TH2003 TH2003

Types of Business Ventures o Commercial and Residential Service

In starting a business venture, an entrepreneur must be familiar with the types of businesses to know o Lodging
what suits him/her the best. There are three (3) types of business based on management: Start-up o Quick Service Restaurants
business, Franchising, and Acquire (Buy-out) business: o Real Estate
o Retail Food
Start-up Business o Retail Products and Services
o Table/Full-Service Restaurant
A start-up business is the kind of business that is just about to be put-up or just starting. This usually starts
from one (1) or two (2) or more entrepreneurs wanting to build their own business or venture. This type
Acquiring (Buy-Out) Business
starts with the desire to meet the need of producing a product and service the entrepreneur/s believes
to be in demand. This usually tries to focus on a small market or a specific one. This goes with big companies, as buy-out means acquiring the controlling interest in a business. The word
There are various types of start-up firms (Barringer & Ireland 2019): acquisition is being used to exemplify the biggest right acquired of an individual to make large decisions.
(Barone, 2020). This type of business is established through a right obtained by an individual within a
• Salary-substitute firms – This type of business will give the same level of income to the
company that allows him to take over or make major decisions. This happens when an individual within
entrepreneur/s as what they are getting from a conventional job or employer without spending
the said company owns more than 50% of it.
the whole day working. This type focuses on those usual products and services people need that
are easily accessible or available. Some salary-substitute firms operate for a particular day or with
a specific time in a day or producing product/s or service/s but are patronized by the market and There are two (2) types of buy-outs:
able to equate or exceed the salary compensation of a supposed to be earning from a usual job. • A management buy-out happens when a company acquires the biggest part of the company from
Let us say those who are selling snacks or pastries in a day for just an hour or two but earning like a private owner or parent company. This sometimes happens when an owner of a private
what an 8-hour worker does. company decides for his retirement. Those people with high ranks often take this opportunity as
• Lifestyle firms – This is the type of business established because of the longing to pursue a certain there is a greater return in being the owner.
lifestyle and earn from it. Some examples are those who facilitate or own tour guiding activities
• A leveraged buy-out happens when the buyer or purchaser controls a company with their assets
and facilities, cooking, or baking. This lifestyle kind of business employs the owner promoting his
hobby or pastime, anything that they are fond of doing. through bonds or loans. This allows the buyer to acquire the company without the need for a large
• Entrepreneurial firms - This one is the kind of business that aims to bring new products and amount of money; without investing too much, the ownership is being obtained.
services with value making the most of every opportunity with whatever resources are available.
The social media sites or applications that promote jobs serve people a wide range of help in easy Misconceptions About Business Ventures
and accessible job hunting. Entrepreneurial firms usually used this partnership to know their full Many people aspire to become a businessman. There is a lot of advice that can get or receive to start a
potential to become successful by growing their operation. business. However, assumptions are also inevitable. Building a business gets a lot of interest and the
conclusions, one of which is that having a venture is an immediate success. This conclusion often happens
Franchising Business after the first week of starting or even during the development of a business. The following are
Franchise means privilege or freedom. This is the type of business where two (2) individuals or partners misconceptions about business ventures:
agree to a venture. The franchisee will pay the franchisor, the rightful owner, that allows the franchisee • Business is a safe investment - This misconception often attracts entrepreneurs to push through
to use their trademark to sell the product, service, and/or business they are known for. starting one without even thinking of any possible drawbacks. They spend money to let their ideas
happen.
There are two (2) types of franchise system: • The business ensures success - This assumption often creates disappointment and
• A Product and Trademark Franchise - This is the franchise where the franchisor guarantees the discouragement to many starting entrepreneurs because they think that doing business is an
franchisee to buy its product and use its trade name. Tracing back previous lessons regarding assurance of success.
intellectual property, a trademark is the exclusivity of a business toward a product, service, and/or • Business grows rapidly - A lot of aspiring entrepreneurs think that business rapidly grows that
business. One example is the SMB Travel and Tours, a travel agency that’s already operating for they are becoming eager to create a business after business. Sometimes, this same mindset stops
six (6) years and is known as one of the top wholesalers of airline tickets, as well as Asian and most of them after not seeing expected results.
Philippine tour packages.

• Business Format Franchise - This is the kind of franchise that is widely used by entrepreneurs
where the franchisor aids the franchisee in training and advertising to let his/her business grow.
Here are some of the industries belonging to the tourism and hospitality industries that use this
kind of franchise. (Barringer & Ireland, 2019)
06 Handout 1 *Property of STI 06 Handout 1 *Property of STI
 [email protected] Page 1 of 14  [email protected] Page 2 of 14
 TH2003 TH2003

What is Feasibility Analysis? Feasibility Analysis. This attests if a business being proposed has total start-up cash or the money
Feasibility analysis is the process of determining whether a business idea is doable. This is done as the needed to operate. It is also important to know the financial movement of similar businesses and
preliminary evaluation to see whether a business idea is worth pursuing. It exists to investigate and the overall financial stand of the proposed venture. An actual and feasible budget is needed upon
critique the quality and distinction of a proposed business. (Barringer & Ireland, 2019) presentation of the business. This includes the foreseen capital purchase needed and operating
The four (4) components of a feasibility analysis are the following: expenses to keep the business going.
• Product/service feasibility analysis - This will evaluate the product or service of a new venture
being proposed, as this is what matters the most when starting a business. It has two (2) Tools in Conducting a Feasibility Analysis
components to support the analysis. These are the product/service desirability and demand. This Feasibility analysis does not happen in a snap. There are series of tools one can use to attest further their
will attest if a product or service is desirable and will meet the market's need and determine if analysis.
there is a demand for the proposed product or service. ▪ Doing a concept test - This tool will exemplify the product or service idea and its description, along
• Industry/target market feasibility analysis - An industry is a group of those firms or businesses with a concept statement introduced to a panel of industry experts and potential customers to
producing the same product or services. While the target market is the minimal portion of the get enough feedback from them.
industry in which it appeals, this feasibility assesses the overall possible engagement of these two The concept statement's inclusions are the following: (Barringer & Ireland, 2019):
(2). This analysis focuses on determining the industry and target market attractiveness. ▪ The product or service description focuses on introducing its feature; some presents it with
a sketch.
Different industries vary regarding their attractiveness. There are three (3) major characteristics ▪ The explanation of the product or service benefits will describe how they add value or solve
of an attractive industry. (Barringer & Ireland, 2019): a problem.
• Young rather than old – An up-to-date industry is advantageous. People nowadays are into ▪ The description will further explain how it will stand along with its competitor or possible
what is new to their eyes and ears. Since the market's needs change from time to time, rivals.
entrepreneurs must always give the latest. ▪ The brief details of the company's management team.
• Early rather than late in their life cycle – Developing ventures are more appealing than those The concept test will stand as the main basis if the product or service meets the four (4) feasibility analysis
already in their diminishing stage and yet to be developed. Change is bound to happen components.
whether people want it or not. The only choice is to adapt or to be left out. In their early life ▪ Talking face-to-face with potential customers - Aside from being familiar with the abilities of a
cycle, industries are still able to see the possible development they can do along the way venture to stand through the description and details an entrepreneur can produce, it is important
compared to those that are already established. to know if the product, service, or business will be an appealing subject to the consumers. This
• Fragmented rather than concentrated – Fragmented industry is the kind of industry that can be conducted through an actual interview or a survey to get customers' reactions regarding
stands alone, and no enterprise can influence its evolution and direction, while the what an entrepreneur will offer.
concentrated industry is the one that is being dominated by some businesses. A fragmented ▪ Using online tools - Since not everyone can do a face-to-face talk, some online tools can be used
industry is more attractive as no one can control its development. It can go big and produce for the feasibility analysis to gather potential consumer's side regarding the proposed business.
products or services unique to them without depending on other ventures. a. For feedback regarding business, an entrepreneur can use the following (Barringer & Ireland,
• Target Market Attractiveness - Compared to industry attractiveness that focuses on the 2019):
enterprise itself or its appealing performance, target market attractiveness focuses on • Foundersuite - http://foundersuite.com - This will let an entrepreneur propose an
knowing the feasible market. executive summary of a business idea and let you get feedback from potential customers.
• Quirky – www.quirky.com - This will let an entrepreneur submit product ideas to a
▪ Organizational feasibility analysis - This is the analysis that exemplifies the organizational community that provides feedback on the said ideas.
capabilities to be launched. It determines the sufficiency of its management expertise, • Unassumer - www.unassumer.com - This will let an entrepreneur test his ideas and
organizational competencies, and resources. assumptions regarding what people want.
b. For landing pages that will allow an entrepreneur to launch a coming product or service and
There are two (2) things to further discuss in knowing these matters. (Barringer & Ireland, 2019): allow him to collect e-mail addresses of the potential consumers, one can use LaunchRock –
▪ Management prowess – This is the call for honesty regarding self-assessments, as this will
www.launchrock.com.
determine the ability of the management team, whether it is a sole entrepreneur or a large
c. For surveys, one can either use Google Consumer Surveys
one.
(www.google.com/consumersurveys), which allows an entrepreneur to create online
▪ Resource sufficiency – This one determines if a venture being proposed has enough
surveys, and Survey.io (www.survey.io) which is a customer development platform
resources to be pushed through. This one focuses on non-financial matters such as
allowing an entrepreneur to be familiarized with consumers' wants through the product
specialized skills.
they offer.
▪ Financial feasibility analysis – This is the last but one of the most important components of the
06 Handout 1 *Property of STI 07 Handout 1 *Property of STI
 [email protected] Page 3 of 14  [email protected] Page 2 of 14
 TH2003 TH2003

Formal Proposal of a Feasibility Analysis Importance and Types of Business Plans

Here's the outline an entrepreneur must consider to propose a feasibility analysis formally. (Kenton, Entrepreneurship and its every essential factor, as thoroughly discussed, will lead to the preparation of a
2020): business plan. After understanding the need to undergo feasibility analysis and how it should be
I. Executive summary: This is the narrative description of the project, product, service, plan, or conducted, an entrepreneur will now create a brief business plan.
business. There are two (2) important reasons for writing a business plan. (Barringer & Ireland, 2019):
II. Technological considerations: This will reflect the technology or resources the entrepreneur will • Internal reason exemplifies the entrepreneur's way of thinking systematically for every aspect
be needing. It will answer the question, "Is it available? If not, how will the entrepreneur related to its venture. This includes analyzing the business's present and future, focusing on the
compensate? How much will it cost?" internal factors such as whom the people to employ or work with, where to get resources, the
possible sources of funds, and the likes.
III. Existing marketplace: This section will be where entrepreneur/s will look into the local and • External reason exemplifies the qualities of the business that will appeal to its consumer. This will
broader markets for the product, service, plan, or business. Possible competitors or people that help an entrepreneur plan accordingly, answering the questions such as what kind of market the
will be marketed are indicated herein. business will serve, the current demands of the people, who are the possible competitors, among
IV. Marketing strategy: This details the projected product/s or service/s, or the venture itself. others.
• Required staffing - Who will be the people that will work for this? How much will they receive There is other importance of a business plan that an entrepreneur should consider (Bajao & Osorno,
or the capital an entrepreneur will be needed for these people? This includes the creation of 2020):
an organizational chart. • More companies stay in business – Since there is a direction to follow, businesses with a business
• Schedule and timeline – This includes significant interim markers for the project's completion plan have coordinated ways and organizations that promote beneficial actions that lead to more
date. market and profit gains, making them see a great future, so they stay in business.
• Project financials - This includes the financial resources, where the capital will be coming • An entrepreneur is more certain of what to do – This will help to analyze one's business. This will
let an entrepreneur determine why customers do not go after the product or service and the things
from, or how the possible venture will do their funding.
competitors offer to make them better. Knowing all these factors can help an entrepreneur what
• Findings and recommendations – This breaks down into subsets of technology, marketing,
to do when things go wrong.
organization, and financials. • An entrepreneur can provide resources better – Since business planning is knowing the operations
Factors to Consider in Pushing Through a Business of the venture to be put up, it can determine if the existing resources are enough. This will also
Entrepreneurs must be aware that as they start a venture, there are factors to consider. Factors that will help an entrepreneur provide enough resources by finding skilled-people beneficial to work with.
prepare them to meet the market including how they will go along with their competitors and be in line • An entrepreneur can understand and manage his finances well – A business plan includes even
with the requirements they should have to minimize the possible drawbacks and risks. the financial capability of a business to keep running in a span of a year or two. This is a relevant
Important factors to consider in pushing through a business. (Donnelly, 2020): factor of a business plan as this will present how a business must forecast its sales and expenses
• A great idea - Starting a business begins with a great idea. Without a great idea, there will be no or costs.
room for an opportunity to start producing something that will make living easy. • Everyone is aware of the plan – Everyone related to the venture needs to know about the business
• Funding and budget - Funding and budget are necessary factors as these will support the plan; thus, the people are drawn together in the same direction and become united. This is not
production and manufacturing of whatever product or service a future business will cater to. only promoting teamwork but also setting limitations for people to be aware of the things to be
• Analysis of competitors - Analyzing who the competitors are, how they manage to market their done toward attaining a goal.
business, and what set of strategies they have will help an entrepreneur to be ready to plan. There are three (3) types of business plans (Barringer & Ireland, 2019):
• Effective business plan - A business cannot succeed in the long run without a set of directions to • Summary business plan - This is the kind of business plan that presents only 10 to 15 pages,
follow. Having a business plan will not only direct the company to the path of their objectives but
usually used by first-timers or pioneers. For pioneers, they are using this if they are preparing for
will help the entrepreneur the proceeding ways along with its development.
a new business and want to spend minimal time in writing a business plan.
• Legal documentation - Legal documentation is another factor to consider in pushing through a
• Full business plan - This is the kind of business plan usually used for investor's opinion. They are
business as this will not only make a business reputable because of its proper documentation.
usually composed of 25 to 35 pages explaining further details regarding the companies'
• Positive attitude - Entrepreneurs should have a positive attitude to continue pushing through the
business as there are risks and drawbacks they cannot avoid. operations and plans. This one is like their blueprint.
• Knowing when you need help - Entrepreneurs should have a positive attitude towards possible • Operational business plan - This is the kind of business plan prepared for existing businesses for
drawbacks and misfortune in doing the business. internal purposes. This kind handles 40 to 100 pages that include many details regarding the
venture and serves as a guide to operational managers.

07 Handout 1 *Property of STI 07 Handout 1 *Property of STI

 [email protected] Page 3 of 14  [email protected] Page 4 of 14
 TH2003 TH2003

Anatomy of a Business Plan (Bajao & Osorno, 2020)

A well-researched business plan to be more appealing needs to follow a series of structures. It must be
well-presented through an outline basis to prevent overloaded and unnecessary details. • Components of the organizational plan:
o Products or services – This contains the description of the product the entrepreneur
Four (4) important principles of a business plan: either manufacture or sell, depending on what business they are proposing. If
• It must be realistic - A business plan must be feasible in the sense that everything that will be providing service, this contains the description of the service and lists of future
written will be based on the availability of the resources needed to push through with the services the business is planning to provide.
o Intellectual property - This section addresses the copyrights, trademarks, and patents
business. May it be human, financial, or physical resources, what is important is that upon writing
with supporting documents of registration.
a business plan, these factors are available and existing to support the start and run of the o Location - This will showcase the desired, planned, or current location along with the
business. costings, legal agreements, and utility forecasts.
• It must be based on felt needs - As entrepreneurship is defined to exist to produce products or o Legal structure - This will describe the advantage of the legal structure composed of
services of value and enough to support the market's need. It is important for a business plan that owners and corporate officers describing strengths.
o Management - This includes the people who manage or will manage the business,
its objective or goals were anchored in producing something that will help people and the
their responsibilities and abilities, and even salaries.
community they belong to. o Personnel - This will give details regarding the number of employees needed, the
• It must be flexible - A business plan must adapt to any possible changes responding to the necessary qualifications, working hours and salaries. This will also include any possible
consumers changing preferences. It must withstand the adjustments of the policies and economic project that will highlight the need for future employees.
conditions that can be changed in no time. o Accounting and legal - This will discuss the set-up for periodic financial statement
• It must start with simple projects - In the Philippines, resources are not always available. An analysis and the person-in-charge. This also includes the need for a legal lawyer just
if there will be a need for anything that can or will go wrong.
entrepreneur needs to have a business plan to reach few markets at first, operated by simple
o Insurance - This section will discuss the insurance a company will implement, its cost,
management and existing technologies. Requiring few resources like funds or money, materials, and the people covered by it.
and equipment to be used is better than trying to play it big time and lose it along the way. o Security - This section will discuss the company's security regarding inventory control
and theft of information – online or offline.
Guidelines in Writing a Business Plan (Baj & Osorno, 2020) V. PART II - Marketing plan - This section of the business plan will describe all the marketing
Analyzing the importance, types, and anatomy of a business plan, an entrepreneur must write his business strategies the company will use, including their market analysis. This will also explain the
plan following a set of outlines to present the business accordingly. advertising and public relations campaigns, traditional programs, and the new technological
strategies.
The following outlines the content of a business plan: • Overview and goals of your marketing strategy – This is the summary of the objectives
I. Cover sheet - This will serve as your title page. This includes the name, address, and contact of the marketing plan. This includes the general information of how the business plans to
details of the company. This also includes the month and year it was established. The name of conduct its analysis and strategy.
the one who prepared it and the number of copies prepared should also be mentioned. • Market analysis - This will explain the target market, competitors, market trends, and
II. Executive summary - This explains the purpose of the business, the management, and the research regarding the product a company will either manufacture or produce or the
strengths of the company. This section summarizes the objectives and the purpose of why a services that they will provide.
company wants to be successful. • Marketing strategy - This is the general description of sales and distribution methods,
III. Table of contents – This includes the details of the page references or the outline of the topics in packaging, pricing, branding, and database marketing. This will also define the sales
the business plan. strategies, incentives or promotions, advertising strategies, public relations, and
IV. PART I - The organizational plan - This is the summary description of the business. This will explain networking.
the broad overview of the business – the origin, the date, and the purpose of the company's • Customer service - This will give details about the customer service activities and
formation. expected outcomes of achieving excellence through the lenses of the consumers.
• This section also elaborates the: • Implementation of marketing strategy - This will define the in-house responsibilities and
o Mission of the company (explaining both short- and long-term goals); out-sourced functions like how advertising, its network, public relations, and marketing
o Business model (its distinction to other companies and uniqueness to the industry); firms will be conducted.
o Strategic relationships (related companies or parenting company); and • Assessment of marketing effectiveness - This will be the method a company will be using
o SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats – both internal after a quarter evaluation.
and external) of the company.

07 Handout 1 *Property of STI 07 Handout 1 *Property of STI

 [email protected] Page 5 of 14  [email protected] Page 6 of 14
 TH2003 TH2003

VI. PART III – Financial documents - This section of the business plan exemplifies the quantitative Research and Development
details of marketing plans. This will showcase the past if it is already existing, current for the Research and development in a general sense is the method of creative and systematic work conducted
present financial reports, and future finances projected for the company. to gather new information and mobilize the available or stock knowledge. This is important in a business
as this is the company's way of developing and marketing their new products or services. This goal is to
• Summary of financial needs - This part is only needed if the company is seeking funding. meet either a specific or general objective to be transferred or traded in a marketplace.
This will highlight the reason for applying for financial needs and the amount the company
is in need. The following are the five (5) criteria a research and development activity must-have (Moris, 2018):
• Loan fund dispersal statement - Likewise, with the summary of financial needs, this part • It must be novel. It must present an original, new, or unique concept meeting the specific or
is only needed if the company is seeking funding. general objectives set.
• Pro-forma cash flow statement (budget) - This part describes the business plan details • It must be creative. It must present a product of original ideas in the artistic sense, professional
regarding money, the cash inflow and outflow in each time frame, and how it is used for
enough to stand out.
internal planning.
• Three-year income projection - This is only applicable to companies that were already • It must be uncertain. It must not be predictable and incalculable. A business must stand out to
established. remain competitive in the market.
• Projected balance sheet - This is the presentation of the foreseen assets, liabilities, and • It must be systematic and methodical. Doing research and development must follow a set of
net worth of the company at the end of the next fiscal year. planning or system processes. Every business will fail without following a thorough process.
• Break-even analysis - The break-even point is the equal matching of expenses to its sales • It must be transferable or reproducible. It must produce a result that is not definite, and it must
and service volume. This section can be presented by total revenue offsetting exactly or welcome possible development or transition of studies through reaching the market and being
equally the expenses or presenting the total production units in which the income and
able to reproduce it accordingly.
the cost match.
VII. PART IV- Supporting documents - This section presents the supporting documents as a backup There are three (3) types of research and development (Moris, 2018):
for the main parts of the business plan. • Basic research - This type of research is being conducted by producing new knowledge or
• Personal resumes - This part includes all the resumes of the people who are facilitating enhancing stock or available knowledge through observable facts and existing events.
or will facilitate the venture. • Applied research - This type of research has the same concept as basic research. The only
• Owner's financial statements - This part includes the company owner's assets and difference is that applied research focuses on meeting set goals or objectives.
liabilities. If the entrepreneur is just starting, this must be included under the financial
• Experimental research - This type of research is being conducted to fully understand the cause-
section (Part III).
VIII. Credit reports - This part includes all the related credits from any suppliers, wholesalers, credit and-effect situation of two (2) variables that can help develop additional knowledge.
bureaus, and banks.
IX. Copies of leases, mortgages, purchase agreements, etc. - This part includes all the agreements There are six (6) steps of conducting research and development for new ideas for product/s or service/s
related to the company leasing or mortgage. (Sutton, 2020):
X. Letters of References - This part includes the recommendations from business or personal 1. Creating new ideas or ideation – This can be done by using the SCAMPER model. It is a tool being
references for being reputable and reliable. used to produce new product ideas. SCAMPER is an acronym for:
XI. Contracts - This part includes all the business contracts duly signed and completed and even
Substitute (alternative name for a particular product like "Happy Cones" for ice cream
those currently processed.
businesses, "Sweet Rush" for dessert, and "Glamness" for clothing line)
XII. Other legal documents - This includes all legal papers, including legal structure, proprietary
Combine (foldable microfiber blanket for traveling that can be a pillow, seat cushion, or
rights, insurance papers, partnership agreements, and even those shipping-related papers.
lumbar support)
XIII. Miscellaneous documents - This includes those documents that are not exemplified in the main
Adapt (café restaurants offering delivery)
body. Examples are those location plans and demographics, competition, and cost analysis. This
Modify (new hotel set-up following customers' desired style or colors)
also includes the advertising rate sheet.
Put to another use (travel bag as pet carrier)
Eliminate (get rid of hotel toiletries or aircrafts food in plastics and used paper curated
packaging or wheat-made packaging)
Reverse or Rearrange (neck pillow with built-in Bluetooth speaker for comfortable traveling)

2. Researching - After coming up with ideas, write everything and do product or service validation,
which will help you assess whether the product or service you will introduce will be somehow
worth the time, effort, and money

05 Handout 1 *Property of STI 08 Handout 1 *Property of STI

 [email protected] Page 1 of 14  [email protected] Page 1 of 14
 TH2003 TH2003

3. Planning – This can be done through a hand-drawn sketch with specific details of the product and liabilities) from time to time.
service, including its features and functions. • Statement of Cash Flow – This includes the movement of the company's finances during a period
4. Prototyping – In this part, an entrepreneur will create a sample of the planned idea. This is done that excludes them from an operation, investment, and even financing activities.
by creating numerous samples until you develop the version you are satisfied enough to introduce • Notes – This includes more of the information regarding the financial statement.
to the market.
5. Sourcing – After creating the prototype, the entrepreneur will now look for the possible sources Social and Environmental Responsibilities in Products and Services
of materials and people or companies that can help manufacture the supplies. Sourcing's another Social responsibility is the way of an entrepreneur to show his/her ethical behavior by adding value to
term is "building your supply chain", which means evaluating the vendors, activities, and the economic development leading to the advancement of ways of living aiming to help the workforce,
resources to manufacture the product or start the service to provide and deliver it to the families, the community, and the society where it belongs
Environmental responsibility goes with social responsibility. This is the way for an entrepreneur to avoid
customers, the sooner, the better.
damaging the natural environment by utilizing resourcefulness in developing or starting the business.
6. Costing – This will reflect all the expenses in manufacturing and delivering the product or service.
The following are the practices to reflect social responsibility (Holbrow, n.d.):
Aside from the above information, some components must be anchored in research and development • Investment in clean technologies - An entrepreneur or a company should invest in clean
(Sanders, G.L., n.d.): technologies, which are enough to suffice the need of the company yet environmentally
• Mantra – This usually serves as a catching phrase to make the product or service known. Some established not to destroy nature.
consider this as a tagline or slogan. • Using energy from renewable sources - Businessmen and established ventures should
• Mission – This includes the purpose of developing a product or offering a service. This part acknowledge the usage of renewable sources and learn to use them properly.
highlights how it will be satisfied or how it will be able to meet a need. • Reduction in business use of transport and car usage by staff - This is advised to minimize the
• Goals and Objectives – This covers the detailed information of why the product or service is being effect of the emission of vehicle gases that contributes to climate change.
developed or served, what type of market it will incorporate or cater to, what need/s it will meet, • Waste minimization/recycling - An entrepreneur or a company should take the initiative to go
and how long it will be beneficial for both developers and users. green by finding ways to minimize waste by reducing some items or using alternative products.
• Analysis – This part will reflect the due process of the development based on the mission and • Energy efficiency measures - This way will let an entrepreneur or a company minimize the usage
objectives. This includes the analysis of external and internal factors. of electronic machines, light bulbs, or any appliances alike.
o External factors for the products may go with but not limited to market condition,
location, consumer's preference, and need, and even the possible shortcomings the Products and Services Cost and Pricing
product or service will encounter along with its development. Cost is the value of money a business or venture uses to manufacture or deliver its product or service.
o Internal factors may include the following but are not limited to: resources that will be This value of money can't be used anymore after consumption. Price is the amount charged to the product
necessary for the production, such as the funding, technology, and people needed for or service that the customer will pay.
the operation or development itself. When deciding on the pricing, it should be considered that prices can't be too high as this will easily
• Tactics – As analysis happened, the ways or solutions to meet all the situations based on the drive a customer away, and it can't be too low as this will compromise profit margin, and customers can
analysis will be needed. perceive negatively about the quality.
• Cost-based pricing is the type of pricing that includes an increase in a product's cost through
Financial Report markup percentage. Markup percentage depends on the company's standard or discretions from
Part of the research and development is creating a financial report to foresee how the planned venture the entrepreneur himself.
will generate or lose profits. A financial report is part of the components of creating a business plan
• Value-based pricing is the type of pricing that includes the customer's decision on how much they
(financial documentation).
want to pay for a product or service.
Components of a financial report:
Customer's perceptions of what value a product or service represents are influenced by the following:
• Balance Sheet – This includes the financial status at present. This encompasses the assets, the • Convenience – This is the accessibility of a product or service to the market or even its operating
liabilities, and the shareholders' equity (usually presented below or at the right side of the asset). hours.
• Income Statement – This includes the company's performance during the period covered and • Brand or image – This is the customer's perception of a product or service. If it has a premium
presented in the financial report reflecting whether the company gains profit or has losses. image or brand, they don't hesitate to pay more.
• Statement of Changes in Shareholders' Equity – This is the collation of the activity of the • Supply and demand – Having high demands for a product or service, a company or an
shareholders' equity (ownership of the company and net assets available after all the paid entrepreneur can be reasonable to set higher prices.

08 Handout 1 *Property of STI 08 Handout 1 *Property of STI

 [email protected] Page 2 of 14  [email protected] Page 3 of 14
 TH2003 TH2003

08 Handout 1 *Property of STI 08 Handout 1 *Property of STI

 [email protected] Page 4 of 14  [email protected] Page 5 of 14