Importance of a Business Plan
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This module focuses on the significance of business planning, aiming to equip learners with the knowledge and skills to create effective business plans. It outlines the importance of a business plan, types of business plans, and the steps involved in their preparation, emphasizing the need for careful market analysis and resource management. It also highlights that a well-structured business plan can minimize risks, reduce production costs, and serve as a valuable tool for securing financing and fostering business growth.
Importance of a Business Plan
- 1. MODULE 4 PLANNING A BUSINESS Mr. Carlo Justino J. Luna Angeles City National Trade School Entrepreneurship 9
- 2. WHAT IS THIS MODULE ABOUT? This module covers knowledge, skills, attitudes, and values needed in discussing the importance of a business plan and enumerating the steps in preparing a business plan.
- 3. 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; c. identify and describe the steps in preparing a business plan
- 4. WHAT DO YOU ALREADY KNOW? Pretest: 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.
- 5. 1. Which of the following is the most basic of all management functions? a. controlling b. directing c. organizing d. planning
- 6. 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
- 7. 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.
- 8. 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
- 9. B. Direction: Choose the letter of the correct answer from the pool of words in the box, then write it in your answer sheet.
- 10. 1. ______________ serves as your guide in managing your enterprise. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 11. 2. A business plan is anticipated before ________________ is assumed. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 12. 3. Lack of _________________ is one of the entrepreneur’s problems to finance business. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 13. 4. _________________ is the parallel effect of lack of planning in business. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 14. 5. _________________ is the number of volume of intended production on a specific period of time. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 15. 6. __________ is one of the components of business planning. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 16. 7. A marketing plan is considered the _____________ of the office because it gives life to business. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 17. 8. An organizational plan is responsible on how to execute plans, objectives and ________ of an enterprise. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 18. 9. Planning can minimize _______. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 19. 10. In business, time is _______. a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 20. ANSWERS: 1. Which of the following is the most basic of all management functions? a. controlling b. directing c. organizing d. planning
- 21. 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
- 22. 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.
- 23. 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
- 24. 1. ______________ serves as your guide in managing your enterprise. Business plan a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 25. 2. A business plan is anticipated before ________________ is assumed.actual business a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 26. 3. Lack of _________________ is one of the entrepreneur’s problems to finance business. capital a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 27. 4. _________________ is the parallel effect of lack of planning in business. Poor management a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 28. 5. _________________ is the number of volume of intended production on a specific period of time. Production plan a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 29. 6. __________ is one of the components of business planning. SWOT a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 30. 7. A marketing plan is considered the _____________ of the office because it gives life to business. bloodstream a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 31. 8. An organizational plan is responsible on how to execute plans, objectives and ________ of an enterprise.goals a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 32. 9. Planning can minimize _______.risks a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 33. 10. In business, time is _______.gold a. actual business g. SWOT b. business plan h. goals c. capital i. cost of production d. bloodstream j. risks e. poor management k. gold f. production plan
- 34. BUSINESS PLAN DO YOU REALLY NEED?
- 35. “Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where–” said Alice. “Then it doesn’t matter which way you go,” said the Cat.
- 36. Clarifying the purpose and direction of your business is most important than anything else. KNOW YOUR BUSINESS FIRST!
- 37. LESSON 1 IMPORTANCE OF A BUSINESS PLAN Mr. Carlo Justino J. Luna Angeles City National Trade School Module 4: PLANNING A BUSINESS
- 38. WHAT IS THIS LESSON ABOUT? This lesson deals with planning for a business or enterprise.
- 39. WHAT WILL YOU LEARN? 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; c. follow the basic principles of business planning
- 43. WORDS TO STUDY means very small / limited in quantity M I C R O
- 44. WORDS TO STUDY means an effort to do a task E N D E A V O R
- 45. WORDS TO STUDY is the process of setting up goals for a particular business B U S I N E S S P L A N N I N G
- 46. WORDS TO STUDY means any plan that works for a business to look ahead B U S I N E S S P L A N
- 47. WHAT IS A BUSINESS PLAN? Business plan is any plan that works for a business to look ahead. It is a “selling document” that conveys the excitement and promise of your business to any potential backers and stakeholders.
- 48. BUSINESS PLAN BASICS • For a business to be successful and profitable, the owners and the managing directors must have a clear understanding of the firm's customers, strengths and competition. • Taking time to create an extensive business plan provides a company with insight into your business. • This document can serve as a powerful financing proposal. • While all business plans follow the same structure, each business will have a unique plan with a different set of information.
- 49. PLANNING IS: WHAT TO DO, HOW TO DO IT, WHEN TO DO IT, AND WHAT TO EXPECT IN THE FUTURE.
- 50. TO START A SMALL ENTERPRISE, YOU MUST HAVE A FORESIGHT.
- 52. THE BENEFITS DERIVED FROM PLANNING A BUSINESS 1. Making a business 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.
- 53. THE BENEFITS DERIVED FROM PLANNING A BUSINESS 2. 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.
- 54. THE BENEFITS DERIVED FROM PLANNING A BUSINESS 3. 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.
- 55. FAST FACTS • 90% of new businesses fail in the first two years. Failure is often attributed to a lack of planning. • A comprehensive, well constructed business plan can prevent a business from a downward spiral. • A thorough business plan will have the information to serve as a financial proposal and should be accepted by most lenders. • By taking an objective look at your business you can identify areas of weakness and strength.
- 56. BASIC PRINCIPLES OF BUSINESS PLANNING 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 of an enterprise.
- 57. BASIC PRINCIPLES OF BUSINESS PLANNING 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.
- 58. BASIC PRINCIPLES OF BUSINESS PLANNING 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.
- 59. BASIC PRINCIPLES OF BUSINESS PLANNING 4. Planning must start with simple projects. This requires simple management and technology, thus, the micro business is advised.
- 61. REMEMBER: PLANNING is important to ensure a profitable and successful business.
- 62. “If you fail to prepare, then prepare to fail.”
- 63. SUMMARY •Once the business plan is completed, it should become an operational tool to measure the success of the business. • This plan should be updated as milestones are reached. •A business should not shelve the plan once they receive the necessary capital. It should be a valuable tool for the growth and development of the business!
- 64. APPLICATION 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 or why not? 3. What principle did you follow in conducting the market survey as part of your business plan? 4. Why do you consider this activity (market survey) as an important tool in planning a business?