Entrepreneurship - 4th Quarter

ORGANIZATION PLAN

section provides a detailed description of the business in terms of the following: form of the business organization, liability of the owner or owners, organizational structure, roles and responsibilities, and salary requirements

SOLE PROPRIETORSHIP, PARTNERSHIP, AND CORPORATE

form of business organization

SOLE PROPRIETORSHIP

type of business owned and managed by a single person

PARTNERSHIP

formal arrangement by two or more parties to manage and operate a business and share its profits

CORPORATE

legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit– incorporators are the person who originally formed the corporation

CAPITAL REQUIREMENT, LIABILITY OF THE OWNER/S, MANAGEMENT AND SUPERVISORY SKILLS, TAX IMPLICATIONS, GOVERNMENT INTERVENTION, NATURE OF BUSINESS, AND EXTERNAL FINANCING REQUIREMENT

factors affecting the selection of the most appropriate business form

LIABILITY OF THE OWNER OR OWNERS

this section describes the extent of the owner’s financial obligations with the creditors– creditors can be in the form of individual person, suppliers of raw materials and supplies, or financial institutions– financial liability can be LIMITED or UNLIMITED

LIMITED LIABILITY

liability of the owner is only up to the extent of his or her financial contributions to the business

UNLIMITED LIABILITY

creditors can run after the personal property of the owner in the event that the business fails to fully settle its financial obligation during the business dissolution

ORGANIZATIONAL STRUCTURE

shown or reflected in organizational chart– shows and defines the hierarchy of the business positions in the organization and interrelationships of the different offices or departments– depicts the flow of communication within the organization, and the line and staff authority that must be observed and executed

ROLES AND RESPONSIBILITIES

must be clearly defined in order to minimize and avoid misunderstanding and overlapping of functions– educational requirements and experiences required of the workers must be specified– complete information about the expectation of the particular job or position facilitates evaluation and hiring of qualified personnel and the assessment of performance of existing workforce

SALARY REQUIREMENTS

must show the total estimated monthly and annual salary requirements of the business– all other mandatory benefits like employers contribution to the Social Security System (SSS), Pag-IBIG, and Philhealth must likewise be specified

PRODUCTION PLAN

part of business plan where it presents or describes the activities related to the production of goods– result of the industry analysis, particularly the study of supply and demand and consumer behavior

PRODUCTION SCHEDULE

presents the total number of goods to be produced and the expected time to produce them– factors that affect: product demand, availability of resources, and capacity of plant

MARKET DEMAND (1) AND TIMING (2)

primary factor that influences the number of goods to be produced (1)– second consideration (2)– producing the goods exactly at the time when the consumers need them in an excellent production practice

PRODUCTION PROCESS

process or stages involved in production of goods must be clearly spelled out– exact processing procedure– materials/parts/ingredients required– expected time to process the product

PROCESSING PLANT AND EQUIPMENT

section describes the manufacturing plant, machinery and equipment, and the various tools to be used in the production of goods including their respective estimated cost– talks about the location of the processing plant and the reason for the selection of the site– factors in selecting machinery: capacity, model, availability of spare parts, and cost and terms of payment

SOURCES OF MATERIALS

possible sources of raw materials and manufacturing supplies– must describe in terms: proximity of the source to the processing plant, payment terms and conditions, discounts and damages, and terms of shipment

PRODUCTION COST

estimated cost of productions– three elements: labor, direct materials, and factory overhead

LABOR

includes all staff costs relating to employees

DIRECT MATERIALS

all costs of materials purchased for production

FACTORY OVERHEAD

all other costs which are not materials or labour– include rent, telephone, and depreciation of equipment

OPERATIONAL PLAN

outlines various activities, from the acquisition of raw materials to the delivery of the products to the target consumers– areas: evaluation of suppliers, materials requisition and receiving procedures, storage and inventory control system, shipment system and control, and functions of support services

EVALUATION OF SUPPLIERS

new basic entrepreneurial concept of quality management is that control starts from the suppliers of raw materials– used to be a common practice that a business starts to implement its control system upon receipt of the materials– suppliers of raw materials must practice total quality management to minimize or avoid defects or damages in the supplies– concept extends from the suppliers of the business to the suppliers of the suppliers– business must conduct critical evaluation of the supplier of raw materials and establish harmonious working relationships with them to reduce the threats they posed

MATERIALS REQUISITION AND RECEIVING PROCEDURE

procedures in requisitioning raw materials and other manufacturing supplies and receiving them must be explained in the operation plan– person assigned to conduct inspection upon receipt of the materials must be included

PURCHASE PROCEDURE

procedure in purchasing raw materials– area covered: basis of receiving the raw materials, comparison of the order and receipt, and quality and materials received

PURCHASE ORDER (1) AND PREPARES THE RECEIVING REPORT (2)

basis of the receiving report is (1)– and must be signed by an authorized personnel– after the inspection, the person receiving the materials usually (2)

STORAGE AND INVENTORY CONTROL SYSTEM

section describes how the business stores the finished goods and protects its inventory against possible theft and losses– section deals with the following: owning or renting a warehouse, management of the warehouse, procedures in the transfer of goods, control of inventory in the warehouse, and shipment system and control

SHIPMENT SYSTEM AND CONTROL

basis of sales invoice and other shipment documents are the purchase order received from the customers– sales contract and shipping documents must be properly approved before the product is shipped to the customers– section covers the following: approval of shipping and sales document, terms of shipment, manner of shipping the product, and other terms and conditions like sales contract

SALES DISTRIBUTION

show the sales procedure or the delivery system

MARKETING PLAN

details show the proposed business will sell its product to the target consumers

PRODUCT, PLACE, PRICE, PROMOTION, PEOPLE, PACKAGING, AND POSITIONING

seven Ps

MARKETING MIX

mode, means, or tool used by the entrepreneur to position the product in the target market segment to efficiently and effectively deliver it to the consumers and to convince them about the benefits that they will derive from buying the products– known as the “Ps” in marketing

PHILIP KOTLER

popularizing the definition of marketing mix– defined marketing as “the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit–” marketing identifies unfulfilled needs and desires– defines, measures and quantifies the size of the identified market and the profit potential

NEEDS AND WANTS (1) AND NEEDS (2)

all human beings, whether rich or poor, have needs and wants. In the parlance of economics, it’s only in humans (1) that the rich and the poor share a common ground– term (2) refers to the thing that a person must have in order to survive

THEORY OF HIERARCHY OF NEEDS

Abraham Maslow postulates that human needs are classified into five levels– from the bottom of the hierarchy upwards, the needs are: physiological, safety, love and belonging, esteem and self- actualization which can be divided into deficiency needs and growth needs

SELF-ACTUALIZATION, ESTEEM, LOVE AND BELONGING, SAFETY NEEDS, AND PHYSIOLOGICAL NEEDS

top to bottom of the theory of hierarchy of needs

PRODUCT

refers to the tangible good or intangible service offered by the business to the target consumers– only produced once there is an existing demand, must satisfy the need or want better than the competing products

PRICE

represent the price point or the price range of the produce or service– factors that influence: availability of the competing products, cost of making, types, presence of substitute products, stages of the product in the market, and demographic profile of the target consumers

PLACE

where target consumers are

PROMOTION

mode of conveying the presence and attributes of the product to target consumers

PEOPLE

individual employees or workers who are directly involved in the production, marketing, and sale of the product and service

PACKAGING

process of putting the product in a package or container

POSITIONING

place occupied by the product in the minds of the consumer