Business Plan Output

BUSINESS PLAN OUTLINE

I. EXECUTIVE SUMMARY ( Write at least 10 sentences summarizing

important items on your business proposal.)
II.MANAGEMENT AND ORGANIZATION
A. Company Name, Logo, and Address
B. Mission and Vision Statements
C. Key Personnel, workforce, and support personnel
D. Organizational Chart
E. Ownership
F .Capitalization
III. PRODUCT PLAN
A.The remainder when operating expenses
are subtracted.
B.Where the bulk of revenue comes from.
C.Is the income that a business has, usually
from sale.
D. Other costs of running a business.
E.This item is difficult to calculate
accurately.
F.The difference between sales and cost of
goods sold.A. Purpose of the product
B. Product unique feature
C. Production Process and Controls
D. Distribution Logistics
IV.MARKET PLAN
A. Market Analysis
B. Marketing Sales and Strategies
C. Pricing Policy
D. Sales Projections.
V.FINANCIAL PLAN
A. Start-Up Cost Requirement
B. Projected Income Statement
Income Statement

Statement of Comprehensive Income ( SCI) – Also known as the income statement.

Contains the results of the company’s operations for a specific period which is called
net income if it is a net positive result while a net loss if it is a net negative result. This
can be prepared for a month, a quarter, or a year. (Haddock, Price, & Farina, 2012)
The Income Statement sometimes called the profit and loss statement, is the financial
record, which summarizes the activities of a business over a while. It reports the
revenues of the business and the expenses incurred in obtaining the revenues and it
shows the profit or loss resulting from these activities. The income statement
complements the balance sheet, both reports are necessary for a full understanding
of the operation of the business.
Point out the different parts of the Statement of Comprehensive Income (SCI)
A. Heading includes the Name of the Company, Name of the Statement, and the
Date of preparation.
b. Sample Statement of Comprehensive Income – Refer to the one above :
I. First part is revenues This is the total amount of revenue that the company
was able to generate from providing services to customers.
ii. Second part is expenses.
iii. Revenues fewer Expenses equals Net income for a positive result and net
loss for a negative result.
The following categories are found in the most income statements.
Revenue
= is the income that a business has from its normal business activities, usually from the
sale of goods and services to customers. Revenue is also referred to as sales or
turnover. Some companies receive revenue from interest, royalties, or other fees.

Sales
= the major activity of most businesses is the sale of products and services and the
bulk of revenue comes from sales. In recording sales, the figure used is net sales- that
is sales after discounts, allowances, and returned goods have been accounted for.
Cost of goods sold
= an important item in calculating profit or loss is the cost of goods that the business
has sold. This item is difficult to calculate accurately. Since the goods sold come from
inventory and since the business may have bought parts of its inventory at several
prices, it is hard to determine exactly the cost of the particular part of the inventory
that was sold.
Gross profit margin
= the difference between sales and cost of goods sold is called the gross profit margin
this item is often expressed as a percentage of sales as well as in peso figures. The
gross profit percentage is a very significant figure because it indicates what the
average mark up is on the merchandise sold.
Operating Expenses
= there are other costs of running a business besides the cost of goods sold. The cost
is called operating expenses. Some typical operating expenses are salaries and
wages, electricity, depreciation, rent, administrative expense, supplies , bad debts,
advertising, and interest payments.
Most of these payments are self-explanatory but there are few that merit further
comment. The most important thing about expenses is to be sure to include all of the
expenses that the business incurs. This does not only help you get a more accurate
picture of the operation, nut it allows you to take full advantage of the tax deductions
that legitimate expenses offer.
Direct Expenses
= is an expense incurred that varies directly with changes in the volume of a cost
object. A cost object is any item for which you are measuring expenses, such as
products, product lines, services, sales regions, employees, and customers. ... The
materials used to construct a product for sale. The cost of the freight needed to
transport goods to and from a manufacturing facility, The labor incurred to produce
hours billable to a client, Labor and payroll taxes paid based on the number of units
produced, Production materials consumed during the manufacture of goods, The
commission and payroll taxes related to the sale of goods or services
There are many more types of expenses that are not direct - they are called indirect
expenses because they do not vary with changes in the volume of a cost object.
Examples of indirect expenses are: Facility rent, Salaried compensation, Secretarial
wages, Depreciation, and amortization, Research and development
Net Profit
= when operating expenses are subtracted from gross profit, the remainder is net
profit. If the business receives revenue from sources other than sales, such as rents,
dividends on securities, or interest on money loaned, it is added to profit at this point.

Cash Flow Statement (CFS)

PARTS OF CASH FLOW STATEMENT

Operating Activities – Activities that constitute the revenue-producing activities of

the company such as cash from customers and cash paid to suppliers, payroll (salary
of employees), royalties, commission, fines, lawsuits, supplier, lender invoices
Investing Activities – Cash transactions related to the purchase of non-current
assets or long-term assets, as well as cash received from their sale. Examples of the
investing activities are the purchase of a fixed asset (equipment, land, etc.) and
purchase or sale of securities issued by other entities.
Financing Activities – Cash transactions related to changes in equity and
borrowings of the business. Examples are the sale of the company shares, the
repurchase of shares, and dividend payments.
Beginning Cash Balance – The balance of the cash account at the beginning of the
accounting period.
Ending Cash Balance – The balance of the cash account at the end of the accounting
period computed using the beginning balance plus the net change in cash for the
current period.
THE DIRECT AND INDIRECT APPROACH OF THE CASH FLOW STATEMENT
There are two ways in which to present the statement of cash flows, which are
the direct and indirect methods.
Direct Approach – The operating cash flow section of the Cash Flow Statement
under the direct method would show each major class of gross cash receipts and
gross cash payments (Deloitte Global Services Limited, 2015).
The direct approach requires to present cash flow information that is directly
associated with the items triggering the cash flow
Indirect Approach – The operating cash flow section of the CFS under the indirect
method will reconcile the net income/loss of the company with the total cash flows
generated/used in operating activities by adjusting the net income/loss for the
effects of non-cash transactions (Deloitte Global Services Limited, 2015).
The indirect approach begins with the net income or loss reported on the
company’s income statement, and then makes a series of adjustments to this figure
to arrive the amount of net cash provided by the operating activity
Note that these two approaches will just yield in the same amount of cash flow
from operating activities.

Financial Position
Assets
Assets are properties or economic resources owned by the business. The most
common properties or assets of a business are: Cash, receivables, furniture and
fixtures (such as tables, cabinets, chairs, etc), office equipment and supplies (such
as calculators, computers, copying machine, fax machine, etc.) machineries, delivery
truck, land, building, etc. Before a property can be considered as an asset, it is
necessary that it has a value and it is owned by the business. The above mentioned
assets are called tangible assets in the sense that they can be seen and touched.
However, there are some assets of the business which have no physical appearance
(cannot be seen or touch) but values sometimes are even higher than some of the
tangible assets. They are called intangible assets. Examples are franchise, patents,
trademark, copyright, goodwill, etc.
Liabilities
These are amounts owed by the business. In simpler terms, they are debts or legal
obligations of the business to individuals or other businesses. Examples are payables
to suppliers, loan with a bank, mortgage payable, taxes payable, and other unpaid
expenses. Liabilities must be classified in the statement of financial position as
current or non-current depending on the duration over which the entity intends to
settle the liability. A liability which will be settled over the long term is classified as
non-current whereas those liabilities that are expected to be settled within one year
from the reporting date are classified as current liabilities.

Capital (also called Owner’s Equity)

This is the owners interest or claims in the assets of a business after subtracting
the interest of the creditors. It is the difference between the amount of assets and
amount of liabilities. Examples are Capital, Drawings or Withdrawal of money from
the business and income.
Capital is ordinarily displayed in the statement of financial position under these
categories:
• Share capital speaks to the sum invested by the proprietors within
the entity
• Retained Earnings comprises the
overall net benefit or misfortune held within the trade after distribution to
the proprietors within the frame of dividends.
• Revaluation Reserve contains the net excess of any upward revaluation of
property, plant and equipment recognized straightforwardly in equity.
The balance sheet is structured in a manner that the total assets of an entity
equal to the sum of liabilities and equity. This may lead you to wonder as to why
the balance sheet must always be in equilibrium.
Reasons For Keeping Business Records

Everyone in business must keep records. Keeping good records is very

important to your business. Good records will help you do the following:
• Monitor the progress of your business
• Prepare your financial statements
• Identify sources of your income
• Keep track of your deductible expenses
• Keep track of your basis the property
• Prepare your tax returns
• Support items reported on your tax returns

Monitor the progress of your business

You need good records to monitor the progress of your business. Records can
show
whether your business is improving, which items are selling, or what changes
you
need to make. Good records can increase the likelihood of business success.
Prepare your financial statements
You need good records to prepare accurate financial statements. These include
income (profit and loss) statements and balance sheets. These statements can
help
you in dealing with your bank or creditors and help you manage your business.
• An income statement shows the income and expenses of the business for a
given period.
• A balance sheet shows the assets, liabilities, and equity in the business on
a given date.
Identify sources of your income
You will receive money or property from many sources. Your records can
identify
the sources of your income. You need this information to separate business from
nonbusiness receipts and taxable from nontaxable income.
Keep track of your deductible expenses
Unless you record them when they occur, you may forget expenses when you
prepare your tax return.
Keep track of your basis the property
Your basis is the amount of your investment in property for tax purposes. You
will
use the basis to figure the gain or loss on the sale, exchange, or other disposition
of
property, as well as deductions for depreciation, amortization, depletion, and
casualty losses.
Types of Records for Accounting and Tax Purposes
• Business expenses
• Credit card statements
• Bank statements
• Annual tax returns
• Quarterly tax filings
• Payroll
• Inventory
• Sales
• Income
• Petty cash
• Vehicle use log
• Travel log
• Cash register tapes
• Credit card sales receipts

2. Ledgers
a. Accounts Receivable Ledgers – contain your company’s individual trade with
customers (accounts).
b. Accounts Payable Ledgers – contain your company’s individual accounts
with creditors.
c. Plant Ledgers – contain your company’s list of all fixed assets.
Prepare your tax return
You need good records to prepare your tax returns. These records must support the
income, expenses, and credits you report. Generally, these are the same records
you use to monitor your business and prepare your financial statement.
Support items reported on your tax returns
You must keep your business records available at all times for inspection by the
Bureau of Internal Revenue. If the Bureau of Internal revenue examines any of your
tax returns, you may be asked to explain the items reported. A complete set of
records will speed up the examination.

Market Plan
The Marketing Plan is a written document that outlines a company’s an
advertising and marketing efforts for this coming year. It describes business activities
involved in accomplishing specific marketing objectives within a set timeframe. The
purpose of the Marketing Plan is to clearly show what steps or actions will be taken
to achieve the plan goals.

BRIEF OUTLINE OF MINI MARKETING PLAN

I. Executive Summary
II. Study and Background
III. Macro Environmental Analysis
IV. Opportunity and threats
V. Micro Environmental analysis
VI. Strength and weaknesses
VII. Marketing objectives
VIII.
Marketing strategies
IX. Tactical implementation
X. Marketing budget
XI. Financial projections

Let us now proceed to complete each part of the plan:

1. Executive summary = It serves as an introduction to the marketing plan and helps
the reader to understand the purpose and goals of the company. It contains a brief
overview of " what the company does," It should begin with a paragraph that grabs
the readers' attention, such as an interesting fact, relevant statistic, or history of the
business which allows the reader to grasp the main features of the business. It can
only be composed after the Marketing Plan is completed.
11. Study and Background = it includes the brief history of the company at the
starting point for your paper, select a product brand. Identify its manufacturer and
write a brief history of this company. Most companies’ historical background can be
found on the internet whenever you use materials from the internet always cite your
source. Second is the mission and vision, these statement can give you vital
information on its business philosophy and long term direction and your products
and services offering list down the company’s current product offerings, classifying
them by type ( hair care, personal care, home care ) and also includes their
suggested retail prices ( SRP) . This product listing can determine the specific role
your selected product brand plays in the company’s entire product offering or
product portfolio.
111. Macro-environmental analysis = Make an assessment of each of the
company’s six macro environments;
Economic, Political, Socio-cultural,
Demographic, Technological, and natural. Get the latest data possible. A
marketing plan of a particular product is a plan of action in the future and is
intended to be implemented in the coming year. It is therefore important that after
accessing current information, secure also authoritative information on how the
figures may look like in the following year. Since the Marketing plan is implemented
a year after, it is the following year’s macroeconomic environment that the product
will have to contend with. Example : inflation rates
1V. Opportunities and threats = Enumerate identified opportunities and threats from
the Macro-environmental analysis. Arrange them chronologically. Relate them
directly to a specific macro environmental factor and justify why they are classified
as opportunities or threats. It is external, things that are going on outside the
company. You can consider and analyze if there are opportunities and protect
against threats, but you can't change them. It include competitors, prices of raw
materials, and customer shopping trends. Example : The Inflation rate is expected to
increase is considered as a threat because of the increase in manufacturing cost
and less consumer demand.
V. Micro Environmental Analysis = the six environmental factors include the
company, suppliers, Marketing Intermediaries, Customers Competition, and Publics
are assessed and evaluated. Because the microenvironment is not expected to
change over the short term it is unnecessary to project the situation to the following
year except the competition situation. It may be possible that there is public
knowledge of the entry of a new competitor that may affect the industry’s
competitive landscape.
VI. Strengths and Weaknesses = Enumerate the identified strengths and weaknesses
from the Microenvironmental analysis. Arrange them chronologically. Relate them
directly to a specific microenvironmental factor and justify why they are classified as
Strengths or Weaknesses are internal to the company things that you have some
control over and can change. Examples include who is on your department, your
patents/copyright, and your assets.
VII. The Market includes the Market Size that shows the size of your markets. the total
market is the total of the group of an individual; who have both the willingness and
financial capability to purchase the product. It includes also the Market needs to
know your market intimately to be able to serve its needs. Understand and express
what exactly the market is looking for in the product you are offering and Market
trends based on historical trend, the segment, and sub-segment growth rate is
projected over the plan period. Trends are also identified conserning market needs
and preferences.
VIII. Marketing Objectives. In this section, state the Marketing objectives. Arrange
the objectives in sequence. Marketing objectives may include brand awareness
target and sales revenue objectives. They must be specific, measurable, attainable,
realistic, and time-bound. Example : To attain a brand awareness level of 65% by
December 31, 2017.
Example of a marketing objective about brand awareness:
“ To attain a brand awareness level of 65% by December 31, 2019”.1X. Marketing Strategies
In this chapter, marketing strategies are proposed based on a thorough
analysis of opportunities and threats, strengths and weaknesses, and the market for
the proposed products/services. Strategies must collectively be able to achieve all
Marketing objectives.
A. Product/service strategy = Product and service strategies should be fully
explained. Indicate any innovations you plan to implement in your
product/service example: a change in packaging or label, supplements to
your service offering. Identify the value proposition or unique selling
proposition of the product/service. It includes the target market and brand
positioning.
B. Based on the marketing objectives formulated, decide on a general pricing
strategy for the brand. It is possible to implement several pricing strategies for
a brand during an operating year. For example, a brand may have a
general strategy of going rate pricing but implement promotional pricing
during the last quarter of the year.
C. Distribution strategy = review the brand’s current distribution strategy to
determine if it is still applicable for the Marketing Plan implementation period.
D. Advertising and promotional strategy = in this section the propose your
advertising and promotional strategy. Based on the advertising and
promotional objectives and target audience profile, decide on the message,
creative style, vehicles, and media you will utilize.
X. Tactical Implementation = develop tactics for each strategy. Some strategies
may only require as little as 2 tactical plans, while others may need to be supported
by five or more tactics.

XI. Marketing Budget

This chapter indicate the total cost involved in the implementation of the proposed
marketing plan.
Example: Amount of the following: advertising expense, leaflets, point of purchase
material,l and sales promotion.
X1I. Financial Projection = at this point, present the financial viability of your
proposed marketing plan. The latest available incoming statement of your
company can be used.
Benefits Associated with Having a Marketing Plan
1. Understanding past Marketing decisions and outcomes better
2. Understanding the target market better-setting goals
3. Planning marketing strategies with more precision.
4. Obtaining funding
5. Providing direction for everyone in the business.
6. Tracking progress more effectively’
No business is too small to have a marketing plan. After all, no business is too
small for customers or clients. And if you have these, you need to communicate with
them about what you have to offer.
A good marketing plan is full of dates and details. The strategy probably
drives a good plan, but tactics, programs, and details make the difference. As much
as possible, the plan has to tie results back to activities and come up with hard
numbers to measure those results

Product/Service Plan

Product/Service Plan
The products and services section of your business plan is more than just a
list of what your business is going to provide. Especially if you intend to use
your business plan to get funding or find partners, your products and services
section needs to showcase the quality, value, and benefits your business offers.
The products and services section of your business plan outlines your
product or service, why it is needed by your target market, and how it will compete
with other businesses selling the same products and services. Your product and
services section should include:
1. Product & Service Description – this section offers a detailed description of
your product or service and how it fits the market. It must be precise to attract
your target market’s attention. Make sure to provide information about your
competitor’s offerings and how your product is similar or different from them.
2. Competitive Edge – in this section, you should provide your key strengths such
as your advantages to other competitors, your timeliness in distribution, and
customer service. Also, your key weaknesses and the steps on how to overcome
this to build a strong relationship with your target market.
3. Sales Literature – in this section, you should be able to explain the distribution
process for both current and potential customers. This will include brochures,
flyers, newsletters, as well as other print media such as print advertisements.
4. Sourcing – in this section, you need to provide information on how you will
acquire your product directly to suppliers with a minimal cost to offer competitive
prices to the customers in the market with a great quality.
5. Technology – in this section, it should be accurate information on how your
company provides an efficient service by using the latest technology that will allow
you to monitor the movements within your company in real-time phase from order
monitoring to stock monitoring, sales, distribution processes and the after-sales
such as returns and collections.
6. Future Products and Services – in this section, you will discuss your start-up
plans on how to provide a better service to your potential customers and also the
plans if you wish to take a higher level of market distributions. You may also include the future
products that you think will be more attractive to customers in
the future.
Executive Summary and, Management and Organization

THE EXECUTIVE SUMMARY

The executive summary of a business plan is an overview. Its purpose is to
summarize the key point of a document for its readers, saving them time and
preparing them for the upcoming content.
The Executive Summary contains everything relevant and important to the
business audience. It is a synthesis of the entire plan. It must contain the major
argumentations of the business proponent on why the business will work and
succeed. It should provide the business plan audience all the arguments on why
they should participate in the business ventures.
CONTENTS OF THE EXECUTIVE SUMMARY
• Description of the proposed business and business model
• Description of the market opportunity to capture, or market problem the
business solves.
• Reasons for why this is an attractive business opportunity
• Key distinctions or differentiators of the business versus competitors
• Overview of the sales, marketing, and operations strategy and plan.
• Description of the execution plan and timeline
• Overview of projected financials containing revenues, costs, profits, and
assumptions.

MANAGEMENT AND ORGANIZATION

The management and organization plan describes the business structure, the
organization chart, the qualifications of the management, and the responsibilities
of all involved in the business.

This section of the business plan includes your company’s organizational structure,
details about the ownership of your company, profiles of your management team,
and the qualifications of the business proponents.

THE SCOPE UNDER MANAGEMENT AND ORGANIZATION

1. Company Name, Logo, and Address
This section is the area where you are going to present who you are by
presenting your company name, your address, and the logo that represents
your company or your product/ service.
Example: MANILA ELECTRIC COMPANY(MERALCO)

2.Ownership
This section specifically shows if the business is owned by a single person or Sole
Proprietorship; Two or more persons if it is Partnership; and Five or more people if
the business is a corporation.
3. Mission and Vision Statement
A Mission Statement defines the company’s business, its objectives, and its
approach to reach those objectives.
A Vision statement describes the desired future position of the company

4.Key Personnel
Are the key persons in your business who know the balance of marketing,
financial, management and production skills, as well as experience with the
product or service you are developing.
5.Workforce and Support Personnel
Workforce refers to people engaged in or available for work, also called the labor
force. While support personnel is personnel not directly involved in the sales or
revenue-generating process, but have an important role to play in the company’s
success.
6.Organization Chart
An organizational chart is a diagram that visually conveys a company’s internal
structure by detailing the roles, responsibilities, and relationships between
individuals within an entity.
7. Qualifications and Responsibilities
This section under Management and Organization shows the qualifications and
responsibilities of all the key personnel in running the business. It identifies the merits.
knowledge, skills, training, and experience of the individuals in their
respective assignments and positions. The job description is emphasized for
individuals' responsibility toward the company.

Overview of the Business Plan

A Business Plan is a formal document containing business goals, the methods on
how these goals can be attained, and the time frame within which these goals need
to be achieved.
Entrepreneurs who plan to enter any business endeavor must have a business plan
on hand to guide them throughout the process. Different business plans are
prepared for different purposes
PURPOSE OF A BUSINESS PLAN
The purpose of a business plan is to identify, describe, and analyze a business
opportunity and/ or a business already underway, examining its technical,
economic, and financial feasibility.
Moreover, it should serve as a business card for introducing the business to others:
banks, investors, institutions, public bodies, or any other agent involved, when it is
time to seek cooperation or financial support of any kind.
PARTS OF THE BUSINESS PLAN
The business plan must have a specific audience in mind and what important
questions do this audience wants to be answered. To aid the entrepreneur in
getting his/her business plan organized, the following contents may be a good
start. They are as follows: the Executive Summary, Management Organization,
Product Plan, Market Plan, and the Financial Plan
I.
Executive Summary
It is a short document or a section of a document produced for business purposes.
It summarizes a longer report or proposal or a group of related reports in such a
way that readers can rapidly become acquainted with a large body of material
without having to read it all.
II.
Management and Organization
The management and organization plan describes the business structure, the
organization chart, the qualifications of the management, and the responsibilities
of all involved in the business. The company name, logo, address, and the mission
-vision statements of the organization are also included in this section.
1. Company Name, Logo, and Address
2.Ownership
3. Mission and Vision Statement
4. Key Personnel
5. Workforce and Support Personnel
6. Organization Chart
7. Qualification and Responsibilities
III. Product /Service Plan
This is the part of the business plan where you will describe the specific
product or services you’re going to offer. You will fully explain the concept for
your business, along with all aspects of purchasing, manufacturing, packaging,
and distribution. It includes the purpose of the product and its unique
features, the materials and the source of supply, the equipment used, the location of your
business, Production process and controls, Distribution
Logistics, the Layout of the store, and also the regulatory and other compliance
issues with regards to production.
1.Purpose of the Product
2. Product Unique Features
3. Materials and Source of Supply
4. Equipment
5. Location Of the Business
6. Production Process and Controls
7. Distribution Logistics
8. Layout of the Store
9. Regulatory and Other Compliance Issues
III.
Market Plan
The marketing portion of the business plan addresses how you will get people to
buy your product or service in sufficient quantities to make your business
profitable. It consists of Market Analysis, marketing Sales, and marketing
strategies. It also includes the Labeling and Packaging and also the Pricing policy.
1. Marketing Sales and Strategies
2. Labeling and Packaging
3. Pricing Policy
V. Financial Plan
The Financial section of your business plan determines whether or not your
business idea is viable and will be the focus of any investors who may be attracted
to your business idea. The financial section is composed of three financial
statements: the Income statement, the Cash flow projection, and the Balance sheet.
1. Start-Up Cost Requirement
2. Financial Projections

Sales Projection
A sales projection is the amount of revenue a company expects to earn at some
point in the future. It's a prediction that is synonymous with a sales forecast. Both help
determine the health of a company and whether sales will trend upward or
downward. Small companies use various inputs to determine sales projections.
advantages of calculating and using sales projections.
Consider the following factors when creating a sales forecast.
- Past financial results/The first place to start when projecting sales is, ironically,
the past. Review your financial statements to determine forecasts. Look at
your records over time for patterns.
- Sales drivers/These are factors that influence the probability of deal-closure,
deal cycle-time, deal profit margin, and the post-sale risk of failure. Examples
include a company's reputation, notable product or service features, a
salesperson's skills, and the state of the economy.

Pricing strategies
The pricing strategy portion of the marketing plan involves determining how you will
price your product or service. The price you charge has to be competitive but still,
allow you to make a reasonable profit

Costing

The selling price is the sum total of the cost price and the profit margin set
by the seller. Selling price is the price at which a product or service is sold to the
buyer. However, cost price is the price that is incurred to produce a product or
provide a service to the buyer.
FACTORS AFFECTING PRICE
1. How the Competition prices the goods and services you plan to provide.
2. Expectations about sales and expenses.
3. How much money the owner wants or needs to make.
4. Market tolerance. It is a measure of how much of a loss an investor is willing
to endure within their business.
5. Suppliers pricing terms and inventory costs. Some suppliers have
established pricing for their goods and services which are often pre-priced.
Some franchisers also set the price of their products.
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prices should be the basis of costing, thus the need to do a price
check from time to time. With this in mind, there are several factors that a
business considers in order to compute for the selling price of the products that
they create as well as how much the business will earn upon selling the products.
These are fixed costs, variable costs, product cost, unit costs, markup price,
and selling price.
1. Fixed Costs – These kind of costs are considered as unchanging no matter
how much a business increase or decrease its sales. Fixed costs are
expenses that a business has to pay even though that there are no sales or
activities. Examples of fixed costs may include rent, utilities, and salary
expense.
2. Variable Costs – These kinds of costs are considered as relative or
proportional to the output produced by the business. It may decrease or
increase depending on the decided units that will be produced during at a
specific time. Examples of variable costs may include raw materials, direct
labor, and delivery fees
3. Product Cost – Production or product costs refer to the costs incurred by a
business from manufacturing a product or providing a service. Production
costs can include a variety of expenses, such as labor, raw materials,
consumable manufacturing supplies, and general overhead. This is the
result of adding the fixed costs and variable costs.
Product Cost = Fixed Costs + Variable Costs
4. Unit Cost – This is the product cost relative to the number of units
produced. The cost can be determined by dividing product costs by units
produced.
Unit Cost = Product Cost/Units Produced
5. Markup Price – Is the amount of difference between the selling price and
unit cost. Often times, this is expressed in percentage. Markup is the
amount added to the unit cost so that the business will incur profit in the
long run. But in order to obtain that amount to be added to the unit cost to
make the business profitable, we follow this formula:
Markup Price = Unit Cost ∗ Desired Rate of Return
Where:
Unit Cost = is the amount obtained by dividing product cost and units
produced
Desired Rate of Return = A subjective minimum rate (percentage) of profit
that an owner wants to gain from selling the product relative to the risk.
6. Selling Price – This is the amount that the business should sell its product.
This can be obtained by adding the unit cost of the item and its markup price.
Selling Price = unit cost + markup price / number of yield

Forecast the Revenues of the Business

Building Financial Forecasts:
1. Start with expenses, not revenues. It is much easier to forecast expenses than
revenues. Below are the most common categories of expenses:
a. Fixed costs/Overhead • Rent
• Utility Bills
• Phone Bills/Communication costs
• Accounting/Bookkeeping
• Legal/Insurance/Licensing fees
• Postage
• Technology
• Advertising and Marketing
• Salaries
b. Variable Costs
• Costs of Goods Sold
• Materials and supplies
• Packaging
c. Direct Labor Costs
• Customer Service
• Direct Sales
• Direct Marketing
Here are some rules of thumb you should follow when forecasting expenses:
• Double your estimates for advertising and marketing costs since they always
escalate beyond expectations.
• Triple your estimates for legal, insurance, and licensing fees since they are
very hard to predict without experience and usually exceed expectations.
• Keep track of direct sales and customer service time as a direct labor
expense even if you're doing these activities yourself during the startup stage
because you'll want to forecast this expense when you have more clients.
2. Forecast revenues.
For example, your conservative revenue projections might have the following
assumptions:
• low price point
• two marketing channels• no sales staff
• one new product or service introduced each year for the first three years
Your aggressive case might have the following assumptions:
• the low price point for the base product, higher price for a premium product
• three to four marketing channels managed by you and a marketing manager
• two salespeople paid on commission
• one new product or service introduced in the first year, five more products or
services introduced for each segment of the market in years two and three
By unleashing the power of thinking big and creating a set of ambitious forecasts,
you're more likely to generate the breakthrough ideas that will grow your business.
3. Check the key ratios to make sure your projections are sound.
After making aggressive revenue forecasts, it is easy to forget about expenses. Many
entrepreneurs will optimistically focus on reaching revenue goals and assume the
expenses can be adjusted to accommodate reality if revenue doesn't materialize.
The best way to reconcile revenue and expense projections is by a series of reality
checks for key ratios.
Here are a few ratios that should help guide your thinking:
Gross margin. It is the total direct cost to total revenue during a given quarter or
year. This is one of the areas in which aggressive assumptions become unrealistic.
This assumption is to make a gross margin increase from 10 to 50 percent. If
customer service and direct sales expenses are high now, then it may be high in the
future.
Operating profit margin. What is the ratio of total operating costs--direct costs
and overhead, excluding financing costs--to total revenue during a given quarter or
given year? You should expect a positive movement with this ratio. As revenues
grow, overhead costs should represent a small proportion of total costs and your
operating profit margin should improve. The mistake that many entrepreneurs
make is they forecast this break-even point too early and assume they won't need
much financing to reach this point.Total headcount per client. If you are a one-man-army
entrepreneur who plans to
grow the business on your own, pay special attention to this ratio. Divide the
number of employees at your company--just one if you're a jack-of-all-trades--by
the total number of clients you have. Ask yourself if you'll want to be managing
that many accounts in five years when the business has grown. If not, you'll need
to revisit your assumptions about revenue or payroll expenses or both.
Building an accurate set of growth projections for your startup will take
time. But it will help you a lot in the future. Revenue forecasts are useful for start
ups and existing businesses. Here is how to prepare it:
1. Decide on a timeline – decide on how far you want to look into the
future. This will be determined by creating a report.
2. Forecast your expenses – predicting expenses is the easiest part of a
revenue forecast with a past expense records of an existing business and
researched forecast.
Two types of Expenses:
1. Fixed Costs – expenses that remain the same every month. Examples
are rent, fixed salaries, utilities, insurance, phone bills, internet and
technology costs, postage, advertising and marketing expenses, legal,
accounting, and bookkeeping fees.
2. Variable Costs – expenses that may tend to change every month,
depending on your sales volumes. Examples are the cost of goods sold,
packaging costs, cost of labor, marketing, and customer service costs as they
directly relate to the sale of the product.
Forecast the Sales
The thought of forecasting sales intimidates a lot of people, but in actuality, it’s
simply an act of looking at some raw data and making some logical assumptions
from it.
• Your customers: Identify your customer base and determine which ones you’ll
include in the forecast.
• Your service area: Do you have expansion plans? If so, include your current
geographical area as well as the area you plan to include in the future.• Market conditions:
What is the state of the market? Will it remain steady or
increase?
• Business position: Consider the position of your business within your industry,
and factor in your growth expectations.
• Seasonal adjustments: Many businesses have increased and decreased sales in a
cyclical seasonal cycle. If your business falls into that pattern, consider this.
Sources of Information on Forecasting:
• Look at the most recent consumer spending habits in the 2013 Consumer
Expenditures report [PDF] from the Bureau of Labor Statistics to see how in-
demand your products or services are.
• To find detailed information about your industry, visit the bureau’s Industries at
Glance pages.
• Check the most recent Producer Price Index to determine price stability for your
industry.
Next, take all the entire researches and make use of them to predict future sales.
Steps to Measure Sales Volume:
• Determine how sales are calculated for your industry.
• Create a profile of your ideal customer. For regional businesses, use the data
from the Census Bureau to determine how many of them live within a
reasonable radius of your business.
• Estimate your market share. Do this by determining the total number of
available customers and then predicting how many of them will buy from
you.
• Determine how often your customers will buy from you. For example, if you
own a beauty salon, you can count on your customers booking a service
every four to six weeks. However, if you run a tree-trimming service, once a
year customer headcount would be a good estimate.
• Predict the average amount of each purchase for each of your product or
service categories.

Developing Business Model

Business Model - is a conceptual framework that encourages the

sustainability of a company and describes how it works, makes money, and how it
aims to achieve its objectives. Many of the business procedures and practices that
an organization adopts and implements are part of the business model.
According to management expert Peter Drucker (Das 2020, 1) “A business
model is supposed to answer who your customer is, what value you can create/add
for the customer and how you can do that at reasonable costs.”

Every business model has three parts:

1. All about product design and how to manufacture a product.
2. Selling the product and finding the right customer to allocate a product.
3. How the business earns money.
But there is a clearer view to present a Business Model through a Business Model
Canvas.
Business Model Canvas - strategic management and a startup template for
the development of new business models or for documentation. IMD Professor of
Innovation Management, Bill Fischer and Alex Osterwalder created and started the
Business Model Canvas.The business model canvas is the “Most prominent popular tool that
makes it
simple for practitioners to design business models in a creative session." (De Reuver
2013, 17)
There are nine different components to a business model.
The following nine elements make up the boxes of The Business Model
Canvas, and each element comes with instructions and questions to consider before
filling in that box.
1. Key Partners
2. Key Activities
3. Key Resources
4. Value Propositions
5. Customer Relationships
6. Customer Segments
7. Channels
8. Cost Structure
9. Revenue Stream

Recruit Qualified People for One’s Business Enterprise

RECRUITMENT
This is a process that includes everything from recognizing, recruiting,
searching, shortlisting, interviewing, choosing, hiring, and onboarding staff
6 STAGES IN RECRUITMENT PROCESS
1. Recruitment Planning – The recruiting process will begin with identifying the
vacancies that exist, followed by an examination of the work requirements,
including the qualifications, skills, and expertise required for the position.
2. Preparing for Job Description - When you know exactly what you need in
terms of expertise, abilities, and experience, it is time to decide the tasks and
obligations of your job. Preparing a detailed job description will let you realize
what your potential employees need to do to fulfill the expectations of the
position. More importantly, it provides your prospects with a checklist or a
list that they can compare themselves to before applying. It is a tool to ensure
that you get applications from the right candidates. A job description must
include all of the following:
a. Title
b. Duties and Responsibilities
c. Qualifications and skills
d. Location
e. Compensation, Perks, and Benefits
3. Talent Search - The most important phase of the recruiting process is to find
the best candidates, to inspire them, and encourage them to apply. The job
posting will be posted internally to create feedback on popular social
networking platforms and preferred job boards as well as publicly. Recruiters
can also run job fairs and promote openings to cast a wider net in leading
industry publications.
4. Screening and shortlisting - To move forward with the recruitment process,
you need an efficient, and accurate screening and shortlisting of applicants.
4 steps in Screening Candidates
a. Screen applicant in minimum qualifications
b. Sort resumes that have the preferred qualifications by examining their
certifications, relevant experience, domain expertise, technical
competencies and other specific skills required for the role.
c. Then, the shortlist of candidates with both the preferred qualifications
and the minimum qualifications.
d. Finally, indicate any concerns or queries in the resume, so that they
can be clarified during the interview.
5. Interviewing - The shortlisted applicants must also go into the interview
process; a variety of interviews can be arranged for each candidate.
6. Evaluation and Offer of Employment - This is the final step of the
recruitment cycle. You should never take it for granted that the candidate
will accept your offer. However, if the applicant has diligently done all the
paperwork and waited through the screening process, chances of the taking
the offer are high.
After determining the Stages in Recruitment Process, it is also important to
determine what the criteria in recruitment are. Means of confirmation and evaluation
of these requirements are also given to guide the HR recruiter.
Value and Supply Chain in Relation to the Business
Enterprise

The Value Chain Vs Supply Chain

Perhaps the first thing to know is that the value chain covers a bigger scope
of business activity than the supply chain. But the supply chain is of central
importance to a successful value chain
Definition and Context of Supply chain
1. Supply chain represents the steps to get the product or service to the
customer.
2. Supply Chain involves all parties in fulfilling a customer request and leading
to customer satisfaction.
3. Supply Chain is a connection of all the parties, resources, businesses and
activities involved in the marketing or distribution through which a product
reaches the end customer. It creates a link between the channel partners like
suppliers, manufacturers, wholesalers, distributors, retailers, and the
customer. It simply includes the flow and storage of the raw material; semi
finished goods and the finished goods from point of origin to its final
destination i.e. consumption.
4. Supply Chain is the interconnection of all the functions that starts from the
manufacturing of raw material into the finished product and ends when the
product reaches the final customer.
5. The objective of supply chain management is to manage the flow of products
from suppliers to consumers. A whole series of related processes takes place along the
supply chain; they must be properly controlled for the company to
deliver goods to end users while remaining competitive.

Definition and Context of Value Chain

1. The value chain refers to the method in which businesses receive raw
materials, add value to them through production, manufacturing, and other
processes to create a finished product, and then sell the finished product to
consumers.
2. Value Chain refers to the range of activities that adds value at every single
step in designing, producing, and delivering a quality product to the customer.
Value Chain Analysis is used to evaluate the activities within and around the
organization and relating to its ability to provide value for money, goods, and
services.
3. A value chain is the set of input activities that a company carries out to create
value for its valued customers. For companies to make money, they have to
create a product. This often involves finding the raw material for
manufacturers or just simply packaging and marketing for retailers.
4. Value chains comprise procedures that are managed in the organization –
establishing customer requirement, defining markets and sales channels,
developing products, selling and collecting cash.
5. In value chain management, the consumer is seen as the source of value.
Consumers create value for manufacturers when they demand products. The
focus is not on the cost of goods, as in supply chain management, but in
creating value in the consumer’s eyes.

PRIMARY ACTIVITIES - those that are involved in the physical creation, Sale and
transfer and support of products or services (including after sale service).
1. Inbound Logistics: It deals with receiving, storing and distributing of inputs
internally. Your supplier relationships are a key factor in creating value here.
Example: handling of raw materials, warehousing, inventory control)
2. Manufacturing operations: These are conversion/transformation of the
inputs into finished products/outputs that are sold to the customer. Here,
your operational systems create value.
Example: production, assembly and packaging
3. Outbound Logistics: These activities deliver your product or service to your
customer. It involves the collection, storage, and distribution of product or
service to customer. It may be internal or external to the organization.
Example: processing of orders, warehousing of finished goods, and delivery
4. Marketing and Sales: Involve activities that create awareness among the
general public regarding the product. These are the processes you use to
persuade clients to purchase from you instead of your competitors. The
benefits you offer, and how well you communicate them, are sources of value
here

5. Services: All those activities that increase the value of product or services.
These are the activities related to maintaining the value of your product or
service to your customers, once it's been purchased.

SUPPORT ACTIVITIES: These activities help the primary activities and include
procurement, technology development, human resource management and
infrastructure.
1. Procurement (purchasing) – This is what the organization does to get the
resources it needs to operate. These activities are concerned with the task of
purchasing inputs such as raw materials, equipment and even labor. This
includes finding vendors and negotiating best prices.
2. Human resource management – This is how well a company recruits, hires,
trains, motivates, rewards, and retains its workers. People are a significant
source of value, so businesses can create a clear advantage with good HR
practices.
3. Technological development – These activities relate to managing and
processing information, as well as protecting a company's knowledge base.
Minimizing information technology costs, staying current with technological
advances, and maintaining technical excellence are sources of value creation.
4. Infrastructure – These are a company's support systems, and the functions
that allow it to maintain daily operations. Accounting, legal, administrative,
and general management are examples of necessary infrastructure that
businesses can use to their advantage.
Companies use these primary and support activities as "building blocks" to create a
valuable product or service.

Selecting Potential Suppliers of Raw Materials

Supplier selection is the process by which firms identify, evaluate, and contract
with suppliers. The supplier selection process deploys tremendous amount of a
business
financial resources. In return, businesses expect significant benefits from contracting
with suppliers offering high value. ( Beil 2009.p1). This module outlines the steps of
supplier selection processes: recognizing suppliers, soliciting information from suppliers,
setting agreement, negotiating with suppliers, and assessing suppliers.
1. Identifying potential suppliers - It is necessary not only to develop existing
suppliers
but to find new suppliers as well.
Process in Identifying Potential Suppliers
a. Find a new supplier – the importance of having new suppliers are:
• new supplier could have created a modern manufacturing technology or a
simplified process that helps it to substantially reduce the cost of production
compared to the prevailing production technology.
• A new suppliers may have a competitive cost advantage over existing suppliers,
for example, too low labor rates or favorable import/export laws in his country of
origin.
• The business can require additional suppliers specifically to boost competition,
minimize the risk of supply interruption or achieve other market goals, such as
diversity of suppliers
b. Supplier Qualification screening – To avoid the terrible results of non-
performance
of the supplier, buyers typically take proactive steps to verify the supplier's
qualifications before to the contract. To prevent the terrible consequences of non
performance of suppliers, buyers generally take reasonable measures to check the
credentials of a supplier before awarding them a contract.
c. Creating a supply base - Suppliers that have met the criteria and apply for contract
award are generally referred to as "pre-qualified" suppliers. The use of a supply base
not only eliminates the expense of certification screening but also allows for the
production of uniform contracts, terms, and conditions for pre-qualified suppliers,
thus streamlining the logistical processes involved in contracting.
2. Information request to suppliers - The next step in choosing a supplier is to
formally
request that the suppliers provide information on their products or services. The
customer usually demands one of the three forms of information to the suppliers.
• Request for Information (RFI) - Ask the suppliers what products and services they
might offer.• Request for Proposal (RFP) - Information on how they would meet the
performance
expectations of the customer and the price they would be willing to pay.
• Request for Quote (Quote Request)- is issued when the buyer can develop a
statement of work that states the exact specifications of the goods or services
needed.
3. Contract terms - The information obtained by the suppliers via the requests must
eventually be converted into formal contractual terms before contracting can take
place. A contract with a supplier sets out what the supplier should do and how the
purchaser will pay for them.
4. Negotiation process - In the negotiations, the buyer tries to establish favorable
terms
on the part of the suppliers, and the suppliers often aim to establish favorable terms
on the part of the buyer.
5. Supplier evaluation and contract award - Evaluate the nature of the programs
provided in the proposal and consider whether they satisfy your criteria. Decide on
the value of each criterion and rate all submissions against it for an objective
assessment process. Identify what the term of the agreement or contract with each
potential supplier is to ensure that you are not caught up in a situation that could
hurt your business. Describes how the customer reviews the suppliers, then decides
the contract winner(s)
6. Monitor the supplier performance - conducts follow-up monitoring and regular
performance reviews to inform future acquisitions of suppliers. This will help you
keep track of their progress and make sure they 're going to meet their agreement.
This feedback will also support you when the time comes to talk about renewing the
deal, so you know where you stand.
An entrepreneur also moves to the day-to-day tasks of material management
including purchasing, inventory control, and work schedule
Purchasing and Supplier Selection
Purchasing (or procurement) - is the method of purchasing the goods and resources
that are to be used for production. The prices of goods for several items make up about
50% of total manufacturing costs. The acquisition of materials requires much of the
entrepreneur's time and attention. There is as a rule no shortage of vendors able to
supply parts and other products, but the trick is to find the right suppliers.
According to (Venzon 2020, 70) In selecting a supplier, an entrepreneur must consider
such questions as the following:
• Can the vendor supply the needed quantity of materials at a reasonable price?
• Is the quality good?
• Is the vendor reliable (will materials be delivered on time)?
• Does the vendor have a favorable reputation?
• Is the company easy to work with?E-purchasing/E-procurement
Technology is transforming the way that businesses buy products. E-Procurement
or electronic procurement refers to the method of purchasing and selling of products
or
services by electronic means via the Internet.
Inventory Control
If a manufacturer runs out of the materials that it needs to produce, then
production will cease. Most manufacturers have since learned that they need to handle
inventories more effectively in order to stay competitive. This role requires the two
menaces to strike a balance. The process of striking this balance is called inventory
control, and companies now rely on a range of inventory controls on a regular basis
Just-in-Time Production
The manufacturer arranges for materials to enter the manufacturing process just
in time to arrive at production facilities. Parts and materials are not unused for long
periods, and inventory "holding" costs are substantially reduced. However, there is a
need
for significant contact and cooperation between the producer and the supplier. The
supplier must make a commitment to producing the right products, of the right quality,
at the right time.
Material Requirements Planning
It relies on a computerized program to measure the number of materials required
for production and to decide when to order or produce them. The program produces a
production schedule based on projected performance, draws up a list of materials
required, and orders the materials.
Work Scheduling
To draw a Master production schedule (MPS), managers need to know where the
materials are stored and are going in the manufacturing process at every stage. They
specify the routing of all materials for this purpose — that is, the workflow of each
item,
based on the sequence of operations in which it is to be used.
Following these guidelines, you will be able to effectively select suppliers that can
meet your business needs by providing the goods and services on time and within
budget.
This will help you increase your productivity and ensure that you deliver better goods/
services.

Product Development
Product Description
A product description is essentially a depiction of the item or items that are in
your store. They can be clever and interesting or genuine and forthright. They can
even recount a story to make them more relatable.
The item or administration depiction essentially portrays how a product or
service functions and how it benefits the clients. A reasonable product or service
description is significant because this will fill in as the outline of all business tasks.
In this way, the entrepreneur needs to observe the accompanying concerning the
product or service description:
1. Define your target market- A good product description starts
with a solid buyer persona. If you don’t know who is going to buy your product,
you don’t know what information to include or leave out in your description.
It ought to straightforwardly address the essential objective market in an
individual way utilizing regular language. The business person should place
oneself from the client's perspective, where the item depiction will be routed
to.
2. Bear in mind the things like:
● Age
● Interests
● Location
● Educational
● Attainment Gender
● Income Status
● Language
● Preferences
2. Provide product benefits- It should feature the highlights that will oblige
the client's needs or address the client's issues. On the off chance that we investigate
the product description of the interesting thing from above, we can see the key
highlights of the product just as the advantages. The substance of the product
description ought to persuade potential buyers that will improve their lives in self
evident, quantifiable ways.
3. Be realistic- Realistic exemplifications ought to be utilized for the product
description. For example, "top-notch service or product greatness" may not make any
difference to the clients by any means. If one needs in-depth, accurate descriptions
for medical products. Descriptions should be with the use of medical terminology
and include a scientific basis or research findings.
4. Use influential words that sell – Influential words such as amazing,
miracle, revolutionary, or sensational are words that can improve the persuasiveness
of product descriptions. These are the words that normally evoke an enthusiastic
reaction to the people.
5. Create an audience-friendly content- Speak to your market. The content
should coordinate what the audience needs to read and improve conversations and
customer retention.

Prototype of Product
In the wake of defining and characterizing the product or services, you may
now continue with one of the most energizing yet in addition to exceptionally testing
pieces of product or services development. Morato (2016) discussed that after the
initial stage of conceptualizing the next step would be designing, prototyping, and
testing the concept. A prototype is a primer model or sample of another product or
service that is made to test a product idea or service measure. This is to translate
the concept into its very physical and very real dimensions.
Agustin-Acierto (2017) enumerated some general rules when prototyping
invention:
1. Define your goals by simply working with your team through a series of
brainstorming.
2. Create your design by sketching out all the ideas created. Design from
paper to computer animated-virtual prototype.
3. Consult experts to validate your idea. And make approved revisions.
4. Develop a concept mock-up out of any possible materials as representation
to create a 3-D model of the design.
5. Create a full –working model of the idea.
Advantages of Prototype
1. Reduced time and cost. It improves the nature of the details and
prerequisites gave to clients. With prototyping, clients can foresee greater
expenses, required changes and potential venture obstacles, and in
particular, potential final product calamities. Solid prototyping can
guarantee item quality and reserve funds for a considerable length of time
to come.
2. It makes it possible to test the performance of various materials. And
describe your product more effectively.
3. Improved and expanded customer association: Prototyping requires client
contribution and empowers them to see and interface with a working model
of their venture. With models, clients can give their quick input, demand
venture changes, and adjust model particulars. Prototyping in particular
wipes out misconceptions and miscommunications during the
advancement cycle.
Testing of Product Prototype
Testing prototypes is a characteristic piece of finalizing designs. No one needs
to ask why clients are not using an application on how it ought to be used or why
they can't finish a buy on your site. Also, no one needs to revamp something that is
as of now been transported. Testing and validation determine the product functions
and to test if it needs further analysis. It redefines the design’s viability. Thus, will
help identify potential in such a way that producer will make improvements. Importance of
Testing
1. Allows the customer and the client to decide the prototype and make potential
upgrades through criticisms. Proposals and suggestion are regularly
examined at this stage
2. Production expenses can be surveyed and concluded. It tends to be examined
for the possible expenses.
3. A new plan or overhaul occurs during this stage. Some portion of the item can
be tried separately, and not the whole item. This permits more and directs the
test to be done.
4. The manufacturer allows the designer to plan a proficient and financially
savvy creation line. It unquestionably prompts a profoundly serious
improvement.
5. Provides customer satisfaction and loyalty.
6. Testing and the design specification should be done independently to
guarantee a full and applicable assessment of a model which is done in the
whole advancement measure.
Service Description of the Product
One of the most significant parts of starting a business is proving that there
is an interest in your product or service. There is nothing more demoralizing than
investing your time and vitality making the product or service that you figure out
individuals will cherish; possibly to understand that there's no premium when you
dispatch. You can approve your service description with the expected clients to
decide its market acceptability utilizing various methods. Here are possible methods
entrepreneurs can make.
1. Survey – According to Morata (2019), is the most preferred instrument for in
depth quantitative research. The respondents are asked a variety of questions
that are frequently about their data, their motivations, and their behavior.
You can maximize the use of Typeform, Survey Monkey, or Google Forms, and
send it out to gatherings, to your companions, and to all individuals who are
your optimal customers. Accumulate their reactions about how they like to
have a few items conveyed, about their needs and their torments so you will
know precisely how to serve them.
2. Beta Testing is the last round of testing before a product or service at long
last is delivered to a wide crowd. The goal is to reveal whatever number of bugs
or ease of use issues as would be prudent in this controlled setting. A test
variant of the product can either be paid, or free, and is an incredible method
to get tribute and criticism. Along these lines, the weight is set to make an
incredible product until you have tried that it works in the manner that you
trusted it would.
3. Early Bird Promo is an arrangement or offer that is accessible at a discounted
cost, yet which you should purchase sooner than you would typically do.
Prompt riser limits are typically accessible toward the start of the period. If
individuals part with cash for your product or service and you can get a few deals for the
thought, at that point you have a sign this is a thought that will
sell.

Introduction of 4 M’s
The operation plan is a significant piece of the marketable strategy since it
essentially expresses the intricacies in working the business. A solid activities plan
ought to have the four operational angles—called the 4M’s of operations: the method,
or the cycles to be followed in inadequately fabricating or conveying a product or
service; the manpower, or the correct HR who will deal with certain business
activities; the machines, or the innovation utilized in productively working the
business, and the materials to be utilized in making a product or service which
incorporates supply chain management.
Manpower Requisites
Toward the start of the business, the person in question generally boosts
oneself, their accomplice, or their relatives to deal with all the parts of the business.
However, as it develops, the business entrepreneur will require the ability of qualified
representatives that can deal with operational capacities, so the person in question
will be liberated from day by day exercises and would thus be able to concentrate on
the key and the board elements of the business. The business entrepreneur needs to
plot a table of association dependent on his business organization.According to Aduana, (2017)
manpower defines as the human workforce
involved in the manufacturing of products. It is considered to be the most vital factor
in production. Business entrepreneurs must determine, acquire, and match qualified
employees with jobs in the most appropriate period.
A portion of the manpower measures that must be profoundly considered by
the entrepreneur are as per the following:
1. Educational attainment and work experience required for the activity
2. Status of employment, whether permanent or temporary
3. Number of workers required for the activity
4. Skills and expertise required for the activity
5. Appropriate time the worker is needed
6. Conduct of background checking and issuance of requirements
7. Amount of compensation and other mandatory benefits
8. Availability of potential workers in the community
Method
Agustin-Acierto (2017) defined a method as the process of converting raw
materials into a finished product. The sequence of operations should be clearly
defined to ensure proper execution thus assuring the consistency of the quality of
the product. The method aspect denotes the day-to-day business activities. It
exemplifies how a business entrepreneur will run the entire business from all facets
of the business operations.
The selection of the method of production is dependent on some factors,
namely,
1. The plant size and production schedules are determined based on
projected demand.
2. The number and capacity of the machine and equipment are determined.
3. The plant location has a long term effect on business operations.
4. Strategic plant layout which helps in lowering production cost.
Machine
Most organizations would not have the option to work without the guide of
machines. Machines can be depicted as the "closest companion" of labor in creating
products and services. They go connected at the hip. In some cases, machines can
even replace people. Machines have become one of the 4Ms because they are a
significant part of producing products and services, and they have changed how
entrepreneurs lead the business. Machines are restricted to physical gear as well as
relate to innovations that help business tasks become normalized and consistent.
Without machines, business activities will be lumbering, expensive, and poor quality.
Aduana (2017) specified the following significant elements on the process of
selecting the type of equipment to purchase, that entrepreneur may consider:
1. Types of product to be produced
2. Production system to be adopted3. Cost of equipment
4. Capacity of equipment
5. Availability of spare parts in the local market
6. The efficiency of the equipment
7. The skills required in running the equipment
Materials
The term material refers to the raw materials needed in the production of
products and services. The materials needed as discussed by Aduana (2017) include
direct and indirect or consumable materials. The specifications, quantity needed and
the schedule of delivery should be stipulated.
The entrepreneur may consider the following important factors in the selection
of raw materials.
1. Identify the cost of materials
2. Monitor the quality of materials
3. Maintain the availability of materials
4. Secure the credibility of suppliers
5. Determine the waste that the raw materials may produce.