Another mistake in starting a business - no business plan

Every generation needs a revolution - an entrepreneurial revolution

I know of someone who invested a good 6 numbers in a food business:   pares in multi storey commercial condominium.  It was all go go go.  Rah rah affair.  Group prressure.    A gang cheering to go ahead

You guess it right - there was not enough traffic, not enough revenue, and the business collapsed in a matter of months.  The poor investor who borrowed most of the investment now could not even afford to pay living expenses.   

Plan think through your business carefully before going into one.

For inquiries into business plan preparation, contact 0908 - 928 7888 or gmail  profjorgeentrep@gmail.com

Multi million investment - malls (hardware shops) in the middle of nowhere

Every generation needs a revolution - an entrepreneurial revolution

It has been observed that there are at least three multi million business establishments in the Eastern province that were put up without thought for primary reason for putting up -  location, vicinity to primary target market.  While this is not necessary for on line business, this is necessary for brick and mortar business that depend on consumer foot traffic.

Apparently, the owners had gut feel, bravado on their side, and past success, and that they can never go wrong. They probably did not go into meticulous process of business planning.  There are risks in going into business, and one of them is failure.   When is the right time to build?   Would there be enough customers for your break even.

This post waited for 8 years before building a commercial building in the front vacant commercial lot in the division it has developed.   This precipitated rapid increase in real estate values and expansion of commercial area into the neighboring town

Even the head of a top fast food said that there is a possibility, their group can fail, and that their employees should be vigilant.  

The mall that is in between Jala jala and Pililla is half closed and its malls are half closed, their employees laid off, and the owners probably so sorry for their investment.

There is a grocery in poblacion of Jalajala which seems to flourish, but it is in the center of population

There were also farm lots and subdivision projects in Tanay and Pililla around the wind mill that were advertsised with Selling Prices at P5k to P7k.  They have gone quiet now

Throwback - Graduation skills - preparing a Business Plan

Every generation needs a revolution - an entrepreneurial revolution

When I started new business, I relied on books on entrepreneurship which I took under Prof Davila who then was working at BOI.  I felt that my training was lacking in something

Hence when I had the opportunity to teach I saw the need for students in the subject to learn how to prepare  a full blown business plan:  complete with Marketing Plan, Operation Plan,  Financial Plan, exit strategy and contingency planning not to mention compliance with govt regulations

Hence I saw the need for an extended period for the students to prepare the  business plan.  Which I did for several terms

However then came the new head of the GSB who saw efficiency ie submission of grades within 7 calendar days after the end of the semester to be submitted.  Our chair insisted on doing that sacrificing the submission of the only proof of graduation skills.  ie bp preparation

Thus ended my career in teaching.  

Every new business need a business plan and a disciplined analysis

Every generation needs a revolution - an entrepreneurial revolution

It is a mistake that only passion desire will make you rich  In the absence of science and math, you can not hope to be rich   You can only expect red ink and hearth ache. 

An acquaintance went into a partnership with another acquaintance who was merely armed with enthusiasm and excitement.  

After investing about a hundred thou invested mostly in site deposit and advance, they have nothing to show except more advances and red ink  After asking if there was a bp or break even analysis it was suggested for them to find out how much as to whether the sales performance breaks even or not   It does not  

Thus it was suggested that:

1.  Gimmicks will be made to raise awareness and sales response (as unli rice or uni sabaw)

2   Lowering further the price of best seller  (not increasing as kneejerk response to red ink results

3.  Expanding menu to have high end product with high gp to make up for number 2

Many start ups make the same mistake   Thus a new product is not a guarantee for success especially if there is nothing unique or compelling about this

A thousand things could be learned from doing things yourself

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
August 25, 2016

This post thanks the 20 doctors who climbed their Everest writing a business plan.  Indeed while they suffered (probably) and struggled with the business model, objectives, sales estimate, writing the long details of the enterprise delivery system, and financials, they would have learned hundreds of thing just planning a business.  And even more when they build the business.

With the new deadlines of the school for grade submission, having enough time for writing the business plan is next to impossible.  That was why I declined teaching assignments before.

This class is an experiment of having the student write the bp co terminus with the end of semester.  With this strategy I have to focus on teaching writing the business plan, and scrap other items needed to be learned in entrepreneurship.

I could not stand too the idea of having pure scholastic approach to entrepreneurship  eg. having just reports and exams which are sterile means of teaching the course.

I am sure that those who established their own hospitals working on the loan with bank, constructing this, agonizing with many problems, recruiting the staff fighting the competition are the real students and graduates of this course.   Well I salute also those who are brave and determined to write the business plan

"I heard and I forgot,
I saw and remembered,
I experienced and I understand"  Old Chinese proverb.

Extension granted to MBAH students submitting business plan today - the suspension of class made it moot

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
August 13, 2016

This author granted a 1 week extension for the submission of the business plan,  the final project for the Entrep subject, after failing to get an endorsement/nod from the program director.  She was against it, after noting her response that as a PhD student, she has to comply strictly with the deadlines.

I earlier said that I take full responsibility for the granting of the extension after noting that  the students have  difficulty with the complexity of the business plan, especially the financial. I also anticipated that challenge that was why I refused to teach the subject with the strict deadline (7 days submission of grade after end of the semester.  I will not teach  the subject without submission of the business plan.)

However this deadline has been rendered moot because  of the suspension of the class at the school today. Now that I am 65 and retireable, the offense merely formalizes my being out.  Being out of the system now.

Breathing new life and direction into a newly acquired regional unit bank

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
July 28, 2016

I tried doing a bp myself. I am doing this for a rural bank which was just acquired and I was asked for advice on how to turn this around.  The BSP requires a BP too:

I started getting the inputs Monday, I attended their informal meeting yesterday. I started working on this this morning and was done by 12:30

3 days from input to output of a draft   5 hours to draft  What am trying to say:   You can do it YOU CAN SUBMIT THE DRAFT

I  Background:

The San Francisco bank  was recently acquired from its former owners recently, (March)   It was established on December 11, 1959 as the 235th rural bank to serve then the growing QC area area.  It has because of its managementand owners  kept up with the times.  It stopped lending for a time, has only about 1.300 depositors

It has been acquired by a group headed by dynamic business woman  who is engaged in construction, real estate, luxury goods trading and lending investor.

Its management team and Board of Directors:  include:

1.  Mr. AG   President and Director former head of a chemical petrochem plant, and now heads the first solar manufacturing plant in the PHL

2.   Mr EV  - VP and Director, formerly from from two large commercial bank

3,  Mr. EMR -  Manager of Operations, formerly cluster head and Senior Manager at a Universal Bank

Affordable mobile dialysis service BP by Dr. Edu

One of the #sbusinessplans that I am looking forward to see is that of Dr. Edu Tuazon (the #entrepreneur behind #Ralos #cassava cake) on #mobile and #affordable #dialysis.  I hope his example can inspire change in the #mindset of health and medical practitioners.  Maybe the example of #DrDavidShetty on the $10 dialysis (yes you read it right - roughly PHP500) in #Narayana hospital in India, where billions of people are poor and can hardly afford medical care inspired him to write a bp which is very much a #socialenterprise

Challenges to the Entrepreneurship Elective Course

Angesono Rizal Philippines   |  Black Saturday

I took the chance of grading and correcting the papers of an entrep course this office handled early December to February.  There are  only a few of them and I am sure the school lost on the class because their number did not reach the break even.

The class was a great class they were lively and very dynamic and mostly middle to senior execs in their organization.  May be the rigors of teaching ie the assessment and grading makes the idea of teaching challenging.  If we could only be like Plato or Aristotle or the Chinese master whose only test is life/or a boxing match itself.... And if only students would not be grade conscious.  (It reminds me of a conversation from an MBA student I conversed in the elevator, who said she would enroll in entrep if it were an easy 4...)

 The comments I earlier made on BP early on may not have reached them

Comments on earlier business plans submitted

From Smartblog - Why some BP do not succeed

A One-Page Business Plan in 5 Steps; start writing your vision and mission statement

 Entrepreneur.com

For rapid prototyping and business acceleration, you need rapid planning.  And really tycoons plan their businesses at the back of the envelope (at least the business model)  Why cant you.

But you really need a full blown business plan to flesh out details (especially the marketing and the operational processes. You cant afford not to have one.

This is very similar to the advice of Brian Tracy on how to be productive:  He said know your goal, write it down, write down your action plan.

This entrepreneur guide tells:

1.  Start with a vision

2.  Write your vision statement

Reminders on the Business Plan preparation

Hi Jopet/Trizza

Please forward to your classmates so that they are properly guided on making/preparing the BP.  This is posted at the blogsite.

Compliance with exit and compliance with regulations part of BP

Comments on Previous Plan Submitted; rubrics for grading

--

Prof Jorge Saguinsin

BIDDA:   BELIEVE, INSPIRE, DREAM, DO, ACHIEVE

Business Plan Concept and Outline-Trizza Castro

Hi Sir Jorge,

I was the one who sent the Business Concept (The GREENER Project) yesterday. Since you’ve replied that there is a prescribed format, I REVISED my outline based on your comments from last semester’s submitted Business Plans.

The GREENER Project

“Now, there is FUN in eating HEALTHY that never tasted this EXCELLENT”

1. Business Concept:

Basically the concept is a food store (for dine in or take out) that offers healthy foods like salads, sandwiches, wraps, fruit salad mixes, soups, fruit juices and fruit shakes. The catch is that, the customers can customize or they will be the one to prepare their food. They can choose/mix the ingredients for their salad, sandwiches and wraps.

There will be an ULTIMATE SIGNATURE food for salads, sandwiches and wraps and an ULTIMATE SIGNATURE drink for fruit juices and fruit shakes.

Business model?  3 word tag?

2. Business Objectives

1. Vision
2. Mission
3. Objectives

3. The Product

4. Product Description (Features, Pricing)
5. Benefits of the Product
6. The Target Market
7. Explain how to apply product satisfaction
8. Demographic and Psychographic behavior of the Target Market
9. SWOT Analysis
10. Execution of the Prototype, the Minimum Viable Product

4. Market Estimate

11. Market Analysis (Micro and Macro
12. Promotional Strategies

5. Enterprise Delivery System

13. Inputs, Throughputs, Outputs
14. Money, Machinery, Materials and Manpower

6. Financials

15. Income Statement
16. Balance Sheet
17. Cash Flows

7. Process in Tax and Regulatory Compliance
8. Exit Strategies

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Compliance with Regulations and Exit Strategy portion at the Business Plan

Deficiency in Many Business Plan

 


 

For the last 3 terms, the contents of this portion of the BP submitted have been very scanty, or non existent.  They are important parts of a business plan.  Maybe more pages are needed.

Compliance with regulators.

There are many laws that govern the operations of business.  That is why lawyers and consultants are needed in order to comply.  Heavily regulated industries include:   energy, transportation, banks, food real estate and all the industries that impinge, affect the public.  Penalties are incurred, even closure may be impending for violation.

Regulators are both local and national:

Local:   barangay, town:   mayor's permit, real estate tax, building permit, BFP fee, sanitary permit, garbage fee; occupancy permit, Zoning, PNP

Comments on the Business Plans submitted by previous Spentrep Class

Rizal  Philippines   | January 24, 2014

I am just about to complete checking the Business Plan submitted by the MM and Spentrep class last semester, some 50 calendar days ago.  They were supposed to submit this last January 10, 2014 which was 45 calendar days after the semester ended.

I know that we need to develop this skills among our MBAs especially those are taking Entrep as elective subject.  A BP is a guide on how to start and run your start up well.  (Although the trend now with other quarters are to:   1.  come out with the business model as your guide/dashboard 2. and for lean start up to come up with MVP  -  minimum viable product at once and test it - at once. Rapid prototyping, having  a product is very important if you are to race to the market place and be the market leader, and rake in the profits.

Some salient points:

1.  The Business Plan is 25 points of the total grade.  It is the final exam, the convergence of all the learning for the semester..  This is where we apply the lectures, the cases, the special reports, and the slideshare presentation on BP, the group creative activities on Micromarket, the PDQ.

2.  The BP format as prescribed has to be followed and not less than 40 pages as specified in the syllabus.  Before, if the paper does not follow the format or is less than 40 pages, it gets a 1.  This quarter is more forgiving.

3.  Be sure:  there is a table of contents and executive summary.  The organization the offerings are not mentioned at the bottom but are important nevertheless

4.  At the concept, as part of the learning on lean start up, you must have 3 word tag for your business.  It should be catchy and denote your business that is MAGIC, UNIQUE, DIFFERENTIATED, MESMERIZING, SEDUCTIVE, MAGNET, ENCHANTING, A WOW BUSINESS.

4.  The salient points to be graded are:

     1. Business concept and model  10%

        Concept  -  50 words or less that describes the business:  the product, benefits, the PTM, and the location, and even positioning.  We did a lot of exercises on this on group creative activities and impromptu exercises in the class

       Business Model   - the BM canvass has to be used, and briefly described.   Focus on the MVP.   This is the dashboard of the business.  The BM answers a basic question -  how does the business make money.  Therefore the cents and pesos have to be specified in the cost and revenue portion of the BM.  It should not escape the eye of the student, if any of the elements of the BM can be innovated.

     2.  Business objectives  10%  VMO KRAPI

     Hand outs have been given at the start of the semester and they must be followed.  After going through the FS, the student goes back to the SMART objectives and the KRAPI

    Most students forget the job generation part;  we have to remember the Ateneo Nation Building motto.  How do you contribute to nation building

   3.  The Product     10%

        1.  What are the customer wants and needs being satisfied;

       2.  What are the demographics and psychographics of the PTM

      3.  What are the features?  What are the benefits?

      4.  Competitive analysis  ( on many fronts, the product, the company, distribution, ads, promo, special deals, SWOT if you may)

      5. Alpha and beta testing

      For the lean start ups:

      1.  You need the prototype, the Minimum Viable Product

      2.  The 3 word tag to capture the imagination of the prospects

      Surprisingly, many miss this out.

4.  Market estimate:  20%

    The outcome of this portion is to make an intelligent guess estimate of the the sales.  Where do you base your sales..

    The case for this is  Pranav,   The group creative activity is micromarket

    The macro and micro analysis (which includes the traffic count and analysis of sales of similar establishments in the same service or catchment area)  Unfortunately, many stop at the micromarket and fail to make a jump to the sales estimate

    This is the proving  portion, after having studied your product, the customer, and the competition, you can sell this much.  This ME portion supports the Financial.  Will you have enough volume to break even?

   Is the risk worth taking because you have enough buyers.

   Will you do a pilot or market test?  Did you do an FGD?

5.  EDS  20%

    Enterprise Delivery System;  this portion was taken in MICO.  This is SPATRES mentioned in the handout by Morato on Strategtic Planning.

   This is is SPATRES:  Strategy, Program (Projects) Activities, Tasks, and Resources

   This is ITO:  INput Throughputs, and Outputs, Matching and Outcomes

   Inputs:      4M:  materials, money, materials machinery

  Throughputs:    activities, projects, programs, Job Descriptions, business process and improvements:;  job descriptions, controls, manuals

  Outputs:   Products and services

  Matching:   4ps of marketing.  The products and services must match the Customer Wants and Needs.

  Outcomes:  The business objectives mentioned in the first part of the BP.

HOW DO THE OBJECTIVES CONNECT WITH THE KEY ACTIVITES AND RESOURCES (This is the strategy portion.)

You must be able to discuss this in great detail;  and it could not be less than 40 pages.  Please do not submit that contains a one page infographic.

6.  Financials:  20%

    It must contain at least 3 elements:

   1.  Cash flow

   2.  Profit and Loss

   3.  Balance Sheet

   This office tries to furnish the student with spreadsheet template (Excel on how to do this easily)  Most have built in ratio.  You must know how the thing works, not necessarily how to do the Excel.  The student must understand how this connects with the objective, key resources and activities.

7.  Compliance with the regulators: 5%

   You must conform to the local national, and even international regulations.  And may include ISO accreditation.   Discuss how you are going to comply.  Will you be a good citizen?  Will you pay the correct the taxes?  How will you deal with difficulties with regulators:  with corruption and facilitation?

8.  Exit strategy:    5%

This refers to two business situations:

When things get bad:  how to bail out?  How do you liquidate, what are your contingencies to lessen your loss?  What are the red flags?  What are the thresholds for bailing out?

When business is good and is profitable:

Plans for succession, IPO, selling for profit? How do you add, multiply, subtract, or divide?

Unfortunately many students neglect this and get nothing as a grade for this.  Please pay attention on this section

Please follow this format.  Please see my slides on BP at slideshare on BP preparation

N.B.

1.  The BP should be 40 pages or more.  When you do your EDS well and thoroughly, it could be more than 40 pages, just for EDS

2.  Have a table of contents.   (You do that for strama)

3.  Have an executive summary, although you write this last

For the last term, 3 students got a grade of 1 for the following reasons:   their BP were less than 40 pages as specified;  they did not contain the  above mentioned parts, did not have enough data and details to prove that the business is viable, and can be operated; and were badly written.  Some were cut and paste afffair, which is a  bad practice for somebody who will soon be called a Master of BA


       

Assignment on Business Concept

Rocky Gabatin

SPENTREP – S09

Prof. Jorge Saguinsin, MBA

Business Concept Assignment

Business Entity: Human Resources Consulting Firm

Concept:

The business will be a "one-stop shop" for all HR related functions which other business are willing to outsource. It will be a "no headache" consulting firm that offers reliable, high-quality, and best results to SMEs and large enterprises.

Accelerator tags:

"One-stop HR solutions"

"Your HR convenience store"

"HR Problems, Solved" 

What must the business concept do for your customer, your stakeholders, and investors?

Rizal, Philippines  December 8, 2013

Today is the feast of Immaculate Concepcion.  Rejoice

 

As we prepare our business plans, it is important that at the start,  the business concept must be (as I have repeated several times in class)

1.  Compelling

2.  Unique

3.  Differentiated.

A former student uses the word "mesmerize"

In the words of Seith Godin:   A purple cow.   Or if you want to be complicated, a business in a "blue ocean"

Guy Kawasaki  calls it "Enchantment"

Then you must have a 3 word tag/title for the business concept as you pre accelerate your business concept.  Getting into an accelerator program

Are you following/benchmarking these, as you do your draft of the business plan?

What is a business concept?

Business concept is the first part of the business plan.  It contains 50 words or less that tells us what the business is all about -  the main product being sold, the market, the price point (positioning) and the geographical market.   It must be easily understood.  If an average student can not understand it, then the concept is too complicated to start or execute.

The business concept must be differentiated, compelling, unique, competitive for it to be a successful start up.  If you will start something that is me too, then you are not an entrepreneur, and the business is likely unsustainable or might fail.

This is a critique of the food trip exercise submitted.   Many failed to address the basics of the business concept

Example of business concept and MVP for a new business we have established

In making a business plan, the entrep students must be able to clarify and crystallize very well the business concept and the business model.  The business concept must be expressed in 50 words or less that describes the product, the target market, and the marketplace.

The business model on the other hand includes:   PTM, customer bond, link, revenues stream, on the communication/customer contact side;   on the supply side:  it contains the partner, the key resources, key activities and major costs.

Our new business connected with our Lending company is marketing, referring, distributing solar aircon; and also financing the acquisition of solar aircon.  The customer's amortization shall be his savings for the use of solar aircon.

Read more about solar aircon at this site:   solar aircon  It is not about photovoltaic cells or solar cells powering the aircon.  It is something very different.

Why do business/strategic plans fail to deliver results

Every generation need a revolution.  One such revolution  is entrepreneurial revolution

From Smartblog on Leadership by Bill French | June 26, 2013

At AGSB, we spend a great deal of time teaching strategic management;  on my part, at Entrep class, we teach students to make business plan (very few master this skill)

However, despite the assumption that the first step toward achievement of goals is writing it down, many business plans/strategic plans fail to produce results (it is dependent on the team, the passion, the communication, the checkpoint that goes with it.  Here are some reasons enumerated:

l.  The senior management has not bought in;

2.  The team is not a team (not collaborative)

3.  The  plan is underfunded;  the plan may be not compelling enough, there is not enough fuel or

logistics to support the plan

4.  Lack of communications;   the contents of the plan is not clear (hence the need for strategy map) and not simple enough to be understood and shared by everyone.   Top management must keep pounding on the table the strategy

5.  Misaligned incentives

6.  Shallow understanding of the customer and environment.   The senior management would not probe deeper into the customer and the knowledge of the facts is mostly tribal (rote) knowledge.  I have seen business plan submitted with little or no data on the customer and the business ecosystem

Read more on Smartblog article on business plans failing  >>>>

Noted in the checking of business plans

Angono, Rizal PHL   |  May 28, 2013

As I am checking the business plan submitted by Standard students and MBAH, I noted the following:

l.  For the effectual bp,  the story in the life of the entrepreneur consumed 60% of the bp;  the main parts of the bp was missed;

2.  There were no page number in quite a number of bp (this will not do in strama)

3. The bps were graded on the basis of completeness of the various parts and many parts:  eds, objectives, business model canvass, products,  were incomplete;

4.  With regards to the sales estimate, the macro and micro market were related to the number of customers/prospects  that can be had by the enterprise.

5.  Despite consultations, the cases, and the creative exercises conducted, these were not incorporated in the business plan