Philippine MSMEs Business Plan PDF

 Category of MSMEs Philippine SMEs are categorized based on asset size (excluding land) and number of employees. Category Total asset value No. of employees Micro enterprises P 3,000,000 or less 1-9 Small...

 Category of MSMEs Philippine SMEs are categorized based on asset size (excluding land) and number of employees. Category Total asset value No. of employees Micro enterprises P 3,000,000 or less 1-9 Small enterprises P 3,000,001-15,000,000 10 - 99 Medium enterprises P15,000,001-100,000,000 100 -199 Source: Small and Medium Enterprise Development (SMED) Council 2 Number of Establishments https://www.dti.gov.ph/resources/msme-statistics/ Sectoral Distribution Geographical Spread of MSMEs Total Employment. Determining your product/service line i. Product industries – you may choose to manufacture your own product (mass market vs specialized demands) ii. Process industries – one or two operations in the total manufacturing process (assembly, packing) iii. Subcontracting industries – trucking, accounting, etc iv. Service industries v. Trading – retailing Types of business according to ownership  Single Proprietorship  Partnership  Corporation Sole Proprietorship Advantages Disadvantages Easily created and terminated Unlimited liability Direct, undiluted action Capital limitations All rewards to owners Perils of individual Flexibility Limited skills and capabilities Minimum regulation and of the sole owner taxation Partnership Advantages Disadvantages Pooling of resources Unlimited liability Ability to obtain capital Tenuous excellence Simplicity and incentive Independence on Limited regulation and management harmony and taxation coordination Problems in share liquidation Corporation Advantages Disadvantages Limited liability Legal formality and cost Legal entity Cost and time involved in Ready for transferability of the incorporation process ownership taxation Obtaining capital Potential loss of control by Employee benefits founders of the corporation  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Feasibility study, business plan and Strategic Management Feasibility study Business plan Strategic Management Feasibility study, business plan and Strategic Management Feasibility study a study to assist in Business plan often used at the Strategic Management Focus on improving a making a go/no go beginning of a company’s company’s performance, decision based upon a existence Exploiting close examination of define the initial goals opportunities product/service, market, and objectives of the and building market industry, and financial company structure and share. data in a sufficient degree processes, products and of detail to ensure services, confidence in the results. financial resources, staffing/talent needs and all of the basics which go into forming a company and getting it functioning. Why Do You Need a Business Plan?  Saves time & money  Key to raising capital  Serves as an operations guide 20 Business Plan 1. State your objectives 2. Describe the business  For a new business – explain what the business will be, how the idea for your business was conceived and how the business is expected to develop  For an existing business – business name, date and place of registration, actual operation began, brief history of the business and names of owners partners of major investors Business Plan 3. Describe your products or services Detailed description of your product or services competitive advantage Identify the products / services you will be competing with Also include advantages and disadvantages of your product/ service Business Plan 4. Identify your potential market Determine your potential market, how many? Group potential customers (age, gender, income, education, and other demographic factors) Business Plan 5. Identify your competitors Description of competitors – identify business likely to become your competitors. Name them Size of competitors – determine your competitors’ assets and sales volume Profitability of competitors – which of your competitors are making money? Which are losing and by how much? Operating methods – pricing strategy, quality of products and services, methods of selling and distribution channels, credit terms, advertising and promotion, discuss only the items relevant to your business. Business Plan 6. Consider your pricing policy Production cost Distribution cost Pricing structure of your competitors Aim is to set the price at a level that maximizes profit in the long run Business Plan 7. Determine your marketing methods How will you promote or advertise your business? How will you sell your product? Will you employ salespeople? What channels of distribution will you use to reach your customers? What do your customers think of your product? How can you improve your image as an enterprise? Business Plan 8. Determine your Key personnel Owner and manager If partnership, list the names and addresses of all the partners If corporation, list the names and address of all the directors Business Plan 9. Identify your material requirements and sources of supply List down the materials you will need and where will you get them Only direct materials (indirect materials should NOT be included in the list) Who is your main supplier is and why Business Plan 10. Determine the process and equipment You will use to manufacture your product. Give detailed explanation of your production process (include the equipment and materials used) Include a diagram showing your work-flow Assign positions for the jobs that need to be done Estimate how many people you need to employ for each position Set salary rates Business Plan 11. Prepare a sales forecast Include a sales forecast that covers at least 2 years of operation 1st year – present your sales on a monthly basis 2nd year – present your sales on a yearly basis Explain how you arrived at the figures and at the assumptions on which they are based Business Plan 12. Prepare a budget If manufacturing – production cost of materials, labor, service, manufacturing overhead should be budgeted If service – operational costs, sales costs should include selling and distribution, storage, discounts, advertising, and promotion. General and administrative expenses (salaries, legal, accounting costs) Projections should be prepared every month during the first year of operation and every quarter for the 2nd and 3rd years Business Plan 13. Set your plan to work Raise funds Obtain license, purchase facilities and supplies Hire and train people Start operating You must be prepared to work long hours and must be totally committed to your business  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Determining your financial requirements Pre- Fixed Working operating capital capital capital Determining your financial requirements Fixed capital Working capital Pre-operating Land, building, Reserve money you need capital machinery, equipment, to run the business until You spend to register furniture, fixtures it becomes self- your business, One time expenses, supporting accountant, lawyer or meaning they are 1-6 months or even consultant generally good for the longer Money you spend before duration of your Purchase raw materials, your business begins to business pay the workers, pay for operate transportation, utilizes  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Seeking sources of Capital  Own savings  Loans from family, relatives or friends External sources of funds (banks, venture capital corporations and loan associations, government institutions) A. Equity capital – personal resources, possibly your partner, plus the portion of the profits you plow back into the business. Also includes resources invested by other people into your company Equity is permanent part of your capital structure, as such, it does not have to be paid back. As your company grows, you will need to put more equity or permanent capital. Seeking sources of Capital B. Creditor’s Equity – outside sources i. Short term loans – less than a year, “clean loans”, used to buy things that will generate funds for repayment of the loan ii. Individual money lenders – friends or relatives, 5-6 operators, iii. Non government organizations – interest rates are usually lower than banks. Feasibility and a credit investigation are customarily conducted. Little or no collateral (character loans) Example of NGO’s  Andres Soriano Foundation, Inc. ABOUT THE ORGANIZATION Mission  To operationalize Don Andres Soriano's business philosophy which is "to couple financial stability with extraordinary public service - service that is expressed in terms of serving the national welfare." Objectives  To conduct and/or fund studies on scientific, technological, economic, and social problems; and fund scholarship and professional chairs in these fields;  To promote social, economic and environmental programs with emphasis on community self-development especially of the rural areas by dessiminating information and educational campaigns on the practical application of the research results and current technological community development methods and procedures; and  To promote, support and fund projects in agriculture, forestry, fishery and industry, which would promote and benefit the public interest. Programs  Program Development and Management Assistance (PDMA) It aims to assist organizations and communities develop their capability (both in terms and skills and structures) to operate and manage social-development iniatives.  Scholarship Program It aims to assist organizations and communities enrich their human resources by development expertise which are critical to their socio-economic growth.  Research and Development Assistance Program It aims to promote the conduct of studies and application of results of researches in agriculture, fishery, the environment, enterprises, forestry and management. Seeking sources of Capital iv. Special Lending Programs – Public and private agencies are confident of the strength of small entrepreneurs, and have thus created programs what would uplift their status.  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Choosing the site/location of your business i. Know the population of the trading area i. Determine the purchasing power of the population ii. Trends ii. Study the competition i. How many similar stores went out of business in this area last year? ii. How many new stores opened this year? iii. What price line does competition carry? iv. Pinpoint which stores will be your greatest competitors. iii. Study the location’s accessibility i. Accessible to your customers, employees, to you? ii. Are there adequate parking spaces? iii. Street light good? Safe environment?  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Registering your business  Registering with the Department of Trade and Industry (DTI)  The DTI-Bureau of Trade Regulation and Consumer Protection (BTRCP) administers the registration of business names  If single proprietor and your business is using a name other than your own name, that business name should be registered. By registering your business name with DTI, you are assured that no other entity may legally use your business name anywhere in the Philippines  Business name registration with DTI is optional for partnerships and corporations  Please refer to our hand out for other steps Registration Single Partnership Corporation Cooperative Proprietorship DTI – Partnership Articles of Economic Municipal / Agreement Incorporation survey City Offices SEC and By-Laws Articles of Picture Filing Fee Articles of Incorporation Registration Legal Affairs Incorporation By-Laws fee Release Registration Registration Fee Fee Release  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Hiring / training Personnel  People make or break your company. People are essential to your business.  Know your employees’ rights: 1) Equal work opportunities to all Male and Female employees are entitled to equal compensation Equal access to promotion and training opportunities Unlawful to discriminate against female employees 2) Security of Tenure Every employee should be assured security of tenure. No employee can be dismissed from work except for a just or authorized cause and only after due process. 3) Work days and work hours 8 hours a day, includes breaks or rest period of less than one hour but excludes meal periods which shall not be less than one hour Hiring / training Personnel 4. Wage and wage related benefits Overtime, night differential, rest day, holiday and 13th month pay Wage is the amount paid to an employee in exchange for a task, piece of work or service rendered to an employer 5. Safe working conditions Safe and healthful working conditions 6. Rest days and holidays 7. Right to self-organization and collective bargaining 8. worker’s participation and tripartism  Self-Analysis: Are you Entrepreneurial? Considering other factors Determining your product/service line and Type of Business Writing a business plan Determining Your financial requirements Seeking Sources of Capital Choosing the Site / location of your business Registering your business Hiring / Training Personnel Getting Your Business Started Getting your business started  Must pay decent wages / salary  Give your customers their money’s worth  Compete fairly in the market  Learn from your failure  Determined to face the challenges ahead  Welcome to the world of business