I.

Introduction

1. Executive Summary

1.1 Description of the Business and Business Concept

Graham Balls Balls (GBB) is a business related to food. It has a motto of "Don't
Panic,It's Organic". This company is highly expected to be successful and it will
be in a good position despite of its many competitors with its own reasons briefly
explained on this section. This business is founded on April 26, 2018 at Lyceum
of Alabang. There is a store established near Lyceum of Alabang. The operating
days is from Monday to Saturday only. Six students with unique abilities was
united as one to become the managers as well as the sellers of this business.
Because of that, there will be less expense in the business.
The best product that the entrepreneurs are offering is the Malunggay flavored
Graham Balls. The products of the entrepreneurs are unique because of its
Malunggay content. It is healthy but at the same time delicious. The company is
established for the entrepreneurs to have a full-time work and decent income.
At first weeks or month of the operation of business, entrepreneurs will peddle
every lunch and recess time because the students, in this time, are hungry. It is a
great opportunity for them to sell their product. The sellers of the product are
trained to be approachable, kind, and cheerful.

1.2 The Opportunity and Strategy

Since the target market of the business is around the campus, the opportunity is
so big for this business because many students and staffs of the institution would
recognize the business.The entrepreneurs decided to peddle at the whole

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 campus to help promote their product. Customers can be easily attracted to buy
because of its business name. There will be a free taste of the product for the
opening of the business store. There will be a lot of posters in the store about
Malunggay. There will also be a lot of promos especially in the opening of this
business.

1.3 The Target Market and Projections

The target market of the Graham Balls Balls is thestudents of Lyceum of Alabang
especially Senior High School students whom they conducted a research on.
The entrepreneurs estimate that Lyceum of Alabanghas about 3000 students
existing in the area.The GBB will also target the teachers, and staff of the
schoolthat is about 100-200 person existing in Lyceum of Alabang as customers.

1.4 The competitive advantages

The GBB has the best served Graham Balls with health benefits to the
customers. Others that are selling Graham balls do not have health benefits
while GBB’s products have. The entrepreneurs of GBB assure that they have the
best quality, best taste, unique flavor to serve for the customers. The GBB also
had good sales agent that can attract many customers because of their talent at
selling. The GBB also hasquality manpower that produces graham balls and
always assures the safety of the customers.

1.5 The Economics, Profitability, and Harvest Potential

The entrepreneurs are selling about 100 pieces of graham balls per day on the
first week with the price of Php5.00 each piece. The entrepreneurs estimated
their possible profit or earnings from selling graham balls. If the entrepreneur can
sell all 100 pieces of Graham balls per day in that week, their total earnings will
be Php500.00 in the first day and Php3,000.00 for the whole week. If their
product is having good feedbacks from the customers in the first week, the
entrepreneurs are going to increase their target pieces of graham balls from 100
to 150 pieces in the second week. The estimated earnings of the entrepreneur

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 on the second week is about Php4,500.00 from selling their product.In the third
week, they will increase it again from 150 to 200that would give them around
Php6,000.00of total sales in a week. The business will target a standard 400
pieces of graham balls sold every day if they would be successful in the first few
months that would give them Php2,000.00sales in a day.

1.6 The Team

As the team is united with each other, the business head is full of passion inhis
workespecially in his leadership skills. The team is full of talented members and
eachmember has a unique skill in entrepreneurship. They can also help each
other to make the business successful and convince their customers that their
product is good. Two of the team members had a wide experience when it
comes to business, so they can become reliable and more productive when it
comes in the business world.Three of the entrepreneurs will handle the
management team and the other three will be the producers of Graham balls of
the business. The rate of producer is Php50.00 per 100 pieces of graham balls
made.All of them will be permanent and full-time workers in the business.

1.7 The Offering

The company will expand its business by establishing new store, and adding
new products to the business. The business will also be suppliers to other
companies and the company will need a delivery van.There will also be a lot of
money needed in order for the company to continue its operation through the
years. The company will give 15% of the equity to the investors participating
through.

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2. The Industry and the Company and its Product(s) or Service(s)

2.1 The Industry

Food business is the most popular business venture today. Everywhere, food
business is in demand. Siomaihouse, burger chain, fast food chain, meat grill,
chocolates, and cafe pastries and a lot more. It is better to operate business in a
well-accessed place, in a commercial place and in a place near to your
prospected customers. In putting up a food business make sure it can compete
and do well in other same food business within that area.Entrepreneurs decided
to operate at Lyceum of Alabang because food is in demand anywhere and there
are a lot of food businesses in Lyceum of Alabang but they trust that their
business can compete with others.

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2.2 The company and the concept

This company is founded at Room 131, Senior High School Academic Building,
Lyceum of Alabang for the full time work of entrepreneurs. The food business
that will be put upis Graham BallsBalls and the prospected customers are
students and it is intended to operate inside or near Lyceum of Alabang
premises. It is organized as a company with six workers, three in the
management team and three in the production team. It is retailing so every
students can afford it. It is ready to eat and fresh from trusted suppliers and
manufacturers which is also the managers.

2.3 The product and service

The Malunggayflavored graham balls is made up of Malunggay that is why it is

unique from other graham balls that are sold from the market today.The product
is distinct to other products because of its taste and at the same time it has more
nutritional value than other graham balls out there because of its Malunggay
content. Malunggay is a good source of energy that is why most students should
eat this. Students are fond of eating sweet products so it will be in demand.
There will be also some topping for the graham balls as the business runs. It can
also be placed in a small and mediumtopperwares for large quantity orders if the
business is able to expand. Students can also buy into pieces that are very
affordable and convenient for them.

2.4 Entry and Growth strategy

First, the business must have a management team that will handle the growth of
the product. Itwill have a free taste in the opening of their store for the first 100
customers.The entrepreneurs will give fliers that contain its important details
about the product that will serve as a promotion. As months pass-by,the number

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 of Graham balls sold everyday will increase overtime if the sales will become
stable. The management team will continuouslymonitor their sales if it is
increasing or not. As the GBB get intact, it willrent a place and establish it as
astore near Lyceum of Alabang. Then, establish another branch on other schools
and if possible, putting up a store in a mall.

3. Market Research and Analysis

3.1 Situational analysis and the target market.

The entrepreneurs current product is the Malunggay flavored Graham ball. It

prices the same as the Graham balls that is also sold in Lyceum of Alabang that
cost Php5.00 per piece. There are some that are also selling Graham balls in
Lyceum of Alabang but it’s health benefits is the key factor why customers will
tend to buy the product of this business rather than the others. The students,
teachers and staffs of Lyceum of Alabang, both gender and no age range are the
target market of this business.As stated above, Malunggay can be a good
source of energy and the target market of this business needs more energy
everyday.

3.2 Marketing objectives and goals

The marketing objectivesof this business are to increase their sales day by day.
Also, to have their product become the more superior Graham balls in Lyceum of
Alabang. They want their product to be known on the entire campus by wisely
marketing it with the use of quality sales agent

3.3 Customers

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 The student especially senior high school and staffs of Lyceum of Alabang are
the beloved customers of the business.The entrepreneurs guarantee to satisfy
their customers with the quality of their product. The potential customers of this
product, if possible, are all the people inside Lyceum of Alabang.

3.4 Market size and trends

There are some graham balls businesses in Lyceum of Alabang. They sell
different flavors of graham balls. The price of their product is Php5.00 only.
Most of the customers in this generation wanted to have a budget friendly
product and at the same time delicious. This pushes the entrepreneurs to have
their productbe like that.There are around 3000 students and 100 teachers and
staffs existing in the location of the business. The pricing of the product is cheap
enough for students and staffs to buy it.

3.5 Competition and Competitive edge

There are many competitors of this product, but the entrepreneurs ensure to
their customers and buyers that their product is the best among the rest. One of
the sellers of Graham balls in Lyceum of Alabang had many flavors, but they are
so sweet that they can cause teeth problems and bad to the health if you eat too
much, while the company’s Graham balls are simple, delicious and at the same
time nutritious. Even if the customers eat as many as they can atleast they are
getting the nutrients that are needed in their body.

3.6 Estimated Market Shares and on sales

The company is expected to get a share of the total market with their competitors
as the days go by. 40% of the total market would be the share of the company.
There will be an increase of the share day after day as the product would be
known to the target market. Its uniqueness will capture the hearts of people. 100-
200 per day is the target number of products that will be sold for the 1 st month of
operation. The estimated sales of the entrepreneur’s product are around
Php500.00-Php1000.00per day.

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3.7 On-going market evaluation

The entrepreneurs will conduct an evaluation to their customers on what are

their comments about the product. It will provide the necessary information on
how the entrepreneurs will improve their business to become a successful one.It
is essential to satisfy the customers for the business to make it easier to market
and become a successful one.

4. The Economics of the Business

4.1 Gross and Operating Margins

The Gross and Operating Margins of the company will be shown and explained
in this particular section. The data shown here are in monthly basis.

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 The Gross Margin of KCD company will be calculated by subtracting Sales
revenues from the cost of ingredients sold. KCD’s gross margin is Php10,200.00.
Here’s how it’s calculated.

Revenue:
Sales of Korean Corndog (3,240pcs. x Php15.00 each) Php48,600.00
Cost of ingredients sold (Php713.00/108pcs.) Php21,390.00
Gross Margin Php27,210.00

The KCD’s gross margin percentage is 32%. Divide cost of ingredients sold by
the sales of Korean Corndog to get the percentage.

Cost of ingredients sold = Php21,390.00

Sales of Korean Corndog = Php48,600.00
Gross margin percentage = 0.44 (44%)
The 44% has great significance on the business. It tells you that in every one
peso sale (Php1.00) 44% goes to the cost of ingredients sold and 68% goes to
the company’s sales and can be used in operating expenses.

The Operating Margin of KCD will be solved by dividing Operating earnings to

Revenue.

Operating earnings = revenue – cost of ingredients sold, and labor

Revenue Php48,600.00
Cost of Ingredients Sold Php21,390.00
Labor Php6,000.00
Operating Earnings Php21,210.00
Operating Margin = Operating earnings / Revenue

Operating earnings Php21,210.00

Revenue Php48,600.00
Operating Margin 0.44 (44%)
This means that for every P1.00 sale, KCD makes Php0.44 in operating earnings

4.2 Profit Potential and Durability

The data of Profit Potential shown is on monthly basis.

Inventory, in units (I) 3,240pcs.

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 Sale price per unit (P) Php15.00
Expenses per unit (E) Php6.60
Profit Potential (PP) Php27,216.00
PP = I x (P-E)
PP = 3,240 x (Php15.00 – P6.60)
PP = 3,240 x (Php8.40)
PP = Php27,216.00

4.3 Fixed, Variable and Semi-variable cost

Fixed cost

Monthly rent of No. of Korean Average cost per Korean

the store Corndog produced Corndog
Php2,000.00 3,240pcs. Php2,000.00/3,240 = Php0.62
Php2,000.00 4,840pcs. Php2,000.00/4,840 = Php0.41

Variable cost

Cost of one No. of Korean Total cost of direct materials

Korean Corndog Corndog produced
in direct
materials
Php6.60 3,240pcs. 6.60 x 3,240 = Php21,384.00
Php6.60 4,8400pcs. 6.60 x 4,840 = Php31,944.00

Semi-variable cost

Monthly salaries No. of Korean Average cost per Korean

of labors/ 100pcs. Corndog produced Corndog
Php6,000.00 3,240pcs. Php6,000.00/3,240 = Php1.85
Php6,500.00 4,840pcs. Php6,500.00/4,840 = Php1.34

Cost of one labor/ No. of Korean Total cost of labors per day
100pcs. Corndog
produced
Php200.00 108 Php200.00 x 2 = Php400.00
Php200.00 208 Php400.00 + (50x0.75) = Php437.50

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4.4 Months to Breakeven
Gross profit per unit = Sales price per unit – Cost of goods sold per unit

Sales price per unit Php15.00

Cost of goods sold per unit Php6.60
Gross profit per unit Php8.40

Fixed monthly expenses = Cost of ingredients sold + Labor’s salary + Rental fee
+ Utilities

Cost of ingredients sold Php21,390.00

Labor’s salary Php36,000.00
Rental fee Php2,000.00
Utilities Php1,000.00
Fixed monthly expenses Php60,390.00

Number of units sold to breakeven = Fixed monthly expenses / Gross profit per
unit

Fixed monthly expenses Php60,390.00

Gross profit per unit Php8.40
Number of units sold to breakeven 7,189.29pcs.
This implies that about 7,189.29 pieces will be needed to sell in order for the
company to reach breakeven point. Probably, after one month and a week will be
the time that the company will reach breakeven point since they are selling about
12,000pcs. per month

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 4.5 Months to Reach Positive Cash Flow

KCD-M Company
Internal Cash Flow Projections
February to March 2018

February March
Beginning cash Php21,390.00 Php19,705.00
Sources of cash:
Direct sales Php48,400.00 Php37,500.00
Total sources of cash Php52,400.00 Php40,900.00
Uses of cash:
Payroll Php6,000.00 Php6,000.00
Monthly rent Php2,000.00
Utilities Php1,000.00
Subordinate’s salary Php6,000.00 Php6,000.00
CEO’s compensation Php10,000.00 Php10,000.00
Cost of ingredients sold Php10,695.00 Php21,390.00
Total uses of cash Php32,695.00 Php46,390.00
Excess cash Php2,400.00 Php900.00
Key Assumptions: 1. 100% of the sales will be collected the month after the sale
2. Salaries are to be paid at the end of the month
3. Payables are due in 30 days

5. Marketing Plan

5.1 Overall marketing strategies and tactics

Graham Balls Balls (GBB) is a business that can attract people because of its
uniqueness and originality. A free taste of graham balls is one per person, for the

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 opening of the business. This is one of the strategies of this business. If the store
is established, some designs will be about Malunggay that states its health
benefits. There will also be promos regarding graham balls if you order in large
quantity. GBB assures that the product has good quality and that makes the
company the best tasting graham balls customers will ever taste.

5.2 Pricing (done)

KCD will exploit penetration strategy in pricing our product. We will serve our
Korean corndog with a very cheap price so that students can afford it. Php15.00
is the ideal price. It also effective because Php6.60 is the cost of KCD. So in
every piece sold, there is Php8.40 of profit. KCD also assure customers will like
the product because of its uniqueness, originality and quality.

5.3 Sales Tactics

There are various sales tactics existing in the business world. Sales presentation
fits the GBB company. By telling the customers that the managers conduct a
research and found out that Malunggay which is a part of the product contains
energy booster. Next sales tactic is relationship selling. The entrepreneurs are
open to talk to the customers if they have any complain or suggestions for the
company so they will feel that GBB is concerned to their customers. By doing
these two, the company can achieve sales goals.

5.4 Service and Warranty Policies

GBB has the best staff that can handle selling of their newly made product,
Graham balls with Malunggay. They assure the cleanliness of their store where
the Graham balls is being made. They also ensure that their product has the
best quality before they sell it to the customers. If a customer complains about
the product, the entrepreneurs will wholeheartedly appreciate their concerns and
immediately make an action for that. They will also get a one free graham balls if
it is valid and proven. They will assure that mistake would never happen again in
the future. GBB is also open for recommendations and suggestions to the
customers to help improve their business.

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5.5 Advertising and Promotion

The entrepreneurs of GBB company can promote their product to the students,
teachers, staffs and other people by posting tarpaulins outside and inside the
campus of Lyceum of Alabang. The entrepreneurs will also give fliers to their
target market so that the customers will know of their newly opened business.
GBB has promos for the students for a cheap price and also for the customers. If
they buy 11 pieces of Graham balls, they will get a 1 free Graham ball. The best
promo that GBB can offer to the customers is if they buy a dozen of Graham
balls, they will have lesser price for another dozen they will purchase.

5.6 Distribution (done)

Ale-Ale accept being a suppliers of store/shops who also want to sell our product
as long as they advertising it. They can get Korean corndog with a lower price
from its original price, when they will get from day by day. There will be an
assigned distributors of our KCD that will deliver our product to the store/shop.
Ale-Ale will strictly check and monitor the distribution of the products so that we
can know if there is something wrong in the distribution.

6. Design and Development Plan

6.1 Development Status and Tasks

The entrepreneurs will look for another place to sell their product to increase
their sales and improve the way they entertain students to buy their product. If all
goes well, they will expand their business by establishing their own store in other
places.The operating days will extend from Monday to Saturday to whole
week.The entrepreneur will also offer promoswhen it is holiday or it is their
anniversary. This development can possibly increase their sales and have
massive impact on their business.

6.2 Difficulties and Risks

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 The entrepreneurs may experience a low rate of sales because of the
competitors. The entrepreneurs need to assure that their products are more
marketable than the others to make more sales. The possible risk will be the cost
of marketing strategies that they need to do in order to compete with other
business.

6.3 Product Improvement and New Products.

After establishing their own sore, entrepreneurs can also think a new addition
that is related to their product. They can add new flavors or the spiciness to their
product to make it look new to the eye of the customers. They can also combine
beverages, iced tea and corndog will be perfectly match.
6.4 Costs

The entrepreneurs need to prepare more money for them to expand their
business. The cost of the ingredients will also increase if they are planning to
offer promos to attract the costumers to buy their product. In adding more flavors
or sprinkles like desiccated coconut will add another cost of about php16.00 per
50g that can be used in 100 pieces of graham balls.

The entrepreneur must have the name for their store, a good location, materials,
and especially budget if they are going to rent a place for the store. The
estimated budget that the entrepreneur needed is Php4000.00 per month for
rental fees and Php20,000.00 for the design of the store. The entrepreneurs are
going to rent a store which is near from Lyceum of Alabang. Store near school
can have a high possibility to maintain their sales and probably increase it.

6.5 Proprietary Issues

The company is owned by 6 persons who is also the labor and management
team of the business.Each of them has shares in the company. 5 of them have
15% share and the other one have 25% share.There is no significant issue
regarding proprietary because entrepreneurs are united as one.

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7. Manufacturing and Operations Plan

7.1 Operating Cycle

Cost of sales Php233,600.00

Period 365 days
Average daily cost of sales Php640.00
Inventory 9,800
Inventory days 15

Sales Php730,000.00
Period 365 days
Average daily sales Php2,000.00
Accounts receivable 8,300
Accounts receivable days 4
Operating cycle = Inventory days + Accounts receivable days

Inventory days 15
Accounts receivable days 4
Operating cycle 19
This means that the average between purchasing ingredients and converting
them into products and receiving money from the sales of the inventory is 19
days.

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7.2 Geographical Locations

The best location of the business would be inside or near the school premises.
The entrepreneurs can easily promote their product to students. They can find
the sellers anytime and anywhere. The entrepreneurs can guarantee that their
location is the place to have a small time business. The location can help to
manage the distribution of products better and helps management team to find
other potential customers.

7.3 Facilities and Improvements

The facility that will be used in the expansion of the business can assure that
product is clean or bacteria-free and well-served.It is important to the group to
maintain the facility organized and easy to recognize by the students and staffs
in Lyceum of Alabang. In the future, the improvement of the store will continue.
The entrepreneurs will decorate the store with some cool trend stuffs that can
attract potential customers. They will also make the store comfortable for the
customers.

7.4 Strategy Plans

The plan is to start a small time business and see what it is going to happen. If it
is going to be successful or not. Ifsuccessful, managers can set a new goal in
the business like increasing the number of sold products per day.Some strategy
plans are torent a small place that can be the store of the business, decorate it
with trending stuffs,add new products, add some toppings or add new flavors in
Graham balls, and extend operating days. By doing this, it can attract many
customers and rapidly increase the sales.

7.5 Regulatory and Legal Issues

The company will legally register their business in the Department of Trade and
Industry (DTI) and gets their business permit at the barangay hall of Tunasan

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 before they even started their business. They also get the permission of
administrators of the institution to sell their product at Lyceum of Alabang. Now,
they have the rights to sell their products legally around the Philippines. Lyceum
of Alabang’s Administrators and the entrepreneurs have an agreement that
selling of the product is highly restricted during class hours because it is stated
that, at first, entrepreneurs will peddle the product around the campus. They can
only sell their product on breaktime or free time in different classrooms.

8. Management Team

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8.1 Organization

Graham Balls Ballsconsist of different personnel and each of them has unique
ability. The group is surrounded of talented person.

Chief Executive Officer

Ronald Christian Andal

John Vincent Lunar Ian Geoffrey Lopez

Accountant Marketing Manager

John Albert Balagat

Head Production

John AldrinBeringuela Jeruel De Villa

Ronald Christian Andal– A person who is good in managingQuality
Producer Control
a company and
leading his subordinates.
John Albert Balagat– Aperson who is good in leadership and taking
instructions.
John Vincent Lunar – A person whois great in calculation and analysis.
Jeruel De Villa – A person who is perfectionist and has good hygiene.
John AldrinBeringuela –A person who takes his job as a passion.
Ian Geoffrey Lopez – A person who is humorous and entertaining. He has the
ability to convince investors or customers.

8.2 Key Management Personnel

Ronald Christian Andal, age 17, He is a smart and wise leader. Now, he is the
Chief Executive Officer (CEO) or President of this business. He orders and
controls his members so that this business will become a successful one. He is
also the one who will hire future employees.

John Vincent Lunar, age 17, he is the Accountant, bookkeeper and controller. He
does the statements of the monthly income and balance sheets, payroll and
managing the cash.

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 Ian Geoffrey Lopez, age 17, he is the Marketing Manager. He promotes and sells
the product. He will make sure that the product of the business will be known to
the public.

John Albert Balagat, age 17, he is the head of Production and will be responsible
for the production of malunggay flavored graham balls of the business and
thereafter the maintenance and expansion of the services that will be offered.

Jeruel De Villa, age 17, he is the quality control, safety and environmental
manager. He monitors the air and water quality, product quality, trains the
employees and filling all the month, quarterly and yearly reports.

John AldrinBeringuela, age 18, he is the producer of graham balls flavored

malunggay. He is responsible for manufacturing the product of the business that
will be sold to the prospective customers.

These are the current personnel that are running the business to make it a
successful one. Future employees of the business will be hired by Ronald
Christian Andal if the business will expand on the near future.

8.3 Management Compensation and Ownership

The members of the management team in this business have their individual
shares. All the members contribute to make this business successful. They
contribute materials, ingredients, budget and etc. The CEO of the company has
25% of shares while his subordinates have an equal distribution of 15%.

Position Salary
CEO Php10,000.00
Accountant Php3,000.00
Marketing Manager Php3,000.00
Head of Production Php2,000.00
Quality Control Php2,000.00
Producer Php2,000.00

The company or the owners are responsible for all the expenses needed in the
company like the salaries, damage or the injuries of their employees. The

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 performance of the employees is also important for the company to be
successful. The company is also ready for giving bonuses if the employees are
performing well on their assigned positions.

8.4 Other Investors

Graham balls ballsis a good quality product and the CEO wants to grow and
share it widely and they can do it by allowing other investors to have it. But they
want investors that continue the values, principle and beliefs of the company.
Investors that will not damage company’sgood reputation and will help them
growinternationally. For now, they are accepting investors to the company.For
inquiries about how to invest, please feel free to call Mr. Ronald Christian Andal,
09984339352, the business head promotion team.

8.5 Employment and other Agreements and stock option and Bonus plans

In addition to the monthly salary paid by the company to the employees and the
bonuses due to individual performance of the employees,GBB agree to have a
financial support and medical help for the employees who are working in their
company. GBB agreeto their employees to have a part time or a full time at the
store. GBB also lets the employees to share the stocks of the store so that they
can promote the product to other people. GBB also agree to give cash bonus like
Christmas and Anniversary bonus.

8.6 Other Shareholder, Rights and Restriction

Graham Balls Balls is owned bysix entrepreneurs with one who has the largest
share. 25% of share for the CEO of the company and 15% share for each of his
subordinates. Graham Balls Balls is built and developed by Mr. Ronald A. Andal.
He was helped by his friends to develop this company. Each of them has their
roles in the company.

8.7 Supporting Professional Advisors and Services

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 Graham Balls Ballswill expand when the business becomes a successful one.
This business will need guidance and other services so that it will continuously
expand and be a great one. The entrepreneurs will need the following:
Accountant- an accountant can help the entrepreneurs to understand the rules
for business compliance and to understand the tax considerations.

Banker- the entrepreneurs will need a relationship with their bank representative
so that when the entrepreneurs are seeking loans to operate their business they
will have a much easier time working with a banker who knows them personally
and understands their business.

Mentors- this personal will provide moral support in the business.

These are some of the supporting professional advisors and services that the
business needs.

9. Overall Schedule
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 Date Plan of action
April 2018 Legalized the business, advertisement
planned and reach the desired fund
June 2018 Start selling the product
June 2018 Advertise the product in social media
July 2018 Build a store
June 2019 Add new product
June 2019 Supply products to other companies
January 2020 Hire more staffs
June 2020 Expand to other markets or schools
December 2025 Build a factory

10. Critical risks, Problems, and Assumptions

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 Financing risks (Low – Moderate)

This will give the entrepreneurs so much trouble because of other bills that they
need to pay as a student. They don’t have much money to support the needs of
the company as of now. This can affect the development of the business if the
entrepreneurs can’t support the business financially.

Marketing risks (Low – Moderate)

Selling or introducing a new product has a higher possibility of having a

marketing risk. People are different in taste and some of them didn’t want the
product which is the Graham Balls. There is also a high possibility that not all the
costumer will love and become our daily buyer. This problem can also lead to the
breakdown of sales of the company.

Management risks (Low – Moderate)

This risk is due of having not enough proper training of hired employees which
will become a big problem in the future. All members of the management team
have their own assigned duty for the company to become successful and to
grow. The relationship between the personnel inside the company has a big
impact on every of them. A disagreement of every one’s thought will cause to
management risk and problem.

11. The Financial Plan

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11.1 Sales estimate on a monthly basis

Month Sales Forecast Percent Growth

June Php30,000.00
July Php37,500.00 25%
August Php45,000.00 20%
September Php52,500.00 16.67%
October Php60,000.00 14.29%
November Php60,000.00 0%
December Php60,000.00 0%
January Php60,000.00 0%
February Php75,000.00 25%
March Php75,000.00 0%
April Php75,000.00 0%
May Php82,500.00 10%
The entrepreneurs estimated their sales in one month. They base their sales and
in one month through their sales in a week. The other expenses in their income
are not included like the ingredients and materials to make graham balls. This
sales is estimated and expected every end of the month.
11.2 Estimate of inventory turnover

Cost of goods sold Php233,600.00

Period 365 days
Inventory 9,800
Inventory days 15
Inventory days = 1 / (cost of goods sold / inventory) x 365
Inventory days = 1 / (233,600 / 9,800) x 365
Inventory days = 1 / 23.8367 x 365
Inventory days = 15.31 or 15 days

11.3 Actual Income Statement

Sales
Direct Cost of Sales Php19,200.00
Total Cost of Sales Php19,200.00
Gross Margin 0.32
Gross Margin % 32%
Expenses
Payroll Php22,000.00
Marketing & Other Expenses Php4,000.00
Rental fee Php4,000.00

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 Utilities Php2,000.00
Total Operating Expenses
Profit Php60,000.00
Less tax (12%) Php52,800.00
Net Profit Php7,744.00

11.4 Breakeven chart and calculations

Ingredients Expenses
8,640

6,240

3,720

600
Marshmallow Condensed milk Crushed graham crackers Malunggay
Ingredients expenses

Monthly Expenses

19,200

12,000

4,000
1,840
Labor Utilities Ingredients Rent
monthly expenses

Gross profit per unit = Sales price per unit – Cost of goods sold per unit
Gross profit per unit = Php5.00 – Php1.60
Gross profit per unit = Php3.40

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 Fixed monthly expenses = Cost of ingredients sold + Labor’s salary + Rental fee
+ Utilities
Fixed monthly expenses = Php19,200.00 + Php22,000.00 + Php4,000.00 +
Php2,000.00
Fixed monthly expenses = Php47,200.00

Number of units sold to breakeven = Fixed monthly expenses / Gross profit per
unit
Number of units sold to breakeven = Php47,200.00 / Php3.40
Number of units sold to breakeven = 13,882.35pcs.

12. Proposed Company Offering

12.1 Desired Financing

Financing is required in all business plan. It is important to entrepreneurs to

provide funds for all the business activities and needs. Having so much financial
strain will lead to a cash flow problem to the company or business after few
years. As of now, the entrepreneurs are working on a store but planning to
expand and establish store on other places in the near future.

Plan Money needed

Three years of operation Php3,321,600.00
Establish new store Php20,000.00
Add new products Php720,000.00
Supplier (Delivery van) Php500,000.00
The desired financing for three years of operation of the business is
Php1,699,200.00 which includes all the fixed monthly expenses. The business
will establish new store and will need Php24,000.00 to do so. If the company

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 decides to add more products, it will cost about Php20,000.00. They will also
need a delivery van if the business will supply other companies of their product.

12.2 Offering

The forecasting of the company on how much net profit will they make is about
Php163,600.00 in its first year of operation. The total net profit at the end of the
first three years of the business is highly expected to be Php2,372,392.00. The
participating investors will get 15% of the equity.

12.3 Use of Funds

The following is where the funds will be used

1st year of operation Php566,400.00

2nd year of operation Php1,020,000.00
3rd year of operation Php1,735,200.00
Design of the new store Php15,000.00
Development of the new store Php5,000.00
New product (frappe coffee) 2nd year Php240,000.00
New product (frappe coffee) 3rd year Php480,000.00
Delivery van Php500,000.00

12.4 Measures of profitability or return of investment

Net profit Php2,372,392.00

Cost of investment Php4,561,600.00
Return of investment 0.52 (52%)
Return of investment = (Net profit / Cost of investment) x 100
Return of investment =(Php2,372,392.00 / Php4,561,600.00) x 100
Return of investment = 0.52 x 100
Return of investment = 52%

This means that the investment’s gains compare favorably to its cost. The
investment is so efficient and cost-effective

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13. Appendixes

13.1 Brochures Describing the products

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13.2 L
et
ters of Recommendation or endorsement

Graham Balls Balls

“Don’t Panic, It’s Organic”
Km. 30, National Rd., Tunasan, Muntinlupa City

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 Contact No. : 09357564743

October 25, 2017

Henry Sy
SM Investments
Metro Manila, Philippines

Dear Mr. Sy

We, the Graham Balls Balls, would like to thank you for continuously trusting our
product. We are confident that you will be satisfied with our delicious graham balls.
However, in any cause of dissatisfaction, please feel free to discuss it with us so we
can immediately make an action for that.

The Graham Balls Balls would like to inform you about the latest variety of our new
products that can be supplied to your mall. We need you to promote our new product
to the market.

If you have any questions, please feel free to call us. We have enlisted you as our
prime client and with this, we are anxious to serve you better.

We look forward to dealing with you once again

Thank you very much and God bless!

Sincerely yours,

Mr. Ian Geoffrey Lopez

Marketing Manager
Graham Balls Balls

13.3 Future activities

Graham Balls Balls will have future activities like Halloween party,Christmas
party,etc.For the loyal customers, employee,managers of the said company.This
will help the people around the company to have better relationship with each
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other.Managers can also help the employee by giving them motivation and
inspiration to do their job well. It can also help the company to introduce a new
product by seeking recommendations of the loyal customer+s.

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