Mariano Marcos State University

College of Business Economics and Accountancy

Batac City, Ilocos Norte

(In partial fulfillment of the requirement of the course in ProEl123,

2nd semester, S.Y. 2009-2010)

AQUACEAN
PURE DRINKING WATER

(A BUSINESS PLAN)

Prepared by:
Hazel Anne Abut
Sheryl Agullana
Gerald Domingo
Mary Ann Lista
Ma Sheryl D. Marzan
Mae Ann L. Salviejo

Submitted to:
Dr. Leah Ballesteros

March 2010
Purified Drinking Water

The water refilling station Brgy. 19 San Lorenzo

San Nicolas, Ilocos
that is centered in
Norte
providing safe and clean

water for consumption at

low… Phone: 771-3214

CP No.:09191234567
low… E-mail:
www.aquacean.com

prices…

INTRODUCTION
 Health is the major priority of every person because it is hard and expensive to be brought

to the hospital once you get sick. Because of this, most people see to it that what they usually

take in is safe and clean. Health is a priority, as the saying goes, “Health is Wealth.”

Purified water was intended for the safety of the people and this is safe for the most

sensitive stomach. This type of water is good enough to prevent intake contamination to anyone

who has weak fighting cells.

In relation to this, most customers are possessing safety assurance in every product they

purchase, especially to the products which indeed to be take in such as water. Water is necessary

for the very survival of human beings, as it to ensure the smooth functioning of body systems. In

fact, 2/3 of our body weight is water. Drinking plenty of water helps fight against flu and

ailments, regulates your body temperature and raises your metabolism.

BUSINESS OPPORTUNITES
 The Municipality of San Nicolas as its name denotes is a town where cooperation and

unity is a way of life. It is considered a rapidly growing center of trade, finance, health,

researches and education. It is also known as the home of eminent men and women who have

significant contribution in the development and welfare of our country and fellowmen.

This section discusses the business opportunities of food delicacies and crafts, and

service business.

1. FOOD DELICACIES AND CRAFTS

Opportunities:

 Pottery  Meat Processing

 Street Food Selling  Furniture Making

 Dress Making/Sewing  Food Chains/Eatery

 Homemade Foods

2. SERVICE BUSINESS

Opportunities:

 Water Refilling Station  Hardware Store

 Computer Shops/Internet Café  Cell Phone Repair

 Photo Studio And Framing  Spa And Beauty Salon

 Grocery Stores  Laundry Shop

 Videoke Bars  Merchandise

 Shopping Centers  RTW

 Jewelry Shops  Auto Repair Shop

 Pawnshops  Auto Parts Shop

Table 1. Screening of Business Idea Screening

Business Marketabilit Profitabilit Desirabilit Deman Possibilit Total Rank

opportunities y y y d y
100%
(30%) (35%) (10%) (20%) (5%)

Water
Refilling
Station 90 95 75 85 65 88% 1

Food
chain/eatery

85 92 72 80 70 84.40 2
%

Pottery

70 80 60 60 80 3
72%

The criteria for screening businesses are the following:

Marketability

It is the acceptability of the business to the market.

Profitability

It is how the business will measure its profit.

Desirability

It is the willingness of the owner to establish the business.

Demand

It is the level of desire or need that exists for a particular business.

Possibility

It is the potential for successful future development.

PART II

EXECUTIVE SUMMARY

A. Name of the firm: AGUACEAN Purified Water Refilling Station

B. Location: Brgy.16, San Marcos, San Nicolas, Ilocos Norte (along the national highway)

C. Type/Nature of business: Service/Sole Proprietorship

D. Proponents: Mary Ann Lista

Ma. Sheryl Marzan
Sheryl Agullana
Mae Ann Salviejo
Hazel Ann Abut
Gerald Domingo

E. Brief Description of the project

AQUACEAN is a business that is centered in providing safe and clean purified water for

consumption. The target markets of the business are the households, food establishments,

schools and nearby towns of San Nicolas. Strategies to trigger competitors product itself is not

only made purified but also contains vitamins (vitamin B and C) and minerals (calcium and

sodium potassium) that are helpful in fighting bacteria. These practices are some of the processes

distinct from the competitors. AQUACEAN can be also accurate in organizing their equipments
and maintaining its buildings physical appearance from the day it is establishes up to its growth.

And they can be efficient delivering the service on time.

F. Highlights of the Plan

Marketing Aspect

This section includes the target market of the business, demand and supply, competitive

position of the business such as the product selling price, competitiveness of the quality product,

methods of transportation and existing rates, channels of distribution, and general trade practices,

the proposed marketing program such as the product, price, and promotional activities, and the

projected sales.

Management Aspect

This section presents the classification of the business. It is classified as a single

proprietorship. Water refilling station is a simple and can be manage by your own. The

proponent is also the manager of the business.

Production Aspect

This section presents the production process, including the plant layout and location. The

business will be situated at the residence of the owner. It will have to provide 3 tricycle and 2

pick-up vans for the delivery service and machines such as multimedia sediment filter, ion

exchange, activated carbon filter, reverse osmosis membrane, post carbon filter, ultraviolet lamp

and the ozone generator. The total projected cost that maybe incurred has a total of ₱1,054,383

that will be the used in the operation of the business.

Financial Aspect
 The financial statement in the financial portion of this business plan is presented with this

order. Income Statement, Projected Cash Flow, the Projected Balance Sheet, Return on

Investment. The net income of AQUACEAN in its first year operation will be ₱36,842. Its

projected cash flow could reach as high as ₱1,066,496.

Social Desirability

This section presents the contributions of water refilling station to the economy such as

provide employment, improve quality of life and provide additional taxes, and the

entrepreneurial level such as income generation and self-fulfillment

CHAPTER I

MARKETING PLAN

Target Market

A. Households from San Nicolas, other nearby towns like Batac, Laoag City, Sarrat and

owners of food establishments and schools from the said towns would much benefited and

qualified to avail of the service.

B. The demand of water refilling station is highly increasing due to rapidly growing

population of the locality. It is needed that almost all households are now drinking purified water

as to satisfy their thirst. Thus it implies that the demand for water, specifically purified drinking

water is increasing more than to every household.

Market Segment
 Households Food Business Schools
Establishments

1. SAN NICOLAS 20,215 250 (estimated) 35

2. BATAC 47,610 300 (estimated) 72

3. LAOAG 19,976 700(estimated) 105

4. SARRAT 4,881 50 (estimated) 29

C. SUPPLIERS/COMPETITORS

SUPPLIERS/COMP ADDRESS STRENGHTS WEAKNESSES

ETITORS
1. AQUA 2000 Brgy. 3 San Idelfonso  Accessibility within  Small processing
the town proper area
 Lack of
employee

2. AMIEL’S Brgy. 11 Sa Fernando  Unlimited area for  Lazy employee

delivery
 Dress code

3. WATER 4 LIFE Brgy. 22 San  Location  Small no. of

Guillermo delivery vehicles
 Lack of
promotions

4. AQUA Brgy. 1 San Fancisco  Location  physical

appearance
n
a
rie
to
s
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m
d
c
f
b D. COMPETITIVE POSITION

1. Selling Price

The family size (5L) costs 25 pesos per container with free delivery in San Nicolas area

and 30 pesos for nearby town, then only 20 pesos for walk-in customers. Medium size (4L) costs

15 pesos. While small sizes such as 500ml cost 5 pesos and 300ml cost 3 pesos.

2. Competitiveness of the quality product


Bacteriological quality

Physical quality

3. Methods of transportation and existing rate

area.

4. Channels of distribution



Chemical quality

Biological quality

The business will provide at least five vehicles. Two pick-up vans for delivery

service outside San Nicolas and three tricycles for delivery service along the location

Through the use of telecommunications such as Cell phones and telephones are

merely used for channels of distribution. In addition, the firm may also distribute the

product through having outlets in some sari-sari store.

 Figure 1. Channels of Distribution

5. General trade practices

Competitors are now at peak in San Nicolas for business like water refilling

station. Certain practices from different water refilling station are in common, like the

selling price if family size cost to 25 pesos with free delivery and if it is directly acquire

in the business it only cost 20 pesos.

E. PROPOSED MARKETING PROGRAM

1. Description of Proposed Product

a. For tangible products

 The product AQUACEAN purified drinking water is a product need by people as

one of their basic necessities in life. The product offered in the market made safety and

healthy as the process of purifying is being implemented. It goes through the process if

distillation, deionization or term as dematerializing the water.

The product is categorized into different sizes to cater the customer according to

what they prefer. The interesting part of the product is not only made purified or distilled

but it contains vitamins (Vitamin B, Vitamin C) and minerals (Calcium, Sodium,

Potassium, and other) helpful in fighting bacteria. These practices are some of the

processes distinct from competitors.

b. Packaging

The name of the product is AQUACEAN Purified Drinking Water located at

Brgy. 16 San Marcos San Nicolas, Ilocos Norte. The product consists of a quality plastic

bottle which is not hazardous, and tested and approved by BFAD use material for its

package. It has also label which emphasize the information about the product including

its benefits, the manufacturer, product name and logo, and cover tightly with sealed

plastic for protection.

2. Description of Proposed Target Market

a. Geographical location-Ilocos Norte

b. Age-all ages

c. Sex-both

3. Proposed Prices

Product Unit Unit Selling Price

Family Size ( 5L) Pc. 25
Medium Size (4L) Pc. 15
Small Size
  500mL Pc. 5
 300mL Pc. 3

4. Proposed promotional activities

The business will be providing flyers, stickers, keychain designed like a mini bottle. On the

grand opening of the business, the first 20 customers will get free t-shirt upon purchasing of 3-5

galloon family size. Every customer will also receive a loyalty card given by the company

wherein customers must purchase ten times in order to get one family size for free.

CHAPTER II

ORGANIZATION AND MANAGEMENT PLAN

The Management of the Business:

The business is classified as a single proprietorship. It will be operated by Ms.

Mary Ann Lista. Water refilling station is a simple and can be manage by your own. The

proponent is also the manager of the business. The owner is responsible in taking all the
 risk, overall in charge in managing the business, sustains the capital requirement of the

business and gives appropriate salary for the employees. The owner must be a graduate of

Commerce and have attended different seminars in managing a business regarding health

and safety implementation of water refilling station.

The management is composed of marketing manager who is responsible in promotional

activities of the business, finance manager who is in charge of bookkeeping and making financial

statement, production manager who looks after the production of the products and needed

materials and equipment to be used, the technical assistant who is responsible in maintaining and

running the machine, the refillers who accept and refills containers of customers and the

deliveryman who transport refilled containers.

Figure 2. The Management Structure of the Business

T
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2. Management Job Description
 Name Position Job Description
Mary Ann Lista Owner and the General  Responsible in taking all the risk
Manager  Overall in charge in managing the business
 Sustains the capital requirement of the
business
 Gives appropriate salary of the employees

Sheryl Agullana Finance Manager  In charge of bookkeeping.

 Makes financial statement of the business
operations.

Ma. Sheryl Marzan Marketing Manager  In charge in the promotional activities of

the business

Gerald Domingo Technical Assistant  Maintains and runs the machine

 responsible in looking after the operations
and repot as to production
 In-charge in reporting the materials to be
purchased for the production in the coming
days.

Mae Ann Salviejo Production Manager  Business planner of what the outcome and
prices of the product
 Responsible in the conceptualization,
design, creation and innovation of the
products to be served to customers.
 Look after the production of the products
and needed materials and equipments to be
used in the identification of the needed
skills and labor, and how much will the
business cost.

Hazel Abut Refiller  Accepts and refills containers of customers

Others Driver/Delivery Man  Transport refilled containers to customer’s

home

PERSONNEL and WORKFORCE

 Personnel in this business are highly qualified based on their wide experiences in the

same field of the job. They are highly equipped with good education and are nurtured by their

experiences. They are all aware of their own tasks and the owner properly delegated the needed

activities on the operations of the business. Personnel are dedicated, friendly and well trained.

A. PROJECTED TIME TABLE

ivities Wk1 Wk Wk Wk Wk5 Wk6 Wk7 Wk8 Wk9 Wk1 Wk1 Wk1 Wk1 Wk1 Wk1 W
2 3 4 0 1 2 3 4 5
and
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 CHAPTER III

PRODUCTION PLAN

Product Specification

The AQUACEAN is a water refilling station that conforms to the national standard for

drinking water. The business primarily provides clean and safe purified water.

Purified is a water that has virtually all of its impurities as well as minerals and

electrolytes stripped through distillation (boiling the water and re-condensing the steam into

clean a container), leaving all contaminants behind. Purified water is good clean water;

unfortunately all the minerals and electrolytes are also all stripped out. Purified water tends to be

slightly acidic moving your body to a less healthy state.

Based on some studies comparing mineral water purified water and it results to minerals’

leaches out are of the unusable, ionic form and we want these to leave the body rather than be

deposited and cause disease. While purified water does not leach out significant amounts of

biologically available minerals because these are quickly taken up the body on an as needed

basis. If they are present in excess then they are filtered through the kidneys and this is exactly

what needs to happen with all things which are in excess in the circulation. Purified water

cleanses the body through promoting healthy kidney function.

atng.
refiliW
PRODUCTION PROCESS

The main processes in a water refilling station are dictated by raw water quality. the

typical steps are filtration (several stages), softening, and disinfection.

 25 sq.m

TOILET
WASTE
DISPOSAL

PARKING
STORE SPACE
MACHINE 1 MACHINE
FOR2THE
ROOM PICK-UP
VAN

PARKING
SPACE FOR
TABLE PERSONNEL
WASHING
25 sq.m
OFFICE AND
AND
MANAGEMENT
CLEANING

PARKING
SPACE FOR
REFILLING AREA THE
TRICYCLES
 PLANT LOCATION

BUS. ESTABLISHMENT

School COCKPIT ARENA

BUS. ESTABLISHMENT
AQUACEAN

BUS.
ESTABLISHMENTS

BUS. ESTABLISHMENT

Church

MUNICIPALITY OF
SAN NICOLAS

PARK
A. Machine and Equipments
Machine
Multi-media sediment filter
Ion Exchanger
Activated Carbon Filter
Reverse Osmosis Membrane
Post-Carbon Filter
Ultraviolet Lamp
Ozone Generator
Cost Description/Specification and
Suppliers
P35,000 Removing sediments such as
rust, sand and particles that are
invisible to naked eye;
employs a total of 5 filters.
P25,000 Replaces hard minerals with
soft minerals.
P25,000 Removes all organic chemical
herbicide, pesticide, offensive
odor and bad taste.
P100,000 The heart system and the most
expensive unit; Removes
inorganic minerals, bacteria
and viruses while retaining its
oxygen content. Since the
filter size is very small at less
than 0.05 micrometer, the
product water could have total
dissolved solids (TDS) of less
than 10ppm. The filtration
process rejects about 50
percent of raw water volume.
P20,000 Improves the taste of water.
P20,000 Ensures that the water is free
from disease-causing micro-
organisms.
P25,000 Inhibits the growth of the
product tank and prolongs the
shelf life of water.
B. RAW MATERIALS

Raw Materials Quantity Cost per Unit Amount

Bottles 1,500 2.90 4,350
Gallons 800 13 10,400
Paper 1,000 3 3,000
Sealed 50 100 5,000
Heat gun 3 2,000 6,000
Total 28,750

TOTAL PROJECT COST

Factory Overhead

Factory Overhead January February March April

Amortization of building 600 600 600 600
improvements 750 750 750 750
Depreciation of materials and tools 290 290 290 290
Depreciation of furniture and fixture 150 150 150 150
Depreciation of office equipments
Total factory overhead 1,740 1,740 1,740 1,740
Fix Asset Book Value Useful life Depreciation Expense
(Monthly) (Annual)
Equipment 845,000 10 7,041 84,500
Furniture 5,650 4 117 1,412
Total 7,158 85,912

Salaries of Employees

Position Monthly Salary Annual Salary

Finance Manager 6,000 72,000
Marketing Manager 6,000 72,000
Production Manager 6,000 72,000
Technical Manager 6,000 72,000
Refillers (3) 3,000 108,000
Delivery Man (5) 3,000 180,000
Total P 30,000.00 P 576,000.00
C.OFFICE SUPPLIERS

Supplies Monthly Cost Annual Cost

Ball pen 50 600
Board Marker 30 360
Bulletin Board 120 1440
Sales Book 20 240
Sales Invoice 20 240
Official Receipts 20 240
Journal 20 240
Total ₱ 380.00 ₱ 3,360.00

D. UTILITIES

Utility Monthly Cost Annual Cost

Electric bill 5,000 60,000
Water 350 4,200
Telephone 1,000 12,000
Cell phone load 1,000 3,600
Total 6,350 79,800

E. PERMITS AND LICENSES

Pre-Operating Activities Cost

Mayor’s Permit 100
Zoning clearance 200
Garbage disposal fee 2,500
Fire safety clearance 100
Fire code fee 50
Tax Clearance 50
Occupation Tax 150
Governor’s permit fee 200
Business Registration Certificate 100
Community Tax Certificate 73
Brgy. Clearance 50
Total ₱5,373.00
 Total of Project Cost Item

Building Improvement 100,000

Plant and equipment

Equipment 815,000
Furniture & fixtures 5,650
Office Supplies 3,360 824,010

Pre-operating Cost
Permit & Licenses 5,373
Freight Expense 1,500 6,873

Working Capital
Packaging 28,750
Advertising Expense 1,500
Salaries 30,000
Telephone 1,500 61,750

Cash 61,750

Total Project Cost ₱1,054,383

Source of fund
Equity ₱704,383
Debt ₱350,000

The proprietor will invest Php 704,383 cash to establish the business. Loans from

bank will be amounting to Php 350,000 could help finance the business for further

development and enhancement. The loan payable to DBP has an interest of 5%. The

business will be located at the residence of the owner in order to minimize the expenses

of building own establishment building. It is a good start to keep the capital liquidating.
 CHAPTER IV

FINANCIAL FEASIBILITY

INCOME STATEMENT

Gross sale P 1,811,770.00

Expenses
Pre-operating
Files and Licenses 5,373
Building and Improvement 100,000
Equipment 815,000
Freight Expense 1,500
Furniture and fixture 5,650
Office Supplies 3,360 P 930,883.00

Operating Expense
Electricity/Water 62,345
Maintenance and Repair 2,000
Salaries Expense 360,000
Advertising Expense 7,500
Telephone Bill/Cell phone load 17,000
Packaging materials 240,560 P 689,405.00

Other Expenses
Depreciation Expense 85,912
Interest Expense 17,500 P103, 412.00
Income before tax 88,070
Income Tax Expense (88,070*32) 28,182
Net Income 59,888
 BALANCE SHEET
For the year 2010

ASSET

Cash 1,066,496
Raw/Packaging Mat. 5,000
Office Supplies 1,000
Furniture and Fixtures 4,000
Equipment 422,612
Total Assets ₱1,499,108

LIABILITIES

Loan 350,000
Income Tax Payable 17,337
Interest Expense Payable 17,500
Total Liabilities ₱384,837

CAPITAL

Capital beginning 1,054,383

Add: Net Income 59,888
Total Capital ₱1,114,271

TOTAL LIABILITIES AND CAPITAL ₱1,499,108

 Return of Investment

ROI= Net Income/ Capital*100

= 47,987/ 1,054,383*100

= 0.0458*100

= 4.58

Payback period

The business could reimburse its debt from the Development Bank of the Philippines
on its second year of operation and the business assures for its full payment and all the liabilities
will be settled.

Break-even Sale

AQUACEAN could attain its break-even sale at first year of operation.

 TOTAL CASH FLOW

Cash Balance, Beg. 1,079,468

Add: Cash Inflows

Equity Contribution 1,054,383
Cash Sale 1,687,020

Total Cash Provided 3,820,871

Less: Cash Outflows 1,686,820

Cash Balance, ending 2,134,051

PROJECTED SALE

JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC TOTAL
PRODUCT U USP QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT
TOTAL
Fam. size gal 25 50 37500 70 52500 80 60000 100 75000 90 67500 60 45000 50 37500 50 37500 50 37500 50 37500 50 37500 50 37500 558,750
(5gal)

Med. size gal 15 100 45000 130 58000 125 56250 150 67500 130 58500 120 54000 110 49500 105 47250 100 45000 100 45000 95 42750 95 42750 621,000
(4gal)

Small size Bot. 5 150 22500 155 23250 170 25500 180 27000 175 26250 165 24270 160 24000 150 22500 150 22500 150 22500 100 15000 100 15000 270,270
(500mL)

Small size Bot. 3 200 18000 230 20100 240 21600 250 22500 250 22500 240 21600 230 20700 200 18000 200 18000 200 18000 200 18000 200 18000 237,000
(300mL)

Total 500 123,000 565 153,850 615 163,350 680 192,000 645 174,750 585 144,870 550 131,700 505 248,250 500 123,000 500 123,000 445 113,250 445 113,250 1,687,020

The month that has the highest sale is the month of March, April, and May, because these months are the summer season. On the other hand, the months that have the least

income is the month of August, September, October, November, December and January because these months are the rainy season. The gross sale for annual sale is Php. 1,811,770
 CHAPTER V

SOCIAL DESIRABILITY AND CONTRIBUTION TO THE ECONOMY

The business contributes the following to the economy:

 Provide employment

AQUACEAN will hire additional employee to do the operation of the

business. This will provide job opportunities to the unemployed and allowing them

also to enhance their skills and knowledge related to the job.

 Improve Quality of life

AQUACEAN purified drinking water caters the best quality product that

satisfy their needs and to develop ways to improve quality of life.

 Provides additional taxes to the economy

AQUACEAN provides taxes to the economy to which the business will pay

tax to strengthen the economy.

Entrepreneur’s level:

 Income generation

The main goal of having a business is to gain profit.

 Self-fulfillment
 This project will develop the entrepreneur’s intense desire to innovate, build

and to meet his goals through making this project.