Republic of the Philippines

CEBU TECHNOLOGICAL UNIVERSITY

Main Campus
Corner M. J. Cuenco Avenue and R. Palma St,,Cebu City
College of Technology

Information and Communications

Technology
DEPARTMENT

Compiled by:

FRANCISCO V. YAP
 Page 1

FOREWORD
One item in the 10-point agenda of the Philippine Government is for the
present leadership to generate a million jobs a year. Part of the response
initiated by the
Department of Trade and Industry through the Bureau of Small and Medium
Enterprise Development (BSMED) was to embark on an even more intensive
countrywide
campaign to create more enterprises that will provide the jobs.

This time BSMED focused its interest not only in developing an

entrepreneurial way of thinking among the people but more so in ensuring
that the enterprises that will be created start on the right path with a
foundation solid enough to enable them to grow and succeed.

This manual, Laboratory Manual in Entrepreneurship, looks at how a small

enterprise evolves from a mere business idea until the enterprise is born. It is
a step-by-step manual that walks the students through a systematic way of
putting up a small business.
It is a light and easy read and the language is simple.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 2

TABLE OF CONTENTS

TOPICS Page

Foreword ……...………………………………………………………………… 1

Vision, Mission, Goals and Objectives ……………………………………… 4

Laboratory Safety Precautions ……………………………………………….. 5

Topic Discussion ……………………………………………………………….. 6

Summary of Activities …………………………………………………………. 11

EXERCISES:

1. Starting a Small Enterprise ……..…………………………………………

12

2. Where Do You Start? .………………………………………….…………. 15

3. Assessing Your Business Ideas .…………………………………............

17

4. The Business Plan ………………………………………………………….. 20

5. Determining Your Market ………………………………………………… 23

6. Marketing Strategies ……………………………………………………… 25

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 3

7. Making Your Product And Completing Your Service …………………

28

8. Organizing Your Business ………………………………………………... 30

9. a) Costing Your Product Or Service …………………………………...

32 b) Final Project - Part I
…………………………………………………… 34

10. Basic RecordKeeping For The Non-Accountant ……………………….

36

11. a) Managing Your Funds

………………………………………………... 38 b) Final Project – Part
II ………………………………………………….. 40

TOPICS Page

References ………………………………………………………………………. 42

ANNEXES:

A. Rating Computation Example ……………………………………………... 43

B. Business Plan For A Soap Making Business ……………………………… 44

C. Recommendation Of The Instructional Manual Committee …………… 67

D. Certificate Of Instructional Material Utilization ………………………… 68

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 4

Vision of the University

A premier multidisciplinary-technological university

Mission of the University

The University shall primarily provide advanced professional and technical
instruction for special purposes, advanced studies in industrial trade,
agriculture, fishery, forestry, aeronautics and land-based programs, arts and
sciences, health sciences, information technology and other relevant fields of
study. It shall also undertake research and extension services and provide
progressive leadership in its
areas of specialization (Sec.2 of RA 9744).

Goals of the College

1. Outcomes-based and quality-oriented technological instruction
delivered to student-customers;
2. Technology market kept more satisfied;
3. Holistic development of faculty members and students enhanced and
fulfilled.

Objectives of the Program

1. Students are equipped with equitable ICT skills and proficiencies
required by the Industry.
2. Research outputs contributed to ICT advancement of students,
faculty, community and stakeholders.
3. Extension services benefit the deprived, depressed, and
underserved sectors of Society.
4. Sustained commitment to be the sufficient source of competent
ICT professionals, managers and executives.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 5

5. Maintained local and international linkages towards mutually

beneficial collaboration.

LABORATORY SAFETY PRECAUTIONS

Do’s
1. Know the location of the fire extinguisher and the first aid box
and how to use them in case of an emergency.
2. Read and understand how to carry out an activity thoroughly
before coming to the laboratory.
3. Report fires or accidents to your lecturer/laboratory technician
immediately.
4. Report any broken plugs or exposed electrical wires to your
lecturer/laboratory technician immediately.
Don’ts
1. Do not eat or drink in the laboratory.
2. Avoid stepping on electrical wires or any other computer cables.
3. Do not open the system unit casing or monitor casing particularly
when the power is turned on. Some internal components hold
electric voltages of up to 30000 volts, which can be fatal.
4. Do not insert metal objects such as clips, pins and needles into the
computer casings. They may cause fire.
5. Do not remove anything from the computer laboratory without
permission. 6. Do not touch, connect or disconnect any plug or cable
without your lecturer/laboratory technician’s permission.

Computer Lab Safety Rules for Protecting

Equipment
1. Turn off the machine once you are done using it.
2. Do not plug in external devices without scanning them for computer
viruses.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 6

3. Ensure that the temperature in the room stays cool, since there are a
lot of machines inside a lab as these can overheat easily. This is one of
the many ways of ensuring computer safety.
4. Try not to touch any of the circuit boards and power sockets when a
device is connected to them and switched on.
5. Always maintain an extra copy of all your important data files.

TOPIC DISCUSSION
1. STARTING A SMALL ENTERPRISE
a. What is a Small Business?
1. Some definitions
2. Strengths and weaknesses of a small business
b. Do You Have What It Takes To Succeed in Business?
1. The role of an entrepreneurs
2. Personal characteristics of entrepreneur
c. Rewards and Risks of Being an Entrepreneur
1. Rewards
2. Risks
d. Doing (Small) Business in the Philippines
1. Incentives to small enterprises
2. Disincentives

2. WHERE DO YOU START?

a. Looking within
b. Looking outside
c. Some Options: Buy a business, Take a Franchise, etc.
d. Buying an existing business
e. Taking franchise
f. Over a Hundred Business Ideas

3. ASSESSNG YOUR BUSINESS IDEAS

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 7

a. The Right Type of Business

b. How Do You Start?
c. Selection checklist
d. Screening Your Ideas
e. Knowing the market for your product or service
f. Creating your product or service
g. Putting your business together
h. Looking at your finances

i. SWOT Analysis
j. Making the Final Selection

4. THE BUSINESS PLAN

a. Why Plan a Business?
b. Components of a Business Plan

5. DETERMINING YOUR MARKET

a. Some definitions
b. Understanding Your Market
1. Segmenting the market
2. Targeting
3. Understanding your target
c. Analyzing the Competition
d. Estimating Potential Market Demand

6. MARKETING STRATEGIES
a. Some definitions
b. Product Strategies
1. Branding
2. Packaging
3. Labeling
4. Product support

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 8

5. Product attributes
c. Place Strategies

 Designing places
d. Price Strategies

 Factors affecting price

e. Promotions Strategies
1. The message
2. Promo tool

7. MAKING YOUR PRODUCT AND COMPLETING YOUR SERVICE

a. Choosing Your Place of Business
1. Locating where you can minimize costs
2. Other considerations
b. Designing Your Plant Layout for Better Efficiency
1. Calculating how much space you need
2. Putting your machines and equipment in the right place
c. Getting Your Machines and Equipment
1. Choosing the right machines
2. The steps to follow in purchasing
d. Maintaining Equipment and Machinery
e. Managing Your Inventory
1. Avoiding poor inventory practices
2. Controlling your inventory
3. Monitoring your stocks
4. Doing a physical count
5. Valuing your stock
f. Production Planning and Control
1. Why plan your production activities?

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 9

2. Production planning
3. Controlling production activities

8. ORGANIZING YOUR BUSINESS

a. The Legal Forms of Business
b. Registering Your Business
1. Why register?
2. Where to go and how to get there
3. Where to register
4. Steps in applying for a business name (single proprietorship with
the DTI)
5. Steps in applying for a business permit in the City of Cebu
c. The BMBE Law and Your Enterprise
1. How to register a BMBE
2. Cost of registering a BMBE
d. Where Else to Register

 Some reminders when you register

e. Other Things to Take Care Of

f. Staffing Your Business  Who will do what?

g. Getting the Right People
h. Other Matters

9.
a) COSTING YOUR PRODUCT OR SERVICE

1. What are Costs?

2. Benefits of knowing your costs
3. The different types of costs
4. Costs and Pricing
5. Costing steps for a manufacturer or a service provider
6. Costing steps for a trader
7. Costing: trading
CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 10

8. Costing: service and manufacturing

9. Some ways to reduce your costs
b) Final Project – Part I

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 11

10. COSTING YOUR PRODUCT OR SERVICE

a. First Things First
b. The Chart of Accounts
c. The Mechanics of Keeping Score
1. 1st step: Journalizing
2. 2nd step: Posting to the ledger
3. 3rd step: Making the trial balance
4. 4th step: Making the financial statements
d. Books of Accounts

 What happens if there are to many….

e. Financial Statements
1. Income statement
2. Balance sheet

11.
a) MANAGING YOUR FUNDS

1. Sources of Funds
2. Some Poor Cash Management Practices
3. Nine Do’s and Don’ts in Managing Your Funds
4. Some Cash Management Strategies
b) Final Project – Part II

SUMMARY OF ACTIVITIES
CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 12

Name: Jose Gabriel Javier Course, Yr. & Sec. BSICT

III-A

EXERCISE DATE
NO. ACCOM TITLE OF THE ACTIVITY RATING
PLISHED
1 Starting A Small Enterprise

2 Where Do You Start?

3 Assessing Your Business Ideas

4 The Business Plan

5 Determining Your Market

6 Marketing Strategies

7 Making Your Product And Completing Your

Service
8 Organizing Your Business

9 a) Costing Your Product Or Service

b) Final Project – Part I
10 Basic Recordkeeping For The Non-
Accountant

11 a) Managing Your Funds and Final Project

b) Final Project – Part II

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 13

EXERCISES

Exercise No. 1

STARTING A SMALL ENTERPRISE

Learning Objectives
Upon completion of this activity, students will learn:
• What is a Small Business?
• What it takes to succeed in business?
• Rewards and risks of being an entrepreneurs.
• Doing (Small) business in the Philippines.

Background
Are you one of those thinking hard of going into business for reasons of your own?
1. You are a young person who wants a job but rejection after rejection of your
job application has given you no hope of landing a job in the near future, An
employee, who is tired of the 8 a.m. to 5 p.m. work routine, and looking
forward to the day when you would be able to work according to your own
time, be your own boos, and enjoy all the money earned from your own
efforts,
2. A young housewife, who needs to help your husband earn in order to add to
the family earnings for the sake of your children’s future,
3. A not-so-young wife, who wants a means to escape from boredom and to find
an outlet for your skills and creativity,
4. A retiree, who is still full of ideas and energy and wise from years of
experience, yet still looking for a second career, or
5. A returning overseas contract worker, who is determined to find some ways of
making the most out of the dollars you have earned abroad.
If you are, then you are on the right track. A small business for a start might
just be what you are thinking of!
Before you rush in, however, pause for a while and ask yourself, “Do I know where
I’m going to?” In the first place, you must have all the information you need so that
whatever decision you will make later will be made on the basis of the right
information.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 14

Such so-called “informed decision-making” will help you a lot especially in starting a
small business, an area where you have not tried before. Going into business can be
likened to taking a risk because you are venturing into something whose outcome
still remains uncertain.
In this exercise, therefore, you will learn the basics of the unknown territory you wish
to go into. What is a small business? Why should you go into it? Do you have what it
takes to start a small business? What are the rewards versus the risks? What help
can you expect if you decide to set up one?

These are just some of the more important questions you need to ask before you
start a small business.

TASK 1.
TOPICS:

1. Observed Characteristics, Values and Attitudes of the Filipino Entrepreneurs and

their
Effect/Impact on Entrepreneurship
2. Turning Negative Filipino Characteristics, Practices, Attitudes and Values Into
Valuable Assets
KEY CONCERNS TO ADDRESS AND OTHER REMARKS:
What are the observed characteristics, values, characteristics, practices and attitudes
of the Filipino entrepreneurs and what are their effects/Impacts on their
entrepreneurial undertakings? Supposing the effects are negative, how will the said
values characteristics, values and attitudes of the Filipino be turned into positive so
that they can be of help to the Filipino entrepreneur in attaining success?

Answer:

Filipinos are hard working people, they have the characteristics of a soldier
that will pour their sweat and blood just to feed their love ones. Filipino
entrepreneurs do the same, some entrepreneurs are afraid to say no, some of them
still work even on weekends and some of them sacrifice everything just to be
successful. But some entrepreneurs fail, but still this doesn’t mean that they give up,
they’re not letting themselves get down. They stand on their own even before
sunrise, they work until they reach the success they want.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 15

TASK 2.
Create a profile about yourself, hobbies, interest, dreams and other aspects.

Answer:

Personal Information

o Jose Gabriel Javier

o 21
o Mabolo, Cebu City
o jigstot28@gmail.com

Hobbies and Interest

o Programming
o Web Designing
o Graphic Designing
o Video Editing

Dreams

o To make a software company

o Make a partnership with other businesses
o World contribution

TASK 3.

Discuss the role of each Small & Medium Enterprise Development (SMED) council
members chaired by the Secretary of the Department of Trade & Industry.

(a) to help establish the needed environment and opportunities conducive to

the growth and development of the small and medium sector;

(b) to recommend to the President and the Congress all policy matters
affecting small and medium sale enterprises;

(c) to formulate a comprehensive small and medium enterprise development

plan to be integrated into the National Economic and Development Authority
Development Plans;

(d) to coordinate and integrate various government and private sector

activities relating to small and medium enterprise development;

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 16

(e) to review existing policies of government agencies that would affect the
growth and development of small and medium enterprises and recommend
changes to the President and/or to the Congress whenever deemed
necessary. This shall include efforts to simplify rules and regulations as well as
procedural and documentary requirements in the registration, financing, and
other activities relevant to small and medium enterprises;

(f) to monitor and determine the progress of various agencies geared towards
the development of the sector. This shall include overseeing, in coordination
with local government units and the Department of Local Government as well
as private sector groups/associations, the developments among small and
medium enterprises, particularly the cottage and micro-sized firms;

(g) to promulgate implementing guidelines, programs, and operating

principles as may be deemed proper and necessary in the light of government
policies and objectives of this Act;

(h) to provide the appropriate policy and coordinative framework in assisting

relevant government agencies, in coordination with the National Economic
and Development Authority and the Coordinating Council for the Philippine
Assistance Program, as may be necessary, in the tapping of local and foreign
funds for small and medium enterprise development;

(i) to promote the productivity and viability of small and medium enterprises
by way of directing and/or assisting relevant government agencies and
institutions at the national, regional and provincial levels towards the;

(1) provision of business training courses, technical training for

technicians and skilled laborers and continuing skills upgrading
programs;

(2) provision of labor-management guidance, assistance and

improvement of the working conditions of employees in small and
medium-sized firms;

(3) provision of guidance and assistance regarding product

quality/product development and product diversification;

(4) provision of guidance and assistance for the adoption of improved

production techniques and commercialization of appropriate
technologies for the product development and for increased utilization
of indigenous raw materials;

(5) provision of assistance in marketing and distribution of products of

small and medium scale enterprises through local supply-demand
information, industry and provincial profiles, overseas marketing
promotion, domestic market linkaging and the establishment of
common service facilities such as common and/or cooperative bonded
warehouse, grains storage, agro-processing and drying facilities, ice
plants, refrigerated storage, cooperative trucking facilities, etc.;

(6) intensification of assistance and guidance to enable greater access

to credit through a simplified multiagency financing program; to
CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 17

encourage development of other models of financing such as leasing

and venture capital activities; to provide effective credit guarantee
systems, and encourage for formation of credit guarantee associations,
including setting up of credit records and information systems and to
decentralize loan approval mechanisms;

(7) provision of concessional interest rates, lower financing fees, which

may include incentives for prompt credit payments, arrangements
tying amortizations to business cash flows, effective substitution of
government guarantee cover on loans for the borrower's lack of
collateral;

(8) provision of bankruptcy preventive measures through the setting

up of a mutual relief system for distressed enterprises, and the
establishment of measures such as insurance against extraordinary
disaster;

(9) intensification of information dissemination campaigns and

entrepreneurship education activities;

(10) easier access to and availment of tax credits and other tax and
duty incentives as provided by the Omnibus investment Code and
other laws;

(11) provision of support for product experimentation and research and

development activities as well as access to information on
commercialized technologies; and

(12) provision of more infrastructure facilities and public utilities to

support operations of small and medium enterprises;

(j) to submit to the President and the Congress a yearly report on the status of
small and medium enterprises in the country, including the progress and
impact of all relevant government policies, programs and legislation as well as
private sectors activities;

(k) to assist in the establishment of modern industrial estates outside urban

centers; and

(l) generally, to exercise all powers and functions necessary for the objectives
and purposes of this Act.

TASK 4.
Site an example of the factors that will affect, ‘How to do business in the Philippines.
1. Internal environment
The internal environment of business refers to all the factors or forces that
have a more direct impact on the daily activities of the company. The main
factors in the internal environment are: customers, suppliers, competitors,
shareholders, financial institutions, and employees.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 18

2. External environment

The external environment of a business refers to the major forces outside

the organization that have the potential to significantly influence the success
of the firm. They consist of primary forces that shape opportunities and pose
threats to the company. These factors include: physical environment,
political-legal, economic, technological, socio-cultural and demographic
factors.

TAST 5.
Make a comparison between REWARDS & RISKS being an Entrepreneur.

Risks Comparison Rewards

Personal investment Even though you sacrifice Financial rewards
a amount from your
pocket, if your business
rise. Large amount will
return to you.
Uncertain return In business, there is no Creativity
sureness that’s why you
need a plan, being
creative boosts your skill
in business.
Ultimate responsibility You need to make you Autonomy
own decisions for your
own, because you are the
boss of your own. Take
the responsibility and
decide for the company

Activity Observation and Summary:

What I learned about the topic is the ways of preparing to start a business, it
is also included that laws and rules of making a business, observing traits of the
people and dealing with the risks and expecting rewards you are going to get when
doing business.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 19

Rating Table: (See ANNEX A)

Rating Legend :

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 20

Exercise No. 2

WHERE DO YOU START?

Learning Objectives
Upon completion of this activity, students will learn:
• Where Do You Start?
- Looking within
- Looking outside
• Some Options: Buy a business, Take a Franchise, etc.

Buying an existing business

- Taking franchise
• Over a Hundred Business Ideas

Background
In many entrepreneurship for a, the most frequently asked question by aspiring
entrepreneurs is: “What is the best business to go into?”

The standard answer they often receive is: “It depends,” which is then explained in
detail in terms of the many internal and external variables on which “it” depends.

Often, this answer disappoints the listeners. Does it disappoint you too?

But an answer that may be considered acceptable now may turnout unacceptable
sometime after. If it is announced, for example, that the business to go into is the
sago pearl business, then everybody would join the mad rush to set up a sago
business and before you know it, the market has become overcrowded. That actually
happened to the sago pearl business – as it did with the shawarma business. Before
that, the hot pandesal business. So many people engaged in these businesses until
competition became cut-throat. With thousands of shops competing for a share of the
market, all but a few folded up.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 21

TASK 1.
1. Why to look within is important in starting a business?
Starting to look within your own experience and your own goals, it can
be a good start of creating a business. By just looking on what you have and
what we had in life. You should decide your core strength on doing a business
so that it well be successful someday.
2. Why to look outside is importanat in starting a business?

In starting a business you should first decide your core strength but on
doing a business also includes ideas from the outside It also help us to know
what business we should build that are useful and convenient to use.

TASK 2.
Make a comparison between “Buy a business” and “Take a Franchise”?
Buying a business is when a certain individual fully buys all the rights of the
business including its products, employees and properties while taking a franchise is
like renting business rights, it’s products and it’s employees in your own property
with a reasonable amount of share of profit on each sides.

Activity Observation and Summary:

Build your own business is somewhat like building your own confidence. It is
important to look within and to look outside when starting a business because it can
help us on doing a good start.
Doing a business is crucial if you don’t have a passion on doing it.

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 22

Exercise No. 3

ASSESSING YOUR BUSINESS IDEAS

Learning Objectives
Upon completion of this activity, students will learn:
• The Right Type of Business
• How Do You Start a Business?
- Selection checklist
• Screening Your Ideas
- Knowing the market for your product or service
- Creating your product or service
- Putting your business together
- Looking at your finances
• SWOT Analysis
• Making at your finances

Background
By this time, you may already have a shortlist of business ideas to think about. Your
next move now is to decide which of these ideas to pursue. You may be attracted to
one business idea, but some other one may seem to be more challenging and more
to your interest.

Many people who want to start a small business already have an idea of the business
they want to own. While some have a generally broad concept, others may already
know the how-tos. It will make sense for any aspiring small entrepreneur like you to
weigh your options carefully. After all, you will be putting in serious money here. Your
objective is to come up with a choice that will match your strengths, needs and
business goals.

To you, almost all of the business ideas you have encountered in the previous
chapter could look promising. This chapter will guide you to trim down this list to a
more manageable number. The process could be painful especially if your ideas are
an extension of yourself, i.e., these reflect your personal interests, experiences,
frustrations, desires, wants, and aspirations.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 23

THE RIGHT TYPE OF BUSINESS

Reviewing your list and sorting out your ideas according to type of business activity
will help you decide which business idea you will eventually entertain.

Ask yourself this question: “Do I want to manufacture a product, deliver a service, or
go into trading?”

• A manufacturer produces a product and sells it. Making new jewelry from
beads, baking cookies, making quilted linen are some examples of a
manufacturing activity.

• A service-oriented business offers a specialized kind of service to customers.

The service can either be creative and technical or professional in nature. An
auto repair shop, a music lounge, laundry shop, internet café, and a tailoring
shop are among the more popular businesses in the first category. A medical
clinic, an accounting firm, and a law office are examples of professional
service providers.

• A trading business, on the other hand, is basically a buy-and-sell type. One

can be a retailer, wholesaler, or even both. The sari-sari store still remains to
be the most common form of a trading business. Another example that is fast
gaining popularity is the distribution of goods. Nowadays a number of small
entrepreneurs are in the business of supplying beverages like soft drinks and
beer to restaurants and grocery stores, an activity that used to be done by the
beverage manufacturers themselves in the past.

One can always combine activities, say, manufacture a product and trade in related
goods as well. A candle maker, for example, can also carry on such wares as
candleholders and candle accessories to go with the candles. A technician can sell
electronics spare parts and related items such as speakers and amplifiers. An interior
decorator can also sell decorative items such as vases, lamps, and wall accessories.
The owner of an internet café can accept computer service jobs on the side.

Then choose an industry. Pick a sector where you are interested in, one that you
enjoy doing, or one that you think you have some knowledge and experience.

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Setting up a business does not always mean starting from scratch. You can also start
by getting a franchise. The next decision you will make is whether you want to set up
an independent business or get a franchise. An independent business is something
that you start and nurture on your own. A franchise essentially involves buying the
right to sell the parent company’s goods or services in a specific area.

TASK 1.
How to choose the right business?

Choosing the right business depends on what you have and what you want,
either you want to pursue your own interest, make some products, or either buy and
sell products or sell you own (what I mean is labor service). It all starts from you, but
it also depends on what the community wants, what you observed on what the
people wants. A entrepreneur must observe the surrounding first before deciding
because creating a business will cost money a lot and if you fail you lose. Taking time
on thinking before deciding is essential part in business world.

TASK 2.
How to screen your ideas in relation to your finances.
All business deals with money, but how can we manage the money in order to
not getting bankrupt? That’s where the financing enters. To be a entrepreneur must
have the knowledge of handling money. The business won’t run without investing,
borrowing, budgeting or saving.
If you have decided your own business, you must have a capital to spend,
budget to maintain and savings to upgrade.

Activity Observation and Summary:

Starting the right business takes time, critical thinking skills, and a lot of
money. An entrepreneur also needs to have knowledge of handling money.

Rating Table: (See ANNEX A)

Rating Legend:

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Email: information@ctu.edu.ph
 Page 25

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

Exercise No. 4
THE BUSINESS PLAN

Learning Objectives
Upon completion of this activity, students will learn:
• Why Plan a Business?
• Components of a Business Plan

Background

Why Plan a Business?

A business plan is a document that aims to establish whether or not a business idea
will bring in money that is greater than what it cost to start and operate it. Your
business idea may look attractive to you at first. But beware! Not all business ideas
are “doable.” Some look brilliant while others are just too absurd.

Therefore, no matter how good your business idea will seem, you will need to make a
business plan for the following reasons:
1. Reduce, if not remove, the risk of losing money invested in a poorly
researched or unstudied business idea.

Shouldn’t you first find out where your money is going before you let go of it?
This way you reduce, if not remove, the possibility of losing your money on
some activity that you should not have gotten into in the first place. Preparing
a business plan will enable you to measure the prospects of a business idea
before parting with your money.

2. Avoid cost mistakes.

Every spur-of-the-moment or careless decision you make for the business

entails cost that you might not be able to recover. It is never advisable to
engage in a trial and error or on a hit-or-miss activity. You can actually save
on costly mistakes by looking carefully at the details of the business in

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 Page 26

advance and determining your actual requirements. For instance, you may
have thought that you will need two units of a high speed industrial sewing
machine to complement your two regular motorized sewing machines and
make full use of your estimated production capacity. After making a business
plan, you realize that one unit of the industrial sewing machine and three
sewers were all you needed to run in full capacity.

3. Anticipate your financial requirements.

Money is the blood of any business. Without it no business can start or even
survive. It is always wise to foresee sudden increases or decreases in the
demand for your product or services so you can prepare for them. Through
the business plan you can plan for the lean months and ensure that the
business will have enough resources to meet business obligations during the
periods when sales are low. In the same manner, the business plan will help
you get ready for the peak production months so that you avoid losing any
business opportunity.

4. Organize your activities beforehand.

A business plan will serve as your road map to an unfamiliar territory and
as such, minimize or avoid unpleasant surprises. The business plan will allow
you to estimate how your business will perform in the future and to prepare
for contingencies in case things will not turn out as planned.

5. Assess actual performance against set goals.

A business plan will enable you to set targets in terms of sales volume
and revenues, as well as expenses, among others. Once you have put up the
business, you can always go back to your business plan to measure actual
performance against your set goals.

6. Apply for financing from lending institutions.

You could be lucky to have a nanay or tatay, kumpadre or kumadre to lend

you money to start your business right away. But under normal
circumstances, no one will lend you a sum if they are unsure about the
prospects of your business idea. You should be able to convince possible
sources of capital, especially banks, that something good will come out of

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 Page 27

your business idea. A well-prepared business plan can be your back-up

support.

Components of a Business Plan

A business plan is basically composed of the following:

• Introduction or executive summary

• Marketing aspect
• Production or technical aspect

TASK 1.
State the reason(s) why we need a Business Plan.

TASK 2.
Discuss/explain the different components of a Business Plan.

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

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Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

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Email: information@ctu.edu.ph
 Page 28

PAS - Presentation & Synthesis

COL - Command of Language

Exercise No. 5

DETERMINING YOUR MARKET

Learning Objectives

Upon completion of this activity, students will learn:

• Understanding Your Market
• Analyzing the Competition
• Estimating Potential Market Demand

Background
There are several meanings of the term, “marketing,” that appear in the website,
www.thefreedictinary.com/marketing. For the purposes of this guidebook, we shall
follow these definitions: Marketing refers to the commercial processes involved in
promoting and selling, and distributing a product or service. It refers to the
commercial functions involved in transferring goods from producer to consumer.
We shall likewise consider the following definitions of the term, “Market” by the same
website:
1. a subdivision of a population considered as buyers;
2. the business of buying and selling a specified commodity;
3. a geographic region considered as a place for sales.
Related words that were given for the term, “Market,” includes:
1. the world of commercial activity where goods and services are bought and sold;.
2. the customers for a particular product or service.
3. a geographic region considered as a place for sales.
The four important things in marketing that an entrepreneur must remember are:
1. The client, the buyer, the target user, generally called the target market;
2. The entrepreneur’s ability as marketer to understand the target market;

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3. The entrepreneur’s ability to influence the target market to by the

products or use the services offered by the business; this will depend on
how well he understood he target market; and
4. The main objective of marketing, which is making the target market buy
the company’s product or service; this will be measured by the revenues
that come in the form of payment form the buyers of the product or users
of the service. Take note of the second and third points, understanding the
target market and influencing them to buy form you. If these may sound
strange, do not be turned off. This chapter will guide you how to identify
your target market and to know them better. The next chapter will discuss
how you are going to make your target market buy your product or use
your service.

TASK 1.

Give example in understanding your market you need know how to:
a. group (or segment) the market
b. identify which segment to focus on (target)
c. be more familiar with your target
d. know who else are making similar products or offering similar services
(competition)
e. estimate the size of the target market that will buy your product or use
your service.

TASK 2.

Give an example of a Competitors Analysis.

TASK 3.

Give an example of ways and means to Estimate Potential Market Demand.

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________
_______________________________________________________________________
_

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 Page 30

Rating Table : (See ANNEX A )

Rating Legend :

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

Exercise No. 6

MARKETING STRATEGIES

Learning Objectives
Upon completion of this activity, students will learn:
• Product Strategies
• Place Strategies
• Price Strategies
• Promotions Strategies

Background
The second point in marketing concerned with activities that will draw the target
market to a product or service. You also learned some of the tricks and techniques
for understanding them better. Your next task now is to find out how you will get this
target market to buy your product or use your service.

The second point in marketing is concerned with activities that will draw the target
market to a product or service and induce them to buy. The success of an
entrepreneur’s efforts towards this end is measured in terms of how much the
business will realize from sales of the product or service.

This chapter shall focus on some of the tried and tested ways of influencing q target
market to buy one’s products or services. The kind of a activities to implement and

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 Page 31

the level of their influence on a target market will depend largely on how well the
entrepreneur understands his market.

Before you reached this chapter, you already had a product or a service in mind,
right? This chapter will help you determine whether or not your product or not your
product or service will sell and how you are going to persuade or induce your target
market to buy from you.

Some Definitions

All throughout the chapter, you will be coming across the term, marketing strategies.
In general, a marketing strategy is a plan of action require to realize the main
objective of marketing, which is to influence the target market to buy the product or
service being offered by a business.

Much of the ability to influence the target market is developed by knowing what
these marketing strategies are, by learning from the other companies, and by actual
practice.

Marketing strategies revolve around the 4Ps of marketing, so-called because they all
start with the letter P. Collectively referred to as the marketing mix, the 4Ps are the
factors that help a business to sell its product or service. The four elements – the four
Ps of marketing – are normally set apart as: getting the right product to the market,
at the right price. Ensuring that promotion in terms of advertising and marketing for
the product or service is right, and ensuring that the product or service is distributed
to the most convenient place for the customers to buy it.

TASK 1.
Try to create a new product(s)/service(s) then apply the product strategies involve
using the properties namely: brand, packaging, label, support and attributes.

TASK 2.
Create a sketch or drawing where your product/service outlet will be located. Explain
the reason(s) why you choose that particular location.

TASK 3.
Show your computation regarding price strategies.

TASK 4.

State your promotional strategies used and why.

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 Page 32

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis COL - Command of
Language

Exercise No. 7

MAKING YOUR PRODUCT AND COMPLETING YOUR

SERVICE

Learning Objectives
Upon completion of this activity, students will learn:
• Choosing the Place of Business
• Designing the Plant Layout for Better Efficiency
• Getting Your Machines and Equipment
• Maintaining Equipment and Machinery
• Managing Your Inventory

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• Production Planning and Control

Background
Where is the best location for your business? What is the best layout suitable for your
business operations? How much stock should you keep? Should you subcontract or
not? Should you buy brand new equipment? How you decide on these questions and
more can make or break your business. So, think things over before you make your
final decision.

CHOOSING YOUR PLACE OF BUSINESS

The best place to locate a business is in a place where the enterprise can produce
and sell to its customers at the lowest cost. It is easy to see why.

Before you can have a product to sell, you need to pay for materials, labor and
overhead, including building rental and maintenance, for example. In the same
manner, before you can sell to your customers, you will need to pay for marketing
and distribution expenses. You need to recover all these costs before you can make
a profit. So, the lower your costs are, the less money you need to recover. In this
way, you may be able to sell your product or service at a price lower than that of your
competitors. When you can sell lower, you enjoy a pricing advantage.

TASK 1.
What are the things/situations and other considerations to be observed in locating
your business in order to minimize cost?

TASK 2.
What are the things/situations/processes and other considerations to be observed in
designing your Plant Layout for better efficiency?

TASK 3.
What are the features/warranty and other considerations to be observed in getting
your machines and equipment.

TASK 4.
Why it is important to properly manage your inventory?

TASK 5

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 Page 34

Why good production planning and control affect the performance of your
business?
Activity Observation and Summary:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend :

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

Exercise No. 8

ORGANIZING YOUR BUSINESS

Learning Objectives

Upon completion of this activity, students will learn:

• The Legal Forms of Business

• Registering Your Business
• The BMBE Law and Your Enterprise
• Where Else to Register
• Other Things to Take Care of
• Staffing Your Business

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• Getting the Right People

• Other Matters

Background
Once your plant is ready, it’s time to organize your business. Perhaps you may
already have an idea of what your business is going to look like. You are pretty
excited to start your operation with the least possible delay. But wait, there are still
some question to answer and things to attend to before you formally open for
business.

What form of ownership will your business take? What is your vision for the business?
What are the goals and objectives that you want your business to achieve? Are you
going to register your business even if you are only starting? Can you run the
business by yourself? Who are the people you think can help you? How are you going
to choose them? What skills must they have?
Who will do what?

TASK 1.
Why should an enterprise be registered with the proper government offices?

TASK 2.
Describe the basic registration process for the 4 business forms mentioned.

TASK 3.
Aside from the business permit, what are the additional registrations for specific lines
of business and products?

Mention the most regular and basic only, especially those that will entail penalties
and surcharges if not complied with.

TASK 4.
List down all the different activities that have to be done in your business. You can
group this according to the four functional areas of management: Marketing,
Production, Finance and Administration

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 Page 36

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

Exercise No. 9

COSTING YOUR PRODUCT OR SERVICE

Learning Objectives

Upon completion of this activity, students will learn:

• What are Costs?
1. Benefits of knowing your costs
2. The different types of costs

• Costs and Pricing

1. Costing steps for a manufacturer or a service provider
2. Costing steps for a trader

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 Page 37

3. Costing: trading
4. Costing: service and manufacturing
5. Some ways to reduce your costs

Background
Now that you’ve organized your business, you have to make sure that customers will
come. How sure are you? You’re never sure. Quality, location, and customer service
are factors that influence people to buy. Price is another. If the price for your product
or service is higher that what your buyers can afford or are willing to pay, chances
are your business will not last very long.

WHAT ARE COSTS?

Costs are all the money a business spends in making and selling its products or
services.
Some examples are:

- raw materials bought to make products or complete services

- goods intended for resale
- salaries and wages of factory workers or service crew
- sales commissions of sales people
- electricity for the machines, light, and office equipment - interest on
business loans.
These examples can be grouped into three kinds of costs: product costs (raw
materials, goods for resale, salary of factory workers or service crew), selling
expenses (sales commissions), and administrative and financing costs (electricity and
interest on loans).

If you are in a service business or a trader, you will not have the same costs as a
manufacturer. But most businesses have costs for materials, electricity, water, rent,
transportation, and the like. Your costs will depend on the nature of your business.

TASK 1.
Create an example of Costing Procedures for a Single/Sole Proprietorship.

TASK 2.

Create an example of Costing Procedures for Trader and Service Provider.

Activity Observation and Summary:

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 Page 38

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

FINAL PROJECT – PART I

Learning Objectives

Upon completion of this activity, students will learn:

• To conduct interviews with all the stakeholders involve in the project.
• To conduct research of the following topics:
1. Executive Summary
a. The Business Firm
b. The Product
c. The Customer
d. The Form of Ownership

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 Page 39

e. The Management Team

f. Business Goals and Vision
2. Marketing Aspect
a. Target Market
b. Customer Profile
c. Competition Analysis
d. Marketing Strategies
e. Competitive Edge
f. Sales Strategy
g. Sales Forecast
h. Marketing Mix

Background

• The introduction of the executive summary.

Just like the preface or foreword of a book, the introduction or executive
summary gives a general idea about the contents of the business plan. It also
states the name of the person who is planning to set up the business, form of
ownership, the business address, type of project, objective(s) of the business,
and total project cost.

• Marketing Aspect.

This generally refers to the product or service that the business will offer. It
gives details of the product or service, how it will benefit the buyer, how it will
look like; who are expected to buy the product or use the service, where they
can buy, and how much it will cost. This component also includes data on how
much sales the business can expect - in a year, in two years, or longer - in
units and in peso values. This portion also looks at the general situation
outside the proposed business. The information will consist, among others of
the following: how many buyers or users there are in the market as against
the number of makers of similar products or services, how the latter are doing
in the market; details as to how they make the buyers and users know about
their products or services and convince them to buy; and many more
information.

TASK 1

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 Page 40

Create the Executive Summary and the Marketing Aspects based on your product of
choice for final project business plan.
This will serve as semi-final examination.

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

Exercise No. 10

BASIC RECORDING FOR THE NON-ACCOUNTANT

Learning Objectives
Upon completion of this activity, students will learn:
• First things first
• The Chart of Accounts
• The Mechanics of Keeping Score
- 1st step: Journalizing
- 2nd step: Posting to the ledger
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- 3rd step: Making the trial balance

- 4th step: Making the financial statements

• Books of Accounts
- What happens if there are to many…
• Financial Statements
- Income statements
- Balance sheet

Background
There are essentially two kinds of books of accounts. The first is the journal where
you record transactions according to their dates. A journal is somewhat similar to a
diary where you write what happened during each day. This is where you record
each transaction as it happens or at the end of the week, if transactions are few.
The second is the ledger where you transfer transactions from the journal – according
to account or type of transaction.

FIRST THINGS FIRST

Before you even begin recording your business transactions, you must be guided by
the accounting equation: Assets = Liabilities + Equity. Anything that you own and
use for business falls under assets. Assets can be acquired in two ways: through
borrowed money which you’ll have to pay later on (liabilities) or your capital or your
own money (equity). The accounting equation is the basis for your balance sheet.
When you open for business, you expect to have some sales – and at the same time
incur expenses. These too are recorded in the books of accounts and are
summarized in the income statement – for a month, a quarter, a semester, or a year.
If your sales are bigger than your expenses within a certain period, then you make a
profit which increases your capital. If the opposite happens, then your business
suffers a loss, which decreases your capital.

Recording each transaction is based on the accounting equation, with a plus (+) sign
to show an increase in amount and a minus (-) sign for a decrease. Take note of
which side of the equals (=) sign these belong, because proper recording of each
transaction does not and should not change the equation.

TASK 1.
Jose Labon, a practicing certified public accountant, had the following account
balances on December 31, 19A:
Cash P32,900 J. Labon, Capital P22,
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 Page 42

920
Manila Hotel (client) 10,000 J. Labon, Drawing 4,
620
Filipinas Hotel (client) 10,500 Professional fees 80,
000
Bay View Hotel (client) 10,500 Travelling 8,
Expenses 200
Dalton Bros. (client) 3,800 Rent Expenses 8,
400
City of Manila (client) 1,200 Juniors’ Salaries 13,
600
Equipment 4,000 General Expenses 1,
400
Notes Payable 6,200

Prepare:

1. Trial Balance
2. Balance Sheet
3. Income Statement for the year.

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

Exercise No. 11

MANAGING YOUR FUNDS

Learning Objectives
Upon completion of this activity, students will learn:
• Sources of Funds
• Some Poor Cash Management Practices
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• Nine Dos and Don’ts in Managing Your Funds

• Some Cash Management Strategies

Background
In business, keeping accounts of transactions implies excellent record-keeping.
Records tell you how your business is going. You are able to determine whether your
business is healthy, sick, or just okay. To keep your business healthy, you need to
manage your funds properly day in and day out.

Business owners think managing their funds means simply maintaining sufficient
cash for their operations. Unfortunately, managing funds entails a more
comprehensive approach than just having ready cash.

SOURCES OF FUNDS

Many small business beginners like you source their start-up capital from their own
pocket. They also borrow from relatives and friends. Another common source,
particularly from among micro entrepreneurs, is the motorbike-riding Indian nationals
with their “five-six” loan scheme where interest is paid either on a daily or weekly
basis. A great number of Filipinos patronize the “five-six” lenders because they are
easy to approach and the relationship is governed by trust. Borrowers can also keep
on borrowing from them even without a collateral.

But these are not the only sources of funds you can tap to finance your business.
There are many formal sources that are as easy and as accessible as their informal
counterparts. Government is intensifying its assistance programs to small
enterprises, introducing new ones, and bringing them down to the grassroots level.
The government, for instance is now beginning to adopt the good points of the “five-
six” that clicks with the masses. One of these programs is in microfinance where
micro and small enterprises can borrow small but quick money from government-
accredited institutions at easy repayment terms. Several non-governmental
organizations, industry associations, and private groups have also been tapped by
the Government to serve as conduits for lending to the micro and small enterprise
sector.

TASK 1.
Why lack of cash planning is dangerous to a business?

TASK 2.
Why poor of internal control is not good to a business?
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TASK 3.
Discuss the nine Dos and Don’ts in managing your business.

TASK 4. (This will serve as final examination.)

Create a Business Plan with a product of your choice for Final Project. (See Annex B)

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

FINAL PROJECT – PART II

Learning Objectives
Upon completion of this activity, students will learn:
• To conduct interviews with all the stakeholders involve in the project.
• To conduct research/create of the following topics:
1. Technical Aspect
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a) Product Description
b) Production Process
c) Production Planning
d) Tools and Equipment
2. Management Aspect
a) Form of Ownership
b) Staffing
c) Job Descriptions Of The Officers And Staff
d) Organizational Policies
e) Organization Chart of the Business
3. Financial Aspect
a) Start-Up Project Cost
b) Projected Income Statement
c) Project Cash Flow Statement
d) Projected Statement of Financial Position
e) Financial Analysis
1. Net Present Value
2. Cash Payback Period
3. Profitability Index
4. Return of Investment
f) Survival and Exit Strategies If Business Will Not Do Well

Background
• Technical Aspect

This component deals with how the product is made or the service completed;
when it is made or completed; type and number of materials and equipment
and number of people needed to make the product or complete the service;
type and amount of electricity, power and water to use; arrangement and
location of machines, work stations, storage and other areas; physical space
and facilities; quality control system; waste disposal system; and many more.

• Management Aspect

What form of ownership will your business take? What is your vision for the
business? What are the goals and objectives that you want your business to
achieve? Are you going to register your business even if you are only starting?
Can you run the business by yourself? Who are the people you think can help
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you? How are you going to choose them? What skills must they have? Who
will do what?

• Financial Aspect

Just as money is very important to any business, this section is critical to any
business plan. This component will let you know how much you will need to
put up the business, where you will get the money to finance it, and keep it
going. Vital to this component is an estimate of how much you will need to
operate the business for at least a year up to, probably five years, especially if
you will borrow from a bank, how you are going to use the loan, how much
profit the business will earn, how you are going to repay the bank loan, and
some other information.

TASK1
Create the Technical Aspect, Management Aspect and the Financial Aspect based on
your product of choice for final project business plan.
This will serve as final examination.

Activity Observation and Summary:

________________________________________________________________________
________________________________________________________________________

Rating Table: (See ANNEX A)

Rating Legend:

KCS - Knowledge & Content of the Subject

PAS - Presentation & Synthesis
COL - Command of Language

REFERENCES

Department of Trade and Industry. Bureau of Small and Medium Enterprises

Development.
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Your Guide to Starting a Small Enterprise. Makati City, 2006.

Technonet Asia and UP Institute for Small-Scale Industries. Soapmaking from

Coconut Oil by Cold Process. Singapore and Quezon City, Philippines: 1983. (Appro-
Tech Bulletin Series no. 17)

Websites Accessed:
http://www.census.gov.ph/data/pressrelease/2002/pr02117tx.html. Accessed June 06,
2006 http://www.census.gov.ph/data/pressrelease/2004/ie03ftx.html. Accessed June
01, 2006. http://www.doh.gov.ph/pitahc/Herbal_Soap.html. Accessed June 07, 2006.
http://www.dti.gov.ph/contentment/9/60/64/491.jsp. Accessed June 08, 2006.
http/www.nscb.gov.ph/ru4/ . Accessed June 08, 2006.

ANNEXES
ANNEX A.

RATING COMPUTATION EXAMPLE

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ANNEX B.

BUSINESS PLAN FOR A SOAP MAKING BUSINESS

Executive Summary
Business Name : XYZ Enterprises
Business Address : No.12 M. de los Reyes St., Poblacion, Los Baños, Laguna

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Nature of Business : Soap Manufacturing

Form of Ownership : Single Proprietorship
Proponent : Ms. Juana dela Cruz

Objectives

The project seeks to achieve the following:

• put into practice the technical skills on soap making that the proponent
acquired from a training seminar recently conducted by the local
government of Los Baños;

• augment the income of the proponent; and

• provide some source of income for the youth in the neighborhood.

Marketing Aspect

The project relates to a business of making soap, specifically, bath and beauty
soap. The product will be known by the brand, CreamySkin. The papaya extract in
the soap will give it whitening and moisturizing properties. Each soap bar will be
wrapped with fine transparent paper and put in individual boxes.

The business will target the female population of Laguna particularly a

conservative 0.0002% of those who fall within the 15 – 64 age group. These are
the women who are most likely already using herbal bath and whitening soap.
CreamySkin will be sold in beauty salons, drugstores, boutiques, grocery and
variety stores, and even schools. The owner will take the lead in selling the soap.
She will also use sales agents to distribute the product. CreamySkin will be sold at
an introductory price of P27.00 in the first year. To create an awareness of the
product and encourage the target market to buy the soap, the business will use
streamers, flyers, and posters, and will also advertise in the newspapers of local
circulation.

Technical Aspect

The project will be set up at the residence of the proponent in Los Bań os in the
province of Laguna, the first province south of Manila. An open area with concrete
flooring and a roof will serve as the plant. Some improvements, such as the
construction of a wall and installation of fixtures, will be done.
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The main ingredients for the manufacture of CreamySkin will be coconut oil, lye,
sodium silicate, papaya extract, and essential oil. Spring water will be mixed with
lye to come out with the caustic soda solution. The business will require weighing
scales, plastic pails, wooden moulds, stainless or laminated-top working tables,
hydrometers, oil storage tanks, beakers, wooden ladles, and a stainless steel
spoon with long handle. The business will also require safety accessories such as
safety glasses, gloves, and dust masks.

Production of CreamySkin will be done two times a month at one-week intervals

in the first year. From a yearly output of 2,797 bars in the first year, the output
will increase by 50% in the 2nd and 3rd years. The business will need 2 workers
working in staggered hours to produce the soap.

Organizational Aspect

The business will be a single proprietorship. It will register as a BMBE with the Los
Bań os government to avail of tax exemption privileges. The proponent will make
all the decisions and handle all the aspects of the operation.

Financial Aspect

The project will cost PhP27,190. The proponent will use her own funds to start the
business.

MARKETING PLAN

The Product

The proposed business intends to manufacture herbal bath and beauty soap. The
product will come in 135 -gram bars measuring 1.25” x 3.20” x 2.0”. Aside from
its basic function as a body wash, the product will have skin whitening and
moisturizing properties. It will carry the brand name, CreamySkin. It will be
produced in Laguna province and sold in the same province during the initial
year.

Target Market

CreamySkin will target individuals from the high-lower up to the middle income
classes. These are people who can easily afford to buy and are willing to try a
new product, especially if it promises other benefits to them. The market will be

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made up of the young girls to the matrons who are most likely already using
herbal bath and beauty soaps that give beneficial effects other than for washing
the body. These are the women who are within the 15 – 64 ears age group, the
age range considered by the NSO as the economically productive years.
Specifically, CreamySkin will target a mere 0.0002% of this female segment of
the Laguna population. Although the product will primarily target the women, the
males within the same age group will also be considered.

The Market Situation

Soaps have evolved from the colored scented bars of old. Nowadays, the general
public is exposed to a very wide variety of these soaps. Of late we have
witnessed the emergence of herbal soaps. Herbal soap is a kind of soap mixed
with natural ingredients, juice or extract, and vitamins from medicinal plants.
They come in various forms, shapes, and sizes and offer benefits other than for
washing the body. There are soaps for practically all types of skin, for babies, for
the face, for people who want to remove pimples, to hydrate and moisturize the
skin, to eliminate body odor, to maintain a fresh smell, to whiten, to address skin
problems, and for many other purposes.

 Demand

At first glance, the market for fragrance soap appears to be saturated.

But there is always room for newcomers for as long as babies will be
born. The consumption of soap is closely related to population growth,
soap being one of the items that is basic in every household. Filipinos
by nature are known for our cleanliness. In fact, many, if not most
Filipinos take a bath at least twice daily. Changing customer
preferences have also contributed quite extensively to the growing
demand for herbal bath and beauty soaps. A 2004 press release from
the Census office reported increases in expenditure in personal care
and effects, among others, in 2003. As people become more conscious
about their color and appearance, the market for herbal bath and
beauty soaps will always be there.

Laguna residents have access to the more established as well as newly

emerging local brands as much as those living in Metro Manila. And
they also share the growing consciousness and desire for a better skin
complexion. This quest continues to encourage them to search for a

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soap brand that will live up to its promise not only of improving the
skin but easy on the pocket as well.

They presently buy their bath soap from the neighborhood retail stores
and grocery stores in the town center.

The following table shows the total population of Laguna Province in

Year 2000. Following the association of the demand for soap with the
population, this table also reflects the total demand for soap in the said
province.

Since herbal bath soaps cater to a specific segment of the population,

it can be safely assumed that the target market for herbal bath soap
would fall within the
figures that are highlighted.

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The next table shows the 2000 census figures for the population of
Laguna with a five-year projection.

 Supply

Big companies dominate the soap industry in the country. These

include Unilever, Procter & Gamble, and Splash, among others. These
are companies that have the resources to conduct extensive R & D and
product development and, naturally, marketing activities.
Dermatologists also come out with their own soap formulations that
they recommend to their clients. Aside from these, there are also
imported soap brands in the market carrying such brand names as
Lush, Body Shop, Jergens, Dove, Mark & Spencer, etc.
The competitors of CreamySkin will be the locally-made herbal soaps
that are starting to make their mark in the industry as well the small
producers of herbal soap, particularly those based in the provinces.
Many of them are backyard and home-based, and they can be found in
many places in the country. In Laguna province, there are a number of
households making laundry soap as well as herbal soap. There are two
makers in the town of Siniloan, one in Cavinti, and three in Calamba
City.

 Demand – Supply Analysis

The proposed business will work with the following assumptions:

- there will be a 2.3% increase in the total population of Laguna for

the years 2006 to 2008;

- 50% of the projected female population of Laguna are female;

- 50% of the projected female population of Laguna represent the
users of herbal soap;

- the business will target a mere 0.0002% of the current users of

herbal soap.

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Marketing Strategies

1. Objective

The proposed business intends to capture a very small percentage (0.0002%)

of the potential users. The proponent will target 111 women (based on 2006
projected population growth), who will buy a bar of CreamySkin at least twice
a month. The estimated size of the market for CreamySkin in the first year is
2,712 bars.

For the second year, the business projects a 50% increase in the demand for
CreamySkin, and another 50% increase in demand is projected in the 3rd
year.

In the 2nd year, the business will introduce CreamySkin to the towns in nearby
Batangas province. The projected increase in demand for the 3rd year will
come largely from the mileage that the business will gain in the 2 nd year as
the users become convinced of
the benefits of the soap.

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2. Product Strategies

The more popular locally-produced whitening soaps in the market are known
by such brand names as Silka Papaya, RDL Papaya, Block & White, Biolink
Papaya, TopOne Papaya, Love Papaya, etc. These are packed in individual
boxes. The herbal soaps that are being made in Laguna do not bear any brand
name. They are individually wrapped in white paper.

CreamySkin will have approximately the same attributes as the other

locallymanufactured herbal soaps. A come-on for the product is the ingredient
that will lighten the skin color and moisturize the skin. The brand name,
CreamySkin, conveys the promise that the user will acquire a lighter skin color
that is comparable to cream.

CreamySkin will be individually wrapped with fine transparent paper first

before being placed inside a box. The box will bear the brand name,
CreamySkin, list the ingredients, and give the name of the manufacturer.

3. Place Strategies

The popular branded whitening soaps are being sold in supermarkets and
groceries nationwide. They are also available in drugstores. The soap products
of Laguna producers are usually sold in a store fronting the owner-producer’s
house. A signboard on which is written the word, SABON, appears in selected
places along the highway.
The producers also get people to sell the soap along the road and in the
neighborhood.

The proposed business will be located in Los Baños, Laguna. This town falls
within the second district of the province, the second most densely populated
among the four districts. The place comes close to the heels of the 1 st district,
the most densely populated district being near Metro Manila. Los Baños town
is also strategically close
to the 3rd district.

CreamySkin will be sold directly to the end-users. The business will also
“borrow stores” and use agents to reach out to the target market.

The soap will be sold in the beauty salon owned by the proponent. A small
corner at the owner’s residence will serve as a showroom for the soap.

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CreamySkin will also be distributed to similar shops, including barber shops,

and other outlets such as boutiques, variety, grocery and convenience stores,
drugstores, offices, and even schools. Aside from the proponent, the business
will get agents to bring CreamySkin to the end users. These will include
schoolteachers, employees, and college students.

4. Price Strategies

The next table will show the prices in Laguna of the existing herbal bath and
beauty soaps available in the market.

The proposed business will consider both internal and external factors in
setting the price of CreamySkin. It will firstly consider the production and
selling costs, the selling price of the competitors, and the market price.

The proponent will sell the product for an introductory price of P25.00 in the
first year.

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The proposed business does not intend to extend credit within the first three
years.

5. Promotions Strategies

The established soap manufacturers promote their products through tri-

media. Their advertisements appear in the newspapers and television, and
are aired over the radio. They also post their ads in billboards and giant
posters that are placed along main thoroughfares. It is no secret that these
companies allot a sizeable chunk of their budget for promotion; majority of
them even tap celebrities to endorse their products.

The promotional activities being conducted by big soap manufacturers have

successfully introduced herbal soap to the entire soap-consuming population.
This has brought awareness of herbal soaps to a certain level that has helped
significantly, the smaller manufacturers, including newcomers, market their
products. So much so that the latter no longer start their promotional efforts
from scratch but can already concentrate on getting their target market buy
the new products.

The Laguna soap producers promote their products by word of mouth. The
sign, Whitening Soap is placed in front of the soap bars that are piled on a
table or a counter. The signs are either computer printouts or printed by hand.

To bring CreamySkin into the consciousness of the target market, the

proposed business will use streamers, flyers, and posters. It will also advertise
in the community newspapers such as the semestral Los Baños Times
published by students of the UP Los Baños and the daily Manila Times
Southern Tagalog Edition. The proposed business will also use the product as
giveaways in contests and as corporate gifts.

The flyers will be inserted in all printed materials specifically magazines and
newspapers circulating in the province. They will also be given out to
parishioners coming out from the church, mall goers, as well as diners in
restaurants and fastfood chains. The posters will be displayed prominently in
beauty parlors, boutiques, variety and grocery stores, drugstores, resorts and
tourism-related establishments.

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Distribution of the promotional materials will be a joint effort by the proponent

and the agents.

TECHNICAL PLAN

1. Plant Location

The proposed business will be put up at the residence of the proponent in Los
Baños, Laguna. This is at No.12 M. de los Reyes St., Poblacion, Los Baños,
Laguna.

Laguna province is one of the coconut-rich provinces in Southern Tagalog.

Coconut oil is the major raw material for making soap using the cold process.
The province also boasts of the availability of herbs and medicinal plants. The
municipality of Los Baños, also known as a university town, hosts the
University of the Philippines Los Baños and various research and development
institutions of the government which the proponent can approach for
technical assistance.

Getting workers should not be a problem. The next table shows the
employment status of employable Laguna residents. The business will initially
tap workers from the

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neighborhood of the proponent.

2. Process Description

Following is the step-by-step process for the manufacture of CreamySkin

whitening soap using the cold process. This process involves the reaction of
the oil with a quantity
of strong caustic alkali solution.

 Safety Precautions

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Exercise much care when handling caustic soda (lye). It can burn the skin
upon contact. Wear rubber gloves and safety masks when pouring, mixing,
or stirring. If you are spilled accidentally, wash immediately with vinegar
or anything sour and then wash with soap and water. For additional safety
precaution, wear long a sleeved shirt, pants, and an apron.

3. Process Flow (Attachment 1)

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4. Property, Plant, and Equipment

Production activities will be done at the existing extension of area adjacent to

the family esidence. It has a floor area of 20 square meters. This is an open
area, the walling will be a combination of concrete (up to the level of the
waist) and wire. It will have a separate installation for electricity. Water from
the owner’s deep well will be used for cleaning the utensils and the production
area. Spring water will be used for the soap.

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The business will require accurate weighing scales, plastic pails, wooden
moulds, stainless or laminated-top working tables, hydrometers, an oil storage
tank, beakers, wooden ladles, stainless steel spoon with long handle. Safety
accessories will also be needed. These are safety glasses with splashguard,
heavy duty, well-fitting gloves, and dust masks.

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5. Layout (Attachment 2)

6. Production Schedule
Production of CreamySkin will be done in 2 batches a month, preferably at one
week intervals, in the first year. The number of batches will increase in the
succeeding years.

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 Raw Materials
The following materials will be needed for making soap using the cold
process:

- Fat – coconut oil prepared by wet processing or by other conventional

methods.

- This is readily available from commercial oil processors. It can also be

made at home.

- Lye – caustic soda dissolved in spring water. The solution should be 35

degrees βe. Use a hydrometer to check the density of the solution.

- Builder – sodium silicate.

- Perfume – essential oils such as citronella oil, ylang-ylang, etc.
- Fruit extract or juice – from papaya, kamias, or calamansi.

Since production of CreamySkin will be by batch at 2 batches per month, it

is important for the proposed business to have materials ready for use.

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Materials will be purchased once every two months. The desirable level of
inventory to keep is
shown on the next page.

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There are no indirect materials required to make the herbal soap. Spring
water is easily available for free from several public sources. The cost of
transporting the water will be part of the overhead cost.

 Labor

The proposed business will need two workers. The workers will work for a
total of hours on a staggered basis to complete one batch. The step-by-
step process and estimated time to complete each is shown on the next
page. All the activities will be done by hand.

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ORGANIZATION PLAN

1. Legal Form

The proposed business will start as a very informal undertaking. It will be a

single proprietorship with the owner-proponent making all the decisions and
assuming all the functions. The owner-proponent has a beauty salon that is
registered with the local government and with the Department of Trade and
Industry. She will consider her soap making business as her new “baby” and
as another outlet for her creativity and energy.
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She intends to register the proposed business with the local government as a
BMBE.

The pre-operating expenses will be amortized over a five-year period.

2. Manpower

Managing a business is not a new thing to the proponent. She was able to
transform the beauty parlor that she set up four years ago from a traditional
hair-make up-nails service station into a salon offering a wide range of
personal care services. These services continue to be availed even by clients
who have moved out of Los Baños and out of the province. She believes that
the good image projected by her salon will be a plus factor that will make her
new product, CreamySkin, be a big hit in the market.

The owner-proponent will run and manage the proposed business by herself.
After successfully completing a local government-conducted training seminar
on making soap, dishwashing liquid, and laundry detergents, she is confident
that she can operate the business. Since this will be a new project, she wants
to start very small.

The business of making bath soap does not require highly technical skills. The
owner will get workers from the neighborhood. The nature of the work and
working hours will be light therefore she is confident that she will be able to
get workers. She, too, will
CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 69

carry out the administrative and finance tasks.

The chart below gives an overview of the different activities that the
proponent will undertake before she will start actual operations. Some
activities will be done simultaneously.

FINANCIAL PLAN

The proponent believes that she will be able to raise personal money to start
the business.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 70

The proposed business looks promising on the basis of the projected income
for the first 3 years.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 71

 Financial analysis

The statements show the following:

- Continuing growth of assets that are being used for the business.
Revenues in the first 2 years to be just be enough to cover its cost of
goods sold and the cost of doing business. This is affected by policies
regarding pricing and production efficiency.

- The business to earn P0.14, 0.23, and 0.39 for the first 3 years,
respectively for every peso sale. This evaluates how operating and
financial expenses affect the ability of the business to generate net profit.

- Every peso of the P27,190 capital put up for the business to generate
P0.035,
0.923, and 2.493, respectively, during the first 3 years.

The analysis shows that the proposed business wants to take things slow.
Being a new player, it does not aim to knock out the existing competition at

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 72

the onset. It will focus instead on studying how the market will behave and
making its presence felt through an aggressive marketing strategy by
combining low prices with an extensive promotional campaign.

ANNEX C.

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 73

RECOMMENDATION OF THE INSTRUCTIONAL

MANUAL COMMITTEE

10/18/2016
Per thorough review of the Instructional Manual/Workbook entitled
“Laboratory Manual in Entrepreneurship” by Francisco V. Yap which is
intended for use in the College of Technology, the committee has come up
with the following findings:
1. That the Instructional Manual/Workbook is comprehensive enough to
cover up the skills and information needed of the course Bachelor of
Science in Information and Communications Technology;
2. That the Instructional Manual/Workbook as intended for Information
and Communication Technology in the College of Technology is
designed in such that students will be thoroughly guided and
evaluated; and
3. That the Instructional Manual/Workbook is recommended for use in
teaching Entrepreneurship in the College of Technology.

College of Technology Instructional Materials Committee:

MARIE JOY B. ALIT, Ph.D. (CAR) JOEBERT F. MONACILLO, MPA

Chairman-ICT Department Member

MARIA GYPSY A. BOHOL, Ph.D. ERNESTO L. VENCI, Ph.D.

Member Member

JOSE MARIA S. GARCIA II, Ph.D.

Chairman
CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph
 Page 74

ANNEX D.

CERTIFICATE OF INSTRUCTIONAL MATERIAL

UTILIZATION

This is to certify that the Instructional Manual/Workbook entitled

“Laboratory Manual in Entrepreneurship”, conceptualized and compiled

by

Francisco V. Yap will be utilized for the instructional function of the subject for

the undergraduate program of the College of Technology of Cebu Technological

University.

This is issued for the purpose of giving due credit to the author of this

instructional material.

Issued on the October day of 18, 2016.

MARDE T. PONCE, Ph.D.

Dean, College of Technology

CEBU TECHNOLOGICAL UNIVERSITY FRANCISCO V. YAP

Corner M.J Cuenco Avenue and R. Palma Street Part-time Instructor

Cebu City, Philippines 6000 http://www.ctu.edu.ph
Email: information@ctu.edu.ph