MODULE 3

Module Title: Developing and Creating a Business Plan

Module Description: This module gives ideas on creating a business plan

Purpose of the Module:

1. This module introduces the fundamental aspects of entrepreneurial mind

and an entrepreneur;
2. This helps the students to assess themselves into different business
ventures
3. This gives students become innovative in creating their own business
concepts and visualizes more competent business ideas.

Module Guide:

1. Read the module guide in order to learn the topics included in this module;
2. Read and understand the reading text presented in this module;
3. Answer each of the reading comprehension given which serves as
assessment;
4. Explore the links or sources given for further readings;
5. Enjoy doing the activities while exploring the concepts of this course.

Module Outcomes:

At the end of the module the students should be able to:

1. Demonstrate understanding on the meaning of entrepreneurial mind;

2. Identify the essential characteristics of an entrepreneurial mind;
3. Create a business concept or visualize business ideas; and
4. Develop an entrepreneurial mindset and capabilities

Module Requirements:

At the end of this module, the students will be able to assess their individual
personality through assessment tasks and able to design a business concept for
future business ventures.

Module Pre-test:

The students are expected to answer the activity prior to the reading text.

Key Terms:

business plan, create, components of writing a business plan

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Lesson 3
Developing and Creating a Business Plan

At the end of this lesson, students should be able to:

1. Describe the different purposes of a business plan

2. Describe and develop the components of a business plan

3. Demonstrate knowledge on how to write a business plan

4. Learn business plan or concepts amids COVID-19 pandemic

5. Demonstrate understanding on the Philippine businesses

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Let’s Find Out:

1. Definition of a Business Plan

2. Importance of a business plan
3. Elements of a business plan
4. How to write a business plan
5. And other pointers about developing and creating a
business plan

Let’s Read:

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Starting a business is not a one-way street. It involves different processes that

require analytical skills and logical thinking. It is also never easy to establish without

enough knowledge, hard work, and attitude that lead people to patronize your idea,

and eventually, the business itself.

Many aspiring entrepreneurs are asking: is there a secret recipe to perfect the

business world? There will never be an objective answer to this question because, in

reality, it is a mixture of both objective and subjective aspects.

One particular part of the objective is the business plan - the powerful document that

serves as the backbone of every business.  For us to understand what a business

plan is, it is necessary to define its meaning, and we have it prepared for you.

Business Plan Definition

Various sources and business organizations have defined business plans differently;

however, when encapsulated in one thought, it refers to the written document that

describes in detail the business’s objectives and goals, mainly, if it is a start-up

company.

It also means laying out a forecasted roadmap that covers up the scope and

limitations of every department in the company and bears different perspectives

coming from the administration, marketing, financial, and operational standpoint.

The Importance of Business Plan

Knowing how a business plan works, it is now time for you to understand its

importance and relevance in the business thoroughly. It is essential to know that a

business plan is a gem for companies, and it is best if it is not misleading and

confusing.

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Simplified, a business plan is essential because it is used to attract investment, even

if the company has no proven track record yet. At the same time, it guides the

company to move forward in accordance with the set goals and expectations.

Elements of an Effective Business Plan

An effective business plan should not fail the stakeholders in providing complete

information about the business. It must have all the necessary information needed so

as not to mislead potential investors. Avoiding this problem can help you secure

funds easier than usual. 

If you do not know how to start creating a business plan, here are the six essential

components of a well-done business plan that you should know.

Executive Summary

The executive summary includes information that helps stakeholders understand the

overall content of the business plan.  In other words, it is an overview of the

business, including the goals, objectives, mission, vision, projects, teams, and other

departments. This section should be short and concise, usually around one or two

pages. A typical executive summary is placed at the beginning of the document, but

others prefer to put it at the end of the paper.

Opportunity

When you write the opportunity section, make sure that you answer these questions:

What are you selling? How does this product help solve a problem in the market?

Lastly, who is your target market and competition? It is necessary to provide

comprehensive answers to these questions to address the audience and the

market’s concerns right away.

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Execution

The business plan's execution is focused on the steps you plan to undertake as you

take the opportunity and turn it into a profitable business endeavor. This section

must have the marketing and sales plans, including the operations, milestones, and

critical performance metrics for success.

Company and Management Summary

At this part of the business plan, you are given a chance to showcase your teams.

Most investors are also particular about the kind of individuals that comprise your

team, so it helps a lot if you can explain each group in a very detailed manner. If you

still need to hire additional people, use this chapter to define who you need to hire

and why. It should also contain an overview of your legal department and other

information about the business that is not common knowledge, mostly if you are

already operating.

Financial Plan

A business is not complete without a financial forecast and source of funds. This is

one reason why a business plan should have a detailed financial section, wherein

you can lay the foundations of your financial plan. Such a plan usually includes the
following: sales forecast, cash flow statement, income statement, and balance sheet.

Appendix

The business plan’s appendix should only include references, additional product

images, and supplementary information about the business and other sections. You

can also add here additional reports, tables, diagrams, or illustrations that can

support your entire business plan.

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How to write a business plan?

It is easy to take note and comprehend the overall idea of a business plan, but

conceptualizing and writing one is not everyone’s cup of tea. Here are three

fundamental aspects that you should consider in writing a business plan.

Keep it short but detailed.

Make sure that your business plan is not as thick as a law book. As much as

possible, try to have at least a 30-page business plan, with up to 50 pages

maximum.

Write it plain and simple.

Although writing a business plan seems like a technical task, it is best not to use

jargon in your plan. If it is unavoidable, make sure you explain the terms in the

simplest ways possible.

Observe proper grammar, spelling, and punctuations.

Just like any other types of documents, observing perfect grammar, spelling, and

punctuations add plus points to your business plan. Ensuring that everything is well-

written will prevent any misunderstanding between you and the stakeholders.

Moreover, if you think writing a business plan is not your forte, here are seven helpful

tips that will help you:

1. Research thoroughly

Before starting your first draft, you must already have researched the business's

necessary details, backed up by proven and correct data gathered through surveys

and interviews or other methods available in the market.

2. Determine the purpose of your plan

It is also essential that you know the aim of the business plan. With this in mind,

doing the plan will be a lot easier, and you will certainly be on track.

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3. Create a company profile

Your company profile should also be ready so that you can input right away any

necessary information from it. Having a detailed company profile also adds credibility

to your business.

4. Document all aspects of your business

It is also suggested to document every process in your company so that it is already

easy for you to write them down and elaborate when you write the business plan.

5. Have a strategic marketing plan in place

Every entrepreneur should consider this done as soon as possible since it is an

excellent addition to the business plan. Having strategic marketing in place adds

authenticity to the business since marketing approaches differ from one company to

another and is considered a unique trait of your business.

6. Make it adaptable based on your audience

You do not want to write a business plan that your stakeholders cannot understand,

especially for the investors. Hence, it is your responsibility to ensure that they

recognize the plan’s importance at a glance.

7. Explain why you care

Most of all, a business plan should include information that expresses why you care

about your business. At times, people may think you are only after income and fame.

Hence, it will help a lot if you can explain well in the business plan why you are

creating the business in the first place.

Business Plan Vs. Business Model

While most entrepreneurs do not get confused any more with a business plan

and business model, some may still have this dilemma, especially when they are

always about to start their entrepreneurial journey.

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So, here is a quick differentiation between a plan and a model. A business plan

practically lays out all the necessary information about a business, including those

related to its administration side. Most of the time, the plan is used for funding

purposes, while a model is mostly used to attract potential clients for the business.

On the other hand, a business model is the structure of the business itself. It

explains how the company operates daily, what processes are used, and what

protocols are followed.

There is an apparent difference between the two concepts, so you should not have

difficulty differentiating both ideas. However, it would help if you remembered that

the two could go hand-in-hand as soon as the business starts operating.

Failure Rate Without a Business Plan

The likelihood of a failed business caused by having insufficient or no business plan

has been discussed and supported by some studies performed by university

students from universities worldwide. At the same time, although not in the Philippine

setting, data from the Bureau of Labor Statistics in the United States of America

revealed the following:

 20% of small businesses most likely fail during the first year

 30% of small businesses fail in the second year

 50% of small businesses fail after five years in business

 70% of small business owners fail in their 10th year in business

Moreover, it is emphasized the other reasons why businesses fail aside from not

having an effective business plan. Among these reasons are the following:

 There’s no market need for their services or products.

 The business ran out of cash.

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  It does not have the right team to make the business run smoothly.

 It has pricing and costing issues.

 There is no business model.

 It has poor marketing and customer service

Business Plan Timeframe

In general, the timeframe in business planning refers to how far you are willing to go

for your business’ future. Of course, it is given that you envision your business to

grow and last for years, but sad to say, a business plan does not last forever.

Instead, each plan covers only a certain planning period.

Business planning is an ongoing process that requires massive and in-depth

research and benchmarking. Before thinking about the timeframe, it is essential to

know that this continuous project does not simply end by completing it before

launching the business. 

Here are some factors to consider when scheduling your business plan’s timeframe.

Commitment

You need to define how far out your planning horizon goes. At the same time, you

must commit to achieve it within that set timeframe, but it should also depend on the

kind of business and the pace at which your industry is moving. Remember that

some businesses only need six months to prove their worth in the market.

Benchmark Years

The nature of the business itself is a defining factor that affects a business plan

timeframe. For example, nonprofit organizations usually have a five or ten-year

timeframe. For the rest, they can choose to adopt one-year, three-year, or five-year

benchmarks.

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Revisions

For something that is not fixed at all, you should condition your mind that a business

plan will constantly have revisions over time. You must consider it as a schedule only

to follow so you can stay on track, but me mindful enough that it can be subjected to

reviews and changes.

Milestones

We know that setting goals and establishing measurable objectives are critical points

of a plan. However, knowing these are not enough. planning. You have to be

accountable in including specific milestones along the way. You can do this by

month or weekly, but the former is more preferable than the latter.

Pointers in Creating the Business Plan

Now, let us talk about the pointers to include.

Basically, you should be able to inform the stakeholders the purpose of the plan in a

clear and concise manner - straightforward and substantial. It helps if the plan can

provide answers to the following questions:

 What is the type of business?

 What is your main funding source?

 What are your other planned fund sources?

 What does the business need to stay operational?

 How much is your operational budget?

 Who are your customers?

 How can you reach them?

 What is your unique selling point?

 How will you handle competition?

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  Do you have a prepared SWOT analysis?

 What do you think are the major challenges?

 How will you measure the success of the business?

Let’s Remember:

COVID-19 and Philippines Businesses

The year 2020 has been a rollercoaster ride, especially when the coronavirus

pandemic broke out. It wreaks havoc not only in our country but worldwide, affecting

most of the countries’ economies.

With not much of a stable economy, the Philippines has been struggling to revive the

dying economy and the businesses have started already to fall apart, with some of

the entrepreneurs giving up against their will.

It is for sure that the implications of the pandemic in the country is devastating and it

will take time to recover completely. Those businesses that have managed to survive

should consider the following:

 Continuously work on business plan

 Adapt the “new normal” protocols

 Focus on customer satisfaction

 Continue being innovative

Your Business Plan Amidst COVID-19

This time, it is important to know that a business plan is of equal importance and

significance in helping you thrive in the business world.

So, what should your business plan look like during this pandemic? Here are some

suggestions:

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 1. Understand that the aim of the plan is to guide you through an economy that
is affected by pandemic. 

2. Set realistic goals and objective insights.

3. Consider the pros and cons of starting a business at this time.

4. Consider the limitations that can affect the business.

5. Check and research if some border restrictions can affect your supply chain
and other supplies needed for the smooth operation of the business.

6. Define who your target customers are.

7. List your competitors.

8. Your action plan in relation to the “new norm.”

9. Follow the other points as indicated in a normal business plan.

10. In a nutshell, a business plan is a company’s important document that

provides clear and specific information regarding the business and its

operations. It has different essential parts to include, so always ensure that

your plan has all of them; otherwise, it is only a document without any

meaning at all.
11. Keep yourself updated with the latest franchise articles by subscribing to our

newsletter. You can also sign up with us for free if you are an

interested franchisor or commercial space owner.

Let’s Do This:

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Instructions: If you are to develop or create a business plan what would it be?
Please share your own personal business plan (concepts) using the format below.
You may also search in the internet for your own choice of business plan formats
provided the concepts or ideas of developing and creating a business plan is
included. Explain further the important details of your future business plan and why
you choose that particular business plan. You will be provided by a rubric on how
you are graded with this activity.

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 RUBRIC FOR CREATING A BUSINESS PLAN

Poor
 Category /Lacking Sufficient Proficient Advanced
Info 10 pts 15 pts 420 pts
5 pts

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Introductor Poor Sufficient Proficient Advanced
y Elements /Lacking
Introductory Introductory Introductory
Info elements were elements were elements were
included but included and included and
Table of Introductory
contained errors. completed completed
Contents elements
correctly, correctly,
Executive were omitted
including an including a
Summary and/or
executive detailed
contained
summary. executive
errors.
summary that
thoroughly
summarizes
the business.

Business Poor Sufficient Proficient Advanced

Description /Lacking
An overview of An overview of An overview of
Info the company is the company is the company
provided but is provided which is provided
Brief An overview
lacking significant includes a which includes
description of of the
pieces of the large portion information
the Business company is
requested but not all of regarding the
(or Idea) not provided.
information. the requested reason for
information. starting, basic
activity,
company
focus, goods
and/or
services
provided,
primary
customers,
and location.

Industry Poor Sufficient Proficient Advanced

Analysis /Lacking
Provides Provides fairly Provides
Info somewhat complete complete
complete information information
Provides
information regarding regarding
largely
regarding industry industry size industry size
incomplete
size and maturity, and maturity, and maturity,
information
opportunities & opportunities & opportunities
regarding
threats in the threats in the & threats in
industry size
industry, overall industry, the industry,
and maturity,
outlook for the overall outlook overall outlook
opportunities
industry, major for the for the
& threats in
competitors. industry, major industry,
the industry,
Explains how competitors. major
overall
proposed Explains how competitors.
outlook for
product/service is proposed Explains how
the industry,
distinct from product/servic proposed
major
others. e is distinct product/servic
competitors.
from others. e is distinct
Explains how
from others.
proposed
product/servi
ce is distinct
from others.

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Mission Poor Sufficient Proficient Advanced
Statement /Lacking
Mission statement Mission Mission
Info is included and statement is statement is
describes the clear, and clear, concise,
Mission
purpose of the describes the and describes
statement is
business. Core purpose of the the purpose of
not included.
values are business. Core the business.
included but do values are Core values
not reflect an included and are included
understanding of reflect an and reflect an
the fundamental understanding understanding
beliefs regarding of the of the
the appropriate fundamental fundamental
manner in which beliefs beliefs
to conduct regarding the regarding the
company appropriate appropriate
activities. manner in manner in
which to which to
conduct conduct
company company
activities. activities.

Managemen Poor Sufficient Proficient Advanced

t Plan /Lacking
Form of business Form of Form of
Info ownership was business business
chosen. ownership was ownership was
SP, No form of
No explanation of chosen and chosen,
partnership, business
how things will be defined. Some defined, and
corporation ownership
done. explanation of reasoning was
ownership was included
how things will given for the
Qualifications in the plan.
be choice of
of MGT team & Permits/licens
accomplished. ownership.
comp. pkg. es/certificatio
Thorough
Explanation of ns omitted.
explanation of
how things will No
how things will
be done. explanation of
be
methods of
accomplished.
doing things.

Product Poor Sufficient Proficient Advanced

&/or /Lacking
Product/Service Product/Servic Product/Servic
Services Info mix was partially e mix was e mix was
discussed and clearly clearly
Product/Servi
seemed to lack a discussed and discussed and
Identify and ce mix was
complete line of included a included a
describe all partially
product/service complete line complete line
products/Servic discussed or
offerings. of of
es, explain how some was
Explanation of product/servic product/servic
your products omitted.
how your e offerings. e offerings and
will be Explanation
products will be Explanation of included
competitive. of how your
competitive was how your reasoning for
products will
missing. products will the selection.
be
be competitive Includes
competitive is
was unclear. explanation of
missing.
how your
products will
be

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 competitive.

Marketing Poor Sufficient Proficient Advanced

/Lacking
Marketing of the Marketing of Marketing of
Info business was the business the business
Who are your
customers, partially discussed was discussed was
Marketing of
where are including some including the thoroughly
the business
they,what do but not all of the identification of discussed
was partially
they want? following: the target including the
discussed but
What is your identification of market and identification
lacked
marketing mix the target market how they will of the target
mention of
(4 p's). and how they will be reached, market and
any specific
be reached, customer how they will
information.
customer needs needs and be reached,
and product product customer
characteristics, characteristics, needs and
pricing, pricing, product
distribution, distribution, characteristics,
promotions. promotions. pricing,
distribution,
promotion.

Financial Poor Sufficient Proficient Advanced

Managemen /Lacking
Some start-up Start-up cost Financing
t Info cost reports were reports strategies and
included. included. concepts were
No start-up
discussed.
Start-up Costs cost reports
Detailed start-
were
up cost reports
included.
included.

Writing Poor Sufficient Proficient Advanced

Skills /Lacking
Fair number of Occasional No writing
Info mechanics errors. mechanics mechanics
Writing style errors. Writing errors; writing
Mechanics
sometimes lacks style is easy style is easy
errors on
clarity for reader. for reader to for reader to
every page.
follow. follow.
Writing style
lacks clarity
to the point
of not being
understandab
le.

Module Post Test:

Instructions: Write a minimum of 250 word reflective essay about creating and
developing a business plan. Why do you think it is really important to have a
business plan? Do you think your business plan will prosper in the future? If not,
what are some steps that you are going to have in order to regain your business?
Answer these questions in paragraph form using the space provided for you. You

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can make your own title for your reflection essay.You will be provided a rubric by
your instructor on how you are graded for this activity.

My Reflective Essay
_______________________________________________
(Title)

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

RUBRIC FOR CONSTRUCTED RESPONSE (SHORT ANSWER ESSAY)

Poor Fair Good

 
10 pts 15 pts 20 pts

RESTATE The question is not There is an attempt to The question is

restated. Response restate, or the question clearly

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 begins with is restated partially, restated/reworded in
"Because," "So," or but it is not clear. the response. The
"That." reader knows what to
expect.

ANSWER
There is no answer or The answer is partly The question is
the answer has correct, incomplete, or answered fully and
nothing to do with the student does not show correctly, showing
question. a clear understanding that the writer knows
of how to proceed. what is being asked.
Answer responds to
questions not asked.

CITE There are no One example is Two or more

examples provided. provided or examples examples are
are present, but do not provided, they are
support the answer. relevant to the
question and they
fully support the
answer.

EXPLAIN No attempt to support The response attempts The response

the answer and to supply reasoning supplies reasoning
examples have been and/or inferencing and/or inferencing
made. which supports the which strongly
answer. supports the answer

EDITING There is no evidence There is some There is clear

that the response has evidence that the evidence that the
been re-read, response has been re- response has been
revised, edited and read, revised, and re-read, revised, and
there are several edited and no more edited and only 1-2
errors in spelling, than 3 errors exist in errors exist in
grammar, spelling, grammar, spelling, grammar,
punctuation, punctuation, punctuation,
capitalization, and capitalization, and capitalization, and
sentence structure. sentence structure. sentence structure.

References
https://saylordotorg.github.io/text_the-sustainable-business-case-book/s09-02-the-
keys-to-successful-sustain.html
https://saylordotorg.github.io/text_sustainability-innovation-and-
entrepreneurship/s08-01-entrepreneurial-process.html
https://www.entrepreneur.com/article/279465
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https://openstax.org/books/entrepreneurship/pages/6-2-creative-problem-solving-
process
https://www.franchisemarket.ph/blog/business-plan
https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan

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