Macro Environmental Factors

• Both the industry players and the market are affected by the macro environment.
• The business plan should discuss the major trends and changing patterns in the macro-environment, which
would have significant impacts on the relevant industry and behavior of consumers.
• SPEET
• Social Environment
• Political Environment
• Economic Environment
• Ecological Environment
• Technological Environment

A. Social environment
• includes the demographics and cultural dimensions that govern the relevant entrepreneurial behavior.
• The structure, social status, and dynamics of the population at large, as well as the people’s beliefs, tastes,
mores, customs, and traditions dictate the major parameters of market behavior.

B. Political environment
• defines the governance system of the country or the local area of business.
• It includes all the laws, rules, and regulations on allowable and disallowable business practices.

C. Economic environment
• is mainly driven by supply and demand forces.
• It is the same factor that drives the interest and foreign exchange rates to fluctuate with the movement of
the market forces.

D. Ecological environment
• includes all natural resources and the ecosystem that defines the habitat of man, animals, plants, and
minerals.

E. Technological environment
• makes or breaks competing participants in any industry.
• New scientific and technological discoveries often lead to the launch and commercialization of new products
with superior attributes or to rendering the old ones obsolete.

VI. Product/Service Offering

• The sixth section of the business plan.
• The products/services must be described by highlighting the features and attributes that would most appeal to
the target customers.
• The business plan should also prove that the products/services would be accepted and carried by the
distribution channels

VII. Enterprise Strategy and Enterprise Delivery System

• The seventh section of the business plan.
• The business plan should expound on the Enterprise Strategy (ES) by mapping the competitive landscape and by
situating the enterprise and its competitors as to their strategies and chosen positionings.
• The business plan should then show how the Enterprise Delivery System (EDS) would enable the business to
implement the Enterprise Strategy.

The Enterprise Delivery System starts from:

1. Input
• Resources mobilized
2. Throughput
• The transformation process where input are converted to output
3. Output
• The products/services
• Outputs are marketed to the customers
Customer satisfaction level, profits generated, and the performance of people from the transaction are the Outcomes of
the EDS.
Financial Forecast

 The eight section of the business plan is the financial forecast including the financial returns, the financial risks,
and the financial contingencies.

 From the financial forecasts, the business plan should then calculate the expected returns from the business.

 Expected return on sales (ROS)

 Expected return on assets or investments (ROA)

 Expected return on stockholders equity (ROE)

Return on Sales (ROS)

 Return on sales (ROS) is a ratio used to evaluate a company's operational efficiency; ROS is also known as a
firm's operating profit margin.

 This measure provides insight into how much profit is being produced per peso of sales. An increasing ROS
indicates that a company is growing more efficient, while a decreasing ROS could signal looming financial
troubles.

 ROS = Net Income/Sales

Return on Assets (ROA)

 Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.

 ROA gives a manager, investor, or analyst an idea as to how efficient a company's management is at using its
assets to generate earnings.

 ROA = Net Income / Total Assets

Return on Equity (ROE)

 Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity.

 Return on equity measures a corporation's profitability by revealing how much profit a company generates with
the money shareholders have invested.

 ROE = Net Income/Shareholder's Equity