A business plan is a formal written description of your business future by defining your goals, strategies to

meet the goals, and the timeframe for the achievement of those goals. Is it necessary for you, as an
entrepreneur, to write your own business plan? As cited by Edralin (2016), the Department of Trade and
Industry through the Bureau of Small and Medium Enterprise Development mentioned the following reasons
of writing a business plan

1.Minimize or remove risk of losing money. Investment on poorly researched business that may result to
financial instability should be avoided. You must see all sides of the venture before letting go of any resources.

2. Avoid costly mistakes. Unplanned decisions may result to negative outcomes that may hurt the business.

3. Anticipate the financial requirements. A futuristic view of the increase or decrease of demand on the given
product/service will prepare you in meeting business obligations.

4. Organize the activities beforehand. Thinking in advance, you must look at the near and distant future.
Contingency plans must be present for anticipated concerns that may arise.

5. Assess actual performance against set goals. Having a clear goal will help you achieve your target in terms of
sales, revenues or even expenses.

6. Apply for financing from lending institutions. There are cases that financial assistance from other
people or organization is needed to start a business. A good business plan may encourage investors to
entrust you their resources but remember to be wise whenever you are lending money and make sure to use
the money for its intended purpose for the growth of the business

In writing a business plan, you must have a specific audience in mind and answers to possible important
questions that may arise. To start, you may follow the format below (Edralin, 2016)

Parts of a Business Plan

I. Executive Summary
II. Management and Organization
III. Product/Service Plan
IV. Market Plan
V. Financial Plan

Let us discuss the individual parts and its contents

I. Executive Summary

This part can be found at the beginning of the plan but is the last to be accomplished since this
synthesizes the whole plan. This contains a brief introduction and summarizes everything that is relevant
and important to the prospect business audience.

These are the information needed to guide you:

 description of your proposed business and business model

 description of the market opportunity you want to capture or market problem
the business solves
reasons why this is an attractive business opportunity
 key distinctions or differentiators of your business versus competitors
 overview of the sales, marketing, and operations strategy and plan
 description of your executive planning timeline
 overview of the projected financials containing revenues, cost, profits, and
assumptions of your business
 II. Management and Organization

This part includes all the basic information of your business. This also describes the workflow
(organizational structure; the background, experience and role of each) of your business from the
highest position up to the lowest.

These are the information needed to guide you:

 Company Name, Logo, and Address

 Vision and Mission Statements
 Key Personnel
 Organizational Chart
 Ownership Capitalization, Compensation, and Incentives
 External Management Support

III. Product/Service Plan

This part describes the highlight of the product or service offered to the customers so that they
will be encouraged to patronize your product or service. It also explains how the products or services
will be accepted and carried by the distribution channels

These are the information needed to guide you:

 Purpose of your Product or Service

 Product’s/Service’s Unique Features
 Material Requirements and Sources of Supply
 Processing Equipment that will be Used to Manufacture the Product or Render
the Service
 Production or Service Process and Controls
 Distribution Logistics
 Regulatory and Other Compliance Issues

IV. Market Plan

This includes your business strategies, the target market, value proposition of you
product or services that may increase the company sales (Chen, 2019).

These are the information needed to guide you:

 Market Analysis
 Marketing and Sales Strategies
 Product or Service Characteristics
 Pricing Policy
 Sales Projection

Market Analysis

This includes the process of how you divide the total market into smaller groups seeking similar
needs and wants (market segmentation) and the characteristic analysis of the business in
relation to internal and external factors. (SWOT Analysis)

An example of market segmentation is shown below.

Food is a physiological need, but the cravings depend on each consumer.
Chicken wings offered by The Wing Hub of Limay even come in different
flavors. Consumers who crave for samgyupsal may turn to Super Boink
of Balanga City while those who want to have a taste of Vietnamese
food would probably go to Loleng’s Hu Tieu-An in Morong.

SWOT Analysis, on the other hand, is a popular tool to evaluate the internal
environment pioneered by George Albert Smith Jr. and Ronald Christensen, two
Harvard business professors (Aduana, 2016). SWOT stands for Strengths,
Weaknesses, Opportunities and Threats

Strengths refer to strong attributes or capabilities of the business that provide

great advantage in exploiting the business opportunity. Weaknesses are poor
attributes or deficiencies that give disadvantage to the business. Both strengths and
weaknesses are considered internal origins, meaning they are attributes inside the
business venture.

On the other hand, opportunities are business situations that must be exploited due to their
potential in terms of profit and growth. Threats are possible external factors that may harm the
business. Both opportunities and threats are outside origins and are attributes outside the
business.

Below is a sample SWOT Analysis of a Small Online Bakeshop

 Marketing and sales strategies

These are also known as the product PUSH. These have three key
characteristics that allow to perform marketing function of persuading customers to buy
right away. (Go, 2010)

1. Temporary – Sales promotions are conducted at short periods creating a sense of urgency
on the part of the customers.

2. Better value – Sales promotions are used to create short-term differentiation by offering a
better product value.

3. Beneficial – Sales promotions promote growth sometimes even at artificial level.

7-11 stores offer promotional sales, such as “Buy1-Take1” of products at

particular period. At the same time, they offer Cliqq Rewards to loyal
customers by getting Cliqq points in every purchase which in turn can be
exchanged to free or discounted items.

Product/Service Characteristics

This includes value proposition of the product/service. Value proposition answers the
question, why should your customers buy from you and not from other similar businesses? These
contain the convincing reasons that buyers should see that will make them purchase your
products/services.

BDO: “We find ways”. Before this pandemic, while other banks operate from
8AM-3PM Mondays to Fridays, BDO offers services until 6PM and even
operates during weekends fulfilling their promise of “finding ways” for the
customers

Pricing Policy

This part specifies the price of the product/service. It must be noted that quality and price
cannot be separated in marketing (Aduana, 2016). You must be careful in setting the price of
your product/service considering the costs of production, competitors’ pricing, and customers’
perception.

Filipinos are generally price conscious. We tend to check the price tag of a product first
before whether to buy or not to buy a commodity. “SALE” and “PROMO” tags
are consumer magnets. In cases wherein the prices of the product cannot be decreased,
the entrepreneur should be able to give emphasis on the benefits of
his/her product to convince the customer of its value.

Sales Projection

This is also called sales forecast or the prediction of the amount of revenue your company
expects to earn at some point in the future. This shows the quantity of product sold or service
rendered and its corresponding amount within a given period

V. Financial Plan

This is a document containing your current financial situation as an entrepreneur and

long-term monetary goals, as well as tactics to attain those objectives. You may create a
financial plan on your own or with the assistance of someone who is knowledgeable
about handling finances such as certified financial planner.

These are the information needed to guide you:

 Start-up costs requirements – These are expenses that you will be needing during
the course of creating a new business
 Financial projections – These are estimates of your future profits and expenses.
 Break-even analysis – This is a financial tool that will help you determine at what stage (or
period) your company will start gaining profit.
 Budget – This includes the amount needed for business operations as well as sources of such
funds (equal shares or through a creditor)