BUSINESS PLAN

Cor Jesu College, Inc.

Sacred Heart Avenue
Digos City Davao del Sur

GRADUATE SCHOOL

In Final Fulfillment of the Requirements in Development of Enterprise

Submitted by

Fatima M. Chin

Submitted to

Mr. Raymond Hastings

October 2020
EXECUTIVE SUMMARY
 INTRODUCTION

The Philippines has consistently been notable around the globe for its abundant

resources. Resources such as its bodies of water, land and forests, minerals, and fisheries.

However, even with all that, the nation is likewise wealthy in its agricultural resources.

Countries, for example, the United States, Japan, and China import our goods. One usually

known agricultural product the Philippines has would be eggs, more specifically chicken eggs.

Chicken eggs are a very common produce throughout the globe. According to United

States Department of Agriculture (USDA), a single person can consume up to 259 eggs in a year.

“Chicken egg production contributed to 3% of the total value of agriculture in the Philippines

during 2002” (Layers Production and Business Guide, 2010). Be as it may be, an egg is

something everyone eggs occasionally, while an egg can be used as daily supplement to augment

our protein needs. Egg itself is a commodity that is readily used for numerous purposes, because

of its highly nutritious content, it is used in manufacturing industries for making of drugs,

supplements, cosmetics, baking, confectioneries, and other activities.

The egg business is one of the ventures that would consistently be there. Egg distribution

business is all about buying eggs directly from farms and reselling at wholesale prices to

retailers, individuals, wholesalers, or even the final consumers. It is an exceptionally productive

business, but most people have not realized the immense investment benefits it brings because

eggs are consumed daily in most households.

Business Name

The name of the business is “Sunnyside Egg Distributor”. The name of the business is

derived from the type of cooking method of eggs that is sunny side up. An egg cooked “sunny-

side up” means that it is fried just on one side and never flipped.

Business Logo

Sunnyside Egg Distributor

Nature of Business

Sunnyside Egg Distributor is an egg distribution business engaged in buying eggs from

poultry farms, disposing of any portion of this production on a graded or assorted basis or other

persons on his own account and selling or transferring eggs to other dealer-wholesalers,

processors, retailers or consumers.

Business Location

Sunnyside Egg Distributor will have its storage facility or outlet at Kapatagan Digos City.

Eggs are fragile and storage facilities are needed to keep them from spoiling. While storing eggs

in cold storage, they should not be washed. However, these must be clean. Cold storage for eggs

requires close monitoring if ideal storage conditions are to be met.

Business Organization

Sunnyside Egg Distributor is a sole proprietorship type of business that is managed by

single entrepreneur. The owner of the business is also the manager of the business.

Manager/Owner

Staff Driver

Figure 1. Organizational Chart of the Business

Product Description

Our fresh farm eggs are produced from JVIC Poultry Farm owned by Mr. James Vincent

Chin located at Malalag Tubig, Sta. Maria Davao del Sur. All their fresh eggs will be delivered

to their outlet at Estrada 5th Digos City. All egg-laying chickens at JVIC Poultry Farm are raised

in their own five houses of battery cage. Eggs are known as the healthiest food in the world as

they are one of the best sources of protein, rich in cholesterol which reduces many health risks

and is useful in the growth and development of young children. Eggs are also rich in vitamin A

for good eyesight and contain chlorine which is important in the production of molecules in the

brain. There are six different weight classes for shell eggs. They are:

 Peewee eggs. These come from young chickens who lay eggs infrequently and are not

readily available in most grocery stores.

 Small eggs. Also called “pullet eggs,” these come from young hens. Much like peewee

eggs, they are not readily available in most grocery stores.

  Medium eggs. Medium eggs are the smallest size of eggs you can expect to find at the

grocery store.

 Large eggs. These are the most common eggs and the eggs that most recipes call for,

even when they do not specify size. Large eggs are always a safe bet.

 Extra-large eggs. Slightly bigger than large eggs, extra-large eggs may be called for

explicitly in some recipes.

 Jumbo eggs. Jumbo eggs can be more than 20% larger than typical large eggs. They are

rare, but not as rare as peewee eggs and small eggs.

Figure 2. Standard Egg Weight Size

Target Market

The target market of Sunnyside Egg Distributor are the local retailers of eggs in

Kapatagan, Digos City. Many poultry farmers produce eggs on their farms, but do not know how

to market their products or reach out to their target customers. Egg distributors’ helps to bridge
this gap by going to poultry farms, buying their eggs at reduced price and transport them to the

retailers or end consumers.

MARKET ASSESSMENT

Demand and Market

The level of demand for eggs is determined by price, the number of potential

consumers, their purchasing power and by the extent to which they prefer to buy eggs rather than

alternative foodstuffs.

SWOT Analysis

Strength Weaknesses
 Affordability for customers  Competitors can offer similar products

 Ability to sell products online quickly

 Limited start up risk  High transportation cost

 Fresh farm produced eggs

Opportunity Threats
 Ability to develop additional stores  Products are already sold by major

 Affiliated relations with related vendors competitors

 Development of wholesale distribution  Changes in regulation can impact

relationships business

 Increases in price inputs can cause

upward pricing
Table 1. SWOT Analysis of Sunnyside Egg Distributor

Marketing Strategy

Utilizing a fitting marketing strategy is a basic component of business success. Shaw

(2012) states that “Choosing an effective strategy requires knowledge of what various alternative

marketing strategies exist and understanding how they work under varying environmental and

organizational conditions.”

The egg business is a local business, not something you need a Super Bowl ad. Printing

option may be one of the marketing strategies of Sunnyside Egg Distributor. Small community

newspapers such as local small business or co-op papers, monthly grocery store handouts, or

even small newspapers. The ad answers all the basic questions of the customers need to know:

what, who, why, where, when, and how. In 100 words or less. Another is the social media

options. Facebook offers many farmer’s market groups or local yard sale pages that are perfect

for selling your eggs.

Following up is a two-way street. You want return customers, and you want to be

organized in advance. This type of interaction creates loyalty and gives you the absolute best

type of advertising there is: word of mouth. A sticker on the carton with the contact information

reminds people what to do when they run out of eggs. Handing out business cards is another

good strategy to give your customers a way to follow up with you.

 MARKETING MIX

Market Position

Sunnyside Egg Distributor is to establish a business identity to its target market in Digos

City that provides fresh produce farm eggs emphasizing and communicating the different

production origin stories.

Product Strategy

We sell eggs that are fresh with no quality loss. Brining produce from areas where it is

plentiful and cheap to those it is relatively scarce and expensive.

Pricing Strategy

Sunnyside Egg Distributor will be utilizing penetration pricing strategy. Penetration

strategies aim to attract buyers by offering lower prices on goods and services than competitors.

OPERATIONAL PLAN

Project Engineering

This aspect will show the overall process of managing the business to start the operation

of Sunnyside Egg Distributor. It consists of coordinated series of events or activities that needs to

perform by the owner to start the operation of the business.

 Activities Duration 1st month 2nd month 3rd month
Acquisition of Funds 3-4 weeks  
Securing Permits and
Licenses 1-2 weeks  
Improvement of the Place 3-4 weeks    
Advertising and Promotion 4 weeks    
Hiring of Employees 1-2 weeks  
Purchasing of Equipment  
2 weeks
and Supplies  
Arranging the Store 2 weeks  
Normal Operation --- --- --- ---
Table 2. Gantt Chart

Acquisition of Funds

The initial investment to start the business will be coming from the personal savings of

the owner and loan from the bank. It will take three to four weeks for the acquisition of funds.

Securing Permits and Licenses

Doing business in the Philippines, either as single proprietorship, partnership, or

corporation, calls for licenses or permits from government. It includes DTI, BIR registration, and

business permit from the city, sanitary permit, fire hazard inspection certificate, and business

plate. Also, businesses with employees must secure government mandated permits, that is SSS

employer’s registration; Philhealth employer’s registration; and Pag-Ibig employer’s registration.

It takes one to two weeks to process such permits and licenses.

Improvement Period
 It would take three to four weeks for the improvement of the storage facility/outlet. At

times when supply may exceed demand, winding up purchasing a larger number of eggs that can

be sold at that period and this would ultimately require the need for an egg storage

facility/warehouse. To ensure the success of egg supply business, an understanding of the

principles of egg storage is needed in the construction of the warehouse as well as the location of

the warehouse relative to the other shops and egg supply farm.

Advertising and Promotion

It would take four weeks for pamphlet advertising in Digos City. This procedure will help

the egg business marketing as your name to reach more and more people. Also, there are more

and more digital options available by posting advertisement campaign on Facebook. These

options are easy to access, low or no cost, and adding fantastic images does not double or triple

the price.

Hiring of Employees

The hiring process will take one to two weeks. There will be reviewing applications,

selecting the right candidates to interview, testing candidates, choosing between candidates to

make the hiring decision, and performing various pre-employment tests and checks.

Purchasing of Equipment and Supplies

All equipment and supplies that are needed for the operation of the business will be

purchased for two weeks.

Arranging the Store

 It will take two weeks for organizing the store. This includes the arrangement of the

equipment and supplies that will be purchased.

OPERATING SYSTEM
 FINANCIAL PLAN

Inventory Level Budget

This aspect will show the required inventory needed in the production from the first to

fifth year of the operation of Sunnyside Egg Distributor.

    Year
    1 2 3 4 5
Monthly Demand
Pewee 480 528 581 639 703
Small 640 704 774 852 937
Medium 800 880 968 1,065 1,171
Large 960 1,056 1,162 1,278 1,406
Extra Large 480 528 581 639 703
Jumbo 320 352 387 426 469
Total Monthly Demand 3,680 4,048 4,453 4,898 5,388
Order Size 500 500 500 500 500
Number of Orders in a
Month 8 9 9 10 11
Total Orders in a
Month 4,000 4,500 4,500 5,000 5,500
Ending Inventory 320 452 47 102 112
Beginning Inventory 320 452 47 102
Table 3. Inventory Level Budget

The table shows that for the first year of the operation of the business it requires eight

numbers of order to satisfy the required monthly demand for the first year. On the second and

third year, nine orders required for the monthly demand of second and third year. For the fourth

year it requires ten orders and eleven orders for the fifth year.
Annual Production Budget

  Year
  1 2 3 4 5
44,16 48,57 53,43 58,77 64,65
Budgeted Sales 0 6 4 7 5
32 45 4 10 11
Ending Inventory 0 2 7 2 2
Total Goods Available for 44,48 49,02 53,48 58,87 64,76
Sales 0 8 1 9 7
32 45 4 10
Beginning Inventory - 0 2 7 2
44,48 48,70 53,02 58,83 64,66
Budgeted Production 0 8 9 2 5
Table 4. Annual Production Budget

Sunnyside Egg Distributor will order 44,480 trays to its supplier on its first year of

operation; 48,708 trays for second year; 53,029 for third year; 58,832 for its fourth year; lastly

64,665 trays on its fifth year of operation.

Cost of Initial Investment

Total Cost of
Investment      
Vehicle ₱150,000.00
Egg Trays 6,000.00
Egg Crates 5,350.00
Pre-operating Expenses
Utilities Expense (1 month) 1,000.00
Supplies Expense (1 month) 400.00
Marketing Expense 10,000.00
Fuel Expense (1 month) 1,160.00
    Taxes and Licenses 2,000.00 ₱175,910.00

Contributed Capital
 Cash Investment by the
owner 100,000.00
Bank Loan 100,000.00 200,000.00
Excess Cash       ₱24,090.00
Table 5. Cost of Initial Investment

The total cost of investment of the business is ₱175,910.00 to formally start its operation.

The owner will invest ₱100,000.00 and will apply for a bank loan of ₱100,000.00 for a total

capital of ₱ 200,000.00 and the excess cash will be allocated to the unexpected expenses that the

business will encounter.

Projected Income Statement

The projected income statement of the business is from the first year to fifth year of

operation of the business.

Sunnyside Egg Distributor

Projected Income Statement
For First to Fifth Year

1 2 3 4 5
Sales 7,152,000.00 8,230,464.00 9,473,080.32 10,904,991.61 12,555,207.53
Less: Cost of Goods
Sold 6,604,800.00 7,628,544.00 8,810,968.32 10,176,668.41 11,754,052.01
Gross Profit 547,200.00 601,920.00 662,112.00 728,323.20 801,155.52
Operating Expense
Salaries and Wages 189,900.00 211,290.00 221,619.00 244,980.90 269,478.99
SSS 23,538.46 23,538.46 32,571.43 32,571.43 40,000.00
Philhealth 2,100.00 2,400.00 2,700.00 3,000.00 3,300.00
Pag-Ibig 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Rent Expense 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00
Depreciation Expense 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
Utilities Expense 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00
Supplies Expense 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Marketing Expense 10,000.00
Fuel Expense 13,920.00 16,443.00 17,265.15 20,142.68 23,264.79
Repairs and
Maintenance 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00
Taxes and Licences 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
 Total Operating Expense 419,658.46 433,871.46 454,355.58 480,895.00 516,243.78
Income Before Tax 127,541.54 168,048.54 207,756.42 247,428.20 284,911.74
Income tax 38,262.46 50,414.56 62,326.93 74,228.46 85,473.52
Income after Tax 89,279.08 117,633.98 145,429.50 173,199.74 199,438.22
Table 6. Projected Income Statement

The price of the product differs from the different sizes of eggs. Given the budgeted sales

above per tray of eggs the total sales in terms of peso are ₱7,152,000.00, ₱8,230,464.00,

₱9,473,080.32, ₱10,904,991.61, ₱12,555,207.53 for the first to fifth year, respectively. After the

deduction of the operating expenses of the business we’ll come up with the net income of

₱89,279.08, ₱117,633.98, ₱145,429.50, ₱145,429.50, ₱173,199.74, and ₱199,438.22 for the first

to fifth year of operation.