WEEK 1: 4M’S OF OPERATION

FOUR M’S OF OPERATION

The 4M’s of operation serve as the essential components that
influence the results of any production or process.

1. MANPOWER
 Manpower, personnel or laborer are human labor force involved in
producing a product, manufacturing.

FIVE QUALITIES OF A GOOD EMPLOYEE

a. Teamwork
b. Willingness to Learn
c. Communication
d. Self-motivation
e. Culture Fit
2. METHOD
 Manufacturing is the conversion of raw materials into finished
goods while the method is the process or step by step procedure
to produce a product.
3. MACHINE
 It is used in the production of goods or delivery of services.
 Manual or Automatic

4 TIPS BEFORE PURCHASING AN EQUIPMENT FOR PRODUCTION USE

a. Prior knowledge of the equipment
b. Quality
c. Dealer
d. Price of the equipment
4. MATERIALS
 Raw materials are needed in the creation of a product and part of
the final output.
 If the materials are substandard, then the product will be low-
quality.

WEEK 2: PRODUCTION AND MARKETING

PLAN

PART 1: PRODUCTION PLAN

Production planning is “the administrative process that takes
place within a manufacturing business and that involves making sure that
sufficient raw materials, staff, and other necessary items are procured
and ready to create finished products according to the schedule
 specified”. A production plan serves as a guide for your company’s
production activities.

PARTS OF PRODUCTION PLAN

A. Product(s) & Product’s Unique Features – usage of the product and
materials composition
B. Manufacturing Process – a step-by-step process on how to produce
the product
C. Machinery and Equipment – tools, equipment or machines needed to
produce a product or service
D. Raw Materials – materials needed for the product to be produced
E. Utilities – electricity, fuel, and water supply
F. Plant Location and Layout – describes and present the plant and
map layouts

PRODUCTION PLANNING PROCESS

1. Forecast Demand: Estimate how many products you need to produce
within a specific time frame.
2. Determine Production Options: Look at different production options
to meet the forecasted demand. EX: Flowchart
3. Choose the Option That Uses Resources Most Effectively: Compare the
cost and time of each production option and choose the one that
maximizes the operational capacity of your firm.
4. Monitor and Control: This control system should be in place to help
you notice problems when they happen, giving you more time to
correct them.
5. Adjust: Be ready to adjust the plan if needed.

PART 2: MARKETING PLAN

A marketing plan is a comprehensive document that outlines a
company’s overall marketing effort. It is a blueprint that outlines how
a company will implement its marketing strategy and use a combination of
resources to achieve business objectives, including sales targets or
customer acquisition.

PARTS OF MARKETING PLAN

I. EXECUTIVE SUMMARY
 This Is a one-page summary of the basic factors involving the
marketing of the service next year. It is intended as a brief
guide for management.
II. COMPETITION ANALYSIS
 Identifying your direct and indirect competitors using research
to know their strengths and weaknesses in contrasting to your own.
III. SWOT ANALYSIS
 STRENGTHS (internal; company or product)
  WEAKNESSES (internal; company or product)
 OPPORTUNITIES (external; costumers, season)
 THREATS (external; competitors, requirements)
IV. OBJECTIVES AND ISSUES
 Objectives (2 years)– baby goals to achieve your major goals
 Issues – major issues that might affect the company, weaknesses
and threats
V. MARKETING STRATEGY
1. Positioning – Representation of a brand or a product in consumer’s
mind.
2. Product Strategy – What a business wants to attain with its
product?
3. Pricing Strategy
a. Penetration (low to high) and Skimming (high to low)
b. Competitive – set prices based on their competitors' prices
c. Value-added – setting prices based on your customers and how
they perceive the value of your product
d. Cost-plus – includes a markup on the cost of products and
services to determine a selling price
4. Distribution Strategy – Methods and channels a company uses to
deliver its products. (by land/air/sea)
5. Marketing Communications Strategy – How will you communicate to
the mass? (promotions/advertisement)
VI. MARKETING RESEARCH – Gathering information that provides an idea
into your customers thinking, buying patterns, and location. It can
also assist you to monitor market trends and keep an eye on what
your competition is doing.
VII. MARKETING ORGANIZATION – A structured organization responsible for
planning, implementing, and evaluating marketing programs to
achieve organizational goals by satisfying the needs and wants of
users through strategic marketing activities.
a. Action Programs – A concrete plan indicating how major marketing
tasks will be managed and implemented, who will do them, and when.
b. Sales Projection – An estimate of future sales figures over a
specific period.
c. Controls – Monitoring the product’s quality and employees’
performance.
d. Floor Plan and Store Layout
 WEEK 3: FINANCIAL PLAN

FINANCIAL PLAN
This tackles how the financial aspects of the business will be
designed or planned. Figures on how much the initial capital is, product
prices or costs, and expected income are indicated in this section.

START-UP CAPITAL REQUIREMENTS

Start-up capital is the money needed to start a new business.
This funding helps the business meet its initial costs, such as office
space or equipment. The computation may range from a period of 1 month
to 3 months or more.

1. Property and Equipment – needed to produce goods and or rendering

of service.
a. Office Equipment
b. Furniture and Fixture
c. Machineries and Equipment
2. Supplies – raw materials to be used to produce a finished product.
3. Rent – renting a space requires a deposit for at least one month
and an advance one-month payment for rent.
4. Operating Expenses
a. Salaries
b. Utilities
c. Promotion / Advertising
d. Packaging and Labelling
5. Miscellaneous Expenses
a. Uniforms
b. Leasehold Improvement
c. Business Permits

PRODUCT COST
The total costs incurred/used in the manufacture of goods.
Materials, labor and manufacturing overhead costs are accumulated daily
when materials are issued to production, labor tickets are issued to
workers so that they can record the number of hours consumed to produce
the product.

3 MAIN COSTS DIRECTLY RELATED TO THE PRODUCT

1. Direct Materials – The total materials consumed or used to
manufacture or produce a product. These are the materials directly
related or seen in the product.
2. Direct Labor – The total amount of labor cost associated directly
with the production of goods and cost of rendering service. The
number of hours consumed in the manufacture of the product is
accounted.
3. Manufacturing Overhead – This include direct factory-related costs
that are incurred when producing a product.
 Indirect Materials – used in the production but not directly
traceable to the product. (glue / oil)
 Indirect Labor – labor of those who are not directly involved in
the production of the products. (security guards)

SELLING PRICE
Unit cost + Mark-up % (tubo)

MARK-UP (tubo)

= Selling Price – Unit Cost

WEEK 4: FINANCIAL PLAN

PROFIT & LOSS STATEMENT A.K.A INCOME STATEMENT or

STATEMENT OF COMPREHENSIVE INCOME
A statement showing the performance of the business enterprise
for a given period. It summarizes revenues earned and expenses incurred
for that period.

ELEMENTS OF INCOME STATEMENT

1. Revenues (Income / Sales) – The income derived from rendering of
service for service type of business and for selling a manufactured
product for manufacturers.
 2. Expenses – The cost of services rendered, or goods sold,
distribution or selling expenses, administrative expenses or other
operating expenses.
a. Cost of Sales – the cost incurred to purchase or produce products
sold to customers during the period; also called cost of goods
sold.
b. Salaries / Wages Expense – all payments as a result of an
employer-employee relationship such as salaries or wages, 13 Th
month pay, cost of living allowances and other related benefits.

FINANCIAL PROJECTION
A forecast of future revenues and expenses. Typically, the
projection will account for internal or historical data and will include
a prediction of external market factors. Financial Projection is
important for investors and for businesses that have just started would
need additional capital.

WEEK 5&6: PRESENTATION OF THE

BUSINESS PLAN

PREPARATION AND PRESENTATION OF BUSINESS PLAN

A. WRITTEN PRESENTATION

MUST DO:

 Avoid jargon, vague terms, and abbreviations.

 Short but concise.
 Organize content from most to least important.
 Visual aids (charts, tables) can enhance understanding.

B. ORAL PRESENTATION
a. Content – the quality, quantity, correctness, and appropriateness
of analyses presented.
 Key Features and Benefits
 Market Opportunity
 Target Market
 Pricing and Revenue
 Competitors
 Marketing Strategy
b. Delivery – includes such dimensions as audience attentiveness,
clarity of visual aids, appropriate dress, Persuasiveness of
arguments, tone of voice, eye contact, and posture.
 Controlling Your Voice
 Managing Body Language
 Speaking from Notes
 Constructing Visual Aids
 Answering Questions