MODULE #01 Week #01

Learning Objectives :
At the end of the lesson the learners are able to:
a. Describes the 4Ms of operation in relation to the business opportunity.
b. Develop a product description.
c. Test product prototype.

Demonstrate the understanding of the 4 M of operations

Four M’s of Production

The most critical factors in the whole production system are the inputs and the transformation
process. Their quality determines the quality of the output.

The factors involved in the input and the production process are usually referred to as the four
M’s of production - manpower, method, machine, and materials.

I. Manpower
- simply refers to the human workforce involved in the
manufacture of products.
It is considered as the most critical and important factor of
production.

II. Method or Production Method

- refers to the process or technique of converting raw
materials to finished goods.
The raw material undergoes several stages before it is
completed and becomes ready for delivery to the target
consumers.

a.Product to Produce
-The product is the physical output of the whole
production process. It should be valuable and beneficial to
the consumers and should satisfy their basic needs and
wants.

b.Heterogeneous Product
- has dissimilar characteristics, parts, and physical
appearance. It can easily be identified from other
products.
Example:
furniture, bags, and home decors

c.Homogeneous Product
- has a physical appearance, taste, or chemical content that can hardly be distinguished from that
of the other products.
Example:
soft drinks and medicines

d.Mode of Production
- refers to how the product will be produced.

1. Intermittent production system

  a. project method
  b. job order method
  c. batch method
2. Continuous production system
3. Just-in-time production system

III. Machine
- refers to the manufacturing equipment used in the production of goods
or delivery of services.

In the process of selecting the type of equipment to purchase, the entrepreneur may consider the
following important elements:
1. Types of product to be produced
2. Production system to be adopted
3. Cost of the equipment
4. Capacity of the equipment
5. Availability of spare parts in the local market
6. Efficiency of the equipment
7. The skills required in running the equipment

IV. Materials
- simply refers to the raw materials needed in the production of a
product.
Materials basically form part of the finished product.

The entrepreneur may consider the following important factors in the

selection of raw materials:
1. Cost
2. Quality
3. Availability
4. Credibility of suppliers
5. Waste that the raw material may produce
Measuring production – once the new process are formalized and employees are trained on how
to perform you can begin to measure for expected performance and begin enforcing minimums.
Do get also production standards and implementation procedures. Once these standards are
known, the manager is responsible in figuring out how to motivate and train the employees to
reach these new standards.
Production or Technical Feasibility
These series of questions below are helpful in deciding the technical requirement of the
business.
1. Are enough raw materials of the correct quality available when needed for year round
production?
2. Is the cost of the raw materials satisfactory?
3. Are the correct size and type of equipment available for expected production level
and is it at reasonable cost?
4. Can it be made by local workshops? Are maintenance and repair cost affordable?
5. Are sufficient information and expertise available to ensure that the food is
consistently made at the required quality?
6. Are suitable packaging materials available and affordable?
7. Are distribution procedures to retailers or other sellers established?
8. Is a suitable building available? What modifications are needed?
9. Are services (fuel, water, electricity) available and affordable?
10. Are trained workers available are their salaries affordable?

Contents of production or Technical Feasibility

Product Description Matters in
Every Business Organization
Product description are a promising
aspect of your marketing campaigns.
 1. Production Planning
2. Raw materials and Ingredients
3. Equipment required
4. Packaging
5. Staffing levels
Benefits of product description
1. Boosting brand reputation – brand building is of a paramount business for every
business organization. Factual and striking product description services are helpful in
brand development, especially the small scale enterprises or startups. It should include
eye catchy taglines or familiar phrases to get the customers focus instantly.

2. Tempting your customers – content is considered to be the king of the website . it is

essential to have a good number of valuable and trustworthy customers who can enhance
your business success in the long run. The outsourcing service providers will support the
descriptions with the striking related images. Customers pay deep attentions to the
performance of the products in the market before the purchase. The product description
writers should plan a motive of creating a powerful description that would convert
potential customers into actual buyers.
3. No copy paste technique – to ease the process and save time most of the e commerce
entrepreneur copy and paste the product descriptions from different websites. But this can
turn out to be fundamental error for most of the business.

Outsourcing the product description services covers certain benefits such as:
 Keeping the description to the point and effectual.
 Enhancing the knowledge base of customers.
 Generating professional description.
 A pool of dedicated, proficient, and experienced writers.
 Increasing website traffic visitors.
 Including multiple products based images for extra ordinary appeal.
 Explaining the product in details, from features to cost, and much more.
 Presenting a clarity-enriching copy of descriptions.
 Highlighting the multiple purposes of the products for targeting different sect of
audiences.
 Creating a short and enchanting title.
 Writing the description, focusing on the buyer’s insight.
 Including bullet points for greater clarity and preciseness.
 Comprehensive data security norms.
 Delivering the content within the mentioned time.
The best product
description service is highly
essential for your brand’s
success in the long run.

A prototype is an early sample, model, or

release of a product built to test a concept
or process. A prototype is generally used
to evaluate a new design to enhance
precision by system analysts and users.
Prototyping serves to provide
specifications for a real, working system
rather than a theoretical one.
 HOW TO MAKE A PRODUCT PROTOTYPE

A prototype is an incomplete or raw version of application being developed. Not

only do prototypes help you reduce time and costs, but they also help you identify key
issues in your user flow and design that would be even more expensive to fix later.

1. DEFINE

➤ Define your application in simplest manner possible. Include the bare bones
such as the purpose it serves, basic functions, features of the application among other
things. Also include any information you have about market demand

2. RESEARCH
➤ Your idea may sound highly convincing to your family and friends. It may
feel like you’re going to get rich quick. However, the true litmus test for your idea is
proper market research. Research plays one of the most important roles in gauging the
true worth of your idea. When conducting thorough market research, you must use
everything from qualitative information such as reviews from appropriate professionals,
systematic literature searches, as well as quantitative data like surveys, web traffic, social
engagement among other analytics tools.
➤ You also want to cap off your research by creating user personas that will help
to communicate a roster of features, non-negotiable and brand guidelines to help
designers and developers create the user experience you have envisioned.

3. BUILD ACCOUNTS
➤Armed with your market research, you can begin to build a low-fidelity
wireframe. Wireframes are the skeletal structure of your app – just bare bone raw
structure without any design elements. Today, wire framing is easy with the tons of drag
& drop apps like Balsamic, Just in mind and Sketch to name a few. Not only is the
process quick and dirty, your wireframes can get surprisingly high-fidelity in a short span
of time with these apps. Interactive wireframes also help you gain clarity about the
functionality, adaptability and viability of your app.

4. TEST

➤ So, now you have a high-fidelity interactive prototype of what your app is going to
look like. You’ll want to your mobile app prototype to the test and step-by-step go
through the process of redefining your wireframe based on user flow and interactions.
Usability tests are a crucial component in the process of creating a well-flowing
application. Repeating your tests and tweaking each subsequent is key to ensuring your
prototype is not just aesthetically pleasing but functional as well.

5. REFINE

➤ Don’t be surprised if you or your team miss things even after carrying out
usability tests. It is common for startups and tech firms to find some loopholes when
putting prototypes to the test even if the application looked perfect on paper before you
began your testing. Iteration is an integral part of designing and developing an
application. One thing to keep in mind – make sure you note down the patterns and
problems that your participants experienced in their journey is essential while carrying
out a usability test.

At the time of having feedbacks from users and stakeholders it is impossible to execute
every comment on board so it is better suggested to be concerned about changes that will
have major impacts.
Testing a prototype / developed design is a very important part of the design and
manufacturing process. Testing and evaluation, simply confirms that the product will
work as it is supposed to, or if it needs refinement.

In general, testing a prototype allows the designer and client to assess the viability of a
design. Will it be successful as a commercial product? Testing also helps identify
potential faults, which in turn allows the designer to make improvements.

There are many reasons why testing and evaluation takes place. Some reasons are
described below

Testing and evaluation allows the client / customer to view the prototype and give his/
her views. Changes and improvements are agreed to
further work carried out. A focus group can try out
the prototype and give their views and opinions .
faults and problems are often identified at this stage.
Suggestions for improvements are often made at
this stage.

Safety issues are

sometimes identified by thorough testing and evaluation. The
prototype can be tested against any relevant regilations and
legilation. Adjustments/ improvements to the design can then
be made.

Evaluating a prototype allows the production

costs to be assessed and finalised. Every stage
of manufacturing can be scrutinised for
potential costs. If the client has set financial
limits / restrictions, then alterations to the
design or manufacturing processes, may have
to be made. This may lead to alternative and
cheaper manufacturing processes being selected, for future production.

Component failure is often identified during the testing process.

This may mean a component is redesign and not the entire product.
Sometimes a component or part of a product, will be tested
separately and not the whole product. This allows more specific tests
to be carried out.

Evaluating the manufacture of the prototype, allows the

designer to plan an efficient and cost effective
manufacturing production line.

Prototype testing can be carried out alongside

the testing of similar designs or even the
products of competitors. This may lead to
improvements.

Testing ensures that any user instructions can be worked out, stage by stage,
so that the future consumer can use the product efficiently and safely. This
guarantees customer satisfaction.
Testing a prototype allows ‘concept’ designs to be evaluated fully. This is
sometimes called ‘proof of concept’. This usually happens during the early
development of a product.
Testing against the design specification, helps ensure a full and relevant
evaluation of a prototype is carried out. This should be carried out during the entire
development process.
 
The testing and evaluation phrase, allows fellow designers, knowledgeable in the
specialist area, to offer opinions and suggest critical improvements. This may lead
to a more successful design.
 A prototype provides other advantages, as well:

1. It enables you to test and refine the functionality of your design. Sure, your idea
works perfectly in theory. It's not until you start physically creating it that you'll
encounter flaws in your thinking. That's why another great reason to develop a
prototype is to test the functionality of your idea. You'll never know the design
issues and challenges until you begin actually taking your idea from theory to
reality.

2. It makes it possible to test the performance of various materials. For example,

your heart may be set on using metal--until you test it and realize that, say, plastic
performs better at a lower cost for your particular application. The prototype stage
will help you determine the best materials.

3. It'll help you describe your product more effectively with your team, including
your attorney, packaging or marketing expert, engineers and potential business
partners.

4. It will encourage others to take you more seriously. When you arrive with a
prototype in hand to meet any professional--from your own attorney to a potential
licensing company--you separate yourself from the dozens of others who've
approached them with only vague ideas in mind. Instead, you'll be viewed as a
professional with a purpose, as opposed to just an inventor with a potentially good
idea.

Prototype testing is the process of testing the

original model on which a physical product will be
based. While many businesses believe that
a prototype needs to be perfect before testing, the
truth is that it's wise to evaluate market response at
an early stage
Steps for Market Testing a Product

The following steps are crucial when

testing a physical product in the marketplace.

1. Assessing the Market

When testing a physical product, it’s important to
consider whether there’s an addressable market
for it. After all, it doesn’t matter how great a
product is if it doesn’t fulfill a current need in the
marketplace. If you want to know what people are
searching for, Google Trends is a helpful tool for
assessing the interest level in an existing product. Not only can
you determine the volume of searches for a topic, but you can also see whether an
item’s popularity is increasing or decreasing.
Additionally, small businesses may want to consider crowdfunding as a platform for
market research. Entrepreneurs can gauge market interest by proposing business ideas
and products and inviting individuals and groups to donate through a variety of platforms.
Along with allowing businesses to assess interest levels, crowdfunding is a great way to
attract customer interest, thus helping you to market your product before it hits the
shelves.

2. Define Expectations
Prototype testing is only useful if you first define clear objectives. Along with defining
the goals of the test itself, businesses can increase the odds of success by considering
variables like audience size, and by setting specific timelines for gathering results.
Additionally, business owners should take time to consider all product features
and choose audience participants accordingly.

3. Select Your Audience

Choosing the right audience helps ensure your
physical product test is as useful as possible. When
selecting participants, it’s important to try to mimic
the composition of your desired market.
Along with factors like age, gender, and income
level, consider whether users have prior experience
with a given product as well as their general level of
interest. If users aren’t interested in using a product, they may not pay close enough
attention to its flaws. The end result is a review that is falsely positive and not as helpful
as you might have hoped.
Additionally, business owners should start building a network of users early in the
process. The goal is to make connections today so that tomorrow’s physical prototype test
provides results that are as accurate and relevant as possible.

4. Create a Presentation
A good problem presentation can be a vital part of the market
testing process. While a product presentation is designed to
introduce an item to consumers, a problem presentation details
the business’ understanding of the product’s biggest issues.
The goal is to garner information from your market at the prototype stage,
when making changes is less cost prohibitive.
Although it’s wise to create your problem presentation before testing a prototype, the
hope is that your participants will raise these issues on their own.

5. Suggest Solutions
It’s not enough to identify problems through
your market testing; savvy developers also use
the opportunity to suggest possible solutions to
their target audiences. When presenting your
ideas, concentrate on conveying the big
idea rather than a laundry list of technical changes that may go over participants’ heads.
Next, take time to observe your audience’s reaction and ask for feedback.
The goal is to ensure that your proposed solutions make sense and correct the most
significant usability issues. You should then redesign any plans that don’t make the
grade. Remember: this isn’t the stage for selling users on your product. Instead, use the
occasion to collect invaluable feedback about your ideas.

Physical Product Testing Services

Businesses often assume that online testing companies

only assess web-based products. but some sites also
 offer testing services for hardware products. Understanding that physical products must
be distributed to beta testers, businesses like Center code handle the distribution and
tracking of prototypes for testing. Center code also manages tester recruitment and assists
companies in collecting the most valuable feedback.
It’s not enough to create a product that sounds good on paper; savvy developers must also
ensure their products hold up to customer expectations and the rigors of daily usage.
Testing your physical product helps ensure that your prototype has a market, and that the
final product will meet your customers’ expectations.

https://quickbooks.intuit.com/r/selling/is-there-a-market-for-your-prototype-how-to-test-
a-physical-product/
https://www.slideshare.net/shahidamuhamedd/role-of-product-description-service-in-a-
business?qid=3f39f7b3-b1c0-4f93-b21c-65a909d1c0e7&v=&b=&from_search=1

https://www.slideshare.net/andappsmarketing/how-to-make-a-product-prototype?
qid=f5147062-61cb-4574-87f7-1886f39ae7d5&v=&b=&from_search=6

ACTIVITY 1.1

Identify the following.

1._________ and 2._________________ The most critical factors in the whole production system.

3._______________ simply refers to the human workforce involved in the manufacture of

products.It is considered as the most critical and important factor of production.
4._______________ refers to the process or technique of converting raw materials to finished
goods.The raw material undergoes several stages before it is completed and becomes ready for
delivery to the target consumers.
5._______________ The product is the physical output of the whole production process. It
should be valuable and beneficial to the consumers and should satisfy their basic needs and
wants
6.______________ has a physical appearance, taste, or chemical content that can hardly be
distinguished from that of the other products.
7.______________ has dissimilar characteristics, parts, and physical appearance. It can easily be
identified from other products.
8._____________ refers to how the product will be produced.
9._____________ simply refers to the raw materials needed in the production of a product.
Materials basically form part of the finished product.
10.____________ refers to the manufacturing equipment used in the production of goods or
delivery of services.

MODULE #02 WEEK #02

Learning Objectives:
At the end of the lesson the learners are able to:
a. validate the service description of the product with potential
customers to determine its market acceptability.
b. Select/pinpoint potential supppliers of raw materials and other
inputs necessary for the production of the product or services.
c. Discuss the value/supply chain in relation to the business
enterprise.
 Product Validation Process - is the second of the verification and validation processes
conducted on an implemented or integrated end product. While verification proves
whether “the product was done right,” validation proves whether “the right product was
done.” In other words, verification provides objective evidence that every “shall”
statement in the requirements document or specification was met, whereas validation is
performed for the benefit of the customers and users to ensure that the system functions
in the expected manner when placed in the intended environment. This is achieved by
examining the products of the system at every level of the product structure and
comparing them to the stakeholder expectations for that level. A well-structured
validation process can save cost and schedule while meeting the stakeholder expectations.

System validation confirms that the integrated realized end products conform to
stakeholder expectations. Validation also ensures that any anomalies discovered are

appropriately resolved prior to product delivery. This section discusses the process
activities, methods of validation, inputs and outputs, and potential deficiencies.

Inputs
Key inputs to the process are:

 End product to be validated: This is the end

product that is to be validated and which has
successfully passed through the verification
process.
 Validation plan: This plan would have been developed under the Technical Planning
Process and baselined prior to entering this process. This plan may be a separate
document or a section within the Verification and Validation Plan.
 Baselined stakeholder expectations: These would have been developed for the product
at this level during the Stakeholder Expectations Definition Process. It includes the needs,
goals, and objectives as well as the baselined and updated concept of operations and
MOEs.
 Any enabling products: These are any special equipment, facilities, test fixtures,
applications, or other items needed to perform the Product Validation Process.

Process Activities
The Product Validation Process demonstrates that the end product satisfies its stakeholder
(customer and other interested party) expectations (MOEs) within the intended operational
environments, with validation performed by anticipated operators and/or users whenever
 possible. The method of validation is a function of the life cycle phase and the position of the
end product within the system structure.
There are five major steps in the validation process: (1) preparing to conduct validation, (2)
conduct planned validation (perform validation), (3) analyze validation results, (4) prepare a
validation report, and (5) capture the validation work products.
The objectives of the Product Validation Process are:

 To confirm that the end product fulfills its intended use when operated in its intended
environment:
o Validation is performed for each implemented or integrated and verified end
product from the lowest end product in a system structure branch up to the top
level end product (the system).
o Evidence is generated as necessary to confirm that products at each layer of the
system structure meet the capability and other operational expectations of the
customer/user/operator and other interested parties for that product.
 To ensure the human has been properly integrated into the system:
o The user interface meets human engineering criteria.
o Operators and maintainers have the required skills and abilities.
o Instructions are provided and training programs are in place.
o The working environment supports crew health and safety.
 To ensure that any problems discovered are appropriately resolved prior to delivery of the
end product (if validation is done by the supplier of the product) or prior to integration
with other products into a higher level assembled product (if validation is done by the
receiver of the product).

Methods of Validation
Analysis: The use of mathematical modeling and analytical techniques to predict the
suitability of a design to stakeholder expectations based on calculated data or data derived
from lower system structure end product verifications. Analysis is generally used when a
prototype; engineering model; or fabricated, assembled, and integrated product is not
available. Analysis includes the use of modeling and simulation as analytical tools. A model
is a mathematical representation of reality. A simulation is the manipulation of a model.
Demonstration: Showing that the use of an end product achieves the stakeholder
expectations as defined in the NGOs and the ConOps. It is generally a basic confirmation of
behavioral capability, differentiated from testing by the lack of detailed data gathering.
Demonstrations can involve the use of physical models or mock-ups; for example, an
expectation that controls are readable by the pilot in low light conditions could be validated
by having a pilot perform flight-related tasks in a cockpit mock-up or simulator under
those conditions.
Inspection: The visual examination of a realized end product. Inspection is generally used to
validate the presence of a physical design features or specific manufacturer identification.
For example, if there is an expectation that the safety arming pin has a red flag with the
words “Remove Before Flight” stenciled on the flag in black letters, a visual inspection of the
arming pin flag can be used to determine if this expectation has been met.

Test: The use of an end product to obtain detailed data needed to determine a behavior,
or provide sufficient information to determine a behavior through further analysis.
Testing can be conducted on final end products, breadboards, brassboards, or prototypes.
Testing produces information at discrete points for each specified expectation under
controlled conditions and is the most resource-intensive validation technique.

Product Validation Preparation

To prepare for performing product validation, the appropriate set of expectations, including
MOEs and MOPs, against which the validation is to be made should be obtained. In addition to
the V&V Plan, other documentation such as the ConOps and HSI Plan may be useful. The
product to be validated (output from implementation, or integration and verification), as well as
the appropriate enabling products and support resources (requirements identified and acquisition
initiated by design solution activities) with which validation will be conducted should be
collected. Enabling products includes those representing external interfacing products and
special test equipment. Support resources include personnel necessary to support validation and
operators. Procedures, capturing detailed step-by-step activities and based on the validation type
and methods are finalized and approved. Development of procedures typically begins during the
design phase of the project life cycle and matures as the design is matured. The validation
environment is considered as part of procedure development. Operational scenarios are assessed
to explore all possible validation activities to be performed. The final element is preparation of
the validation environment; e.g., facilities, equipment, software, and climatic conditions.
When operator or other user interaction is involved, it is important to ensure that humans are
properly represented in the validation activities. This includes physical size, skills, knowledge,
training, clothing, special gear, and tools. When possible, actual end users/operators should be
used and other stakeholders should participate or observe activities as appropriate and practical.
Outcomes of validation preparation include the following:

 The validation plan, approved procedures, supporting configuration documentation, and

an appropriate baseline set of stakeholder expectations are available and on hand;
 Enabling products are integrated within the validation environment according to plans
and schedules;
 Users/operators and other resources are available according to validation plans and
schedules; and
 The validation environment is evaluated for adequacy, completeness, readiness, and
integration.

Perform Product Validation

The act of validating the end product is performed as spelled out in the validation plans and
procedures, and the conformance established to each specified stakeholder expectation (MOEs
and ConOps) shows that the validation objectives were met. Validation differs from qualification
testing. Validation testing is focused on the expected environments and operations of the system
where as qualification testing includes the worst case loads and environmental requirements
within which the system is expected to perform or survive. The verification lead should ensure
that the procedures were followed and performed as planned, the validation-enabling products
and instrumentation were calibrated correctly, and the data were collected and recorded for
required validation measures.
When a discrepancy is observed, the validation should be stopped and a discrepancy report
generated. The activities and events leading up to the discrepancy should be analyzed to
determine if a nonconforming product exists or there is an issue with the verification procedure,
conduct, or conditions. If there are no product issues, the validation is replanned as necessary,
the environment preparation anomalies are corrected, and the validation is conducted again with
improved or correct procedures and resources. The Decision Analysis Process should be used to
make decisions with respect to needed changes to the validation plans, environment, and/or
conduct.
Outcomes of performing validation include the following:

 A validated product is established with supporting confirmation that the appropriate

results were collected and evaluated to show completion of validation objectives.
 A determination is made as to whether the fabricated/manufactured or assembled and
integrated products (including software or firmware builds and human element
allocations) comply with their respective stakeholder expectations.
 A determination is made that the validated product was appropriately integrated with the
validation environment and the selected stakeholder expectations set was properly
validated.
 A determination is made that the product being validated functions together with
interfacing products throughout their operational envelopes.

Analyze Product Validation Results

Once the validation activities have been completed, the results are collected and the data are
analyzed to confirm that the end product provided will supply the customer’s needed capabilities
within the intended environments of use, validation procedures were followed, and enabling
products and supporting resources functioned correctly. The data are also analyzed for quality,
integrity, correctness, consistency, and validity, and any unsuitable products or product attributes
are identified and reported.
It is important to compare the actual validation results to the expected results. If discrepancies
are found, it needs to be determined if they are a result of the test configuration or analysis
assumptions or whether they are a true characteristic or behavior of the end product. If it is found
to be a result of the test configuration, the configuration should be corrected and the validation
repeated. If it is found to be a result of the end product being validated, discussions with the
customer should be held and any required system design and product realization process
activities should be conducted to resolve deficiencies. The deficiencies along with recommended
corrective actions and resolution results should be recorded, and validation should be repeated,
as required.
Outcomes of analyzing validation results include the following:

 Product anomalies, variations, deficiencies, nonconformance and/or issues are identified.

 Assurances that appropriate re-planning, redefinition of requirements, design, and
revalidation have been accomplished for resolution of anomalies, variations, deficiencies
or out-of-compliance conditions (for problems not caused by poor validation conduct).
 Discrepancy and corrective action reports are generated as needed.
 The validation report is completed.

Prepare Report and Capture Product Validation Work Products

Validation work products (inputs to the Technical Data Management Process) take many forms
and involve many sources of information. The capture and recording of validation-related data is
a very important, but often underemphasized, step in the Product Validation Process.
Validation results, deficiencies identified, and corrective actions taken should be captured, as
should all relevant results from the application of the Product Validation Process (related
decisions, rationale for decisions made, assumptions, and lessons learned).
Outcomes of capturing validation work products include the following:

 Work products and related information generated while doing Product Validation Process
activities and tasks are recorded; i.e., method of validation conducted, the form of the end
product used for validation, validation procedures used, validation environments,
outcomes, decisions, assumptions, corrective actions, lessons learned, etc. (often captured
in a matrix or other tool—see Appendix E).
 Deficiencies (e.g., variations and anomalies and out-of-compliance conditions) are
identified and documented, including the actions taken to resolve.
 Proof is provided that the end product is in conformance with the stakeholder expectation
set used in the validation.
 Validation report including:
o Recorded validation results/data;
o Version of the set of stakeholder expectations used;
o Version and form of the end product validated;
o Version or standard for tools and equipment used, together with applicable
calibration data;
o Outcome of each validation including pass or fail declarations; and
o Discrepancy between expected and actual results.

Outputs
Key outputs of validation are:

 Validated end product: This is the end product

that has successfully passed validation and is ready
to be transitioned to the next product layer or to
the customer.
 Product validation results: These are the raw
results of performing the validations.
  Product validation report: This report provides the evidence of product conformance
with the stakeholder expectations that were identified as being validated for the product
at this layer. It includes any nonconformance, anomalies, or other corrective actions that
were taken.
 Work products: These include procedures, required personnel training, certifications,
configuration drawings, and other records generated during the validation activities.

Success criteria for this process include: (1) objective evidence of performance and the
results of each system-of-interest validation activity are documented, and (2) the validation
process should not be considered or designated as complete until all issues and actions are
resolved.

Choosing the right supplier involves much more than scanning

a series of price lists. Your choice will depend on a wide range
of factors such as value for money, quality, reliability and service.
How you weigh up the importance of these different factors
will be based on your business' priorities and strategy.

A strategic approach to choosing suppliers can also help you to

understand how your own potential customers weigh up their
purchasing decisions.

This guide illustrates a step-by-step approach you can follow

that should help you make the right choices. It will help you decide what you need in a supplier,
identify potential suppliers and choose your supplier.

 Thinking strategically when selecting suppliers

 What you should look for in a supplier
 Identifying potential suppliers
 Drawing up a shortlist of suppliers
 Choosing a supplier
 Getting the right supplier for your business

Thinking strategically when selecting suppliers

The most effective suppliers are those who offer products or services that match - or exceed - the
needs of your business. So when you are looking for suppliers, it's best to be sure of your
business needs and what you want to achieve by buying, rather than simply paying for what
suppliers want to sell you.

For example, if you want to cut down the time it takes you to serve your customers, suppliers
that offer you faster delivery will rate higher than those that compete on price alone.

For some pointers to help you identify what you want from suppliers, see the page in this guide
on what you should look for in a supplier.

The numbers game

It's well worth examining how many suppliers you really need. Buying from a carefully targeted
group could have a number of benefits:

 it will be easier to control your suppliers

 your business will become more important to them
 you may be able to make deals that give you an extra competitive advantage

However, it's important to have a choice of sources. Buying from only one supplier can be
dangerous -where do you go if they let you down, or even go out of business?

Equally, while exclusivity may spur some suppliers to offer you a better service, others may
simply become complacent and drop their standards.
What you should look for in a supplier

Reliability

Remember - if they let you down, you may let your customer down.

Quality

The quality of your supplies needs to be consistent - your customers associate poor quality with
you, not your suppliers.

Value for money

The lowest price is not always the best value for money. If you want reliability and quality from
your suppliers, you'll have to decide how much you're willing to pay for your supplies and the
balance you want to strike between cost, reliability, quality and service.

Strong service and clear communication

You need your suppliers to deliver on time, or to be honest and give you plenty of warning if
they can't. The best suppliers will want to talk with you regularly to find out what needs you
have and how they can serve you better.

Financial security

It's always worth making sure your supplier has sufficiently strong cash flow to deliver what you
want, when you need it. A credit check will help reassure you that they won't go out of business
when you need them most.

A partnership approach

A strong relationship will benefit both sides. You want your suppliers to acknowledge how
important your business is to them, so they make every effort to provide the best service
possible. And you're more likely to create this response by showing your supplier how important
they are to your business.

Identifying potential suppliers

You can find suppliers through a variety of channels. It's best to build up a shortlist of possible
suppliers through a combination of sources to give you a broader base to choose from.

Recommendations

Ask friends and business acquaintances. You're more likely to get an honest assessment of a
business' strengths and weaknesses from someone who has used its services.

Directories

If you're looking for a supplier in your local area, it's worth trying directories such as Yellow
Pages and Thomson.

Trade associations

If your needs are specific to a particular trade or industry, there will probably be a trade
association that can match you with suitable suppliers.

Business advisors

Local business-support organizations, such as chambers of commerce, can often point you in the
direction of potential suppliers. You can also contact our Strategic Information Centre.

Exhibitions
 Exhibitions offer a great opportunity to talk with a number of potential suppliers in the same
place at the same time. Before you go to an exhibition, it's a good idea to check that the
exhibitors are relevant and suitable for your business.

Trade press

Trade magazines feature advertisements from potential suppliers. You can contact our Strategic
Information Centre for a list of specialist trade magazines.

Drawing up a shortlist of suppliers

Once you've got a clear idea of what you need to buy and you've identified some potential
suppliers, you can build a shortlist of sources that meet your needs.

When considering the firms on your shortlist, ask yourself the following questions:

 Can these suppliers deliver what you want, when you want it?
 Are they financially secure?
 How long have they been established?
 Do you know anyone who has used and can recommend them?
 Are they on any approved supplier lists from trade associations or government?

Do some research and try to slim your list down to no more than four or five candidates. It's a
waste of time for you and the potential supplier if you approach them when there's little chance
of them fulfilling your requirements.

Choosing a supplier

Once you have a manageable

shortlist, you can approach the
potential suppliers and ask for a
written quotation and, if appropriate,
a sample. It's best to provide them
with a clear brief summarising what
you require, how frequently you'll
require it and what level of business
you hope to place.

Get a quotation

It's worth asking potential suppliers to give you a firm price in writing for, say, three months.
You can also ask about discounts for long-term or high-volume contracts.

Compare potential suppliers

When you've got the quotation, compare the potential suppliers in terms of what matters most to
you. For example, the quality of their product or service may be most important, while their
location may not matter.

Price is important, but it shouldn't be the only reason you choose a supplier. Lower prices may
reflect poorer quality goods and services which, in the long run, may not be the most cost
effective option. Be confident that your supplier can make a sufficient margin at the price quoted
for the business to be commercially viable.

Check that the supplier you employ is the one that will be doing the work. Some suppliers may
outsource work to subcontractors, in which case you should also investigate the subcontractor to
determine if you are happy with this arrangement.
Wherever possible it is always a good idea to meet a potential supplier face to face and see how
their business operates. Understanding how your supplier works will give you a better sense of
how it can benefit your business.

And remember that your business' reputation may be judged on the labour practices of your
suppliers. It makes good business sense to consider the ethical dimensions of your supply chain.

Negotiate terms and conditions

Once you've settled on the suppliers you'd like to work with, you can
move on to negotiating terms and conditions and drawing up a contract.
See our guide on how to negotiate the right deal with suppliers.

Getting the right supplier for your business

Know your needs

Make sure you know what you need. Don't be tempted by

sales pitches that don't match your requirements.
Understand the difference to your business between a
strategic supplier, who provides goods or services that are
essential to your business - such as high-value raw
materials - and non-strategic suppliers who provide low-
value supplies such as office stationery. You will need to
spend much more time selecting and managing the former
group than the latter.

Spend time on research

Choosing the right suppliers is essential for your business. Don't try to save time
by buying from the first supplier you find that may be suitable.

Ask around

People or other businesses with first-hand experience of suppliers can give you
useful advice.

Credit check potential suppliers

It's always worth making sure your supplier has sufficiently strong cash flow to deliver what you
want, when you need it. A credit check will also help reassure you that they won't go out of
business when you need them most.

Price isn't everything

Other factors are equally important when choosing a supplier -

reliability and speed, for example. If you buy cheaply but persistently
let down your customers as a result, they'll start to look elsewhere.

Agree on service levels before you start

It's a good idea to agree on service levels before you start trading so you know what to expect
from your supplier - and they know what to expect from you. See our guide on how to manage
your suppliers.

Don't buy from too many suppliers...

It will be easier for you to manage - and probably more cost-effective - if you limit the number
of sources you buy from. This is particularly the case with low value-added suppliers.

...but don't have just a single supplier

It's always worth having an alternative supply source ready to help in difficult times. This is
particularly important with regard to suppliers strategic to your business' success.

Value Chain

The idea of a value chain was

pioneered by American
academic Michael Porter in his
1985 book "Competitive
Advantage: Creating and
Sustaining Superior
Performance."1 He used the
idea to show how companies
add value to their raw
materials to produce products
that are eventually sold to the
public.

The concept of the value chain

comes from a business
management perspective.
Value chain managers look for opportunities to add value to the business. They may look for
ways to cut back on shortages, prepare product plans, and work with others in the chain to add
value to the customer.

There are five steps in the value chain process. They give a company the ability to create value
exceeding the cost of providing its goods or service to customers. Maximizing the activities in
any one of the five steps allows a company to have a competitive advantage over competitors in
its industry. The five steps or activities are:

1. Inbound Logistics: Receiving, warehousing, and inventory control.

2. Operations: Value-creating activities that transform inputs into products, such as
assembly and manufacturing.
3. Outbound Logistics: Activities required to get a finished product to a customer. These
include warehousing, inventory management, order fulfillment, and shipping.
4. Marketing and Sales: Activities associated with getting a buyer to purchase a product.
5. Service: Activities that maintain and enhance a product's value, such as customer support
and warranty service.

In order to help streamline the five primary steps, Porter says the value chain also requires a
series of support activities. These include procurement, technology development, human
resource management, and infrastructure.

A profitable value chain requires

connections between what consumers
demand and what a company produces.
Simply put, the connection or sequence in
the value chain originates from the
customer's request, moves through the
value chain process, and finally ends at the
finished product. Value chains place a great
amount of focus on things such as product
testing, innovation, research and
development, and marketing.

Supply Chain
The supply chain comprises the flow of all information, products, materials, and funds between
different stages of creating and selling a product to the end-user.2 The concept of the supply
chain comes from an operational management perspective. Every step in the process—
including creating a good or service, manufacturing it, transporting it to a place of
sale, and selling it—is part of a company's supply chain.

The supply chain includes all functions involved in receiving and filling a customer request.
These functions include:

 Product development 
 Marketing 
 Operations 
 Distribution 
 Finance 
 Customer service

Supply chain management is an important process for most companies and involves many links
at large corporations. For this reason, supply chain management requires a lot of skill and
expertise to maintain.

While many people believe logistics—or the transportation of goods—to be synonymous with
the supply chain, it is only one part of the equation. The supply chain involves the coordination
of how and when products are manufactured along with how they are transported.

The primary concerns of supply chain management are the cost of materials and effective
product delivery. Proper supply chain management can reduce consumer costs and increase
profits for the manufacturer.

You can’t typically grow your business without growing the number of people with whom you
work. Your success will depend on your ability to put together a team of highly qualified people
who are committed to the goals and objectives of your firm.

If your business is in an early stage of growth, you will most likely be the person doing the
recruiting and hiring. As your business grows, it will be important to hire the right top managers,
as these managers will recruit and hire the staff. Plan a method for recruiting and hiring the very
best people you can find. Such a plan requires four strengths:

 An understanding of how hiring will support your business strategy

 A philosophy of whom to hire and recruit
 An employment package that can entice superior employees
 A step-by-step hiring process that follows your state’s and federal hiring laws

Organizations with a solid business strategy are more likely to succeed, but they have to align
their business operations to their strategy. Nothing is more important in this regard than your
hiring and recruitment efforts. When you begin thinking about hiring, ask yourself why you’re
considering it and make sure that your rationale is aligned with your strategic objectives.

Your business will benefit if you know what you’re trying to accomplish in hiring. For many
entrepreneurial businesses, hiring capable, self-motivated employees provides a competitive
advantage. Prospective hires should have not only great technical skills but also the motivation to
make the business a success.

Look for employees who:

 Embody the company’s values.

 Work hard and work smart.
 Have the specific skills required.
 Learn quickly when new skills are needed.
 Are able to work with little supervision.
  Take initiative to make things happen.
 Are comfortable in the uncertainty of an entrepreneurial situation.
 Are flexible to business needs and changing requirements.

The key in hiring for your company is not necessarily finding people who thrive in uncertainty
but rather finding people who thrive in the kind of organizational culture your company strives
for. Resist the urge to hire people just because they share the same personality traits and
background as you. Businesses benefit from having different points of view to challenge and
develop the company into the future.

Ewing Marion Kauffman offered his personal twist to the talent equation with this advice to
entrepreneurs: “Hire people who are smarter than you! In doing so, you prevent limiting the
organization to the level of your own ability—and you grow the capabilities of your company.”
Kauffman also said, “If you hire people you consider smarter than you, you are more likely to
listen to their thoughts and ideas, and this is the best way to expand on your own capabilities and
build the strength of your company.”

Finding qualified candidates is sometimes difficult because of competition, changing workforce

demographics, and workers’ values. To be successful, you may need to be open-minded and
creative. Strategies to attract the best talent include:

 Providing good management.

 Offering profit sharing and equity partnerships.
 Providing generous compensation packages.
 Having flexible work rules including job sharing, working at home, and flex-time.
 Providing challenging work assignments and learning opportunities.
 Using temporary help and contract labor and hiring the disabled and seniors.
 Offering strong health and benefits packages.
 Doing socially-responsible work.

Interviewing and hiring employees can be difficult and time consuming. Entrepreneurs can gain
confidence in their final decisions by following some of these hiring guidelines:

Use Applications—Before interviewing applicants, consider having them complete and sign an
employment application form, even if they have a resume. As a legal document, the application
form must conform to state and federal regulations. For example, it generally must specify if
employment with the firm is “at-will,” which means that employment can be terminated at any
time. Also, this application form must give the employer permission to verify information
submitted by the prospective employee. Human resources consultants can assist you with the
development of legal applications.

Screen—Save time conducting interviews by screening applicants beforehand using information

provided on the application form. Look for unexplained breaks in employment, omissions on the
application, career changes, and reasons for leaving other employers. Salary history, professional
affiliations, and overall professionalism in completing the form can also give clues about the
applicant.

Interview—Determine what you are looking for and develop interview questions in advance.
Develop questions that ask interviewees to tell you how they would respond to real workplace
situations. Ask every interviewee the same set of questions. Rate their answers in some
systematic way. Add up the scores. Use this scoring in combination with other information, but
don’t rely solely on the interview as the critical factor in hiring. Research shows that human
beings aren’t very good at making judgments about people from interviews.

Avoid Bias—Be aware that we tend to judge people who are similar to ourselves more highly
than those who are different from ourselves. This bias can cause you to hire clones who don’t
add anything to your organization’s skill set. It can also create a lack of diversity, limiting the
creativity and decision-making of your company. Recent studies have shown that persons tend to
rate others more highly if they exhibit physical beauty or attractiveness, regardless of their actual
qualifications; so beware of this tendency when interviewing. One of the best ways to determine
whether someone can do the job is to ask them to demonstrate that they can do it. Have writers
take writing tests, ask sales people to simulate a sales call, and have managers make difficult
case-study decisions.

References—Always check references to verify the information with additional research.

Studies show that about 30 percent of resumes contain some kind of false information. People
who overstate or falsify their job qualifications may cause future harm to your organization or
may be poor employees. Depending on the nature of your business and the type of job to be
filled, a criminal background check can provide critical information about a prospective
employee. A number of firms provide background checks on employment applicants.

The law prohibits businesses from asking potential employees certain questions or personal
information on applications. Check with your attorney or human resources consultant about
permissible areas of inquiry. In general, questions should relate to the applicant’s ability to
perform the job. Document all reasons for not offering a position to an apparently qualified
applicant. Maintain records for at least seven years.

Promote From Within

Apart from satisfied customers, a growing company needs skilled and competent managers
whom founders can trust, says Donna Boone, president of the Potomac Swim School, an indoor
swim facility in Ashburn, Virginia.

Boone launched Potomac Swim School in 2003 and plans to open additional swim facilities in
the Washington, D.C., area. That means finding managers with whom she feels comfortable
sharing authority.

“This is a classic stumbling block for entrepreneurs seeking to expand,” Boone says. “In my
case, I expect to promote from within, which means I must hire with an eye to developing
managerial talent. No longer can I view employees merely as part-time swim instructors. Instead,
I must look at them—and treat them—as potential managers, even partners. I must consider
whether they are individuals as committed as I am to both swimming and the school and to
learning the business from the ground up.”

https://www.investopedia.com/ask/answers/043015/what-difference-between-value-chain-
and-supply-chain.asp
https://www.infoentrepreneurs.org/en/guides/supplier-selection-process/
https://www.nasa.gov/seh/5-4-product-validation

Activity 2.1
1.what is prototype?
Enumerate how to make a product prototype.
2.
3.
4.
5.
6.
Identify the following.
7._______________ is a very important part of the design and manufacturing process. Testing
and evaluation, simply confirms that the product will work as it is supposed to, or if it needs
refinement.
8.______________ allows the client / customer to view the prototype and give his/ her views.
Changes and improvements are agreed to further work carried out. A focus group can try out the
prototype and give their views and opinions . faults and problems are often identified at this
stage. Suggestions for improvements are often made at this stage.
9._____________ are sometimes identified by thorough testing and evaluation. The prototype
can be tested against any relevant regilations and legilation. Adjustments/ improvements to the
design can then be made.
10._____________ a prototype allows the production costs to be assessed and finalised. Every
stage of manufacturing can be scrutinised for potential costs. If the client has set financial limits /
restrictions, then alterations to the design or manufacturing processes, may have to be made. This
may lead to alternative and cheaper manufacturing processes being selected, for future
production.

MODULE #03 WEEEK #03

Learning Objectives:
At the end of the lesson the learners are able to:
a. Recruit qualified people for one’s business enterprise.
b. Develop the business model.
c. Forecast the revenue of the business.
WHAT IS RECRUITMENT
In human resource management, “recruitment” is the process of finding and hiring the best and
most qualified candidate for a job opening, in a timely and cost-effective manner. It can also
be defined as the “process of searching for prospective employees and stimulating and
encouraging them to apply for jobs in an organization”.

A business model is a company's core strategy for profitably doing business. Models generally

include information like products or services the business plans to sell, target markets, and any
anticipated expenses. The two levers of a business model are pricing and costs.

THE 7 ELEMENTS OF A STRONG BUSINESS MODEL

Creating a business model isn’t simply about completing your business plan or determining
which products to pursue. It’s about mapping out how you will create ongoing value for your
customers.

Where will your business idea start, how should it progress, and when will you know you’ve
been successful? How will you create value for customers? Follow these simple steps to securing
a strong business model.

1. Identify your specific audience.

Targeting a wide audience won’t allow your business to hone in on customers who truly need
and want your product or service. Instead,  when creating your business model, narrow your
audience down to two or three detailed buyer personas. Outline each persona’s demographics,
common challenges and the solutions your company will offer. As an example, Home Depot
might appeal to everyone or carry a product the average person needs, but the company’s
primary target market is homeowners and builder

2. Establish business processes.

Before your business can go live, you need to have an understanding of the activities required to
make your business model work. Determine key business activities by first identifying the core
aspect of your business’s offering. Are you responsible for providing a service, shipping a
product or offering consulting? In the case of Ticketbis, an online ticket exchange marketplace,
key business processes include marketing and product delivery management.

3. Record key business resources.

What does your company need to carry out daily processes, find new customers and reach
business goals? Document essential business resources to ensure your business model is
adequately prepared to sustain the needs of your business. Common resource examples may
include a website, capital, warehouses, intellectual property and customer lists.

4. Develop a strong value proposition.

How will your company stand out among the competition? Do you provide an innovative
service, revolutionary product or a new twist on an old favorite? Establishing exactly what your
business offers and why it’s better than competitors is the beginning of a strong value
proposition. Once you’ve got a few value propositions defined, link each one to a service or
product delivery system to determine how you will remain valuable to customers over time.

5. Determine key business partners.

No business can function properly (let alone reach established goals) without key partners that
contribute to the business’s ability to serve customers. When creating a business model, select
key partners, like suppliers, strategic alliances or advertising partners. Using the previous
example of Home Depot, key business partners may be lumber suppliers, parts wholesalers and
logistics companies.
6. Create a demand generation strategy.

Unless you’re taking a radical approach to launching your company, you’ll need a strategy that
builds interest in your business, generates leads and is designed to close sales. How will
customers find you? More importantly, what should they do once they become aware of your
brand? Developing a demand generation strategy creates a blueprint of the customer’s journey
while documenting the key motivators for taking action.

7. Leave room for innovation.

When launching a company and developing a business model, your business plan is based on
many assumptions. After all, until you begin to welcome paying customers, you don’t truly know
if your business model will meet their ongoing needs. For this reason, it’s important to leave
room for future innovations. Don’t make a critical mistake by thinking your initial plan is a static
document. Instead, review it often and implement changes as needed.

Keeping these seven tips in mind will lead to the creation of a solid business plan capable of
fueling your startup’s success.

Your business revenue forecast is an essential part of future business planning. You need to

know approximately how much you can make throughout the year, your expected cash flow and
how much growth your business may experience. Revenue forecasting is not intended to give
you exact figures for yearly earnings.
Here are three things to keep in mind to assist you in forecasting your company's revenue.

1. Research thoroughly
It takes a significant amount of data to forecast revenue. In addition to your standard expenses
and recurring payments, look at data from competitors in similar growth stages as your business,
predicted seasonal trends and other increased revenue periods. Pull data from your analytics and
financial reports, industry case studies and reports, and other data sources for a compilation.

2. Provide a thorough breakdown of expenses

Obtain a full accounting of your yearly expenses. After all, figuring out your revenue is trickier
than anticipating your fixed costs. Look beyond your regular costs and estimate the amount of
occasional expense costs. Estimate irregular costs on the high side. It's better to plan for higher
costs and be pleasantly surprised if you have a budget surplus.

3. Review your company's cash flow history

You can't predict sudden growth phases, but you can estimate your future revenue based on your
company's performance during the last few years. If you are planning big changes, such as a new
product line or a major company announcement, look at revenue trends from similar events in
the past to guide you for the direction your business may be headed.
Entrepreneur recommends taking a look at revenue forecasting with two specific mindsets: the
optimistic approach and a more conservative estimate. You always want to hope for a high level
of success for your company, so the optimistic estimation looks at a best-case scenario for your
business. The conservative revenue forecast takes a more measured approach to determine how
much your company will bring in during the coming year.

https://www.accountingdepartment.com/blog/3-ways-to-forecast-your-revenue#:~:text=Your
%20business%20revenue%20forecast%20is,exact%20figures%20for%20yearly%20earnings.

https://www.cleverism.com/what-is-recruitment/

https://www.entrepreneurship.org/articles/2005/11/recruiting-and-hiring-capable-
selfmotivated-people
ACTIVITY 3.1
1. _______________ is the process of finding and hiring the best and most qualified candidate
for a job opening, in a timely and cost-effective manner

2-8. Enumerate the THE 7 ELEMENTS OF A STRONG BUSINESS MODEL

9._______________  is an essential part of future business planning.
10._____________ Obtain a full accounting of your yearly expenses.

MODULE #04 WEEK#04

Learning Objectives:
At the end of the lesson the learners are able to:
a. Forecast the cost to be incurred.
b. Compute for profits.

WHAT IS FORECASTING
Forecasting in accounting refers to the process of using
current and historic cost data
to predict future costs. Forecasting is important for planning purposes . it is necessary to
estimate and plan for costs that will be incurred prior to actually incurring them.
FINANCIAL FORECASTING- is an essential component of planning. It serves as a basis for
budgeting and for estimating future financing requirements.
 Internal financial –refers to cash flow generated by the business enterprise’s normal
operating business.
 External financing – refers to the capital provided by parties outside the business
enterprise, such as investor and banks.

STEPS IN PROJECTING A BUSINESS ENTERPRISE’S FINANCING NEEDS ARE:

1. Project the business enterprise’s sales.
2. Project additional variables, such as expense.
3. Estimate the level of investment in current and plant assets.
4. Calculate the business enterprise’s financing needs.

PERCENT-OF_SALES METHOD
 The most widely used method for projecting the business enterprise’s
financing needs.
 This method requires financial planners to estimate future expenses, assets
and liabilities as a percent of sales for that period.

Present year retained earnings =previous year retained earnings plus projected
net income less cash dividends paid.

External financing nedded=projected total assets less the sum of projected

equity.

External funds needed=required increase in assets less spontaneous increase in

liabilities less increase in retained earnings.

BUDGET- represent a business enterprise’s annual financial

plans.
A comprehensive (master) budget is a formal
statement of management’s expectation for
sale, expenses, volume and other financial
transactions for the coming period.

TYPES OF BUDGET
1. OPERATING BUDGET
 Sales Budget
 Production budget
 Direct material budget
 Direct labor budget
 Factory overhead budget
 Selling and administrative expense budget
 Pro forma income statement

2. FINANCIAL BUDGET
 Cash budget
 Pro forma statement of financial position.
 SALES BUDGET
-is the starting point in preparing the master budget, since estimated sales volume
influences nearly to all other items in the master budget.
-ordinarily indicates the quantity in units of each product the business enterprise expect to
sell.
Formula:
total sale=Expected sales in unit’s times the unit sales
price

PRODUCTION BUDGET
-after sales are budgeted, the production budget is
developed by determining the number of units expected to be manufactured in order to
meet budgeted sales and inventory requirements.
Formula:
Expected Production Volume
= Planned sales + Desired Ending Inventory –
Beginning Inventory.

DIRECT MATERIAL BUDGET

-It is constructed to show how much material will be required and how much be
purchased to meet production requirements.

Purchase in units = Usage + desired ending material inventory units – Beginning

Inventory units.

DIRECT LABOR BUDGET

-The production requirements in the production budget provide the starting point for the
preparation of the direct labor budget.

To compute direct labor requirements, multiply expected production volume for each
period by number of direct labor hour required to produce a single unit. The result is then
multiplied by the direct labor cost per hour to obtain budgeted total direct labor cost.

THE FACTORY OVERHEAD BUDGET

-it provides a schedule of all manufacturing costs, other than direct materials and direct
labor, such as depreciation, property taxes, and factory rent.

THE ENDING INVENTORY BUDGET

-it provides the information required for the construction of budgeted financial
statements.
-It helps compute the cost of good sold on the budgeted income statement and the peso
value of the ending materials and finished good inventory that appears on the budgeted
statement of financial position.

THE SELLING AND ADMINISTRATIVE EXPENSE BUDGET

-it lists the operating expenses incurred in selling the products and in managing the
business.

THE CASH BUDGET

-it helps managers anticipate the expected cash inflow and outflow for a designated time
period, keep cash balances in reasonable relationship to needs, and avoid both
unnecessarily idle cash and possible cash shortages.

4 MAJOR SECTIONS OF CASH BUDGET

1. Receipt Section- including the beginning cash balance, cash collections from
customers, and other receipts.
 2. Disbursement Section – comprising all cash payments that are planned during the
budget period.
3. Cash Surplus or deficit section – which shows the difference between the cash
receipts section and the cash disbursements section.
4. The financing portion – which provides a detailed account of the of the borrowings
and repayments expected during the budgeting period.

THE BUDGETED INCOME STATEMENT

-it summarizes projections for the various components of revenue and expenses for the
budgeting period.
Formula: Sales less variable costs less fixed cost.

https://www.slideshare.net/JeromeLoresca/chapter-6-financial-forecasting-and-budgeting

https://www.google.com/search?sxsrf=ALeKk00MpezIXlVRWvSn0OO0KtwOFtcsnw
%3A1597284588430&source=hp&ei=7KA0X-
7AF5yLr7wP4p2v6A4&q=forecast+the+cost+to+be+incurred+in+entrepreneurship&oq=forecast+the+co
st&gs_lcp=CgZwc3ktYWIQARgAMgIIADIGCAAQFhAeMgYIABAWEB4yBggAEBYQHjIGCAAQFhAeMgYIABA
WEB4yBggAEBYQHjIGCAAQFhAeMgYIABAWEB4yBggAEBYQHjoHCCMQ6gIQJzoECCMQJzoFCAAQsQM6C
AgAELEDEIMBOggILhCxAxCDAToLCC4QsQMQxwEQowI6AgguOgUILhCxA1DWI1jYtgFgnNQBaAFwAHgAg
AHiAYgB7w2SAQYxMi40LjGYAQCgAQGqAQdnd3Mtd2l6sAEG&sclient=psy-ab

ACTIVITY 4.1

1. ______________ in accounting refers to the process of using current and

historic cost data to predict future costs.
2. ______________ is an essential component of planning. It serves as a basis for
budgeting and for estimating future financing requirements.
3. ______________refers to cash flow generated by the business enterprise’s
normal operating business.
4. _____________ refers to the capital provided by parties outside the business
enterprise, such as investor and banks.
5. _____________represent a business enterprise’s annual financial plans.
6. _____________it summarizes projections for the various components of
revenue and expenses for the budgeting period.
7.- 10. Enumerate the 4 MAJOR SECTIONS OF CASH BUDGET.
MODULE #05 WEEK #05
Learning Objectives:
At the end of the lesson the learners are able to:
a. Implement business plan.

How to implement a business plan

Writing a business plan is actually quite a daunting prospect. Most start-ups do not know where
they will be in one month’s time, let alone five years. Many business plans are unrealistic, as
people dream of setting up the next “unicorn”.

The concept of having a solid business that simply makes money and is sustainable seems to be
lost. However, even the most realistic well-thought-out business plan is just a stack of paper if it
isn’t implemented. So how do you implement a business plan?

Your business plan has to be realistic

First and foremost you have to go back to the beginning. Is your business plan realistic and does
it have clear goals, objectives and aims that suit your aspirations? Do not get sucked into
following the mass opinion of what your plan should be like.

Although the list below is not exhaustive, your business plan should contain a clear outline of the
following:

• Business proposition – What is your product/service? Who are your clients? Who is your
competition? How are you going to sell your product or service?

• Management team – Who is your management team –  directors, key personnel and any
strategic partners and alliances you may have?

• Marketing – How are you going to promote (marketing, including market research, and pricing)
your product or service?

• Staff – Who do you need to employ and what is your organisational structure?

• Operations – More information about your office premises, and infrastructure needed, such as
IT, website, telecoms, and similar.

• Infrastructure – What is your trading entity, insurance needed, lawyers and accountants you
will be using?

• Finances – More information about your profit and loss forecasts, cash flow, finance needed,
and investment opportunities.
Set out your objectives
Once you have your business plan you should set out your objectives, for example, in the
recruitment industry, some of your objectives could include the following:

• Secure office space, set up the company/infrastructure and start trading within three months.

• Secure your first deal within two months of trading.

• Make one business deal every month from there on for the first year.

Set tasks to reach your objectives

Once you have set out your objectives, consider what tasks need to be completed so you can
achieve these.

Assign a person who is responsible for each step so that roles are clearly defined and there is
accountability in completing the tasks. Avoid micromanaging people with detailed explanations
of how to complete each task.

Some generic examples of this could be:

• Setting up an established company – You

• Finding an office – Office manager
• Setting up internet, phones and computers – Office manager
• Marketing collateral  - Marketing manager
• Recruitment – HR manager Securing new clients and business - Business development
manager
• Opening company bank account – You
• Social media management – Marketing manager
Time allocation
Each task should be paired with an appropriate time frame for completion.

You should be aggressive, but reasonable with your time allocation in order to ensure, not just
completion but competent work as well.

For assistance in framing this timescale, create your own Gantt chart – a helpful tool that shows
how long it will take to complete different tasks and in what order the tasks should be finished.

Progress and review

You or a member of your management team needs to be in charge of monitoring each task’s
progress and the completion percentage of each objective.

When delays occur, try to get to the root of the problem. Did the person responsible drop the
ball? Did he or she have too many responsibilities to handle? Did a third party, such as a supplier
or the bank, fail to hold up its end of a deal?

While the above steps may seem like overkill, the early days of a start-up are critically important
– it’s a time when good management patterns are set and also probably a lean era when revenue
has yet to start rolling in.
 The more efficiently you start implementing your business plan, the more likely it is that you
will survive this early period.

Keep a tab on your finances

Keep reviewing your finances.

Are you hitting your targets? If not, why not? Implement changes to tackle this.

Have a regular review with your accountant to manage income, costs and any tax liabilities. It is
so important to keep disciplined, focused and motivated by cash flow, even more so in the early
stages of your business.

Join a trade association or networking group

Business plans are always dynamic. Make sure you join a networking group so you can keep up
to date with on the ground market knowledge, connections, and legal and financial updates.

You may need to react and change accordingly. Don’t get totally blinkered into your business
plan, you always have to see what is going on around you.

Regularly review your business plan

Review your business plan on a regular basis.

Compare budgeted numbers to actual figures of doing business.

Determine whether you can keep operating as you are or whether you need to make changes,
such as reducing costs, raising prices or increasing marketing.

How to implement a business plan

1. Your business plan has to be realistic. First and foremost you have to go back to the
beginning. ...
2. Set out your objectives. ...
3. Set tasks to reach your objectives. ...
4. Time allocation. ...
5. Progress and review. ...
6. Keep a tab on your finances. ...
7. Join a trade association or networking group. ...
8. Regularly review your business plan.

Why should I keep records?

Everyone in business must keep records. Keeping good records is very important to your
business. Good records will help you do the following:

 Monitor the progress of your business

 Prepare your financial statements
 Identify sources of your income
 Keep track of your deductible expenses
 Keep track of your basis in property
 Prepare your tax returns
 Support items reported on your tax returns
Monitor the progress of your business
You need good records to monitor the progress of your business. Records can show whether your
business is improving, which items are selling, or what changes you need to make. Good records
can increase the likelihood of business success. 

Prepare your financial statements

You need good records to prepare accurate financial statements. These include income (profit
and loss) statements and balance sheets. These statements can help you in dealing with your bank
or creditors and help you manage your business. 

 An income statement shows the income and expenses of the business for a given period
of time.
 A balance sheet shows the assets, liabilities, and your equity in the business on a given
date. 

Identify sources of your income

You will receive money or property from many sources. Your records can identify the sources of
your income. You need this information to separate business from nonbusiness receipts and
taxable from nontaxable income. 

Keep track of your deductible expenses

Unless you record them when they occur, you may forget expenses when you prepare your tax
return.

Keep track of your basis in property

Your basis is the amount of your investment in property for tax purposes. You will use the basis
to figure the gain or loss on the sale, exchange, or other disposition of property, as well as
deductions for depreciation, amortization, depletion, and casualty losses.

Prepare your tax return

You need good records to prepare your tax returns. These records must support the income,
expenses, and credits you report. Generally, these are the same records you use to monitor your
business and prepare your financial statement. 

Support items reported on your tax returns

You must keep your business records available at all times for inspection by the IRS. If the IRS
examines any of your tax returns, you may be asked to explain the items reported. A complete
set of records will speed up the examination. 

https://www.arabianbusiness.com/how-implement-business-plan-625819.html
ACTIVITY 5.1
1. What is your product/service? Who are your clients? Who is your competition? How are
you going to sell your product or service?
a.Business proposition
b.management team
c.finances
d.operations

2. Who is your management team –  directors, key personnel and any strategic partners and
alliances you may have?
a.Operation
b. Management team
 c.Marketing
d.infrastructure

3. How are you going to promote (marketing, including market research, and pricing) your
product or service?
a.Business proposition
b.Management team
c.Finances
d.Marketing

4. Who do you need to employ and what is your organisational structure?

a.Marketing
b.Staff
c.Finances
d.Business proposition

5. More information about your office premises, and infrastructure needed, such as IT,
website, telecoms, and similar.
a.Operations
b.Infrastructure
c.Finance
d.Marketing

6. What is your trading entity, insurance needed, lawyers and accountants you will be
using?
a.Operations
b.Infrastructure
c.Finance
d.Marketing

7. More information about your profit and loss forecasts, cash flow, finance needed, and
investment opportunities.
a.Business proposition
b.Management team
c.Finances
d.Marketing

8. It shows the income and expenses of the business for a given period of time.
a.Balance sheet
b.Income Statement
c.Business Proprosition
d.Finance

9. it shows the assets, liabilities, and your equity in the business on a given date. 
a.Balance sheet
b.Income Statement
c.Business Proprosition
d.Finance

10. Each task should be paired with an appropriate time frame for completion.
a.Time allocation
b..Progress and review
c.Set tasks to reach your objectives
d.Set your objectives

MODULE #06 WEEK #06

Operating a Business
Business registration requirements:

1. SEC registration – for partnership

or corporation

2. DTI registration- for registering

your business trade name ( BTR)

3. Mayor’s Business permit – for

getting the license to operate in the
city or municipality and payment
of your local business taxes.

4. BIR registration- for getting TIN ,

official receipts and invoices registering your books of accounts, paying your
national internal revenue taxes ( Income tax, VAT or percentage tax, Witholding
Taxes)

5. SSS, Philhealth and Pag- Ibig Fund Registration- for registering yourself or
company as an employee and for remitting your employee’s contribution together
with your employee’s share.

Special requirements

There are also special licenses or registrations that must be obtained by a business to start
the operations. For example banks, financing company, lending company , pawnshops, money
chargers , money remittance business and other financing institutions required to be registered
with the Bangko Sentral ng Pilipinas ( BSP). If you are manufacturing and selling products
related to food and drugs you also have to register with Bureau of Food and Drugs ( BFAD). For
schools and entities involve in providing education they should register with the Commission on
Higher Education and Department of Education.

Other steps to follow before Operating a Business

1. Set up an accounting system or hire an accountant

2. Advertise the business

3. Secure insurance for the business.

Selling the Product

Methods 1- showing Enthusiasms for the Product

1. Study the Product

2. Emphasize the perks of the product to customers

- Will the product make the customer’s life easier?

- Will the product create a sense of luxury?

- Is the product something that can be enjoyed by many people?

- Is the products something that can be used for a long time?

3. Ensure that the product has been adequately explained .

Method 2- Connecting with the buyer

1. Share your love of the product

 2. Anticipate the customer’s motivation

3. Practice breaking the ice with customers

4. Convert the customer’s motivation into the product’s characteristics

5. Be honest about the product

6. Close the sale

7. Give customer time to consider

Method 3- Selling Product as an Owner Sales person

1. Familiarize yourself with all aspects of the products

2. Market the products

3. Review the sales performance

4. Trouble sales, if necessary

Records are the source documents both physical and

electronic that specify transaction dates and amounts,
legal agreements and private customer and business
details.

Here are the top 5 reasons to keep good financial

records for your business:
1.  Keeping up with the Progress of your Business
Part of running a successful business is being able to
make decisions, being able to cast a vision and reach goals.  How do you know where you are
going if you can’t track what is going on with your business?  By keeping good records, you
allow yourself to quickly determine how your business is doing at any particular moment.  After
keeping good records for a while you will be able to notice trends in your business and work to
take advantage of them or minimize their impact.  You cannot put your head in the sand and
hope things take care of themselves.  They don’t.  You have to play an active role in knowing
what is going on in your business.
2.  Prepare your financial statements
Most business owners would kind of like to know how much money they are making. 
Regardless of the size of your business, you need to keep up with your income statement
(commonly referred to as a Profit and Loss Statement by the IRS) so you know how much
money you are making (or losing).  It is also important to have a balance sheet so you know
about your company’s assets and liabilities as well as your equity in the company.
3.  Identify Sources of Receipts
In other words – know who is paying you.  First you want to make sure you keep up with who
has paid and who has not so you can collect your money.  But more than this, know who your
best customers are is one of the secrets to success.
You know the old 80/20 rule?  20 percent of your customers provide 80 percent of your profit? 
Some business may be more skewed than that – like 95/5.  Anyway, by knowing who those 20
percent of your customers are, you can treat them better, market to them more effectively and
further strengthen your relationship with them.  This also lets you know which customers are just
draining you so you can drop them or just spend significantly less time on them until they
become more profitable.
You can also apply the 80/20 rule to sources of income when we are talking about just customers
but revenue streams altogether.  For example, as an attorney, I keep up with the income I receive
from my tax problem clients, family court clients, real estate clients, corporate clients, etc.  You
can do this as well so you can determine if there are specific areas of your practice that are more
profitable.
4.  Help prepare your tax returns
This may be one of the most important reasons to keep good records.  You need to accurately be
able to determine what your business earned this year and how much you should have to pay in
taxes to the government.  If you have no idea about your corporate finances, then I can guarantee
that you are losing money and paying too much in taxes each year.
Keeping up with good records also helps you keep up with all of those deductible business
expenses that you have all year long.  You definitely want to be able to take those off the top of
your gross receipts otherwise you are going to be stuck with a huge tax bill.  But if you don’t
keep track of them your accountant is not going to be able to manufacture the numbers out of
thin air for you.
5.  Support items on your tax return
Here is where bad record keeping kills you.  You have just been audited by the IRS or your state
taxing authority and they want to see your records for those transportation expenses, materials,
advertising and more.  If you don’t have anything to prove what you spent, then you are straight
out of luck.  The IRS will disallow all of your expenses that you can’t prove.  So, even if they
know you had some transportation expenses, if you can’t prove them, they’re gone!

Best practice and record keeping

Depending on the industry , keeping the following records may be a legal requirement
but it is best practice to keep them 5- 7 years.

1.Employee accreditation certificates and licenses

2. Employees resumes and job applications
3. Performance reviews
4. Position statements and Job advertisement
5. Customer Records
6.Customer Complaint
7. Details of any disputes with other business
8. Qoutes given and won
9. Details of advertising
10. Insurance policies

https://www.irs.gov/businesses/small-businesses-self-employed/why-should-i-keep-records

ACTIVITY 6.1

Enumerate the Business registration requirements:

1.
2.
3.
4.
5.

Enumerate the top 5 reasons to keep good financial records for your business:
6.
7.
8.
9.
10.
MODULE #07 WEEK #07

Learning Objectives:
At the end of the lesson the learners are able to:

a. Perform key bookkeeping task.

Key Bookkeeping task

Daily task

1.Review Available Cash

2. Monitor incoming and outgoing payments

Weekly task

1.Record and reconcile transactions

2. File and upload receipts
3. Enter unpaid bills from vendors
4.Pay vendors
5.Prepare and send invoices
6. Review projected

Preparation of the Financial Statement

Financial Statements- determine the

business financial position at a specific point and over a period of time. Information from the
accounting journals and ledger is used in the preparation of your business financial statements :
the income statement, the statement or retained earnings, the balance sheet and the statement of
cash flows

Income Statement – also called profit loss statement is most uniquely important because it
shows the overall probability of your company for the time period in question.

- Information on sales revenue and expenses from both the accounting

journal and general ledger are used to prepare income statement.
- It shows revenue from primary income sources such as sales of the
company’s product
- Shows any revenue during the time period in question from assets. Such as
claims on sales of equipment or internet income.
- Shows the business expenses for the time period including primary
expenses, expenses from secondary activities and finally losses from any
activity including depreciation.
- The bottom line of income statement is net income or profit. Net income is
either retained by the firm for growth or paid out as dividends to the firms
owners and investors.

Statement of Retained Earnings- shows the distribution of profits that are retained by the
company and which are contributed as dividends

- Second financial statement to be prepared in the accounting cycle

 - Net profit and net loss must be calculated before the statement of retained
earnings can be prepared.
- After computing the profit or loss figure from the income statement, you
can see what the total retained earnings to date are and how much will be
paid out of the investors dividends.

Statement of Financial Positions ( balance Sheet ) – illustrates the firm financial positions at a
given point in time .

- The last day of the accounting cycle

- Showing what the business owns ( assets) and what the business owes
( liabilities and equity)

Statement of Cash Flows- this statement compares two time periods of financial data and shows
how cash has changed in the revenue, expense, asset, liability and equity accounts during the
time periods.

- Shows the firms financial position on a cash basis rather than an accrual
basis

Cash basis – record revenue actually received from the firms customer’s
in most cases.

Accrual basis – shows the records and revenues when it is earned.

https://www.irs.gov/businesses/small-businesses-self-employed/why-should-i-keep-records

ACTIVITY 7.1
1. determine the business financial position at a specific point and over a period of time.
a.Financial Statement
b. Income statement
c. Statement of Cash Flows
d. Statement of Financial Positions

2. Information on sales revenue and expenses from both the accounting journal and
general ledger are used to prepare income statement.
a.Financial Statement
b. Income statement
c. Statement of Cash Flows
d. Statement of Financial Positions

3. shows the distribution of profits that are retained by the company and which are
contributed as dividends
a.Financial Statement
b. Income statement
c. Statement of Cash Flows
d. Statement of Retained Earnings

4.Statement of Financial Positions ( balance Sheet ) – illustrates the firm financial

positions at a given point in time .
a.Financial Statement
b. Income statement
c. Statement of Cash Flows
d. Statement of Financial Positions

5. this statement compares two time periods of financial data and shows how cash has
changed in the revenue, expense, asset, liability and equity accounts during the time
periods.
 a.Financial Statement
b. Income statement
c. Statement of Cash Flows
d. Statement of Financial Positions
6.Cash basis – record revenue actually received from the firms customer’s in most cases.
a.Accrual basis
b.Cash Basis
c.Income Statement
c.Financial Statement

7.Accrual basis – shows the records and revenues when it is earned.

a.Accrual basis
b.Cash Basis
c.Income Statement
c.Financial Statement

Enumerate the daily task of book keeping

8.

9.

Enumerate the weekly task of book keeping

10.

11.

12.

13.

14.

15.

MODULE #08 WEEK #08

Learning Objectives:
At the end of the lesson the learners are able to:
a.identify where there is a profit or loss for a business.

What Is a Profit and Loss Statement (P&L)?

The profit and loss (P&L) statement is a financial statement that
summarizes the revenues, costs, and expenses incurred during a specified
period, usually a fiscal quarter or year. The P&L statement is synonymous
with the income statement. These records provide information about a
company's ability or inability to generate profit by increasing revenue,
reducing costs, or both. Some refer to the P&L statement as a statement of
profit and loss, income statement, statement of operations, statement of
financial results or income, earnings statement or expense statement.

P&L management refers to how a company handles its P&L statement through revenue and cost
management.
KEY TAKEAWAYS

The P&L statement is a financial statement that summarizes the revenues, costs, and
expenses incurred during a specified period.
 The P&L statement is one of three financial statements every public company issues
quarterly and annually, along with the balance sheet and the cash flow statement.
 It is important to compare P&L statements from different accounting periods, as the
changes in revenues, operating costs, R&D spending, and net earnings over time are more
meaningful than the numbers themselves.
 Together with the balance sheet and cash flow statement, the P&L statement provides an
in-depth look at a company's financial performance.
Understanding a Profit and Loss Statement (P&L)
The P&L statement is one of three financial statements every public company issues quarterly
and annually, along with the balance sheet and the cash flow statement. It is often the most
popular and common financial statement in a business plan as it quickly shows how much profit
or loss was generated by a business.

The income statement, like the cash flow statement, shows changes in accounts over a set period.
The balance sheet, on the other hand, is a snapshot, showing what the company owns and
owes at a single moment. It is important to compare the income statement with the cash flow
statement since, under the accrual method of accounting, a company can log revenues and
expenses before cash changes hands.

The income statement follows a general form as seen in the example below. It begins with an
entry for revenue, known as the top line, and subtracts the costs of doing business, including the
cost of goods sold, operating expenses, tax expenses, and interest expenses. The difference,
known as the bottom line, is net income, also referred to as profit or earnings. You can find many
templates for creating a personal or business P&L statement online for free.

It is important to compare income statements from different accounting periods, as the changes
in revenues, operating costs, research and development spending, and net earnings over time are
more meaningful than the numbers themselves. For example, a company's revenues may grow,
but its expenses might grow at a faster rate.

EXAMPLE OF PROFIT & LOSS STATEMENTS

  Total revenue $ 1,000,000 100%

Less Cost of Goods Sold $      426,200 42.6%

  Gross Profit $ 573,800 57.4%

         

Less Expenses    

  Accounting and legal fees $ 11,700  

  Advertising $ 15,000  

  Depreciation $ 38,000  

  Electricity $ 2,700  

  Insurance $ 15,200  

  Interest and bank charges $ 27,300  

  Postage $ 1,500  

  Printing and stationery $ 8,700  

  Professional memberships $ 1,800  

  Rent for premises $ 74,300  

  Repairs and maintenance $ 21,100  

  Training $ 6,900  

  Vehicle operating costs $ 20,000  

  Wages and salaries $ 223,500  

  Workers compensation $ 6,500  

  All other expenses $          14,100

Less Total Expenses $        488,300 48.8%

Equals Net Profit (BOS) $ 85,500 8.6%

         

       

BOS = Before owners salary

One can use the income statement to calculate several metrics, including the gross profit margin,
the operating profit margin, the net profit margin and the operating ratio. Together with the
balance sheet and cash flow statement, the income statement provides an in-depth look at a
company's financial performance.

https://www.investopedia.com/terms/p/plstatement.asp#:~:text=The%20profit%20and%20loss
%20(P%26L,a%20fiscal%20quarter%20or%20year.

https://www.entrepreneur.com/article/243753

https://www.entrepreneur.com/article/80678

ACTIVITY 8.1
1. Make a list of simple Profit and loss statement

MODULE #09 WEEK #09

Learning Objectives:
At the end of the lesson the learners are able to:
a. Generate an overall reports on the activity.

What is activity report?

Summary submitted by each salesperson to provide certain details to the management about his
or her activities and performance over a given period. It includes information such as (1) number
of customer visits made, (2) demonstrations performed, and (3) new accounts opened.
POPULAR TERMS.
Reports are accounts of certain individuals of the things or events they have observed,
investigated, or researched. A report can be a written  or spoken piece of information that is
given to express hard facts to a specific population or audience.

What Are Business Reports?

A business report is a set of data which can provide historical information related to a company’s
operations, production, specific department’s insights, and create a base for future decision-
making processes or factual insights needed to organize business functions.
According to Lesikar and Pettit, “A business report is an orderly, objective communication of
factual information that serves some business purpose”. It organizes information for a specific
business purpose. While some reports will go into a more detailed approach into analyzing the
functionality and strategies of a specific department, other examples of business reports will be
more concentrated on the bigger picture of business management, for example, investor
relations. That’s where the magic of these kinds of reports truly shines: no matter for which
business goal you need it, their usage can be various and, at the same time, effective.

They can also be of many different types, but they all have one common trait: gathering data and
tracking the business activities related to something specific. From there, their author(s) will
often perform an analysis and provide recommendations to the organizations. A good business
report template presents an in-depth analysis where the writers show how they have interpreted
their findings. The more factual the report is, the clearer the data, which can then be interpreted
in a cost-effective way, meaning, the reduction of time needed to analyze findings will be
increased, and it will save countless of working hours in a specific organization or company. For
example, a marketing report can reduce the time needed to analyze a specific campaign, while
an HR report can provide insights into the recruiting process and evaluate, for example, why did
the Cost per hire increase.

You can easily find a sample of business report on the Internet, but not all of them fit your needs.
Make sure, at any moment, that the report you want to create is accurate, objective and complete.
It should be well-written, in a way that holds the reader’s attention and meets their expectations,
with a clear structure. We will come back later in the article on how to write a good report, but
also with a specific business report sample, so that you can see what kind of data you can
incorporate.

The purpose

These reports address specific issues and are often used when decisions need to be made. As
author Alan Thomson says, “a business report conveys information to assist in business decision-
making. [It] is the medium in which to present this information.” They have several purposes:
some record information to plan for the future, some record past information to understand a
situation, and others present a solution to a business problem. They all are essential to business
success, as they bring clarity to a complex analysis. As mentioned earlier, the clearer the data,
the more cost-effective results will be, so keeping in mind the exact data to incorporate into this
kind of report should be essential in deciding of what kind of report to generate. All industries
have their specific sets of Key Performance Indicators and metrics, which should be considered
when creating that kind of report. You can also generate an interdepartmental report or between
businesses to compare industry values and see how your company stands on the market.

Working with an online dashboard tool to produce your reports is an incredible advantage for the
easiness of use, the time saved but most importantly, the accuracy of the information you will
use. As you work with real-time data, everything on your report will be up-to-date and the
decisions you will take will be backed with the latest info. Such tool is a significant help when
you need to explore your data and perform data analyses to extract actionable insights. It will
deliver an important added-value to your report thanks to the visualization of your findings,
bringing more clarity and comprehension to the analyses, which is their whole purpose. While
exploring your data, with deeper insights generated with just a few clicks, the report doesn’t have
to be dull, boring and lost in hundreds of pages or spreadsheets of data. Keeping a clean
approach to generating a customized report for a department or whole company will bring more
value than printing or searching through a spreadsheet. Imagine yourself in a meeting, with 200
pages of analysis from the last 5 years of business management. One participant asks you a
specific question regarding your operational costs dating 3 years back. And you’re sitting there,
trying to find that specific piece of information that can make or break your business meeting.
With data analysis tools you cannot go wrong, all the information you need is generated with a
click, within a click, within a click.

Why You Need Business Reports

 These reports also enable data collection by documenting the progress you make. Through them,
you have the means to compare different periods of time and activity, growth, etc. You can better
see which products or services are more successful than others, which marketing campaign
outperforms which other, and which markets or segments require more attention. Collecting all
this data is indispensable – and by doing so, you build a paper trail of your past (or, namely, a
data trail). They let people outside the company (like banks or investors) know about your
activity and performance, and enable stakeholders to understand your organization’s tangible and
intangible assets.

The benefits

With these reports, you increase the understanding of risks and opportunities within your
company. They accentuate the link between financial and non-financial performance: they
streamline processes, reduce costs and improve efficiency. They help you compare your
performance to other business units or other companies in the same sector. On a more specific
level, a business report template can help you dig thoroughly into details, and discover
correlations that would be overlooked otherwise. All of these benefits, if used correctly, will
provide insights into the most valuable information a business can obtain: will I survive on the
market? By creating that kind of a report, not only will you find your answer, but the whole
organization can tackle deeper into specific insights that can bring operational value and control
the overall expenditures. That being said, how to write this kind of report, with specific examples
and templates, can provide building blocks to establish a successful business intelligence
strategy. Let’s see this through a more detailed approach.

How To Write A Business Report

Before starting writing your report, establish the goals and the audience. Knowing who you want
to direct it to is key in its elaboration, from the tone, vocabulary/jargon you choose to the data
you will focus on. A report to external stakeholders, to the CEOs or to the technical engineers’
team will be drastically different from one another.

Likewise, the scope varies according to the objective of the report. State beforehand the needs
and goals, to direct you on the right path. It should be impartial, objective, with a planned
presentation or dashboard reporting tool which enables an interactive flow of data and immediate
access to every information needed to generate clear findings. Some good example of a business
report you can find later in the article.

The structure

To help you write your report, let’s go over some step you should not miss.

1. Determine and state the purpose: as we stated in the previous paragraph, defining your
goals according to the needs of your audience is important. As we said, a report usually assists in
decision-making and addresses certain issues. You can state them at the beginning of the report.
The more clear and specific the goal, the better will be the content. You won’t lose time on
adjusting information when you present your purpose in a clear and well-defined manner.
2. Gather and organize the information: now that the purpose and scope are clearly
defined, you can start gathering the data under any form needed that can address the issue.
Thanks to that information you will carry out data analysis to understand what lies beneath and
to extract valuable insights. These findings need to be balanced and justifiable – what
significance they have to the purpose of the report. Identifying Key Performance Indicators for a
specific business, organizing, comparing and evaluating them on the needed level, can be one of
the most important parts of creating this kind of report. Example of business report that shows
how to extract and define your analysis can be found below in the article.
3. Present your findings: explain how you uncovered them, and how you interpreted them
that way. Answer to the original issue by detailing the action to take to overcome it, and provide
recommendations leading to a better decision-making process. A best practice to present the
insights you have drawn out are the use of business dashboards that communicate data visually
in a very efficient way. A dashboard software like datapine’s can precisely answer that need,
while at the same time help you with the data exploration, which is a crucial part. When you
click on a specific part of the dashboard, you can easily access your data in a more in-depth
approach. Comparing your findings is also one of the features you can use if you are asking
yourself what has changed in relation to a specific period. When you assess these datasets in just
a few clicks on your monitor, the whole reporting process and measurement of your business
strategy can be done in minutes, not days. Evaluating findings in today’s digital world has
become one of the main focus of businesses wanting to stay competitive on the market. The
faster you can do that, the more information you gain, the more successful in your actions you
become.

Business Report Examples And Templates

Examples of business reports that we used in this article can be utilized in many different
industries, the data can be customized based on the factual information of the specific
department, organization, company or enterprise. Interdepartmental communication can then
effectively utilize findings and the content can be shared with key stakeholders.

Now that we know what they are, their purpose, and how to write them, let’s go over some
concrete, real-world business report examples of visuals you will need to include in your reports.

Visual financial business report example

This first business report example focuses on one of the most important and data-driven
department of any company: finance. It gathers the most important financial KPIs a manager
needs to have at his fingertips to make an informed decision: Gross Profit Margin, Operational
Expenses Ratio (OPEX), both Earning Before Interests (EBIT) and Net Profit margins, and the
income statement. Next to these are the revenue evolution over a year compared to its target
predefined, the annual evolution of operational expenses for various business departments as
well as the evolution of the EBIT compared to its target. The different sets of visual
representation of data can clearly point out specific trends or actions that need to be taken in
order to stay on the financial track of a company. All your financial analysis can be integrated
into a single visual. When the presentation becomes interactive, clicks will provide even deeper
insights on your financial KPIs, findings and desired outcomes to make a company healthy in its
financial operations. The importance of this dashboard lays within the fact that every finance
manager can easily track and measure the whole financial overview of a specific company while
gaining insights into the most valuable KPIs and metrics. Empowering a steadfast and operation-
sensitive plan is one of the most important goals a business can have, and finance is right in the
middle of this process.

Thanks to all this information displayed on a single dashboard, your report is greatly enhanced
and backed with accurate information for you to make sound decisions. It becomes easier to
implement a solid and operation-sensitive management plan.

Visual investors business report example

As mentioned earlier, holding account of your activity, performance, and organization’s assets is
important for people outside of the company to understand how it works. When these people are
investors, it is all the more critical to have a clean and up-to-date report for them to know how
successful is the company they invest in, and for you to increase your chances to have more
funds. This example business report provides just that: an exact overview of the most important
findings and specific values in a particular time-frame.

Calculating and communicating operational KPIs about the overall company situation is what
this investors’ relationship dashboard tries to focus on. You learn about the Return on Equity and
Return on Asset, the Debt-Equity ratio, Working Capital ratio, but also see the evolution of a
share price over time. Each of these metrics is crucial for a potential shareholder, and if they are
not monitored on a regular basis and kept under control, it is easy to lose investors’ interest.
Tracking them and visualizing them through a modern dashboard is a competitive advantage for
your investors’ business report. You can even see on this visual a clear set of data, so you don’t
have to dig through a numerous amount of spreadsheets, but clearly see the specific development
over time, the percentage gained or lost, ratios and returns on investments. Not to be limited just
to these data, you can always customize and make a sample business report for your specific
needs.
Visual management business report example

The management KPIs presented above in an example of a business report focuses on the
Revenue and Customer Overview seen through a specified quarter of a year. With just a click
you can easily change your specific date range and make an overview of different months or
years. When analyzing insights on a more specific level, you can easily spot if the revenue is
approaching your target value, compare it to the previous year and see on how much of the target
you still need to work on. The average number of your Revenue per Customer compared to your
targets can also identify on a more specific level how much do you need to adjust your strategy
based on your customers’ value. If you see your values have exceeded your goals, you can
concentrate on the KPIs that haven’t yet reached your target achievement. On this specific
example of business report, we have gained insights on how to present your management data,
compare them and evaluate your findings to make better decisions.

This clear overview of data can set apart the success of your management strategy, since it is not
possible to omit vital information. By gathering all your findings into one single visual, the
information presented is clear and specific to the management’s needs. The best part of this
example business report is seen through its interactivity: the more you click, the more data you
can present and the more specific conclusions you can look for.

These business report templates that we have analyzed and presented in this article can be a
roadmap to effectively create your own report, or customize your own data to tailor your needs
and findings.

https://www.examples.com/business/activity-report.html
https://www.google.com/search?sxsrf=ALeKk03DairQ4BPY1Jdq1O23-SVRTVc22g
%3A1597216691517&source=hp&ei=s5czX5GOHZTZ-
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https://www.datapine.com/blog/business-report-examples-and-templates/

ACTIVITY 9.1
1. What is Business Report?
2. Why Business Report is essential to a business?