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Final Calabash PDF
Final Calabash PDF
Final Calabash PDF
INTRODUCTION
Good health is a secret of every happy man. A person can’t do his job in
school or work if he doesn’t feel well. One should be both physically and
emotionally healthy for when a person is healthy his body and mind function as
they are supposed to. Being unwary to a healthy lifestyle can make way for health
Making small changes in your diet can go a long way and it’s easier than
you think. By taking steps to eat healthily, a person will be on his way to getting
smoothies. Somewhere along the way, health food took liquid form, and that
includes the smoothie which is a thick beverage made from blended raw fruit or
vegetables with other ingredients such as water, ice or sweeteners. Smoothies are
The Calabash Fruit (Crescentia cujete) or Miracle Fruit to the few people
who know of their existence is a large spherical fruit. The study “Antiangiogenic
Dame of Dadiangas University in General Santos City and was declared 3rd place
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in the DOST-PCHRD Gruppo Medica award for Outstanding Undergraduate
Thesis in Herbal Medicine. The results of the study show that leaves of Cresentia
compared with stem bark and a clear correlation exists between the antioxidant
functions of the body. Scientific evidence suggests that antioxidants reduce the
severe effect of climate change on human health, the researchers have decided
medicine, is a fitting way to do. This study is entitled "A Proposed Production and
Fruit has the researchers decided that the fruit be the main ingredient in the
proposed product.
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STATEMENT OF THE PROBLEM
production of Calabash smoothie and its distribution in the Cebu City Sports Center
1.1 Technical;
1.2 Marketing;
1.3 Management;
1.5 Financing;
1.6 Financial;
project?
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SIGNIFICANCE OF THE STUDY
The findings of this study will open up the need for a healthy yet refreshing
drink for the human society which leads the way for the product of this study to be
introduced. The following benefactors will gain knowledge about the health
Prospective Investors
Their decision to put up the proposed business near the Cebu City Sports
Center is not solely for the reason of putting up an additional store but also for the
consumers to have access of the calabash drink and its benefits. This study will
address the queries of the prospective investors regarding the said product in the
market and the prospected risks and benefits relative to the product. Hence, this
study will provide them with the useful information they need to judge whether the
said project is feasible or not. This study will then be a medium that will help
The Respondents
information needed in deciding whether or not they would purchase and drink the
smoothie. They will be aware of the possible health benefits of drinking the
Calabash Smoothie, and these benefits will motivate them to start living a healthy
lifestyle as they age throughout the years and gain the desirable results they plan
to achieve. But mostly, they will be reminded of how important it is to take care of
one’s health.
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Government
The study will provide awareness of the possible health benefits of drinking
Calabash smoothie and include this drink to their approved drinks for a healthy
lifestyle for the community. Moreover, this study will inform the government on how
Calabash has a positive effect on the human body, especially on the respiratory
system, which is apparently one of the many issues that the government is trying
to resolve.
Proponents
This study enabled the researchers to apply what they have learned in their
through with the development and interpretation of the data and its implication.
During the process of the study, the researchers also learned the value of
developing their personality and enhancing their skills in dealing with their peers
and with the pressure that they may experience in the workplace of their profession
Future Researchers
engage deeper to their research. They will be aware of the other possible issues
related to the study that will enrich their endeavor. Through this study, they will be
able to find solutions to the said issues and innovate the product of the study
further. As they will also learn the value of teamwork, understanding, patience,
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enhancing their skills in dealing with their peers and with pressure that they may
RESEARCH DESIGN
The research design provides a detailed systematic plan of the study that
study. It is essential for the collection, measurement, and analysis of data and
Research Environment
The focus of the study is the health enthusiasts who are active in
maintaining their healthy lifestyle. The basis of the selection of the research
environment is where the health enthusiasts are commonly found. The best ground
for conducting the study is the Cebu City Sports Center. Because of its accessible
location and facilities, the sports center has encouraged many people of different
ages to take an interest in sports and live a healthier lifestyle. The researchers
found a place along Cebu City Sports Center which is a perfect setting area for the
beverage store. It is also accessible for patients and medical practitioners that are
coming from St. Vincent’s General Hospital who might wish to avail the proposed
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Figure 1
gathering data and information needed for the accomplishment of the study. This
method involves direct contact with the target market by asking questions or giving
the survey, the proponents will summarize all answers of the respondents
proponents, and frequency and average. The respondents’ answers will vary from
one person to another because of different preferences, taste and believes of each
person.
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Research Respondents
The respondents of the study were the health enthusiasts who are goers in the
Cebu City Sports Center. The population in the area is undeterminable because it
the views and opinions of the respondents. These were distributed to gather data
from the population. The questions that were formulated to provide the exact and
appropriate answers that are related to the study. The survey questionnaires are
given to the fixed amount of the total sample size of the population.
Data Treatment
and, percentages are presented. The answers of the respondents vary because of
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LIMITATIONS OF THE STUDY
Each study has restrictions that the researchers will come across and will
vary from one study to another. But these will not be much of a hindrance to the
success of the study. The following are the limitations of this study:
The researchers were unable to gather the exact and reliable data and
information regarding the number of people that avails the Cebu City Sports Center
Unresponsive respondents
During the survey, there are people who are unwilling to give the
Estimation of Figures
Since the researchers are still students, they cannot accurately estimate the
costs and forecast. So, there might be variances between the estimated or
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DEFINITION OF TERMS
The study has words and terminologies that are maybe not commonly
encountered by the readers as they go through the pages of this book. For the
Hemoglobin
It is the protein molecule in red blood cells that carries oxygen from the
lungs to the body's tissues and returns carbon dioxide from the tissues back to the
lungs.
Flavonoids
It is a substance in fruit and vegetables that may help protect people against
Phytochemicals
Quercetin
immunity.
Anthraquinone
Antiangiogenic
It refers to the substance that inhibits the growth of new blood vessels.
Phenolic/Phenols
It is closely associated with the sensory and nutritional quality of fresh and
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CHAPTER II
TECHNICAL ASPECT
Success for business comes with hard work and risk. Extreme planning and
proper planning and processes for the production and distribution of the proposed
product. This chapter determines the information about production such as the raw
The technical aspect is one of the crucial phases of this study because it
contains the production flow and activities of the business. It also consists of how
much is the cost in producing the proposed product. This chapter is the foundation
of the study.
PRODUCT DESCRIPTION
skinned fruit that takes about six months to ripen. The fruit is a popular folkloric
medicine in treating many illnesses, when extracted into juice. Aside from its
healing properties, its shell is being used for ornamental decorations and musical
calabash juice, fresh chunked pineapple, crushed ice, low-fat milk and brown
Sugar. The drink contains Vitamin B1 which is essential for the breakdown of fat
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and protein and responsible for energy production and improves brain function;
Vitamin C which is necessary for the growth, development and repair of all body
tissues; calcium which builds and maintains strong bones; potassium which is
crucial to heart function and plays a role in skeletal and muscular contraction; and
as well as iron which helps metabolize proteins and play a vital role in the
production of hemoglobin and red blood cells. Also, the Calabash fruit contains
for antiangiogenic activities, a process that inhibits the growth and development of
new blood vessels in the body which could be used to help prevent the spread of
product to the public as it produces a lot of benefits that promote a healthy lifestyle
to people.
System Support and can also help reduce severe inflammation, tumor growth and
the risk of macular degeneration. The product has a unique taste which will be
extraordinary to the taste buds of the public. Apparently, pregnant women are
highly discouraged to consume the product as it induces labor. Overall, the product
is a healthy thirst quencher that will help individuals to increase health satisfaction.
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THE PRODUCTION FLOW
creation of the said product. The production flow of this study will serve as the
guide for the proper production of the product. Thus, the researchers developed
sequence of steps for its proper production and taste. It will also determine on how
Preparation of Raw Materials, Tools, and Equipments for the process of the
Calabash Juice
The raw materials is prepared by the persons on duty for the creation of the
Calabash Juice. The only raw material that is to be prepared is the Calabash Fruit
since it is the main ingredient of the proposed product. First, the fruit will be
inspected by the workers for around 2 minutes to ensure that it is not rotten.
Second, the tools: hammer, ladle, spoon, strainer, large and small pots, and wine
Step 1
Break the shell of the fruit using a hammer in opening it since it is thick and
won’t break without difficulty, but do not swing the hammer hard for it will sink into
Step 2
Scrape the inside contents of the fruit, which are white and in pulpy texture,
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Step 3
Transfer all inside contents of the fruit into the large pot to prepare it for the
Step 4
Boil the pot under low heat to control its temperature. Stir continuously and
observed the color until it becomes dark purple. Wait for about thirty minutes until
Step 5
When the juice is now ready for extraction, set it aside first for around 8
minutes to cool it down. Then use the strainer to separate the remaining residue
of the juice.
Step 6
Transfer the juice in the wine container after its separation from its residue.
Step 7
Preparation of Raw Materials, Tools, and Equipments for the process of the
Calabash Smoothie
The raw materials, tools, and equipments are prepared by the worker on
duty for the day. First, the worker will gather and arrange the raw materials:
calabash juice, honey, ice, pineapple, low-fat milk, and check if it the raw materials
are still fit for use. Second, the worker will prepare the blender, ice crusher,
measuring tools and packaging materials for the day. Make sure that the tools and
equipments will still be fit for the production of the product for the day.
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Production of the Calabash Smoothie
Step 1
Sanitize the tools and equipment equipments properly before starting the
process. Other raw materials such as pineapple chunks, crushed ice, honey and
low-fat milk are placed in a clean container and shall be regularly inspected to
Step 2
The blender is prepared by mixing all the ingredients. Place inside the
blender, all the ingredients necessary which include: the calabash juice, pineapple
Step 3
Mix all the ingredients in the blender and wait until it will turn into a clear
texture.
Step 4
In the final and last part of the production, place the smoothie inside the
plastic cup packaging and insert a straw for the consumer to take a sip and enjoy
the product. Serve it cool and chill. The full phase of completing the production of
juice is one hour; while in making the smoothie is about three to five minutes.
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Figure 2
Step 7. Chill it in the refrigerator Step 1. Break the shell of the fruit
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Step 4. Boil it under low heat
Figure 3
Step 1 Step 2
Step 4
Step 3
Put the main ingredients inside
Prepare the blender for use
the blender
Step 5 Step 6
Mix all the ingredients using the Put the smoothie in a plastic cup
blender
Figure 4.0
Calabash Smoothie
½ cup of Low-Fat Milk
Raw material is the ingredient of the product that is still in its original and
unprocessed or semi-processed state. It is the main input used for the production
of the product. These inputs are the essential part of the product for they will
Calabash
Crushed Ice
fat milk has to do with avoiding the extra calories and saturated
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Pineapple
In order to process and create the proposed product there are tools,
machines and equipments that will be necessary for its completion. Each one of
Measuring Cup
Figure 11
Measuring Cup
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Disposable Plastic Cup
Figure 12
Disposable Cup
Fire Extinguisher
This is used for the customers in order for them to sip in and
Figure 14
Straw
Refrigerator (Hanabishi)
Figure 15
Straw holder Refrigerator
Figure 16
Straw Holder
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Kitchen Sink
P2,500. Figure 17
Kitchen Sink
Apron
clothes from incidental stains and marks and dangers like excessive
P425.00
Figure 19
Mono Block Chair
Figure 20
Microwave Safe Containers
Chopping Board
Figure 21
Chopping Board
21
Emergency Light
Exhaust Fan
Figure23
Bowl Exhaust Fan
Figure 24
Cooler Bowl
P300.00.
Figure 25
Cooler
Garbage Can
Gaisano P175.00
Figure 26
Garbage Can
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Funnel
Figure 27
Funnel
Gas Stove
A kitchen tool that is mostly used for liquid and deep pots for
Figure 29
Ladle
Pots
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Sanitary Mask
Serving Spoon
Strainer
Figure 34
Strainer
Hair Net
Gaisano P12.00
Figure 35
Hair Net
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Kitchen Towel
Gaisano P50.00performance.
Figure 36
Kitchen Towel
PRODUCTION CAPACITY
Production Capacity is the volume of production that can be achieved by a
business in a given period using current resources. Through the estimation of the
Table 1
(a) [(a*b*c)-d]
(b) (c) (d)
1 6 4 12 18 270
2 6 4 12 18 270
3 6 4 12 18 270
4 6 4 12 18 270
5 6 4 12 18 270
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Table 1 displays the total number of working days in a year to determine the
Table 2
Production Capacity
(mL)
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Table 3
2019 9,639
2020 10,121
2021 10,627
2022 11,158
2023 11,716
The projected production capacity for the next five years is increased by
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PLANT LOCATION
Figure 37
Figure 38
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Calabash Smoothie is renting a small store space located in Jones Avenue
determining the success of the business. There are different factors in determining
the plant location for a business. Plant location refers to the “choice of region and
plant location is made after considering the cost and benefit of other alternative
sites. Selecting the ideal location from several choices is based on the
Brgy. Sambag 1 Cebu City is that the location is near the Cebu City Sports Center,
St. Vincent’s General Hospital and Abellana National High School. This particular
place is also a residential area. Marketing towards families who wants to enjoy
smoothies but don’t want to go too far can be effective. It can be a challenge in
terms of exposure to other markets. People who do not reside in this particular
area or do not have reason to go in this area might discourage them in visiting
Calabash Smoothie. But this remains as the optimal choice of location regarding
cost. Renting commercial spaces in the downtown area of Cebu would cost a lot
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UTILITIES
All business requires utilities to operate. Utilities like electricity, water, and
others play a vital role in the daily operations of a business. The proposed plan
Electricity
business’ daily operations, and these ultimately need electrical power. This would
Water
The water is primarily used in the sanitation and preparation of the tools and
The protection of the environment and the health of the population should
always be given importance. Taking into account the personal hygiene of people,
waste disposal must be taken seriously for proper waste disposal could not only
help the environment wherein the business is located, but also the environment as
a whole. The proposed plan should abide by R.A. 9003, or the Ecological Solid
Waste Management Act of 2000. This act aims to establish segregation among
Biodegradable Wastes
broken down by the action of bacteria or other living organisms; these include the
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shell of the Calabash fruit, pineapple rinds, and paper cups. These biodegradable
wastes are to be put in a trash bag which will be collected every day by a garbage
Non-biodegradable Wastes
plastic sachets, gloves, mask, straw and other non-decaying wastes that are part
biodegradable wastes are to be put in a trash bag and will be collected every
Sanitation
product. Policies must be taken into action to maintain the cleanliness of the area.
The working area, especially the tools and equipment, shall be regularly sterilized
and sanitized. Also, before the production starts, the workers are required to wash
their hands and wear gloves, mask, apron, and hair-nets to maintain the
cleanliness.
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CHAPTER III
MARKETING ASPECT
acquire customers establish and maintain both supplier and customer relationship
for successful business transactions. This chapter will tackle who are its target
market, the projected demand and supply, and product’s marketing schemes like
pricing, the channel of distribution and other marketing strategies will be identified.
TARGET MARKET
consumers will effectively raise the feasibility and success of the study since they
will be the focus in selling the product. Thus, having a specific group of consumers
that the study is aimed for the accuracy of the demand and possibly supply is
essential.
The target market for the “Proposed production of Calabash Smoothie and
its Distribution” are the health enthusiast joggers, athletes and customers at the
Cebu City Sports Center near Abellana National High School. The proponents
chose this group because the calabash fruit that is to be used in the smoothie is
Carbohydrate, Protein, Calcium, Iron, Potassium, Sodium and Fat and could help
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prevent major diseases, such cardiovascular diseases, and certain cancers. The
business location is also close to the St. Vincent General Hospital. For this reason,
the demand for a unique and nutritional beverage is in demand. Filipinos are free
spirited people who like to explore and experience something new. With this,
Miracle Smoothie will make its way to the industry catering the demands by offering
nutritious drink and innovating the typical smoothie that the Filipinos frequently
consume.
DEMAND
It is very important to know the demand for the product to determine the profitability
and capacity of the business. A well-estimated demand will provide the necessary
Table 4
n = 385
smoothie. But this data would not affect the success of the study since this question
is just to identify the respondent’s general knowledge about liquids. This table is
presented for informational purposes only. It does not affect the forecasts of the
study.
question will aid the proponents about the respondents’ knowledge of the calabash
fruit.
Table 5
n = 385
According to the data, only 41.00% are aware of the calabash fruit and the
majority of the respondents are not aware of it and its nutrients. This data would
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Respondents’ Interest in trying the Calabash Smoothie
The respondents’ interest in trying the product will aid the proponents in
determining whether they will buy or not depending on other factors and
Table 6
n = 385
According to the data, 88% of the respondents are interested in trying out
the Miracle Smoothie. This finding is a good indicator that a big majority of the
respondents are interested to buy the product, after which they may like it and
become a customer.
that would affect the consumer’s decision to buy or avail a product or service. This
will aid the proponents whether a location near the area will affect their willingness
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Table 7
n = 339
According to the data presented, 94% of the respondents are willing to avail
the Miracle Smoothie putting up a stall near the vicinity where they would jog and
exercise.
availing a service. This question will aid the proponents whether the projected price
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Table 8
n = 317
Whether or not P59.00 per cup is a reasonable price for this product
According to the data presented, 87% of the respondents are willing to buy
There are chances that the respondents would go back to the area where
the store is located since it is accessible to all. This will aid the proponents in
determining the frequency or total number of units expected to be sold during the
week.
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Table 9
n = 276
Due to some unrealistic findings during the survey, the proponents decided
this, twenty-two answers from the respondents were disregarded. The proponents
decided to patronize only the results within the range of 1-10 cups.
units of the product per week will be purchased by each person depending on their
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PROJECTED ANNUAL DEMAND
Table 10
Year Population
2017 10,000*
because the data is undeterminable and numerous people are going in and out of
the center every day from five in the morning until nine in the evening. Even the
NSO has no established population regarding this matter. For that, this will be used
Table 11
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Table 12
SUPPLY
quantity available for sale and all possible prices charged for that good. Some
products include soft drinks and juice. Both similar and substitute products are sold
in 7/11 convenience store, Elizabeth Mall, Jollibee, McDonalds and other micro-
competitor of the business. Maximizing profit is what all business aims for. To do
be known because in doing so, an effective and efficient calculation and application
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PROJECTED ANNUAL SUPPLY
Product supply of similar types of products in the market is essential for the
forecasting of the annual supply of the proposed product for this study. A forecast
of the annual supply of the product is made by the computation of the gathered
data from the respondents of the chosen target market. The proponents assumed
that 97% of the demand will be provided by the existing competitor, which is the
7/11 convenience store, Elizabeth Mall, Jollibee, McDonalds and other Micro-
Transaction businesses that are selling beverages by the reason that they are
the competitors every year because the product will be then recognized by the
market and it will result to them shifting to the Miracle Smoothie that contains more
Table 13
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PROJECTED DEMAND AND SUPPLY GAP ANALYSIS
The demand and supply gap analysis are made to establish the market
share of the proposed product. It is the difference between the projected demand
and the projected supply. The gap aids in the determination of the market share of
the proposed product and its capability to go through the existing market. This table
Table 14
on processed formulation of beverages. It has also been observed that the different
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PROJECTED MARKET SHARE
Every business wants to increase sales and grow market share. In order to
quantify the remaining business and then adopt strategic planning for the
betterment in increasing the sales. Market share projection makes this possible. In
this matter, a percentage is projected on the highest probability that the proposed
product will be purchased in the market. Table shows the information regarding
this matter.
Table 15
Formula:
Projected Market Share (%) = DSG or PC (whichever is lower)
Projected Demand X 100
Table shows the projected market share where demand-supply gap or
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MARKETING STRATEGY
advertising the product to its market in order to boost sales and profit. This is a
very important step in the introduction of the product because this will give the first
impressions to the consumers. A wrong move on this part could have a great
Consumers are much more attracted when they see stuffs like
introducing it to them.
The researchers decided to use more frequently the physical or visual types
3.1 Promotion
to be branded in the market, make the product trend, and maximize profit easily.
These can be achieved through creating promotional strategy and taking steps and
efforts to be known in public. The promotional tools that the business will be using
will include free sample, print media advertising and online marketing.
Free Samples
For Miracle Smoothie, it is a wise move to let the future consumers have a
little taste of the product enough for them to decide whether to patronize the
product or not. An employee will be walking around the vicinity of the stall and the
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Cebu City Sports Center to let the future consumers taste the product which could
Print Media
the project will use posters that will help for the unlimited exposure of the product.
Also, print ads are less intrusive than other forms of media in which prospects have
greater control as to when the prospect views the ads, which eliminates
interruptions. Written in the poster are the information about the business such as
email address and contact numbers. This will be place around the area of the store
and may also be posted on different places that are still accessible and convenient
Figure 39
45
Figure 40
Social Media
The researchers considered this as the biggest scope among all other
promotion mix tools. As marketers, the social networking sites such as Facebook,
twitter, and Instagram will be used to promote our products. This medium is
advantageous to the business because it is free and people have easy access to
it. It will help provide higher product boost by creating accounts with these sites
and sharing information regarding the offering. This will keep the public updated
with the newest features of the product. Also answering to the different comments
and feedbacks to the customers is also the concern. This is to gain trust and
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Figure 41
Facebook Page
Figure 42
Twitter Page
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Figure 43
Instagram Account
3.2 Packaging
Miracle Smoothie is available in 12oz plastic cup with the logo of the product
in front, its nutritional facts on its back, and a plastic straw for the consumer to take
a sip of the smoothie. The plastic cup is made of light-weight plastic material
because paper cups may not be enough to store low temperature drinks.
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Figure 44
It is the term of payment and delivery agreed between the buyer and seller.
This involves the payment, incentives, discounts, return/s and etc. This is also a
great way to create deals with the consumers for them to have a reason to keep
coming back. For this study, the researchers decided to give the incentive by giving
a loyalty card for each individual customer. And its deal is that, on the 7th purchase
of the consumer, 1 cup is equal to 1 purchase, they will receive a free 1 12oz cup
of Calabash Smoothie. The loyalty card will have no expiration date, and will exist
as long as the business will continue to exist. If a customer has fully utilized the
loyalty card or if the card is lost, they will be given a new card.
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Figure 45
Loyalty Card
entity’s product. This also refers to the path through which goods or services travel
Considering the fact that the Miracle Smoothie is just a new entrant in the
by conducting it directly between a company and consumers who are the end
users of the product. Miracle Smoothie will distribute its product through direct
channels or zero level channels. In this manner, the entity will sell its product
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Figure 46
Channel of Distribution
Producer Customer
Jones Avenue, Cebu City. This is to provide a direct touch between the consumer
and the brand. Through this, the customers can undertake physical interaction with
the sales staffs. Physical stores would be appropriate and would give convenience
Price is one major factor that could affect the customer’s decision to buy a
product. A price cannot be set too low, because a business may experience loss,
or too high, because it is no longer affordable to the customer’s budget. With this,
the researchers created a pricing policy in order to regulate the price of the product
in accordance to both the business and the customer’s advantage. Pricing policy
is important for it provides for the terms to be followed in calculating the cost of the
The total cost of the product is calculated first before setting the price of the
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The pricing strategy used for this proposed project is Psychological Pricing
involves using pricing that ends in “9” and “99”. According to Thomas and Mortiz,
“Nine-ending prices will be perceived to be smaller than a price one cent higher if
the left-most digit changes to a lower level, but not if the left-most digit remains
unchanged.” Noting that there are established brands with larger market share,
charm pricing will help the business acquire and get hold of the market share. The
following illustration show the computation of the cost of the product for the five (5)
year period.
Full Costing:
Table 16
Full Costing
(In Pesos)
years).
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CHAPTER IV
MANAGEMENT ASPECT
Every business needs people to pursue and makes the vision and mission
Management is the group of people who plan, controls and strategize the
project. It is essential because it is the first step of the actualization of the business.
In this period, general planning is done, the location and suppliers are identified,
necessary permits and licenses are secured, and employees are recruited.
Project Timetable
A Gantt chart is presented to help visualize how long the process is going
to take and plan the order of each task. It will aid the organization in tracking the
progress of each business activity that needs to undertake to initiate the proposed
plotted in sequence and its expected date and time frame of occurrence. In figure
17, the pre-operating period is to last for five months. The promotions, initial
production, and product testing, and Normal Operation are to take place
simultaneously
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Figure 47
Gantt Chart
Month 1 2 3 4 5
Activities
Week 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1. General Project
Planning
2. Sourcing of Funds
3. Lease Negotiation
4. Securing Permits
and Licenses
5. Leasehold
Improvement
6. Canvassing and
Purchasing of Raw
Materials
7. Canvassing and
Purchasing of Tools
and Equipment
8. Setting up of
Acquired Tools,
Equipment,
Furnitures, and
Fixtures
9. Recruitment,
Selection, and Hiring
of Employees
10. Training of
Employees
11. Promotions, Initial
Production, and
Product Testing
12. Normal Operation
Success starts with proper planning. The entity must plan and prepare the
possible events that they will encounter as they face throughout the journey. It is
in this phase that the management creates comprehensive plans and thorough
studies as a guide to the success of the project. It is at this stage that cautious
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decisions should be made, questioned and answered. All the essential matters
Sourcing of Funds
Funds serve as the fuel in running the business. It is important that the entity
a sole proprietorship, the business will raise its capital from the contribution of the
proprietor himself, through bank loans and well-off individuals. The funds will
Lease Negotiation
small-scale location first to minimize the costs to be incurred all throughout the
operating period. The proposed business site will be located at Jones Avenue
Brgy. Samabag 1, Cebu City. The owner or the lessee must establish a legal
negotiation with the lessor concerning the rental fees, modes of payment, the
length of stay, leasehold improvements, penalties, and other matters that are to be
forming a business which includes the acquisition of permits and licenses from the
bureaus and agencies of the government of the Philippines. It is in this phase that
contracts between other private parties are being executed and signed. It takes a
long period before all the necessary statutory requirements are to be completed
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Lease Improvement
necessary documents for the business. After the lease negotiation, various
renovations shall be needed for the enhancement of the business site. Itincludes
proper ventilation and wirings for the prevention of accidents, the plumbing of
waterways and disposal drainage and expanding the building in case the demand
The raw materials used for the production manifest the quality of how the
product will be made. It is trivial for the proprietor to look for accessible suppliers
to provide the raw materials that are needed in the long run of the business.
Through these potential business suppliers, the proprietor must give importance
to costs and benefits analysis to conclude for the best decision to be made.
In purchasing tools and equipment, quality should not be for granted. The
proprietor should assess carefully what the business needs to minimize costs that
are not relevant to the production. It will be a challenge on the part of the proprietor
to purchase tools and equipment needed that are of standard and durable so it
could be kept in the long run. The warranty and maintenance shall be given
57
during operations will be avoided, and there would be ease in the flow of the
operations. The set-up of the tools, equipments, furnitures, and fixtures would be
In any business, the employees are one of the most important and valuable
assets. Without them there, the business would not operate efficiently and
successfully. Each person brings something unique to the business, and it’s
important to seek out those with the best qualities. The proposed project will need
Training of Employees
the employees. It is very vital since it will show employees how to perform their
jobs safely and efficiently. A trained employee knows what they need to do
orientation, basic skills training, customer service training, and training to do the
job itself.
This stage involves the initial production and introduction of the proposed
product to the public. The advertisement styles and forms to be used for the
promotion of the product are further discussed in the previous chapter under
Marketing Strategy.
58
Normal Operation
The company has its own goals; it needs a detailed management plan to
attain this goal. It must be properly planned to have the best strategy for the
the owner’s legal liability and tax treatment. This is essential for the owner upon
business because it is easy for a start-up business. Aside from being easy to start,
it requires a very low cost in organizing this type of business. Aside from all these
considerations, its taxing power will be declared on the owner’s individual income
Organizational Structure
their roles are in the business. Also, this determines how each role and
management. Figure 4.0 shows the organizational structure for the proposed
project.
59
Figure 48
Organizational Chart
Owner
Bookkeeper
Bartender
a job quality. It will identify the scope of responsibility each employee would be
performing and giving the authority to do so. Thus, the employees will start meeting
Here are the following job titles and descriptions of the workers that would
60
Owner
• Purchase and raw materials necessary for the business, Cooks the
Calabash and turns it into juice and delivers them to the business stall.
activities log and making sure that personnel are knowledgeable and
of the company.
Bookkeeper
61
• Prepares financial documents (e.g. Purchase Orders, Sales Invoice,
etc.);
Bartender
• Take orders;
JOB SPECIFICATIONS
an entity. This will be attained by screening out the applicants who can perform the
job. Since the success will be obtained through the collective efforts of the workers.
Business organizations should set job standards in hiring qualified and suitable
individuals that could meet the standard requirements the business organization is
needs. Job specifications may include specific skills, types and amounts of work
62
or areas of knowledge. The following are the job specifications for one to be
Bookkeeper
• Bachelor's degree;
discipline;
Bartender
• A good stamina and ability to work for long hours while serving
customers;
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WORKING SCHEDULE
employee during working days. It also consists the time schedule of which the
The employee of the stall will be working 6 times a week from Monday to
Saturday with a worker with working hours of 5 hours per day during Monday to
. The stall will be open from 2:00 in the afternoon until 7:00 in the evening
during Monday to Wednesday and 11:00 in the morning until 7:00 in the evening
during Thursday to Saturday. The production of the calabash juice is done by the
owner during Sunday and will be delivered the following day and is expected to
Table 16
Schedule of Work
Schedule
Personnel
Sun Mon Tue Wed Thurs Fri Sat
Juice
Owner 10:30AM - 7:00PM
making
Bartender Day-off 2:00PM - 7:00PM
Bookkeeper Every last day of the month
RECRUITMENT PROGRAM
applicants, hiring and assimilating the new employee to the business. With this,
64
proper deliberation is needed to ensure success in choosing the qualified people
proprietor’s interest. Thus, the success of the operation of the business relies on
how carefully the proprietor choose his or her employees. For this proposed
business, to hire potential employees, job opening notices will be posted near the
business site. The management will also make use of the popularity of social
media sites and recruiting sites to advertise the vacant position. The following
• Resumé;
• Health certificate.
After such, the applicants will undergo an initial interview with the proprietor
to ask certain questions and grasp information straight from the applicant. After
COMPENSATION
Employees are essential people that could affect the business’ success.
65
inside the business. The table below shows the compensation for each employee
of the business:
Table 17
Compensation Table
Employee Benefits
Incentives are one of the reasons why employees work hard, at the same
time these are also the reason why employees maintain their productivity. Without
these incentives, the employees will not likely be determined to work hard and
will provide protection and aid against disasters like disabilities, sickness, death,
become a member of the government agency, even private business are required
to enforce this program to their employees, and once they become members they
66
beneficiaries. Likewise, this program will also help those not so fortunate to be able
The PAG-IBIG fund was established to aid workers to be able to acquire the
house of their dreams through a savings method design by the former. Every
employer is required and obliged to register and contribute for their employees.
The agency offers its members short-term loans or access to housing programs.
All workers are given the benefit of 13th month pay, provided that the former
has worked for the business for at least one month of a calendar year but not later
than December 24 of every year. Its amount is computed 1/12 of the total salaries
Paid Leaves
There are times when a worker cannot report for work because of different
reasons. And some of these reasons are inevitable causing the worker to leave
work and rest or take care of sick family members. There are different kinds of paid
leaves: Sick leave, Vacation leave, Service Incentive leave (Force leave),
Free Coffee
Coffee is available at the stall for workers who wish to warm themselves up
or keep them awake for the duration of the duty hours. This is for them to keep up
67
MANAGEMENT POLICIES
govern its actions. When they are followed, workplace accidents and incidents are
less likely to occur making the employees feel safe and comfortable in the
workplace. Also, it provides a roadmap for day-to-day operations and time and
Policies are good for employees, and the organization as a whole but these
when they are accepted after the recruitment stage. By doing so, they are
conveying that they have read and understood the policies written in the company
policy.
The following are the policies that every employee must follow:
being ready to start work on time, remaining on the job during the workday to
should notify the manager. Prior notice of absence which may occur because of
sickness or emergencies is a must. Also, employees are only allowed ten days
sick leave and fifteen days vacation in a year. In the event of a pre-planned leave,
68
employees should ask for the manager’s consent and approval and if not given,
During working hours and at all times while on work premises employees
must be free from the influence of drugs, alcohol and tobacco products. This type
creates an attractive business image. Society tends to judge people by how they
attracts and helps retain customers is established. Dress codes include wearing of
clean aprons and gloves that help in minimizing contamination, putting on of hair
restraints like hair nets to avoid having hair in the product, and lastly, no wearing
of jewelries aside from rings or stud earrings because it may fall into the product.
Confidentiality Policy
outside the business and replicate restricted documents. When employees stop
working, they are obliged to return any undisclosed files if there is any and delete
69
them from their devices. In case of violation, disciplinary and, possibly, legal action
is made. This policy is binding even after the separation of employment in cases
of any leaks.
Workplace Romance
it may raise concerns about favoritism, bias, ethics, and conflict of interest. Advice
Its purpose is to show employees that the company does not tolerate any
misconduct. The goal of disciplinary policy and procedure is to set and maintain
employee/s involved so that they will understand them. Before any decision to take
any disciplinary action, the employee is told of the nature of the complaint and an
investigation will be undertaken which takes into account any statements from
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The table on the next page shows the specific violations and sanctions that the
Table 18
71
Inappropriate Verbal Written 2-3 days 1-week
dress code warning warning suspension suspension
Romantic Verbal Expulsion
relationship warning
between co-
workers
Imprudent Verbal 2-3 days 1-week Expulsion
behavior warning suspension suspension
towards
customers
Stealing Termination
company’s
property or
money
72
CHAPTER V
permits is necessary in order for the business to operate legally. Licenses and
permits are mandatory for the purpose of identifying the business and making sure
that it is accountable for whatever actions and for keeping track of the business’
finances for tax purposes. Business permits regulate safety, structure and
appearance of the business community. They act as proof that your business
follows certain laws and ordinances. No matter how small or big a business is, they
LEGAL ASPECT
When a business fails to comply with all the licenses, permits, and tax
incurred, which can jeopardize the business. Seizure of property and assets is also
Businesses that comply with the rules and regulations within the jurisdiction of the
law will avoid the said consequences. A business which is formed contrary to the
elaborated in this portion. The following are the legal requirements needed by the
proposed project:
73
• Registration of Business Name
The following are the requirements for the registration of its name for Filipino
such as:
(PRC); and
74
3. Processing fee of five hundred (500) pesos with fifteen (15) pesos
under DTI:
registered online.
Registration is valid for five (5) years and shall be valid only at the
75
Securing Permits and Licenses
operated. The following are the legal requirements that it must conform:
Business Permit
Securing a Mayor’s Permit from the Cebu City Hall is one of the
requirements for the business to operate. The application must be done prior to
normal operations. These are the relevant requirements needed for the approval:
✓ DTI Registration
✓ Barangay Clearance
✓ Police Clearance
✓ Sanitary Permit
DTI Registration
Registering a business name with DTI is the first step to becoming a sole
proprietor as it gives you the sole right to use the business name.
Barangay Clearance
would be located in Brgy. Sambag 1 Cebu City. Anyone can apply for a certificate
after all the requirements have been complied with, necessary fees to be charged
76
and the approval of the Barangay Captain. This is very important in the
Sanitary Permits
wholesome, sanitary food preparation. The requirements for the issuance of the
Police Clearance
has not been involved in any criminal act. As part of safety precautions, employers
require this in the process of hiring qualified employees. It can be acquired from
the office of the Philippine National Police in Cebu City. The following are the
✓ Barangay Clearance
77
✓ Official receipt of the corresponding fees from the Municipal’s Treasurer’s
Office
required in the certification to be able to have a photo taken and fingerprints by the
Fire Protection unit in case of unforeseen events such as fire. This certification was
issued to certify that the establishment has complied the precautionary measures
being asked by the local government unit for the security in case of fire. The
stub.
78
Application for Social Security System (SSS) Membership
Every business institution is required to file for this application to secure the welfare
of the employees or workers. This is a requirement for them to avail retirement and
health benefits. This can also help them in assistance such as educational,
The owner of the sole proprietorship must secure the following requirements
for registration:
• Monthly contribution
• Schedule of contribution
• Quarterly contribution
• Sickness Notification
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accessible health care services for all citizens of the Philippines. It is likewise a
Private and public entities are required to register with PhilHealth for the
will be given and is one of the requirements for other permits and licenses about
The following are the requirements for Employer Registration in the private sector:
duplicate)
After having processed the requirements, PhilHealth will issue the following:
registered employees.
of Finance. It collects more than half of the total revenue of the government. The
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proposed business is under the Revenue District No. 82- Cebu City South. BIR is
mandated by law to assess and collect all national internal revenue taxes, fees,
and charges, and to enforce all forfeitures, penalties, and fines connected also,
including the execution of judgements in all cases, decided in its favor by the Court
of Tax Appeals and the ordinary courts. In completing the registration, the following
3. BIR Form No. 2305 (Certificate of Update and Exemption and Employer’s
4. Birth Certificate
5. 2x2 picture
Business Permit, if the former is still in the process with LGU) and PTR
should be used
81
1. BIR Form 1901 together with the documentary stamp tax requirements of
3. Pay P15.00 for the Documentary Stamp Tax (DST). And then present the
proof of payment.
concerned for new registrants to apprise then if their rights and duties.
6. The Regional District Officer (RDO) shall then issue the Certificate of
Registration (Form 2303) together with the “Ask for receipt” routine,
selling products related to food and drugs. Hence, the proposed business is
scheduled every Monday. Here are the stages to obtain the agency’s approval.
inquire about the requirements for FDA registration. Get an application form and
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2. Documents will be assessed to determine the amount to be paid for the whole
process. Applicant will be given a routing slip for the different stages of the FDA
3. At its Product Services Division, the FDA will evaluate the technical documents
4. FDA will proceed with the actual evaluation to be conducted by certified food
technologists.
6. The CPR, LOD and NOD are distributed at the Releasing Section of the FDA.
TAXATION ASPECT
citizens and corporate entities, on the production cost or sales price of goods and
services. Taxes are known to be the lifeblood of the government. Without it, the
expenditures.
Taxes detract businesses from gaining profit that is why it is not very popular
that takes advantage of legal loopholes and credits presented by the tax code. This
tax policy will help the business reduce its tax liability, thereby increasing its
83
contributes a lot to the progress of our country, without taxes our government
Understanding the tax laws will help a business plan for the future. A long
hard look at the different tax laws that pertain to the different ways that a business
will be registered to should be done because by doing so, an estimate will be made
on how much money will be owed for taxes. Business entities should comply with
the proper tax regulations required by the Bureau of Internal Revenue and other
Percentage Tax
This tax type is usually imposed from individuals or businesses that sells products
and services with annual sales not exceeding Php 3,000,000, and are not VAT-
Income Tax
individuals must file an income tax return every year to determine whether they
owe any taxes or are eligible for a tax refund. Income tax is a key source of funds
that the government uses to fund its activities and serve the public.
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Income Tax is a tax on all yearly profits arising from property, profession,
like. The succeeding table presents the graduated rates for income tax.
0 250,000.00 0 0
the Philippines.
Withholding Tax
the payer of an item of income to withhold or deduct tax from the payment, and
pay that tax to the government. In most jurisdiction, withholding tax applies to
employment income.
85
Business and bookkeeping agents
and agencies- If the current year’s
1601-E/2307 WE gross income is Php 720,000 and WI060 8%
below
withholding tax.
Excise Tax
The SSB or Sweetened Beverage Tax seeks to impose an excise tax of ten
pesos (Php 10.00) on sugar sweetened beverages, the rate of which shall be
beverages; and
removed from the place of production without the payment of excise tax.
For each place of production, a separate return shall be filed and the excise
tax shall be paid before removal of the sweetened beverages from the place of
production.
86
CHAPTER VI
FINANCING ASPECT
its financing resources for these are the lifeblood of the business entity. It is in this
aspect that the organization determines the costs necessary to put up the
business, as well as identifies the possible sources of funds needed for the project.
This phase guides the management in making decisions for the project’s cost to
to seeking possible financial resources that could be employed to carry out the
requirements, the terms and conditions forecast of operating revenues, costs and
expenses. In this stage, it primarily consists of the estimation of all the cost element
of the proposed project where resources could be fully utilized and applied
amount needed for initial capital to begin its operations. Thus, through proper
Sources of Financing
Funding is the fuel on which a business runs. Throughout its life, funds are
necessary. Since it is a sole proprietorship, the prospective owner will finance the
87
start-up capital first. His savings are likely to be the source of funds of the early
88
Note 1
Bookbinding 1,000.00
Honorarium 3,500.00
Note 2
89
BIR Registration 500.00
Note 3
Leasehold Improvements
Note 4
Production Equipment
90
Note 5
Note 6
Production Supplies
91
Straw Holder 1pc 200.00 200.00
Note 7
Direct Materials
Quantity
Note 8
Indirect Materials
Quantity
92
Straw 1,800 0.50 900.00
Note 9
Salaries Expense
Employees Days
Note 10
Rent Expense
Monthly 5,000.00
Total 25,000.00
93
Note 11
Utilities Expense
Water 900.00
Note 12
Cleaning Supplies
94
Note 13
Advertising Expense
Note 14
Transportation Expense
95
CHAPTER VII
FINANCIAL ASPECT
GENERAL ASSUMPTIONS
The following are the general assumptions used in the preparation of the financial
statements:
Operations
2. The business will start its pre-operating period from September 1, 2017 up
8. The business shall make the SSS, Pag-ibig and Philhealth contributions on
their respective prescribed schedules. Contributions for the last month shall
Production
96
Salaries
year. Such pay shall be equal to their annual salary divided by twelve.
3. The increase of the employee’s salary will be 2% and will start at the second
4. The stall workers will be paid every 15th and 30th of the month.
Sales
1. The selling price of the product will remain the same for the first five years
of the business
3. Premium for the redemption of the free smoothie is estimated at 200 units
every year.
2. All tools and equipments shall have no salvage value at the end for their
useful life.
accounting period and are expected to last until their expected useful life.
Depreciation
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1. The useful life of the depreciable assets without salvage value are as
follows:
• Blender 1 year
• Refrigerator 5 years
• Cabinet 5 years
Inventory
immediately consumed.
2. The purchase of crushed ice will increase according to the annual capacity
of the business.
Utilities
Production Supplies
Leasehold Improvement
1. Leasehold improvement shall be made before the start of the operation and
Rent
1. The lease term agreement provides that the lease term shall be 5 years and
the end of the lease term if the leasee no longer occupies the premises.
99
Allowance for Wastage
2. Pineapple and Low-Fat Milk are the ingredients that are likely to be spoiled.
Allocation of Expenses
101
Miracle Smoothie
Statement of Comprehensive Income
For the Years Ended, December 31
102
Miracle Smoothie
Statement of Changes in Owner's Equity
For the Years Ended, December 31
Miracle Smoothie
Statement of Cash Flows
For the Years Ended, December 31
104
Miracle Smoothie
Statement of Financial Position
As of the Years Ended, December 31
106
Schedule 3 - Cost of Goods Sold
107
Schedule 5 - Purchases of Raw Materials
108
Schedule 6.1 - Raw Materials Inventory - Calabash Fruit
109
Schedule 6.4 - Raw Materials Inventory - Low-fat Milk
110
Schedule 7 - Direct Labor
Fixed Overhead
Production Supplies 11 ₱ 2,730.00 ₱ 2,730.00 ₱ 2,730.00 ₱ 2,730.00 ₱ 2,730.00
Utilities Expense 14 26,400.00 26,400.00 27,192.00 27,192.00 28,007.76
Leasehold
2,205.00 2,205.00 2,205.00 2,205.00 2,205.00
Improvement 16
Depreciation Expense 21 5,702.50 5,702.50 5,702.50 5,702.50 5,702.50
111
Total Fixed Overhead ₱ 37,037.50 ₱ 37,037.50 ₱ 37,829.50 ₱ 37,829.50 ₱ 38,645.26
Total Manufacturing Overhead ₱ 74,549.00 ₱ 76,136.00 ₱ 78,772.50 ₱ 80,731.00 ₱ 83,474.73
1L Bottle 10 0 0 10 0 in units
Price ₱ 10.00 ₱ 10.00 ₱ 10.00 ₱ 10.00 ₱ 10.00
Total ₱ 100.00 ₱ - ₱ - ₱ 100.00 ₱ -
Total Cost of Indirect
₱33,836.50 ₱35,423.50 ₱37,194.50 ₱39,153.00 ₱ 41,006.00
Materials
112
Schedule 10 - Cleaning Supplies
Unit
Particulars Quantity Unit Cost 2019 2020 2021 2022 2023
Broom 2 pcs ₱20.00 ₱ 40.00 ₱ 40.00 ₱ 40.00 ₱ 40.00 ₱ 40.00
Dustpan 2 pcs 45.00 90.00 90.00 90.00 90.00 90.00
Garbage Can 2 pcs 175.00 350.00 - - 350.00 -
Trash Bags 288 pcs 15.00 4,320.00 4,320.00 4,320.00 4,320.00 4,320.00
Cleaning Detergent 12 pcs 60.00 720.00 720.00 720.00 720.00 720.00
Rags 3 pcs 40.00 120.00 120.00 120.00 120.00 120.00
Mop 1 pc 169.00 169.00 169.00 169.00 169.00 169.00
Sanitary Mask 2 pcs 50.00 100.00 100.00 100.00 100.00 100.00
Total ₱ 5,909.00 ₱ 5,559.00 ₱ 5,559.00 ₱ 5,909.00 ₱ 5,559.00
Unit
Particulars Quantity Unit Cost 2019 2020 2021 2022 2023
Apron 2 pcs. ₱25.00 ₱ 50.00 ₱ 50.00 ₱ 50.00 ₱ 50.00 ₱ 50.00
Hairnet 1 pack 12.00 12.00 12.00 12.00 12.00 12.00
Measuring Cup 2 pcs. 79.00 158.00 158.00 158.00 158.00 158.00
Ladle 3 pcs. 50.00 150.00 150.00 150.00 150.00 150.00
Knife 3 pcs. 100.00 300.00 300.00 300.00 300.00 300.00
Gloves 2 dozen 125.00 250.00 250.00 250.00 250.00 250.00
Strainer 1 pc. 50.00 50.00 50.00 50.00 50.00 50.00
Kitchen Towel 2 pcs. 50.00 100.00 100.00 100.00 100.00 100.00
113
Chopping Board 1 pc. 150.00 150.00 150.00 150.00 150.00 150.00
Microwave Safe Containers 5 pcs. 28.00 140.00 140.00 140.00 140.00 140.00
Straw Holder 1 pc. 200.00 200.00 200.00 200.00 200.00 200.00
Bowl 2 pcs. 85.00 170.00 170.00 170.00 170.00 170.00
Cooler 1 pc 300.00 300.00 300.00 300.00 300.00 300.00
Funnel 5 pcs. 50.00 250.00 250.00 250.00 250.00 250.00
Serving Spoon 3 pcs. 150.00 450.00 450.00 450.00 450.00 450.00
Total ₱2,730.00 ₱2,730.00 ₱2,730.00 ₱2,730.00 ₱2,730.00
114
Schedule 13 - Rent Expense
No. of
Cost months 2019 2020 2021 2022 2023
Rent Expense ₱5,000.00 9 ₱45,000.00 ₱45,000.00 ₱45,000.00 ₱45,000.00 ₱45,000.00
Security Deposit ₱5,000.00 1 5,000.00 - - - -
Advance 3-
₱5,000.00 3 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00
months
Total ₱65,000.00 ₱60,000.00 ₱60,000.00 ₱60,000.00 ₱60,000.00
Allocation of
Expenses
Production ₱26,400.00 ₱26,400.00 ₱27,192.00 ₱27,192.00 ₱28,007.76
Selling ₱26,400.00 ₱26,400.00 ₱27,192.00 ₱27,192.00 ₱28,007.76
115
Schedule 15 - Depreciation Expense - Production Equipment
116
Schedule 16 - Depreciation Expense - Leasehold Improvement
117
Schedule 17 - Furnitures and Fixtures
118
Schedule 19 - Accumulated Depreciation
120
Schedule 23 - Transportation Expenses
121
Schedule 25 - Advertising Expense
122
Schedule 26 - SSS Contribution
123
Schedule 27 - PhilHealth Contribution
124
Schedule 28 - PAG-IBIG Contribution
125
Schedule 29 - Operating Expense
General and Administrative Expenses Schedule 2019 2020 2021 2022 2023
Cleaning Supplies 10 ₱ 5,909.00 ₱ 5,559.00 ₱ 5,559.00 ₱ 5,909.00 ₱ 5,559.00
Utilities Expense 14 26,400.00 26,400.00 27,192.00 27,192.00 28,007.76
Depreciation Expense 21 5,702.50 5,702.50 5,702.50 5,702.50 5,702.50
SSS Contribution 26 14,144.40 14,144.40 14,144.40 14,144.40 14,144.40
Philhealth Contribution 27 5,400.00 5,400.00 5,400.00 5,400.00 5,400.00
PAG-IBIG Contribution 28 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Permits and Licenses 24 2,635.00 1,830.00 1,830.00 1,830.00 1,830.00
Research and Study Cost 7,225.00 - - - -
Total ₱ 68,615.90 ₱ 60,235.90 ₱ 61,027.90 ₱ 61,377.90 ₱ 61,843.66
Selling Expense
Advertising Expense 25 ₱ 8,556.09 ₱ 6,638.69 ₱ 6,477.20 ₱ 6,204.77 ₱ 6,043.90
Premium Expense 40 16,319.05 16,797.54 17,208.29 17,308.22 17,702.57
Rent Expense 13 60,000.00 60,000.00 60,000.00 60,000.00 60,000.00
13th Month Pay 12 7,987.50 7,987.50 8,147.25 8,147.25 8,473.14
Leasehold Improvement 16 2,205.00 2,205.00 2,205.00 2,205.00 2,205.00
Professional Fee 22 36,000.00 36,000.00 36,000.00 36,000.00 36,000.00
Transportation Expense 23 800.00 800.00 800.00 800.00 800.00
Percentage Tax 35 17,061.03 17,914.17 18,809.79 19,749.66 20,737.32
Excise Tax 42 20,524.25 21,550.56 22,627.99 23,758.64 24,946.79
Total ₱ 148,928.67 ₱ 148,342.90 ₱ 149,647.53 ₱ 150,414.90 ₱ 151,961.93
126
Schedule 30 - Accrued Electricity Expense
127
Schedule 32 - Accrued PhilHealth Contribution
128
Schedule 33 - Accrued PAG-IBIG Contribution
129
Schedule 35 - PercentageTax
130
Schedule 37 - Expanded Bookkeeper Withholding Tax
131
Schedule 39 - Premium Expense
132
Schedule 41 - Excise Tax
133
Schedule 42 - Allowance for Wastage
134
FINANCIAL STATEMENT ANALYSIS
used by various interested users to better understand and manage the business.
financial capitalization is a leading cause for financial stress and failure. The role
solvency.
trends. The rate of financial analysis is to assess the various aspects of the
Liquidity Ratio
It provides information about the firm’s ability to pay its current obligations
and continue operations. Based on results, the ratio that yields higher value is an
indication that the business possesses a huge margin of safety in paying short-
term debt. The interpretation of the ratio is of great help for the creditors to decide
Current Ratio
The data shows that the business would be able to pay the current liabilities
with its current assets due to higher current assets than the current liabilities. The
increasing ratios from 2019-2023 indicates that for every one-peso liability the
entity has more than cash available to pay off such debt.
Quick Ratio
Current Liabilities
The quick ratio of the business shows that it is still capable of paying off its
maturing obligations. Quick ratio is similar to current ratio except that the current
assets which are converted to cash quickly are the only included that signifies that
the company could pay in the very near term. The quick ratio of the company is
increasing every year meaning that more cash is entering the business and will be
136
Solvency Ratio
Solvency ratio is used to measure the ability of the business to pay all its
current and noncurrent liabilities when they fall due. It indicates how solvent the
entity is and whether the cash flow is enough to fulfil its liabilities. The lesser the
solvency ratio, the greater chances it will fail to pay its debt obligations.
Debt-Equity Ratio
equity. The ratio is also used to indicate how much debt a business is using to
The data provided above shows that the business relies on the investment
of the owner and not of loans or debts. The debt-equity ratio is computed also
shows that the business can sustain its life without the help of outside or third-party
financing groups. Liabilities consists only of accrued liabilities and no loan has ever
taken place. In case the business decides to take a loan, they could easily pay
them.
Equity Ratio
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The equity ratio indicates the percentage of total assets provided by the
that the assets of the business are invested from the owner’s investment and not
of Bank Loans. This will also attract potential investors to finance the business and
Profitability Ratio
its past performance and whether the business can continue generating profit in
the future. The ratio indicates whether the proposed business is profitable or not.
A profit is what is left of the revenue the business generates after it pays all
Return on Sales
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Return on sales is computed to determine the percentage of income after
deducting all expenses during the operations. The data shown above shows little
percentage of return on sales since net income is very low. but is still favorable
Return on Assets
percentage of the profit earned in the business in relation to its assets. The data
shown above shows positive results since that all cost of assets can be recovered
Return on Equity
it determines how well the company is performing with the investment contributed
by its owners.
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Return on Equity
The table shows that every year, the return on equity increases. It is an
indication that the company has been able to earn from the investment made. The
Contribution Margin
The total contribution margin generated by an entity indicates the total earnings
Contribution Margin
Contribution Margin
93% 93% 93% 93% 94%
Ratio
The data shown above shows a possible income that could go towards the
business. This is a positive data since cost of variable is only a little percentage
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Schedule 2019 2020 2021 2022 2023
Variable
Overhead
Indirect
Materials 9 ₱33,836.50 ₱35,423.50 ₱37,194.50 ₱39,153.00 ₱41,006.00
Allowance
₱ 3,675.00 ₱ 3,675.00 ₱ 3,748.50 ₱ 3,748.50 ₱ 3,823.47
for Wastage 43
Fixed
Overhead
Production
₱ 2,730.00 ₱ 2,730.00 ₱ 2,730.00 ₱ 2,730.00 2,730.00
Supplies 11
Utilities
26,400.00 26,400.00 27,192.00 27,192.00 28,007.76
Expense 14
Leasehold
2,205.00 2,205.00 2,205.00 2,205.00 2,205.00
Improvement 16
Depreciation
5,702.50 5,702.50 5,702.50 5,702.50 5,702.50
Expense 21
Total Fixed
Overhead ₱37,037.50 ₱37,037.50 ₱37,829.50 ₱37,829.50 ₱38,645.26
Total Manufacturing
Overhead ₱74,549.00 ₱76,136.00 ₱78,772.50 ₱80,731.00 ₱83,474.73
Break-Even Analysis
Break-even Analysis depicts the point in which sale and expenses will
break-even or will equal to a zero income or loss. It determines how much shall be
produced or sold at a minimum to ensure that the project does not lose money.
Break-Even Analysis
to recover the cost invested in the business without experiencing any lost or profit
during the operating year. It shows a growing number throughout the year since
Payback Period
Payback Period refers to the period of time required for the amount to be
invested in an asset to be repaid by the net cash flow generated by the asset. It is
the simple way to evaluate the risk associated with the proposed project.
Cost of
Present Value
Investment Net Cash PV of Cash
Year PVF Balance Payback
to be Inflow Inflows
Years
Recovered
1 ₱ 112,071.00 ₱ 28,823.92 0.893 ₱ 25,739.76 ₱ 86,331.24 1
2 86,331.24 71,249.77 0.797 56,786.07 29,545.16 1
3 29,545.16 68,145.24 0.712 48,519.41 - 0.61
4 - 90,479.67 0.636 57,545.07 -
5 - 115,170.71 0.512 58,967.40 -
Within 2.61 years the business can recover the investment spent by the sole
proprietor. The lower the amount of Payback years, means the faster and bigger
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SENSITIVITY ANALYSIS
can attain at a future date are incorporated in the five-year projected financial
revenues.
analysis to gain more insight into the operation of the business. This study aimed
with a focus on financial performance. The following are used in the assumptions
Table 21
Some operating expenses and the cost of goods sold are assumed to
increase 5% for all the scenarios due to the unstable economy that will result in
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of revenues is based on the expected growing beverage industry. This will result
consumers.
COMPARATIVE
Return on Equity
Original 18% 44% 62% 91% 113%
Scenario 1 3% 21% 25% 28% 27%
Scenario 2 -83% 195% 63% 32% 20%
Scenario 3 -154% 144% 56% 31% 21%
Break-even Point in
Peso Sales
Original ₱531,189.50 ₱558,040.50 ₱586,050.00 ₱615,420.50 ₱646,414.53
Scenario 1 514,128.47 540,126.33 567,240.21 595,670.84 625,677.21
Scenario 2 474,981.32 502,189.32 528,656.64 557,670.14 587,431.99
Scenario 3 457,920.29 484,275.15 509,846.85 537,920.48 566,694.67
Payback Period
Original 2.61
Scenario 1 3.80
more than 5
Scenario 2
years
more than 5
Scenario 3 years
For Net income, Scenario 2 is much more sensitive than scenario 1 but of
all the 3 scenarios, scenario 3 is the most sensitive since it has the lowest numbers
amongst the rest. This means that if sales go down, the business could still earn
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income, if the prices go up and both sales go down and prices goes up, both
all the 3 scenarios, scenario 3 is the most sensitive since it has the lowest
percentage of return. This means that when expenses go up and sales remains
the same or goes down the business would need to raise the price in order to
1 but of all the 3 scenarios, scenario 3 is the most sensitive since it has the lowest
break-even in peso sales. The business would need to increase the price in order
to even lower down the break-even point. The lower the amount of break-even
shows a positive result since that the break-even will be easily met if breakeven is
low.
Conclusion
delineates the lower net income compared to scenario 1 and 2. It is concluded that
in this proposed business, the increase of costs and expenses is more sensitive
than the decrease of revenues. The impact of having both the decrease of
revenues and increase of costs and expenses is the most sensitive among the
three scenarios. Since that scenario 3 shows that worst possible scenario that the
the business would be at stake if no proper action will be taken in order to adjust,
norms and ethics and other social philosophies that influence consumer behavior
to shape an economy. The aim is to earn a profit. However, while doing so, the
proposed company should also take account of its corporate social responsibility.
Our community is continuously growing and improving, that is why it is very fitting
that the proposed business’ operation will relate to the public’s advantage. Also,
the society and the economy at large can also benefit in another way. This
proposed business will give socio - economic benefits to the respective sectors:
Government
One of the duties of the government is to provide its people with services.
They are embedded with the power to collect taxes, the lifeblood of the country,
from its people. The taxes collected from the proposed business will raise more
productivity.
Community
Every business should promote the benefit and general welfare of the
society. Being involved is one way of doing so in the society. An organization can
support a local charity; sponsor a local sports team, offer scholarships and job
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business is giving back to the community for its help in alleviating the former among
competitors.
Competitors
innovation. The organization can use this knowledge to come up with new
enhance customer loyalty, which could improve the business performance. Also,
and standards. They are challenged to provide better quality products to their
customers.
Target Market
making which is only possible with the existence of consumers. A target market is
recognized to attract customers. In this way, the business can focus on whom they
will sell their product. If the industry is implemented, there will be a provision of a
kind of medical drink that prevents illness and promotes living which will satisfy the
Related Industries
related industries will also be benefited. Such as the utility companies like in
electrical and water companies. There will be an increase in their revenues once
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the project will be implemented because there will be more demand for their
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Figure 20
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CHAPTER IX
ANALYSIS
identify factors that would affect the firm internally and externally. Internal factors
are those that might affect the business directly in which the entity has control over
all the factors in making a business decision. It stands for strengths, weaknesses,
challenges and finding ways to enhance business profitability. These factors refer
to firm’s strengths and weaknesses that the company may have and the trials they
are facing. On the other hand, external factors are those that might affect the
has no control. A proper analysis is made to make a better decision for the firm’s
stability. These factors must be analyzed and evaluated because it can obstruct
Next page is Figure 21, showing the 4-cell SWOT Matrix. Its discussions
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Figure 21
SWOT MATRIX
STRENGTHS WEAKNESS
MATCH
SWOT ANALYSIS
negative factors that affect in attaining the goals of the business. It will help the
company to identify the cause of errors in prospering it and converting these into
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STRENGTHS
questions “What do we do well?” or “What is good for our product?” which are
helpful in making decisions for the company. Strengths are the internal factor that
the company can only control. It helps the company in determining their distinction
Natural Flavouring
The business aims to feature natural flavors that direct competitors have
nothing to offer. The product is made of natural flavoring that would present the
customers a beverage that suits to their lifestyle. The ingredients for this product
includes calabash juice, pineapple, honey, crushed ice, and low-fat milk. It can
provide a thirst quencher that consumers would enjoy and at the same time
Loyalty Card
The proposed business gives loyalty cards to customers in which they offers
a reward for their regular purchase of the product. Through this, the proposed
company can get to know well its customers; it’s also a tried and trusted method
of keeping them.
The product being organic and natural, contain a lot of health benefits which
provides consumers advantage regarding its satisfying taste and enhanced health.
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Psychological Pricing Strategy
which it influences the way that the customers view the product. The Calabash
Smoothie costs at Php 59.00 which attracts customers more than when it costs at
Php 60.00. Customers are more likely to get swayed by the incremental price
WEAKNESSES
competitive position and its opportunity to post positive returns on the investment.
Knowing the business’ weaknesses is important because in doing so, the areas
The proposed business would be the first to venture into the production of
smoothie out of Calabash locally. Since unknown in the city of Cebu, there would
the fruit in their backyard. It lacks known plantation that produces sufficient quantity
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Can Easily be Copied
easily be imitated.
The business offers only one flavor which is the pineapple flavor. Customers
OPPORTUNITIES
boost in all aspects of the business from its image to its sales. It involves future
much more. Determining business opportunities will help future progress once the
The Philippines only experience two climates: sunny and rainy. And each
atmosphere mostly lasts for six months or half a year. During the sunny season,
the temperature in the Philippines is extremely burning. And this will cause its
citizens to thirst and would find something to drink to quench such thirst. And such,
the product would fulfill the need while at the same time would give health benefits
to the consumers.
Franchise Opportunities
another location. With the right amount of capital and planning, it is possible for the
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entity to let people franchise its name to supply the demand in other locations. If
the product will hit the market very positively and it establishes a name for itself, a
beverages, a lot of people will most likely prefer food because of its variety of
combinations. But nowadays, drinks are beginning to keep up with the same
unusual, the product of the study will fit since a smoothie out of calabash is not
THREATS
Business threats are anything that can adversely affect its performance and
achievement of a company’s goals. These are external and negative factors that
do not benefit anything and are beyond the control of the company. Taking them
into account can help in making the best decisions and by not doing so can cause
Competitors
Since the nature of the product is quite ordinary in the market, potential
competitors are everywhere making the product less special in the eyes of the
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Substitutes
When the economy is unstable, and once the customers’ salary tightens, the
budget for food likewise would go down. Hence, the beverage being not a
necessary part of the meal; it may potentially affect the sales of the product.
There are no direct competitors as of this time which is good for a start-up
business.
The strength of the original idea about the product is protected by applying
a patent for the concept. Through this, the signature product will continue to
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produced and be patronized by many consumers without any fear of being
imitated.
Competitors
significant impact on its demand. Its taste can provide satisfaction to the
Substitutes
competitors. It can make the business more competitive in marketing the product
to the consumers. It is necessary to consider the nuances of the company and the
market.
thing. In an uncertain business world, one thing is certain; entrepreneurs will find
a way to turn that uncertainty to their advantage. It is the time where the business
needs to focus on their employees, flexible workers, and suppliers. It will challenge
them to improve and develop the mindset, skills, and behaviors of the employees
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MATCHING STRENGTHS TO OPPORTUNITIES
Filipinos are free spirited people who like to explore and experience
something new. With the Miracle Smoothie, it will make its way to the growing
beverage market industry catering the demands by offering nutritious drink and
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CHAPTER X
SUMMARY
answered:
1.1 Technical;
1.2 Marketing;
1.3 Management;
1.5 Financing;
1.6 Financial;
project?
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FINDINGS
Based on the data presented in the previous chapters, the following are
summarized:
Technical Aspect
low –fat milk, honey and crushed ice. The smoothie is rich in nutrients such as
Calcium, Iron, Potassium, Sodium, and Fat which could help prevent major
the calabash smoothie will be at Jones Avenue Brgy. Sambag 1 Cebu City. The
product will be positioned in the market as a new and healthier beverage compared
Marketing Aspect
The target market for the proposed project is the health enthusiast joggers,
athletes, and customers at the Cebu City Sports Center near Abellana National
High School. Based on the data gathered from the respondents, the majority of
88% are only interested in trying the Miracle Smoothie. The gathering of data is
based on the total population needed for the breakdown. The proponents saw a
substantial opportunity and demand for the new business which can penetrate the
market. There is the highest probability that the product will be purchased in the
market as its market share is projected to increase every year. The total cost of
the product is calculated first before setting the price of the product. And then the
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researchers decided to set it at a reasonable price of P59.00. The researchers
settled to increase the charge every year by P3.00 also depending on the increase
to be known in public, make the product trend, and generate profit easily. These
are accomplished through creating a promotional strategy and taking steps and
tools that the business will be using comprise print media advertising, free
Management Aspect
The business will start as a sole proprietorship type of business since it will
require smaller capital to start such business. Also, the proposed project is
manageable by one person since only a small number of personnel will be hired,
business has also crafted some policies to regulate and to make sure that its
The proposed project should comply with the following legal requirements
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Also, the business would be subjected to pay income tax, documentary
stamp tax, withholding tax, expanded withholding tax and percentage tax.
Financing Aspect
Since the proposed project is a sole proprietorship, funds are sourced from
the owner’s personal savings with additional resources borrowed from institutional
lenders such as banks and well-off individuals. The start-up capital of the proposed
preliminary costs of the business which includes the initial operating expenses,
materials, equipment and other costs essential for the operation of the industry.
Financial Aspect
The financial aspect of the proposed business shows that it will be profitable
starting the first year of the operation. Regarding its sensitivity, the scenario has
the worst impact of all due to the assumption of decreasing the revenues and
Socio-Economic Desirability
the community benefit when this proposed plan be implemented. The target market
can have the medical drink that prevents illness and promotes living which will
satisfy their needs and wants. It can also open opportunities to other sectors
SWOT Analysis
The business has its strength, weaknesses, opportunities, and threats that
would help in making future decisions. SWOT matrix is used to illustrate those
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factors mentioned. It involves specifying the objectives and identifying the internal
and external factors that are favorable and unfavorable to achieve the business
objectives. Identifying the SWOT is vital because this is the way of knowing the
possible step to make the best plan to reach the objectives. SWOT analysis is also
CONCLUSION
After evaluating all the results in all the gathered information and
feasible based on the evaluation of the Research Ethics Board because of the
suggested seeking for the second opinion. Thus, researchers found other studies
from Notre Dame of Dadiangas University that revealed that the “calabash extracts
can prevent blood vessel growth and development and are not poisonous.” Other
studies also showed that “According to the Philippine Council for Health Research
Technology (DOST), the students’ analysis mentioned above revealed that the
calabash “fruit and leaf extracts contain flavonoids such as quercetin and
process that inhibits the growth and development of new blood vessels in the
body.” Despite the research ethics board results, the proponents experimented the
finished product which is the Miracle Smoothie. The proponents had tasted it
numerous of times on different dates and time, and there was a feedback about
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their regular intake of the calabash juice. It has been tested by other Filipinos as
well for treating their illnesses. Thus, the proponents concluded it to be edible,
viable and feasible in all aspects. Likewise, it is also socially and economically
desirable.
RECOMMENDATIONS
Smoothie.”
recommended:
calabash fruit.
1.2 On the chemical reaction of the calabash fruit if mixed with different
varieties.
164
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Philippines:
Press, Inc.,
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treatment
165
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http://www.pchrd.dost.gov.ph/index.php/news/r-d-updates/3133-calabash-fruit-
found-potential-in-lowering-blood-sugar
Ejelonu,B.C., Lasisi, A.A., Olaremu, A.G., Ejelonu, O.C. (2011). The chemical
https://www.ajol.info/index.php/ajb/article/view/99140
https://businessmirror.com.ph/calabash-the-miracle-fruit/
bagged-top-awards-in-national-research-competitions/
Nandita Das; Md Ekramul Islam; Nusrat Jahan; Mohammad Saiful Islam:; Alam
ethanol extracts and fractions of Crescentia cujete leaves and stem bark and the
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