Entrepreneurship
Contents of the Business Plan
(BTVTED II)
Submitted to : Mrs. Wercelie G. Tugdang
Module: Contents of the Business Plan
Module Objectives
At the end of this module, students will be able to:
1. Identify the essential contents of a business plan.
2. Understand the purpose and importance of each section.
3. Develop learners knowledge and skills needed to create a business plan.
Module Introduction
Starting a business requires careful planning, creativity, and strategy. A well- crafted
business plan serves as the road-map to turn your ideas into reality. This module is designed to
guide you through the essential components of a business plan, preparing you to create a
strategic guided planning in the entrepreneurial journey.
ESSENTIAL KNOWLEDGE
Writing and preparing a business plan is very important before putting up any business. Do you
have any idea about it? Let’s see what you already know about this lesson.
Matching Type. Match column A with column B. Write only the letter that
corresponds to your answer.
COLUMN A COLUMN B
a) A short overview that
1. Business Plan highlights the main points of
the business plan.
2. Executive Summary b) A document that outlines
a business’s goals, strategies,
3. Target Market
and plans for success.
4. Financial Forecasts c) Projections of revenue,
expenses, and profits for the
5. Financial Planning business.
d) The specific group of
people a business wants to
sell its products or services
to.
e) Provides a clear picture of
expected income, expenses,
and funding needs.
What is a Business Plan?
The business plan is a document that helps the small business owner determine what
resources are needed to achieve the objectives of the firm, and provides a standard against
which to evaluate results. It is a sort of business blueprint and it keeps the entrepreneur on the
track.
Purposes of a Business Plan
A business plan is written for two main purposes. They are the following:
1. to serve as management’s guide during the lifetime of the business; and
2. to fulfill the requirement for securing lenders and investors.
Contents of the Business Plan
1. Introduction: A business plan introduction provides a general, high-level view
that describes a business's primary goals and purpose. Since this is the first item
that readers and investors use to learn about your business idea, it's important
to give considerable thought and attention to this section. A strong, engaging
introduction to a business plan creates a clearer sense of what your business is,
what your goals are and how you hope to achieve them. A business plan
introduction is the first section of your business plan. It's generally two to three
pages, although there is no set requirement and may be as short as a single
paragraph. The business plan introduction contains a general overview of the
business plan, including a brief company description, goals and objectives and
the purpose of starting the company. Additionally, business plans usually
answer the following questions:
o What does the business do?
o Why start this business now?
o Who is the ideal customer?
o How will customers buy from the business?
o What separates the business from other competitors?
o What will make the company profitable?
2. Executive Summary: An executive summary is a short overview of a business
plan that summarizes the main points and key information. It's usually the first
section of a business plan. It provides a brief overview of the document and
contains its main points. In other words, it is a condensed version of a complete
business plan or proposal. It is primarily used in the business world, but its
application in academia is also possible.
What does it include?
o Overview of a company/business
o Identification of a main problem or proposition
o Analysis of a problem or proposition, with supporting facts, data, and figures
o Possible solutions and their justifications
o Clearly defined conclusions
Why is it important?
It's a concise overview of the business plan.
It's often the first thing a reader sees. Decision makers may only read the
executive summary to determine if action is needed
3. The Business Proponents: Business proponents are the people or organizations
involved in a business venture, and they play a crucial role in the success of the
business:
Proponent: A person or organization that supports a plan, idea, or project, and
advocates for it to happen. Proponents are essential for innovation and progress in a
business.
Types of business proponents
There are four main types of business proponents:
o Organizers/top managers: Lead the business and make strategic decisions
o Financiers: Provide capital and track finances
o Sellers: Responsible for sales
o Producers: Manufacture products
What is the Role of business proponents?
Business proponents drive innovation by identifying opportunities
for new products, services, or business models. A business plan
should include details about the proponents and stakeholders to
show that the necessary roles are filled and resources are available.
4. The Target Customer and the main value proposition to the customer:
Target Customer: The target customer refers to the specific group of people or
organizations that a business aims to serve with its products or services. These are
the customers most likely to purchase from the business because the offerings meet
their needs, preferences, or problems. Identifying a target customer involves
understanding there:
o Demographics: Age, gender, income, education, etc.
o Psychographics: Lifestyle, values, and interests.
o Behavior: Buying habits, usage patterns, and brand loyalty.
Main Value Proposition to the Customer: The main value proposition is the unique
benefit or solution a business offers to its customers. It explains why the customer
should choose your product or service over competitors. A good value proposition is
clear, concise, and directly addresses a specific customer need or problem.
It typically answers questions like:
o What problem are you solving for the customer?
o How does your product/service add value to the customer's life?
o What makes your offering unique?
o The business
proponent must be
very precise about
the target audience
or target customers.
o Target
Customers must be
of sufficient size,
sufficient paying
capacity, and have
sufficient
o interest to purchase
the products being
offered by the
enterprise.
o The Main Value
Proposition is the
unique selling
proposition of the
enterprise.
o The business
proponent must be
very precise about
the target audience
or target customers.
o Target
Customers must be
of sufficient size,
sufficient paying
capacity, and have
sufficient
o interest to purchase
the products being
offered by the
enterprise.
o The Main Value
Proposition is the
unique selling
proposition of the
enterprise.
The business proponent must be very precise about the target audience or
target customers.
Target Customers must be of sufficient size, sufficient paying capacity, and have
sufficient interest to purchase the products being offered by the enterprise.
The Main Value Proposition is the unique selling proposition of the enterprise.
5. The Market: The market refers to the overall environment in which the business
operates, including the customers, competitors, and industry trends. It provides a
detailed analysis of the business’s potential audience and competitive landscape to
demonstrate a clear understanding of the opportunities and challenges.
Key Elements of The Market Section:
a. Market Size:
Estimation of the total potential customers or revenue in the
industry.
Example: "The global coffee market is valued at $100 billion and is
projected to grow at 4% annually."
b. Target Market:
A defined segment of the market the business aims to serve.
Example: "We target urban professionals aged 25–40 who prefer
premium coffee."
c. Industry Trends:
Current trends influencing the market, such as customer preferences
or technological advancements.
Example: "There is a rising demand for organic and sustainably
sourced coffee."
d. Competitive Analysis:
Overview of direct and indirect competitors, highlighting strengths
and weaknesses.
Example: "Our main competitors are Starbucks and local cafes. Our
unique selling point is affordability combined with premium quality."
e. Market Need:
A clear articulation of the customer problem or gap that the business
intends to address.
Example: "Many urban areas lack affordable, high-quality coffee
shops."
6. The Product and Service Offerings section of a business plan outlines the goods or
services that a business intends to provide to its customers. It details what the business
is selling, why these offerings are valuable to the target market, and how they stand out
from competitors. This section is crucial as it communicates the core value of the
business to potential investors, partners, and stakeholders.
Key Components of the Product and Service Offerings Section:
1. Description of Products/Services:What the business offers, including specifics
such as features, uses, or benefits.
Examples: Physical products, digital goods, or services like consulting or
maintenance.
2. Unique Value Proposition (UVP):Explanation of what makes the
product/service unique or [Link] on how it addresses a gap or solves a
problem in the market.
3. Target Market Alignment:Details on how the offerings meet the needs of the
identified customer segment.
4. Stage of Development:Information on whether the product/service is in the
concept, prototype, or fully operational stage.
5. Pricing Strategy:Overview of pricing models, such as premium pricing,
competitive pricing, or cost-plus pricing.
6. Production/Delivery Process:How the product is manufactured, sourced, or
[Link] services are offered, this could include a description of how they are
performed.
7. Future Plans:Potential expansions, upgrades, or additional offerings planned
for the future.
By detailing these elements, this section not only informs readers about what the
business does but also demonstrates a clear understanding of the market and the competitive
advantages of its offerings.
7. The Enterprise Delivery Systems in a business plan describe the processes, structures, and
resources a business will use to deliver its products or services effectively. This section ensures
that the enterprise strategy is actionable by specifying the operational framework.
Key components include:
Operational Processes: Steps for producing and delivering products or services.
Supply Chain Management: Sourcing, logistics, and inventory processes.
Technology and Infrastructure: Tools, systems, and facilities used to support
operations.
Human Resources: Workforce planning, recruitment, and skill development.
Customer Service: Methods for maintaining high levels of customer
satisfaction.
[Link] forecasts in a business plan are projections of a company's future financial
performance. These include estimates of revenue, expenses, profits, and cash flow over a
specific period (typically 3-5 years). Financial forecasts help demonstrate the business's
viability, sustainability, and profitability to investors, lenders, or other stakeholders.
Key components include:
1. Income Statement (Profit and Loss Statement): Projects revenues, costs,
and profits.
2. Cash Flow Statement: Estimates the inflow and outflow of cash to ensure
liquidity.
3. Balance Sheet: Provides a snapshot of assets, liabilities, and equity over
time.
4. Break-even Analysis: Identifies the point at which revenues cover all costs.
Meaning of Expected Returns, Risks, and Contingencies in a Business Plan:
1. Expected Returns:This refers to the anticipated financial benefits or
profitability of the business, often expressed as return on investment (ROI) or return on
equity (ROE). It provides stakeholders with an understanding of the potential rewards of
investing in or supporting the business.
2. Risks:The potential challenges or threats that could impact the business, such
as market volatility, competition, or operational issues. Common risks include financial,
operational, market, and regulatory risks.
3. Contingencies:These are backup plans or strategies the business will use to
address risks or unexpected events. Contingency planning ensures the business can
adapt and minimize losses if problems arise. Examples include securing additional
funding, diversifying suppliers, or adjusting market strategies.
9. Environmental and regulatory compliance in a business plan refers to the adherence of a
company to relevant laws, regulations, and standards governing its operations, particularly
those related to environmental protection, health, and safety. This involves ensuring that the
business activities, products, and services meet local, national, and international legal
requirements to avoid penalties, protect the environment, and promote sustainable practices.
Including this section in a business plan demonstrates that the company is aware of and
committed to fulfilling its legal obligations, minimizing risks, and fostering a responsible
corporate image.-
[Link] Capital structure and Financial offering: Capital structure refers to the specific mix of
debt and equity that a company uses to finance its overall operations and growth. This includes
funds obtained through loans, bonds (debt), and equity financing such as issuing shares. A well-
planned capital structure balances risk and return, ensuring the company can operate
efficiently while meeting its financial obligations.A financial offering is a detailed presentation
of financial instruments—such as stocks, bonds, or other securities—that a company provides
to investors as a means of raising capital. This includes outlining the terms, potential returns,
associated risks, and any other details that help investors make informed decisions.
Assessment
Answer the following questions based on the components of a business plan. Be as detailed and
specific as possible in your responses. This assessment includes multiple-choice, short answer,
and essay-style questions.
Section 1: Multiple Choice
(Choose the best answer for each question.)
1. What is the primary purpose of the introduction in a business plan?
a) To list financial projections
b) To provide an overview of the business and its goals
c) To analyze the market trends
d) To explain the capital structure
2. Which section of the business plan provides a summary of the entire document and key
highlights?
a) The Market Analysis
b) Executive Summary
c) Financial Forecasts
d) Target Customer and Value Proposition
3. What does the "Target Customer" section focus on?
a) Competitor analysis
b) Identifying the ideal customers based on demographics and psychographics
c) Outlining financial risks
d) Defining business proponents
Section 2: Short Answer
(Provide concise responses.)
4. Define "environmental and regulatory compliance" in the context of a business plan.
5. Explain the importance of the "Main Value Proposition" to customers.
6. List three key elements typically included in the "Market" section of a business plan.
Section 3: Essay Questions
(Answer in 150–200 words each.) 7-10
Describe the role of financial forecasts in a business plan and explain why they are essential for investors
and stakeholders.
Discuss the importance of including "Enterprise Delivery Systems" in a business plan and how it
contributes to operational success
Post Test Answer Key:
1. b) A document that outlines a business’s goals, strategies, and plans for success.
2. a) A short overview that highlights the main points of the business plan.
3. d) The specific group of people a business wants to sell its products or services to.
4. c) Projections of revenue, expenses, and profits for the business.
5. e)Provides a clear picture of expected income, expenses, and funding needs
Answer Key: Assessment
Section 1: Multiple Choice
1. What is the primary purpose of the introduction in a business plan?
Answer: b) To provide an overview of the business and its goals
2. Which section of the business plan provides a summary of the entire document and key
highlights?
Answer: b) Executive Summary
3. What does the "Target Customer" section focus on?
Answer: b) Identifying the ideal customers based on demographics and psychographics
Section 2: Short Answer
4. Define "environmental and regulatory compliance" in the context of a business plan.
Answer: It refers to the company’s adherence to laws, regulations, and standards related to
environmental protection, health, and safety. It ensures that business activities meet legal
requirements to avoid penalties, protect the environment, and promote sustainability.
5. Explain the importance of the "Main Value Proposition" to customers.
Answer: The main value proposition highlights the unique benefits or solutions a business
offers its customers. It explains why customers should choose the product or service over
competitors by addressing their needs or solving a specific problem.
6. List three key elements typically included in the "Market" section of a business plan.
Answer:
1. Market Size: Total potential customers or revenue in the industry.
2. Competitive Analysis: Overview of competitors, including strengths and
weaknesses.
3. Industry Trends: Current trends influencing customer preferences or technology.
Section 3: Essay Questions
(7-10)
Describe the role of financial forecasts in a business plan and explain why they are essential
for investors and stakeholders.
Answer:
Financial forecasts provide an estimate of the company’s future financial performance,
including revenue, expenses, profits, and cash flow. They are essential for investors and
stakeholders because they demonstrate the viability, sustainability, and profitability of the
business. Forecasts help decision-makers assess risk, plan for future funding needs, and
evaluate the return on investment. For stakeholders, financial forecasts provide confidence in
the business's ability to meet its financial obligations and achieve its goals.
Discuss the importance of including "Enterprise Delivery Systems" in a business plan and how
it contributes to operational success.
Answer:
The "Enterprise Delivery Systems" section outlines the operational processes, resources,
and structures needed to deliver products or services effectively. It is important because it
ensures that the strategy is actionable by specifying supply chains, technology, workforce
requirements, and customer service systems. By detailing these aspects, the plan demonstrates
the business’s readiness to execute its vision and meet customer expectations efficiently,
ultimately contributing to the company’s success.
References
Abrams, R. (2019). The Successful Business Plan: Secrets & Strategies. Planning Shop. A
comprehensive guide to creating a business plan, including detailed insights on the product and
service section.
Barringer, B. R., & Ireland, R. D. (2019). Entrepreneurship: Successfully Launching New Ventures.
Pearson Education.
CFI Team. (2015). Corporate finance
[Link]
example#:~:text=The%20purpose%20of%20a%20business,Over%2045%20Tips%20on%20Writing
Chubby Bunny. ( 2023). Career development or Business plan
[Link]
%20proponents%20refer%20to%20the,to%20implement%20the%20business%20successfully.
Indeed Editorial Team. (2024). Guide to business Plan
[Link]
introductionexample#:~:text=The%20purpose%20of%20a%20business,Over%2045%20Tips%20on
%20Writing
Pinson, L. (2008). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and
Securing Your Company’s Future. Out of Your Mind and Into the Marketplace.
Prepared by: Yvonne D. Calumba
Elyn Encipido
