Module 9Basic Business

Management Skills Training (BBMST)

Introduction

In this module, women will be given an opportunity to reflect on their strengths and weaknesses as persons and assess their suitability to engage in an income generating activity. They will also discuss on how to plan, organize, direct and control a small scale business. This module is useful for women who have entrepreneurial skills and have plans of engaging in an income generating project (IGP).

Module ObjectivesThis module aims to:

1. Enable the participants to assess themselves as possible women entrepreneurs;

2. Capacitate the participants on how to manage a small business; and

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3. Guide the participants on how to prepare a project proposal.

Table of Contents

Topic PageSession Flow 3Session 1:Overview of Basic Business Management Skills Training 5Session 2:Managing a Small Business 16Session 3:Business Planning 33Annex A: Project Proposal Format/Template 37

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Session Flow

Topics Methodology

Materials Needed

Time Allotment

Session 1:Overview of Basic Business Management Skills Training(BBMST)

Activity 1: Workshop: Personal Assessment and Self-analysis

Lecture-Discussion

Activity 2:Sharing on the Strengths, Weaknesses, Opportunities and Threats of a Small Business Enterprises

handouts,Powerpoint, LCD, laptop, chalk, whiteboard marker,questionnaires

1.5 hours

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Topics Methodology

Materials Needed

Time Allotment

Lecture Discussion

Session 2:Managing a Small Business

Activity 1:Sharing on the Four Pillars of Basic Business ManagementLecture- Discussion

Activity 2: Workshop on the Indicators of a Successful Livelihood Project

Lecture-Discussion

handouts,Powerpoint, LCD, laptop, chalk, whiteboard marker

1.5 hours

Session 3:Business Planning

Activity 1:Sharing on Project Identificatio

handouts,Powerpoint, LCD, laptop,

1.5 hours

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Topics Methodology

Materials Needed

Time Allotment

n

Lecture-Discussion

Activity 2:Project Proposal Preparation

chalk, whiteboard marker,project proposal form

SESSION 1OVERVIEW OF BASIC BUSINESS MANAGEMENT SKILLS TRAINING

(BBMST)

Introduction

This session will provide opportunity for the women to assess their entrepreneurial qualities and skills and make them aware of the challenges and opportunities in small business industries.

Session Objectives

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At the end of the session, the participants should be able to:

1. Assess their entrepreneurial qualities and skills;

2. Identify the desired qualities of small business women entrepreneurs;

3. Enumerate the small business challenges and opportunities; and

Estimated time

1 Hour and 30 Minutes

Methodology

Workshop Individual Work Lecture/Discussion

Materials

Handouts

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Powerpoint, LCD, Laptop Chalk, Whiteboard marker Questionnaires

Procedure

Activity 1: Personal Assessment and Self-analysis Exercise

1. Tell the participants that they have 10 minutes to undertake the exercise.

2. Distribute to the participants the questionnaires on Basic Guide on How to Start a Business by the Technology Resource Center, with questions that are answerable by yes or no.

3. Instruct the participants that they have to check on the space representing their answers. The questionnaire will gauge the participants’ “entrepreneu-rability.” Note that there are few modifications on the questionnaires.

Questions AnswersYes No

1. Do you have a strong desire to engage in business?

2. Are you physically fit for

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self-employment?3. Do you accept criticisms

positively?4. Are you emotionally

suited for self-employment?

5. Do you have any background/experience in business?

6. Do you know the ins and outs of the business you are interested in?

7. Are you willing to learn about the business you want to engage in?

8. Do you mingle well with people?

9. Are you organized in your work?

10.Are you creative, resourceful and innovative?

11.Are you happy to accept responsibilities and makes sure that work is done?

12.Are you good in budgeting your time and other resources?

13.Have you saved enough money to enable you to start a business and survive while it is still running?

14.Are you prepared to put

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these savings at risk?15.Are you determined

enough to succeed?

4. Reiterate to the participants that the administered questionnaire is a tool to help them identify their strengths and weaknesses in areas crucial to small business ownership.

5. Knowing their strengths and weaknesses will help them in:

a. Determining if they are ready to start a small business

b. Choosing the best business for them since they can match their skills with the right business, and

c. Realizing if they need a partner in business who has the skills that they lack.

6. Let the participants analyze their responses by saying that if most of their answers to the aforementioned questions are “yes”, then they are most likely capable of becoming an entrepreneur. However, if most of their answers are “no”, then they still need time to cultivate the qualities that will prepare them to venture into the world of business, which is the essence of the module/training.

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7. Provide the definition of BBMST, as a strategy in Business Management/Entrepreneurial Skills Development. This is a strategy which serves as a guide for individuals or groups who wish to have additional knowledge on project management, thereby ensuring success in their chosen livelihood activities.

Processing

1. Ask the participants the following questions:

a. Affective Level

While you are doing the exercise, what was your recation?

b. Cognitive Level

What did you learn from the exercise?

2. Synthesize the responses and proceed to the discussion of the Key Learning Points.

Key Learning Points

1. An entrepreneur should possess the following qualities:

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?!

a. Basic knowledge and skills on chosen project

b. Positive work habits and attitudes

c. Creativity

d. Resource management

e. Positive mindset

f. Social responsibility

Application

For the participants to:

1. Consider their answers to the questionnaire in making a decision whether to engage in business or not.

Synthesis

Basic to the qualities of an entrepreneur are having basic knowledge and skills on chosen project, has positive work habits and attitudes, creative, resourceful, positive mindset, socially responsible and has the ability of handling crisis.

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Note to the Facilitator

BBMST is useful for participants who have entrepreneurial skills. They may want to continue with their income generating activities or they beginners who are planning to venture into business.

Procedure

Activity 2: Discussion on Strengths, Weaknesses, Opportunities and Threats (SWOT) of a Small Business Enterprise

1. Start the discussion by asking the participants to share their ideas on what they think are the strengths, weaknesses, opportunities and threats (SWOT) of a small business enterprise and of an entrepreneur.

2. During the sharing, ask the participants to elaborate their answers based on their experience or what they have observed from other people.

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3. Write the key words of the responses on the board.

4. Synthesize the responses and proceed to the discussion of the Key Learning Points.

Key Learning Points

1. SWOT Analysis is a tool in planning. It evaluates the strengths, weaknesses, opportunities and strengths of a business.

2. Factors that are internal to the business are called:

a. Strengths – characteristics that give advantage to the business

b. Weaknesses – characteristics that places the business at a disadvantage position compared to other business

3. Factors that are external to the business are called:

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a. Opportunities – chances that will make the business prosper

b. Threats – elements that can cause trouble to the business

4. A small business enterprise can have the following strengths, weaknesses, opportunities and threats.a. Strengths

It needs a small capital, equipment, materials and availability of manpower in the area.

It has a clear defined responsibility. It has an assured easier return. It provides enough experience/skills to

the entrepreneur. Owner should possess managerial/

technical capability. Raw materials should be available. Product/service should be of good

quality.

b. Weaknesses It has a limited capital.

(lack/inadequate/shortage of capital) It has few market outlets. Its sources of credit are few and it has

limited access to banks. Its product components are not readily

available. Profit realized is not enough to meet

basic needs.

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Owner lacks technical know-how. Raw materials are scarce. It has outdated technology.

c. Opportunities It is set on a good location. It has a strategic location or accessible. Government, Non-Government

Organizations (NGO) and other micro-financing programs and projects are available.

d. Threats

The occurrence of natural and man-made calamities.

The occurrence of unpredictable business conditions that could cause negative effects.

Application

For the participants to:

a. Select an existing small business project in the community

b. Apply the SWOTc. Summarize recommendations/specific

actions

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Synthesis

SWOT is an analytical tool in planning. It evaluates the strengths, weaknesses, opportunities and strengths of a business. The use of SWOT provides a basis whether a project can be successful or not and will give a guide on what to work on in the project to ensure that its implementation or operation will be improved.

SESSION 2MANAGING A SMALL BUSINESS

Introduction

Basic knowledge on business management should be learned to enable to identify the basic indicators that will make a livelihood project successful. This is the main objective of this session.

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Session Objectives

At the end of the session, the participants should be able

to:

1. Explain the four pillars of basic business management skills;

2. Identify the indicators of a successful livelihood project; and

3. Acquire important information on how to manage a small business.

Estimated time

1 Hour and 30 Minutes

Methodology

Group Sharing Workshop Lecture/Discussion

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Materials

Handouts Powerpoint, LCD, Laptop Chalk, Whiteboard marker

Procedure

Activity 1: Sharing on The Four Pillars of Basic Business Management

1. Start the discussion by asking the participants what they know about the organization and management; financial; marketing; and production as the four pillars of basic business management.

2. Write their responses on the board.

3. Synthesize the responses and proceed to the discussion of the Key Learning Points.

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Key Learning Points

The Business Management Course of the Technical Resource, and the Business Dictionary.com are the source of information for the session on the four pillars, as follows:

1. Organization and Management - It is always best to identify the category of business to be undertaken before starting any business, Categories include the following:

a. Types of Business by Ownership

Sole Proprietorship – This type of business is owned by only one person. If you choose this type, your personal assets as owner can be utilized to pay the liabilities incurred by your business. This should be registered at the local government office where it operates.

Partnership – This is owned by at least two persons assuming equal risks, individually and collectively. Each partner is answerable for the other partner’s liabilities. A person has to be registered at the Securities and Exchange Commission (SEC). You pay your individual tax on your share of the

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partnership income. When one partner quits or dies, the partnership is dissolved.

Corporation – This type is owned by several persons. Your personal assets can not be attached to satisfy the corporations as liabilities. This is usually resorted to where capitalization requirement is high. A corporation’s requirements with SEC are treated as a separate tax-paying entity. Aside from the tax paid by the corporation from its income, the individual owners pay additional taxes on dividends earned.

Cooperative – this is owned by at least 15 persons with common bonds of membership and interests which could either be residential, institutional, by associations and occupational/ professionals. There are six types of cooperative to choose from: credit, consumer, producers, marketing, multi-purpose agricultural, multi-purpose non-agricultural and service.

b. Types of Business by Size

Micro – This is a home-based business employing a few workers who are mostly family members. Examples of this type of business: “chicharon” making, home-made “longganisa,” etc.

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Small Business – This is characterized by a set-up outside the home. It has more than five employees, majority of whom are non-family members. Investment of machinery and equipment is visible. Examples of this are: grocery store and gasoline station.

Medium Business – This is characterized by the employment of more than 100 employees and has a sizeable investment in machinery and equipment. Examples are: garments manufacturing and food processing ventures.

Large Business – This is characterized as a corporation employing several thousands of workers. Examples are: cigarette manufacturer, cannery and mall.

c. Types of Business by Activity

Retailing – Involves setting up a store which enables the general public to buy merchandise on a per piece basis, in which payment is mostly cash or credit. Customers usually buy products for personal use.

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Wholesaling – Involves setting up a store which buys merchandise in bulk for the purpose of reselling them in the same form. Stocks inventory is high and are stored in warehouse.

Manufacturing – Involves the creation of goods from raw materials or assembly of parts from finished products. Manufacturers sell their goods to wholesalers or distributors

Services - Involves personal work to be rendered with or without the aid of tools or equipment, whether skilled or non-skilled. Examples are: food and beverages services, photography, etc.

d. Other Important Consideration

Size of Capital - It is important to know how much capital you will need. If the capital is big, you will know what opportunities to look for. But there are businesses that require small capital.

Experience - It is best to venture on a business that you are familiar with rather than an entirely new or an unfamiliar one that you do not know how to operate and manage. Familiarity of the business, in addition to the capital is important.

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Need for the product or service - Carefully consider your proposed site concerning the demand or need for your product or services there.

2. Financial - It is important to know your sources of finance which could be any of the following:

a. Internal Financing – Involves the utilization of one’s own funds, credit line, cost cutting, effective collection of loans or receivables and correct inventory.

Personal savings – earned funds from personal sources

Credit cards – some credit cards have high credit limits that will enable you to start a micro or macro business

Borrowed from supplier – sometimes suppliers are willing to provide all the goods needed for your store, for instance, a pre-agreed term of payment or consignment.

“Paluwagan” or Forced savings – This can be tapped as an easy and inexpensive source of capital

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Pawning or Selling – Sometimes personal assets can be pawned to be used as capital.

b. External Financing – Involves borrowing from various sources or taking in new partners for additional capital

Capital borrowed – this entails borrowing capital from friends or relatives and paying the loan with the small amount of interest in return.

Bank loans – tapping banks, either government or non-government, for business loans that are usually supported by collaterals though there are some banks that can arrange loan without collateral at a fee.

Loans from Non-Government Organizations – There are several NGO in the country whose objectives include helping finance micro entrepreneurs.

Take in a partner with money – Some people with capital may be willing to lay out cash for one’s business, if you take them as partner in one’s proposed business.

3. Marketing

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a. The process of bringing the goods to the consumers at a quality and price that they are willing to pay, not only entails the actual selling activity but all activities from the time the product is a finished good up to the time it reaches the buyer.

A guide question is “Where can we sell our products?” A general rule for producers is that they should only produce what is being demanded by the market. While there is an actual demand for particular products, competition always exists. Thus, it is also very important to determine that what will be sold is in demand in the market, as well as to make sure that there is a capacity to do so. Sell only the things that can be produced.

b. The Four Ps of Marketing

P roduct Costing and Budgeting

Budgeting refers to the financial requirement of a business, how this budget will be allocated and utilized and how a business is going to be funded. The following guide questions can help you in budgeting:

Questions1. What are the different expenditures

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(equipment, tool, materials, wages, etc.) within the business which is necessary to produce and market your products?

2. How are you going to finance your business --- through your personal funds only or will you have to get a loan/borrow?

3. How much is your capital?4. How much can you afford to invest into

your business?

Costing is the process of determining the amount for which a certain product is to be sold. This takes into account the expenses incurred in its production. The components of costing are as follows:

> Raw materials> Tools and equipment> Manpower/labor> Other expenses incurred in the

management of a business as a whole such as administration, interest, taxes and maintenance

P ricing Techniques

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Two things to consider in price determination are the:

> prevailing local market price, and> the cost of production

The following questions should be given the proper answers:

Questions1. What is the wholesale price? Retail

Price?2. What is the cost of production? Other

expenses incurred?3. What are the prices of the competitors?4. What is the price that the perspective

market is willing to pay?5. What is the mode of payment? Cash,

credit, installment, or consignment?

P roduct Innovation and Techniques in Promoting the Products

This is basically improving the product through:

Packaging - This enhances the physical appearance of a product. A carefully packed product would attract more attention than those that are clumsily wrapped.

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Adding new components to result into a finer product.

Recycling - This lessens the cost of production and at the same time encourages people to participate in the conservation of nature through buying your product.

Shapes and sizes

P lace/Location

This includes decisions about where to sell the product, where the customers are and how to get to them, and the "channel of distribution," meaning, all the different middlemen you use to get the product out to the customer.

P roduction

Processes and methods employed in the transformation of tangible inputs (raw materials, semi-finished goods, or subassemblies) and intangible inputs (ideas, information, know how) into goods and services.

Highlight the following points in the discussion:

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Things to Remember in Production

Develop a product in the fastest time, with a lower cost without affecting the quality

Importance of ensuring the permanent source of supply for the production of goods and services before introducing the product to the market

Standards in the Handling of Materials

Lowering the cost through the following:

Efficient use and maintenance of the place for production

Purchase of materials in bulk

Faster and shorter time of production

Efficient and proper use of materials to avoid wastage.

It is important that everything to be used is well arranged prior to production to avoid waste of time of the workers and money.

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Increasing Production of Goods and Services

Carefully observe and provide instructions on how to make use of the raw materials.

Install a system and develop a procedure of production.

Purchase of machinery and materials that are appropriate for the bulk of production of goods and services.

Preparation of Place for Production of Goods and Services

Ensure that the area is safe from any danger such as fire and illnesses that may affect the workers.

Do not extend, as well as exceed, too much working hours for workers to avoid over fatigue and to avoid creating negative emotions in the workers concerning their rights.

Provide enough space for production and always keep the area well-ventilated.

Ensure that workers are using safety gears to protect themselves from any possible injury.

protect themselves from any possible injury.

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Note to the Facilitator

In the course of the discussion, facilitator can invite speaker/s, particularly women, who are engaged in small business to share her experiences in handling their own business. Participants will also be encouraged to ask questions to the speakers so as to further their knowledge in managing small business.

Procedure

Activity 3: Workshop on the Indicators of a Successful Livelihood Project

1. Tell the participants that they have 15 minutes to do the workshop.

2. Divide the participants into small groups of five.

3. Ask them to identify indicators of a successful livelihood project.

4. The groups will present their outputs.

5. Write the key words of the outputs on the board.

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6. Synthesize the results of the presentation and proceed to the discussion of the Key Learning Points.

Processing

1. Ask the participants the following questions:

a. Affective Levelb.

While you are doing the exercise, what was your reaction?

c. Cognitive Level

What did you learn from the exercise?

2. Synthesize the responses and proceed to the discussion of the Key Learning Points.

Key Learning Points

1. The following are indicators of a successful livelihood project:

a. Building up of capital from profit/incomeb. Increasing sales

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?!

c. Expanding marketd. Improving product linese. Increasing consumer patronage

Synthesis

Small Business comes in many forms and always before starting out a project it is best to identify the category of business one has to engage in whether for sole proprietorship, partnership, corporation and cooperative. Type of business should also be considered – small or micro business and medium or large business. By activity, business can go retailing, wholesaling, manufacturing and services. Other considerations in planning a business should include determining the size of capital, experience of the person who will handle the business and feasibility of the product or service that will be produced. Financial, marketing, pricing and production schemes should likewise form part of planning a business. All factors in going into a business should be planned carefully.

SESSION 3BUSINESS PLANNING

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Introduction

The inputs and the discussions made in the previous sessions will serve as basis in preparing a business plan. A project proposal template will be provided as basis in the preparation of the project plan.

Session Objectives

At the end of the session, the participants should be able to:

1. Identify what income-generating projects they can undertake;

2. Prepare a proposal for a livelihood project; and

3. List the indicators of a successful livelihood project.

Estimated time

1 Hour and 30 Minutes

Methodology

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Workshop Lecture/Discussion

Materials

Handouts Powerpoint, LCD, Laptop Chalk, Whiteboard marker

Procedure

Activity 1: Sharing on Project Identification

1. From the inputs of the previous session, ask the participants what projects they have identified for their individual or group venture.

2. Ask three to four volunteers to share their identified projects.

3. Tell the participants that this is an introductory activity before they write their project proposal.

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Procedure

Activity 2: Project Proposal Preparation

1. Guide the participants in preparing their proposal for the project that they identified using the prescribed format. Refer to Annex A (Project Proposal Format/Template. )

2. Ask three to four volunteers to share their project proposal for critiquing of other participants.

Application

For the participants to:

1. Keep the copy of their project proposal for reference when they have to avail of livelihood assistance from an organization.

Note to the Facilitator

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The project proposal template of Self-Employment Assistance – Kaunlaran (SEA--K) is used in the session since there is a possibility that the participants can also avail of livelihood / capital assistance from the Department of Social Welfare and Development (DSWD).

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Annex AProject Proposal Format/Template

I. Identifying Information

A. Project Title : ___________________________________

B. Project Location : ________________________________

C. Individual/Group/Organization Proposing the Project : _______________________________________________

D. Target Start of the Project : ________________________

E. Budgetary /Capital Requirement of the Project :_______________________________________________________

II. Objectives of the Project :______________________________________________________________________________________________________________________________________________________

III. Information About the Project :

A. Management of the Project___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

B. Production

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____________________________________________________________________________________________________________________________________________________________________________________________

C. Marketing___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

D. Financial____________________________________________________________________________________________________________________________________________________________________________________________

IV. Components of the Project

A. Manpower

Name Work/Role Salary

B. Production

B.1. Raw Materials Needed

Number

Unit Kind Unit Price

Total Cost

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B.2. Materials/Equipment Needed

Number

Unit Kind Unit Price

Total Cost

B.3. Other Expenses

a. Fare Php ____________

b. Rental Cost Php ____________

c. Gas, electricity, water Php ____________

d. Others Php ____________

Total Cost Php ____________

C. Marketing

Number

Unit Kind Unit Price

Total Sales

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D. Capital Needed/ Financial

*Refer to the following:IV-A. Humanpower Php

__________IV-B.1. Raw Materials Php

__________IV-B.2. Materials/Equipment Php

__________IV-B.3.Other Expenses Php __________

Total Cost Php __________Minus: Cash on Hand

Php___________Needed Capital Php __________

E. Computation of Gains/Profit

Expected profit Php __________

Deduct/Minus:

*Refer to the following:

IV-A. Humanpower (Labor Cost) Php

__________IV-B.1. Raw Materials

Php___________IV-B.2. Materials/Equipment(Depreciation Cost) Php

__________IV-B.3.Other Expenses Php __________

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Total Sales Php __________Deduct/Minus: Payment for Capital Loan Php

__________Remaining amount/Cash on hand Php

__________

Prepared by: Recommended by:______________________ ___________________________

Name of Proponent Name of Recommendee

Adapted from DSWD Self-Employment Assistance-Kaunlaran (SEA-K) Program

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