TYPES OF BUSINESS PLAN

WHAT IS THIS LESSON ABOUT?

This lesson deals with the different types of business plan.

At the end of the lesson you should be able to:

a. enumerate the components of a business plan; and

b. determine and describe the different types of business plan;

LET US STUDY

Words to study

Component is a constituent part of the business

plan.
Feasibility study is an analysis and evaluation of a
proposed project to determine its
profitability.
Marketing deals with the selling and buying
activities of the business.
Project summary deals with the introduction
statement of the problem.

After having learned about the importance of business planning,

you must know the different types of business plan.

1. Feasibility study
– It is created in order to minimize risk and to ascertain the
viability of a project.
- It is not merely an investigation but a frame work on how the
operation of a business project shall be accomplished.
- It is used to determine the potential success of a proposed
business venture.

A feasibility study has a project summary which deals with the

introductory statement of the problem, the business name, the

7
business logo, the business location, descriptive definition of the
project and objectives.

A feasibility study contains five major components, namely:

a. Marketing study
– The sufficient demands for the product as well as the
competitive position of the firm in the industry must be
determined.

b. Technical study
– In this study, you must consider the manufacturing
process, plant size, production schedule, machinery,
plant location and layout structure, raw materials,
utilities and waste disposal.

c. Management study
- This involves on how the project shall be managed such
as the business organization including the organization
chart and function of each unit management personnel,
skills and numbers of labor required.

d. Financial study
- You should include the assessment of total capital
requirements break-even outputs, sales and prices,
amount of sales required to earn a certain amount of
profit and the cash payback period.

d. Social desirability
- This is measured by economic benefits to the people
living in the community and its vicinities.

2. Concept Paper

It is a written plan for a business on how it will be

managed. It is a tool to represent a certain venture
anticipating its future.

The different parts of the concept paper are the following:

a. Introduction – This is the part that discusses the significant

details of the product/service and why the
product/service is needed by the community.

b. Objectives - This part gives the details of the business both

specific and general.

8
 c. Rationale – This part focuses on the advantages of putting a
certain business.

d. Terms & conditions - In this part, specific agreement from

particular to general things are clarified.

e. Recommendations – This part is very important because it

helps to improve the project in the future.

3. Business Plan

A business plan describes the nature of the business, the sales

and marketing strategy, the financial background, containing a
projected profit and loss statement.

Components of Business Plan:

a. The environment –The needs of the people in the community

should be identified.
b. Behavior of the product – You should know the market trends,
product demand in the community, the resources,
quantity and quality goods in buying,
c. Location of the business – You should consider the place
where customers prefer to buy.
d. Organizational plan – The needed workers in the business
must be listed in the organizational chart.
e. Production plan – This involves the manpower, money,
machinery, materials and methods to be able to
produce the desired output based on anticipated profit.
f. Financial plan – You as an entrepreneur need to determine the
fiscal needs of the business and the sources of needed
funds.

4. Project Proposal
This is the initial document that converts an idea or policy
into the details of a potential project.

The Essential Parts of a Business Proposal.

a. Executive Summary
The overview of the proposal from beginning to end should
be stated in the project proposal.

b. Justification
This emphasizes the need of the proposal.
c. Procedure

9
 The steps are being explained where to start and to end.
d. Objectives
The goals or targets of the business are defined.
e. Project Organization and Management
The manpower and function of each are clearly stated.
f. Budget
You should determine the source for the input and output,
the profits and the loss of the business.

LET US APPLY WHAT YOU HAVE LEARNED

Directions: Think of a service type of business which you

feel is a good venture to invest on.
Part 1: Make your own concept paper to support your
business ideas and plans. Share it to your classmates.

TITLE OF YOUR CONCEPT PAPER:

INTRODUCTION:

OBJECTIVES:

RATIONALE:

TERMS AND CONDITIONS:

RECOMMENDATIONS:

10
Part 2: Using your data in the concept paper, conceptualize a Business
Plan. Fill in the data regarding the Components of a Business Plan.

ENVIRONMENT:

LOCATION OF THE BUSINESS:

BEHAVIOR OF THE PRODUCT:

ORGANIZATIONAL PLAN:

FINANCIAL PLAN:

LET US REMEMBER

A business plan unifies the different

parts and activities of the business to
achieve its goals and objectives.

HOW MUCH HAVE YOU LEARNED?

Directions: Choose the letter of the attribute/attributes being
described/ asked:
1. The component of a business plan which identifies the available
raw materials in your community.
a. behavior of the product
b. environment
c. location of the business
d. organizational plan
2. Why is an organizational plan needed in planning a business?
a. To find out what products and services are available and
which of these can be improved
b. To coordinate the activities of the work force towards the
company’s goals
c. To determine the needs of the community
d. To identify the market trends in the community

11
3. It is the process of setting up goals for a particular business
endeavor and taking up steps to achieve these.
a. business enterprise
b. business planning
c. business operation
d. business expertise
4. The component of a business plan which identifies the available
raw materials in your community.
a. behavior of the product
b. environment
c. location of the business
d. organizational plan
5. There are several factors to consider in selecting the location of
your business. Which of these factors is not included?
a. the cost and availability of land
b. the quality of the product
c. the availability of transportation facilities, communication,
water, electricity and labor
d. behavior of the product

12
RESOURCES:

Computer with Internet Access

Journals
Magazines

REFERENCES:

Villanueva, et. al., Business Management III,

Adriana Publishing Co. Inc., pp. 74-76, Cubao, Quezon City
http//[Link]/
http//[Link]
Teneza [Link], Business Management IV,
Shekinah Publishing and Printing Press, pp. 116,
171-172; Las Pinas, City

13
LESSON 3

IDENTIFY AND DESCRIBE

THE STEPS IN PREPARING A BUSINESS PLAN

WHAT IS THIS LESSON ABOUT?

This lesson deals with the Steps in Preparing a Business Plan

At the end of the lesson you should be able to:

a. identify and describe the steps in preparing a business plan;

and
b. follow the steps in preparing a business plan.

LET US STUDY

Words to study

scheme deals with the design of a project.

adequate means enough supply of the product.
management involves the administration of a
business enterprise.

If you already know the type of business you are planning to

engage into, the following are the steps which can help you in
preparing a business plan that you must follow:

1. Make an evaluation of your personal resources, interests,

available raw materials and available specialized technical skills
in your community. Create a name of your business. Does it tell
well about what you are selling? Is it easy to spell and
remember?

These are guide questions to help you evaluate your personal

resources:

 Are you interested in the business?

 Do you have sufficient funds?
 Do you possess management skills?
 Are raw materials available?

14
  Does the government give financial and technical
assistance?
 Do you have good personal relations with other people?

2. Conduct an analysis or survey of your market.

 Who are your customers?
 What product or service will you offer?
 Is there a good demand for your product or service?
 Are the customers interested in the existing product or
services?
 How many competitors are there in the market?
 How much is your estimated share in the market?
 Could you possibly offer a better quality product or service
at a lower price?
 Is there a reasonable profit?
3. Select a proper business location.
 Is the location clean, decent and peaceful?
 Are there customers in the place?
 Are facilities such as electricity, water, transportation and
communication available?
 Is the place accessible to raw materials and other supplies?
 In case your first choice is not available, do you have a
good alternative?
4. Make a financial plan.
 Determine your objective.
 How much money will you need?
 What are your sources of funds?
 Does your budget determine how you will spend your
money?
 How soon can you recover your investment?
5. Make a production plan.
 Determine whether to buy or lease the production
equipment
 Will you improve the quality of an existing product?
 Can your production scheme meet market demand?
 Do you have a proper scheduling of production?
6. Make an organizational plan.
 Find out what type of organization is most suitable
 Are you acquainted with the laws, policies and requirement
of your business organization?
 Who will be your workers?
 What will be the duties and responsibilities of each?
7. Make a management plan.
 Write down your goals and objectives.
 Determine your strategies.
 What customer policies will you adapt?

15
  What human resource development program will you
undertake?
 What will be your program of social responsibility?

Being an entrepreneur, you must have an effective business

plan. You should follow the steps in preparing a business so that the
data must be accurate and adequate. This will help you to choose the
appropriate and effective strategies to ensure success in your business
venture.

LET US APPLY WHAT YOU HAVE LEARNED

ACTIVITY: Think of a simple business you want to engage

in.
Make a sample business plan of that business using the format
below:

Business Name :
Location :
Name of Owner :

Introduction :

is a registered business engaged in

owned by .

Business goals are as follows:

a. The operation started on

b. The location could be reached by

c. The business could be expanded by

Table of Contents
Section I : The Business

1. Description of the Business

The business is engaged in the distribution of or production, or of
servicing customers.

2. Product/Service
The product/service is

16
3. Market
Production will be distributed in (mention primary and secondary
market) The clients belong to (description of the socio-economic
level). The product is bought by clients for the following
reasons:

4. Location of the Business

The business is located at

It can easily be reached by .

17
 5. Competitors are as follows:

(State the name of the company and other relevant facts such as
size and possible sales)

A competitor’s profile includes price, quality, location, image

projected, strategies of selling and operations.

6. Price
The current price is _____. It is derived from the following factors:
(production cost and marked up costs) .

7. Marketing strategies
The product will be distributed in the following manner:

8. Management
The management group is composed of the following (name,
position, responsibility and qualification)

9. Personnel
The personnel needed are the following (enumerate the type of
work and their qualifications)

Summary of Section One

Section II: Financial Data

1. Sources and application of funding:

18
 Secure financial assistance from

For the following purposes

Using the following collaterals

2. Capital Equipment List

The capital and equipment lists are the following:

Briefly describe the equipment and their uses. Include

processes employed in the production)

3. Balance Sheet
This is a statement of the financial condition of an enterprise at a
given point in time usually only a focus, quarterly, semi-annually
or annually. It shows the owner how money has been invested
and the accrued profit or losses.

4. Break-even Analysis
(It is a tool used by an entrepreneur in solving managerial
problems). It compares the total resources (TR) with the total
cost (TC)

TR represents income while TC represents expenses of the

enterprise. When TR is greater than TC, there is profit. But
when TR equals TC it is break even. There is no profit, nor loss.

5. Income Projection (Profit-Loss Statement)

a. Detailed by month(for the first year)
b. Detailed by quarter (for the 2nd, 3rd, 4th, 5th)

LET US REMEMBER

Business planning is needed to guide the entrepreneur in

the management and other aspects of the business
process to ensure profit.

19
HOW MUCH HAVE YOU LEARNED?

A. Directions: Choose the answer in column B to the questions in

column A. Write the letter only in your test notebook.
A B

1. Who will be your workers? a. organizational plan

2. How much money will you b. financial plan
need?
3. How many competitors are c. survey of your
market
there in the market? d. management plan
4. Are there customers in the e. business location
place?
5. What customers policy will
you adapt?

B. Choose a partner. Exchange Business Plans that you have prepared

in the application portion. Check if all the parts are complied with. Rate
the Business Plan using the following descriptive ratings:

Descriptor Rating
Complete 5
Incomplete 3
Needs Improvement 1

RESOURCES:

Computer with Internet Access

Journals
Magazines

REFERENCE:

Villanueva, et. al., Business Management III,

Adriana Publishing Co. Inc., pp. 105-110,
Cubao, Quezon City

20
KEY TO CORRECTIONS

Pre-test
A.
1. D
2. B
3. A
4. B

B.
1. B
2. A
3. C
4. E
5. F
6. G
7. D
8. H
9. J
10. K

Lesson 1
1. E
2. C
3. A
4. F
5. B

Lesson 2

1. B
2. B
3. B
4. A
5. B OR D

Lesson 3
1. A
2. B
3. C
4. E
5. D

21