Q2 LESSONS

 BUSINESS MODEL

 A business model is a company's core strategy for profitable doing business.

 Business model is a description of how your business makes money.
 It is an explanation of how you deliver value to your customers at an
appropriate cost.
 Models generally include information like products or services the business
plans to sell target markets, and any anticipated expenses.
 Business model describes how your business operates and work to provide
the best value to your customer.

In their simplest forms, business models can be broken into three parts (Parsons
n.d.):
• Everything it takes to make something design, raw materials, manufacturing,
labor, and so on
. • Everything it takes to sell that thing: marketing, distribution, delivering a
service, and processing the sale.
• How and what the customer pays, pricing strategy, payment methods, payment
timing, and so on.

Components of Business Model

1. Value Proposition - Defines the unique benefit your product or service offers
your clients. How do you fulfil customer's needs differently from your competition.
What makes it worth buying? Reasons why your customers buy the product
(USP,UVP and Tag-line)

2. Customers- Answers the question, who are my customers? Customers are the
reason why you are creating your product or service. Identify your customers and
distinguish their needs.

3. Distribution Channels - describes how a company communicates with and

reaches its Customer Segments to deliver its Value Proposition. It is important to
understand which pathway (or channel) is best for your company to reach your
customers. (Dual, Indirect, direct, reverse )

4. Key Resources-The resources are needed to create value for your customers.

These resources can be categorized into four main categories (Empower Women
2016):
 Physical resources - raw materials, building, vehicle, transportation, storage
facility, machines, factory. and equipment.
 Human Resources-staff or employees Intellectual Resources-brand, patent,
copyright, customer data base
 Financial Resources-cash, credit
5. Key Activities - Any activities that your business is engaged in for the primary
purpose of making a profit such as operations, marketing, production, problem-
solving, and administration.

BUSINESS MODEL SUMMARY

BUSINESS MODEL-CORE, DELIVER VALUE, PRODUCT SERVICES, OPERATES AND
WORK
3 PARTS-MAKE, SELL, PAY
COMPONENTS-CDKEYKEY
Value Proposition-REASONS WHY NEED TO BUY- PRODUCT
Customers-YOUR TARGET MARKET
Distribution Channels-CHANNEL-DIDR
Key Resources-FINANCIAL, PHYSICAL, HUMAN
Key Activities-ACT. WHERE YOU FIND PROFIT

The Key activities of a business represent what the company must do to make the
business model work.

Lesson 6: Guidelines for successful business plan implementation:

Objectives the entrepreneur should have a clear idea on what is his purpose of
putting up his enterprise.
Tasks-this means that the entrepreneur must know the tasks he has to perform in
order to realize his objectives.
Time allocation - This means that the entrepreneur should have a time table or a
schedule to follow for every

 Prototype is a scaled-down version of a product.

It is a visual representation of our idea and allows us to test our ideas directly with
users before developing into a fully-fledge product.

Purpose
Validate customer demand and save resources
-Having your target customer engaged with your product
prototype will give you enough data to know whether your
idea is worth the investment.
Improve your product's aesthetics and meet customers
standards Prototyping presents numerous opportunities
for improvement, both technical and aesthetic.
Showcase to investors during fundraising to gain their
support.
1.

People need to see it to believe it Creating product/service prototype

1. Concept sketch-drawing
2. Virtual Prototype-digitalized
3. Physical prototype-final product
 Method applied in testing the product prototype
Method Description
Participants will provide relevant insights
Focus group discussion
about the new product/service
Prior to launching, the entrepreneur
must ensure that the product or service
Legality and ethical test complies with all relevant laws and
regulations and has the necessary license
or permit to operate
The entrepreneur must ensure that the
product is safe to use, consumed (food &
Safe test
beverages), and safe to be applied
(cosmetic products)
The entrepreneur must examine every
Product costing test stage of the manufacturing process to
evaluate and finalize the cost involved
Each component of the product/service
must be tested independently to identify
component failures. Any failure
Components test
identified must be redesigned and tested
again until it becomes fully operational
and functional
The entrepreneur must test a similar line
of product/service to compare and get
Competitors test
best practices to be applied to the new
product or service
1.

Lesson 3: Potential Supplier

Select/pinpoint potential suppliers of raw materials and other inputs necessary

for the production of the product or service

Factors to consider in selecting potential suppliers of raw materials and other

inputs
Price: If you focus on managing your finance, a main consideration for selecting
suppliers is affordability yet possessing a good quality product.
Reliability: Defined as the ability of the supplier to consistently supply an acceptable
raw material at a required time.
Stability: When entering into a long-term contract with a supplier, conduct
performance review on their credit history to see if they are financially stable.
Location: Consider location when selecting a supplier, dealing with distant suppliers
might provide you longer delivery time and extra cost.
Developing Partnership
 SUMMARY FOR PROTOTYPE
TYPES-CONSEPTUAL, VIRTUAL, PHYSICAL
METHODS(FLSPCC)-Focus group discussions
-Legality and ethical
-Safe test
-Product cost
-Component
-Competitors

Lesson 3: Potential Supplier Select/pinpoint potential suppliers of raw materials

and other inputs necessary for the production of the product or service

Factors to consider in selecting potential suppliers of raw materials and other

inputs
1. Price if you focused on managing your finance, a main consideration for
selecting suppliers is affordability yet possesses a good quality product.

2. Reliability-defined as the ability of the supplier to consistently supply an

acceptable raw material at a required time.

3. Stability when entering to long term contract with a supplier, conduct

performance review on their credit history to see if they are financially stable.

4. Location-consider about location when selecting supplier, dealing with distant

suppliers might provide you longer delivery time and extra cost.

5. Developing Partnership

Lesson 4: Value and Supply Chain in relation to business enterprise

Value Chain-Is defined as the series of activities that adds value to the product.
Series of input activities that a company carries out in order to create value for
its customers
-Refers to the process in which businesses receive raw materials, add value to
them through production, manufacturing, and other processes to create a
finished product to customers.

Value chain primary activities

1. Inbound logistics - receiving, warehousing, inventory control.

2. Operating-value-creating activities that transforms inputs into products, such
as assembly and manufacturing
3. Outbound logistics - activities required to get a finished product to a customer.
These includes warehousing, inventory management & shipping.
 4. Marketing and sales - activities associated with getting a buyer to purchase a
product.
5. Service-activities to maintain products and enhance consumer experience,
such as customer service, maintenance, repair, refund and replacements.

Supply Chain-The integration of all the activities involved in the procurement,

conversion and logistics of the product. Supply chain represents the steps it
takes to get the product or service to the customers

Example would be: From raw material producer, manufacturer, and distributor,
retailer and retail customer.

POTENTIAL SUPPLIER SUMMARY

FACTORS
PRDLD
“PRESIDENT SUTERTE LAKING DIGONG”
-PRICE
-STABILITY
-LOCATION
-DEVELOPING PARTNERSHIP
VALUE AND SUPPLY CHAIN SUMMARY
VALUE CHAIN-ACT-ADD VALUE
-INBOUND-Collect raw material
-OPERATE-turn to product
-OUTBOUND-sell
-MARKET AND SALES-act. To sell
-SERVICE-response to the customer
SUPPLY CHAIN-STEPS TO FINISH PRODUCT
-RAW MATERIAL
-MANUFACTURER
-DISTRIBUTOR
-RETAILER
-RETAIL CUSTOMER
 ENTREPRENEURSHIP
Forecasting is the process of using historical data to predict future events.
• Businesses utilize forecasting to determine how to allocate their budgets or plan for
anticipated expenses for an upcoming period of time. This is typically based on the
projected demand for the goods and services offered.
Example:
For the month of January, Company X was able to sell 100 pieces of perfume. For the month of
February, the company sold 120 and 140 in March.
Now, the company needs to forecast the sale for the month of April and May. How many perfume do
you think Company X may sell for the month of April and May based on the given data?
Answer:
April- 160
May- 180

How to forecast Sales? Sales = units sold x selling price

How to forecast expenses? Expenses= units sold x purchase price
How to forecast Income? Income= sales - expenses
Example:
Last month, Jhunel sold 20 T-shirts. For this month, Jhunel decided to sell 24 T-shirts in which one T-
shirt amounts to P350.00. The purchase price of each T-shirt is P85.
a. Compute for the total sales this month.
b. Compute for the total expenses this month
c. Compute the income this month.

b. Units sold 24 Units sold

Multiply by purchase price per 85 2
unit 4
Expenses 2040 Multiply by Selling 3
a. price per unit 5
0
Sales P
8
c. Sales 8400
4
Expenses 2040
0
Income 6360 0