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NJO Puto Cheese

A Feasibility Study on NJO Puto Cheese

In Partial Fulfillment of the Requirements

Bachelor of Science in Business Administrative

Major in Marketing Management

Submitted by:

Olive Rose T. Ganuhay

Joy I. Gonzales

Nathaniele Nikko C. Mesiona

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Chapter 1
MARKETING ASPECT

Marketing business, as defined by the American, marketing Association, is the

process of planning and executing the conception, pricing, promotion, and distribution of
ideas, goods and services to create exchanges that satisfy individuals and
organizational goals (Kotler, 2000) Others defines marketing as the process of
continuesly and profitably satisfying target customer’s needs, wants, and expectations
more seriously than its competitors, In a feasibility study ,marketing is a crucial part
because it talks about series of significant activities which includes the establishments
demands for a proposed product in view of identifying the particular needs and wants of
a target market or customers and customers satisfaction , doing research, analyzing
their needs and formulating strategies to achieve this goal of customers satisfaction.

The COVID-19 pandemic affects the global food industry as governments close
down restaurants and bars to slow the spread of the virus. Across the world, restaurants
and daily traffic dropped precipitously compared to the same period in 2019. Closures of
restaurants caused a ripple effect among related industries such as food production,
liquor, wine, beer production ,food and beverage shipping, fishing and farming . The
reopening of the business gives us the question on how the filipino delicasy cope up to
these challenges of the new normal. The term meriendas of filipino is a filipino tradition
adopted from spaniards who colonized the Philippines for almost five hundred
years.Faithful to the legacy, in the Philippines,meriendas is eaten twice a day between
breakfast and lunch and between lunch and suppers , The target customers of The NJO
is mostly all of ages and races are set aside as long as you can eat you can enjoy our
product to your hearts content . The second target market is the canteen, restaurant,
and cafe or any events like birthdays ,weddings and any gatherings.

Business Description

NJO puto cheese is a manufacturer, and at the same time retailer of its own
products. The business will be established as Partnership. Operation of the business
will from 8:00 Am – 5:00pm, Monday-Saturday and will be located along the highway
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fronting Bambu Estate Village.The business accepts pre-order and delivery services. In
terms of personnel, it only consists of (3 per each store). The store attendant who is
responsible for assisting the customers, the cashier responsible for the accepting
payments and ensuring that customers will get their money’s worth on what they're
buying and that's what we give from our product that is the NJO puto cheese quality at
its finest and lastly a janitor who keeps sanitize the place.

Product Description
Puto is a Filipino steamed cake. Some of us eat puto during a snack or after the
main dish. The Puto Cheese will be very fluffy, smooth, and soft. To make fluffy/soft we
use flour and topped with cheese to make it tastier, we put cream for additional taste.
When you taste it, you will really taste the cream and it is delicious and nutritious. The
sizes of puto are small, medium and large and It looks like cupcake. For packaging, we
use transparent disposable food containers. To provide the best service, the owner and
personnel will keep the store clean and sanitized to provide safety to the customer. 

Product Marketability
The per capita expenditure for food and percentage shares of food in the total
family expenditures in the Philippines is 42% (PSA, 2017). This means that the biggest
chunk of every Filipino household expenses is on food. Food remains essential,
demand for these products would still take a blow as Filipinos try to survive the impact
of Covid-19, according to the Philippine Institute for Development Studies (PIDS). With
this, food businesses will also remain in demand.

The product is marketable since Puto cheese is the number 1 on the top 10 most
popular Kakanin in the country. Puto is quite popularly paired with the classic
Dinuguan. These two would always be a perfect meal combo. Puto is also quite big on
birthdays and fiestas as they are served alongside classic fiesta dishes like pancit and
other native delicacies(Villareal, 2020).

Market Analysis
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A market analysis is a quantitative and qualitative assessment of a market. It

looks into the size of the market both in volume and in value, the various customer
segments and buying patterns, the competition and the economic environment in terms
of barriers to entry and regulation. (Gregory, 2018)

According to the Barangay Hall of Sto. Niño, Davao City, the area has a
population of 20,103. The researchers considered an average of 5 members per
household. The population 20,103 is divided into the average 5 members per household
which will set the 4,020.6 results of Barangay Sto.Niñ0 Household. Based upon the
survey, the average of Puto consumption per household is 1 pack hence, the total
demand per month is 120,618 packs.( philatlas.com 2015)

Table 1. Market Analysis

A. Demand Analysis
Population 20,103
Average Filipino Members per Household ___5_______
Brgy. Sto Niño Household 4,020.6__families
Average Puto Consumption 1,500packs(6pcs puto/pack)per month
Total Demand/Month 150,000 per month
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B. Supply Analysis (Competitor’s Market Share Competitors)

Competitor A 10,489 pack/month
Competitor B 7,801 pack/month
Competitor C 6,576 pack/month
TOTAL 24,866
Unsupplied Demand 125,134
NJO Puto Cheese Supplier (20%) 1,500 pack/month
300 pack per day

As a result, a total of 24,866 is considered to be the competitor’s supply analysis.

The unsupplied demand has resulted in 125,134 and the researchers have come up
with 5,300 or 20% target market shares. Hence, the target market share shall be 300
packs per day.

Marketing Strategies

Marketing strategy is the comprehensive plan formulated particularly for

achieving the marketing objectives of the organization. It provides a blueprint for
attaining these marketing objectives. It is the building block of a marketing plan. It is
designed after detailed marketing research. A marketing strategy helps an organization
to concentrate its scarce resources on the best possible opportunities so as to increase
the sales. The importance of marketing strategy is it provides an organization an edge
over its competitors. Secondly, it helps in developing goods and services with best
profit-making potential. Lastly, a marketing strategy helps to fix the advertising budget in
advance, and it also develops a method which determines the scope of the plan, and it
determines the revenue generated by the advertising plan. (Prachi Juneja, 2019)

SWOT ANALYSIS

SWOT Analysis is an overall evaluation of the company’s strengths (S), weaknesses

(W), opportunities (O), and threats (T). Strengths include internal capabilities,
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resources, and positive situational factors that may help the company to serve its
customers and achieve its objectives. Weaknesses include internal limitations and
negative situational factors that may interfere with the company’s performance.
Opportunities are favorable factors or trends in the external environment that the
company may be able to exploit to its advantage. And threats are unfavorable external
factors or trends that may present challenges to performance (Kotler, et. al., 2017).

Table 2.

Strength Weakness

The store location is one of the strengths
since the location of the business is along
the highway and it is very accessible to
the customer. The location also is near to
the place wherein the target markets can
easily come and go.
Offering food with a great taste on a
cheap price and healthy to our customers
is another strength of the business. The
company will produce the tastiest Puto
Cheese but it would be on the affordable
price so that all customers can afford. The
ingredients are organic and healthy for
the health of the customers.
Limited promotion, the promotion of the
product is very important to any business.
NJO Puto Cheese product packaging is very
simple and cheap. The positioning of the
product is also very simple. They do not focus
on product promotion.
Unstable price for raw materials, the demand
and supply of raw materials will vary because
it will affect the price of the products that was
produced.
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Opportunities
Increase number of potential customers
because consumers help the business
sales increase by having continuous
number of potential customers.
Have no substitute product to take
NJO Puto Cheese was made with its own
uniqueness. By using ingredients that is
different from others that will surely fit the
taste of the customers.
Threats
Entry of new competitor can affect the
company’s sales because of the same
product that they offer. The customer might
be attracting because of the new venture that
may exist especially if they offer a low price. It
can also affect the employees since there will
be a change especially in sales.
Existing competitor of the product might be a
threat because they can easily produce an
innovative product with the same products
worth the use of different strategies.

Market Mix

Product Strategy

For product strategy we will make sure that our product was packed properly,
clean and we will maintain consistency of the taste. The product will provide a
better-quality food habit and produce a healthiest Puto in the market to move the
people from junk taste to healthy taste. NJO Puto cheese will use organic
ingredients to make it different from the others.

Promotion Strategy

For promotion strategy we will use the social media like Facebook, Instagram
and will create an online page for our product. In that way we can reach our
target customers publicly to promote our products. Another promotion strategy to
be use is the flyers, posters and tarpaulin, it will be posted in every place in the
area and near the area to reach the customers and give information about the
product and its prices. Lastly, the word of mouth, we will give a positive
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impression to our customer regarding the product so that they will spread it to all
of their friends or family.

Pricing Strategy

For pricing strategy, we will use the bundling pricing. We will be combined
different sizes of the product for a lower price than we would charge customers to
buy it separately. Another pricing strategy that we will use is the promotional
pricing, like the “Buy one get one” campaign. Lastly the price skimming, it
involves setting rates high during the initial phase of a product. The company
then lowers prices gradually as competitor goods appear on the market

Place Strategy

For place strategy we will use the selling directly strategy or the direct selling.
We will interact directly to our customers so that if there will be changes, we can
easily adapt. We can also control the price of the product and the methods on
which it should be sold. The distribution methods will be the door to door, retail,
social media or online selling and on site.
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Chapter 2
TECHNICAL ASPECTS

This chapter discusses the details and processes on the processes, including

materials, labor, logistics and technology related to producing delivering and procuring

the products and services to be developed. Specifically, in this phase of the study the

manpower, machineries and equipment’s, tools and supplies requirements, location and

operation/production process.

Product Description

Puto is a Filipino Steamed cake which is fluffy, smooth and soft. Puto is also an
umbrella term for various kinds of indigenous steamed cakes, including those made
without rice. It is a sub-type of kakanin or the rice cakes. Puto eaten on its own
commonly add toppings like cheese, butter /margarine, meat, or freshly grated coconut.
NJO Puto Cheese only focusing on one variety of Puto which is Puto Cheese, the main
reason why we choose our product because it is one of Filipinos favorite kakanin and it
is healthy for everyone. Along with the factors such as canteen, restaurant, and café or
any events like birthday, wedding, and any gathering the business will be marketable
since it is needed.
NJO Puto cheese comes with different sizes, the Busog Pack which is the big size and
it has 6 pieces of puto. The regular medium size that has 6 pieces and the children size
which is the small size and has 20 pieces of puto inside.

Manpower

Manpower is an essential requirement for any business. It helps the company to

prepare well in advance for the type of employees. They would be requiring in their
organization in the future. With constantly changing business requirements,
technological advancements etc. The skills and knowledge of employees tend to
become obsolete over a period of time. Also, if a business is growing, then the
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workforce needs to expand. If the company wants to have its business at different
locations, different business domains etc. If a company fails to prepare beforehand. It
can create issues in the future and can collapse the business model for a company.
Hence, timely preparation of manpower planning would always help a business grow.
for example, IT companies are often facing the business problem of hiring right people
for upcoming projects as well as attrition. These companies have multiple projects going
on at a single time and upcoming projects in the pipeline. If they hire more people
without planning, they would end up with many resources on the bench which would eat
into profits and if they keep waiting until the last. They would not have enough skilled
people to set up the project and start delivering eventually leading to customer
dissatisfaction and losses.

Table 3. Manpower Requirements as to skill

POSITION NUMBER SKILL REQUIREMENTS

Cashier/ 1 High school graduate

attendant Good conduct
At least 20 years of age and above
Flexible and can-do multi-tasking
Good with handling money
Driver 1 Has at least 1-year experience of driving
High-school graduate
At least 20 years of age and above
Owns a driver’s license
Has knowledge of road policies
Baker 2 Physically and mentally fit
Has 2 years experienced on making Puto
and other pastries
High school graduate
At least 18 years of age and above
Flexible and can-do multi-tasking
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The business firm cannot function without the presence and help of the
personnel. There is a total of 4 workers needed within the business and this are the
cashier/ attendant, driver and bakers. The cashier and attendant are responsible for
money handling and the operation of the business since he/she is the one who handles
the payments, orders, cash register in the business and minor works like maintaining
the cleanliness of the area. The driver is responsible for operating the business
transportation service upon delivery of customer’s orders or pick up of the business’
product supply. The 2 bakers will be responsible for making the Puto Cheese and
putting them on proper storage.

Machineries, Equipment and Store Supplies

The table below indicates the list of machineries, equipment and store supplies,
appliances and requirements needed for the business.

Table 4. List of Machineries, Equipment and Store Supplies

UNIT TOTAL
EQUIPMENT QUANTITY SOURCE
PRICE PRICE
Php Php
Mixer 6pcs GAISANO
452 2,712
Plastic Puto
Molder Cups 25 dozen Php 35 Php 875 GAISANO
(small)
Plastic Puto
Molder Cups 20 dozen Php 35 Php 700 GAISANO
(Medium)
Plastic Puto
Php
Molder Cups 20 dozen Php 50 GAISANO
1,000
(Large)
Disposable Php
150 dozen Php 50 GAISANO
Food 7,500
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Container
(regular)
Disposable
Food Php
150 dozen Php 65 GAISANO
Container 9,750
(Large)
3 Layer
Aluminum Php Php
5pcs GAISANO
Steamer Pan 1500 7,500
26cm

Mixing Bowl 10pcs Php 50 Php 500 GAISANO

Php
Spoon 2 dozen Php 260 GAISANO
130
Php
Fork 2 dozen Php 260 GAISANO
130
Measuring
5 pcs Php 70 Php 350 GAISANO
Cup
Php Php
Refrigerator 2 SM Appliance
10,500 20,100
Php Php
Motorcycle 1 EMCOR
70,000 70,000
Php Php
Aircon 1 SM Appliance
18,990 18,990
Php Php
Ceiling Fan 1 SM Appliance
2,500 2,500
Php
TOTAL
142,907
STORE UNIT TOTAL
QUANTITY SOURCE
SUPPLIES PRICE PRICE

Cellophane 20 packs Php 45 Php 600 Gaisano

Php
Receipt Book 100 pcs. Php 20 SM
2,000
Php
Ballpens 2 boxes Php 240 SM
120
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TOTAL Php 2,840

Furniture and Fixtures

The table below indicates the list of furniture and fixtures needed in the daily
business operation.

Table 5. List of Furniture and Fixtures

ITEMS QUANTITY UNIT PRICE TOTAL PRICE SOURCE

Wooden Office
2 sets Php 2,000 Php 4,000 UNITOP
Tables

Plastic Chairs 4 pcs. Php 250 Php 1,000 UNITOP

Signage 1 set Php 10,000 Php 10,000 Q ADS

TOTAL PHP 15,000

The Furniture and Fixtures mentioned above is needed within the operation of
the business for comfort in work and will be used in the long run.

Pre-Operating Expenses

Pre-operating supplies are the physical items required for the running of a
manufacturing production or services owned by a business. It does not include salaries,
but they do include consumable materials used by the business on an Ongoing basis.
The pre-operating expense is a day-to-day expense such as sales and administration,
or research and development, as opposed to production, cost and pricing. In short, this
is the money the business spends in order to turn inventory into throughout.
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Table 6. List of Pre-Operating Expenses

A. Pre-operating Expenses Amount

Receipts Php 1,500
TOTAL Php 1,500
B. Pre-operating activities expenses
Preparation of the feasibility study Php 10,000
Survey of Location Php 500
Securing of Business Permit Php 7,000
Hiring of Manpower Php 2,000
TOTAL Php 19,500
C. Other pre-operating activities
Flyers (500 copies printed) Php 1,000
Posters/ Tarpaulins Php 500
TOTAL Php 1,500

Raw Materials Requirements

The table below shows all the raw materials with their corresponding costs that
are needed for a month of business operations. NJO Puto Cheese Use Multi-purpose
flour 10 kilogram 45 pesos per kilo, 30 boxes of Eden Cheese 165gram 48 pesos per
box. Condense Milk 20 cans 300mL per day 33 pesos per can. Alaska Evaporada 10
cans 370 mL per day, 25 pesos per can. White sugar 5 kilos per day, 48 pesos per kilo.
Vanilla 2 bottles per day, 25 pesos per bottle. Baking powder 10 pcs 50 grams per pack,
15 pesos per pack. Egg 50pcs per day , 6 pesos per egg, Mineral water 3 liters 20
pesos per liter.

Table 6. Material Requirements

Item Quantity Price Daily Monthly Source

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Multi- 10 Kilogram 45 pesos P 450.00 13,500 Supermarket

purpose
Flour
Eden 30 boxes 48 pesos/box P 1,440.00 43, 200 Supermarket
Cheese 165gram
Condense 20 cans 33pesos/can P660.00 19,800 Supermarket
Milk 300mL
Alaska 10 cans 25pesos/can P250.00 7,500 Supermarket
Evaporada 370 mL

White Sugar 5 kilos 48 peso/kilo P240.00 7,200 Supermarket

Vanilla 2 bottles 25 P50.00 1,500 Supermarket

pesos/bottle
Baking 10 pcs 50 15 P150.00 4,500 Supermarket
Powder grams per pesos/pack
pack
Egg 50 pcs 6pesos per P300.00 9,000 Supermarket
egg
Mineral 3 liters 20 pesos/liter P60.00 1,800 Supermarket
Water

Location

It is very important to identify the location if the business since it can affect many
aspects of how it operates. Location has always been an important element of setting
up a business. In order for the business to be accessible, the owners must identify a
location where they can access huge numbers of the target market such as a populated
are like Along the Highway, the more accessible the location of the business is the more
consumers will buy.

Figure 1.
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Though the store is located at the middle part of the Barangay Sto. Niño, the
place is still accessible to the target market. Its location is a walking distance from the
school of Philippine Science and Holy Child College of Davao and it’s along the highway
fronting Bambu Estate Village. It is also accessible for those who pass by.
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Figure 3. Floor Layout

NJO Puto cheese is a concrete building business store with a 10 meters floor.
The store will be facing the Bambu Estate Village. The entrance of the customer and
employees is at the left side of the building facing the display area, on the back side of
the display area is the cashier, the area will be fully air-conditioned to make sure that
the products are stored in a cool place. At the back of the cashier is the stock room and
on the right side is the kitchen. The kitchen will be visible through window glass so that
the customer can see how we make our puto and the cleanliness of the kitchen. The
store office is located beside the display area and the CR is located at the last part of
the building after the office.

CHAPTER 3
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MANAGEMENT AND ORGANIZATIONAL ASPECTS

This chapter shows the Pre-Operating Activities, Gantt chart, Form of

Organization, Structure and the Duties and Responsibilities of the workers. The Pre-
Operating Activities consists of the preparations and activities set in duration (in
months) to form the business. This includes the preparation of feasibility study-which
includes brainstorming for the researchers of possible and potential kind of business,
survey location- to be able to determine the target market of the business, securing of
business permit- to ensure that the business is abiding and following the rules set by the
government for business and securing of legal documents, refurbishing space- to be
able to arrange and sanitize the area and its products, purchasing of tools, equipment,
appliances, furniture and fixtures- for the needs and ambiance of the business area and
hiring manpower- to be able for the business to operate.

Pre-Operating Activities Duration (in months)

1. Preparation of Feasibility Study 4 months

2. Survey of Location 1 month
3. Securing of Business Permit 1 month
4. Refurbishing Space 2 months
5. Purchase of Tools, equipment, appliances, 1 month
Furniture and fixtures
6. Hiring Manpower 1month
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Table 8. Gantt chart of Pre-Operating Activities Duration in Months

PRE-OPERATING JAN FEB MAR APR MAY JUN JUL AUG SEP OCT
ACTIVITIES

1.Preparation of
Feasibility Study
2.Survey of
Location

3.Securing of
Business Permits

4. Refurbishment of
space

5. Purchase of
tools, equipment,
furniture and
fixtures
6.Hiring of
Manpower

The preparation of the feasibility study must be done within 4 months. The survey
of location was conducted during May. By the month of May, June, July and August,
securing of business permits and refurbishing space was processed and fixed.
Canvassing, researching and purchasing of tools, equipment, appliances, furniture and
fixture was then done by the month of September. Hiring of Manpower will be done by
the month of October. The sourcing for capital is provided by the 3 owners of the
business so there is no need for any acquisition. When everything is double checked,
fixed and done, the business can start with the operation.

Form of Organization

NJO Puto Cheese will be organized as a partnership composed of three owners.

A partnership in a business is similar to a personal partnership. A business partnership
is a specific kind of legal relationship formed by the agreement between two or more
individuals to carry on a business as co-owners, each of whom has invested equally in
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the business. A business and personal partnerships involve making money, sharing
individual skills and sharing in the ups and downs of profit loss.

A partnership is a form of business where two or more people share ownership, as

well as the responsibility for managing the company and the income or losses the
business generates. That income is paid to partners, who then claim it on their personal
tax returns, the business is not taxed separately, as corporations are, on its profits or
losses. (Business Encyclopedia, 2019)

Organizational Chart

An organizational chat is a diagram that shows the structure of an organization

and the relationships and relative ranks of its parts and positions/job. It also shows the
clean responsibilities of each individual in the organization. It displays a reporting or
relationship hierarchy. The most frequent application of an organizational chart is to
show the structure of the business, government, or other organization. Organizational
Charts have a variety of uses and can be structured in many different ways. It might be
used as a management tool, for planning purposes, or as a personal directory. For
example, perhaps your organization doesn’t operate in a “command and control” style,
but instead relies on teams. Organizational Chart also shows work responsibilities, allow
leadership, allow employees to better understand their work fits into the organization’s
overall scheme and improves lines of communications. (Encyclopedia, 2020)

Figure 4. Organizational Chart

STORE MANAGER

CASHIER/HELPER BAKER

Figure 4. Organizational Chart

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The organizational structure represents the person or employees working within

the business. As you can see, the store managers which will be the co-owners of the
business is in charge of monitoring the employees’ performance and well-being, and
making sure that everything falls into place. They will also be responsible for the
financial and accounting aspects of the business to make sure that profit and expenses
are well-balanced as well as the bookkeeping. Below the store managers are the
cashier which is the one responsible on handling payments and money within the day
and making sure that the profit is issued at the end of the day to its owners and should
be honest and transparent with regards the collection of money. Then the Baker is the
who will cook the Puto cheese Followed by the Driver, who is responsible for the
delivery and picking up of products from the producers, maintaining and addressing the
needs of the business service transportation.

Duties, Responsibilities and Qualifications of Manpower

Table 9. Duties, Responsibilities and Qualifications

POSITION DUTIES AND RESPONSIBILITIES QUALIFICATIONS

Store Manager A Store Manager is responsible for
overseeing the daily operations of
a store, making sure it runs
smoothly and effectively.
In charge of monitoring the
employees’ performance and well-
being.
Responsible for the financial and
accounting aspects of the
business to make sure that profit
and expenses are well-balanced.
High school diploma or equivalent
qualification.
Bachelor’s degree in Business
Administration or relevant field
preferred.
A minimum of 2 years’ experience
working in the same industry.
Strong leadership and customer
management abilities.
Excellent communication and
interpersonal skills.

Cashier Cashier responsibilities include High school graduate

receiving payments and issuing At least 20 years of age and
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receipts and keeping track of all above

cash and credit transactions. Good with handling money
Should be honest and transparent Flexible and can-do multi-
with regards the collection of tasking.
money.
Can also clean and maintain the
ambiance of the area

Baker A baker is responsible for High school graduate

measuring and combining At least 20 years of age and above
ingredients and using mixers, Ability to work in hot, hectic
blenders, heat sources, and other environment, stand, walk, bend, use
equipment to make Puto Cheese. hands and appliances, and lift heavy
Testing ingredients and finished items for extended periods.
goods to ensure that each item Attention to detail, especially when
meets food safety and quality performing quality inspections on
controls. ingredients and products.
Cleaning and restocking
workstations and ensuring that all
equipment is sanitized.

The duties and responsibility of each employee is divided equally and must be
observed to prevent conflicts about who should do this and who should do that. They
have different duties, responsibilities and qualifications of every position. On hiring the
employee, the good conduct will be the top priority of the owners to be observed since
good business obtains good employees.

Administrative Policies

Employee Conduct. This policy establishes each and everyone’s duty and
responsibility set within the business. Whereas the employee’s behavior will be
observed strictly, proper grooming and dress code will also be observed. Workplace
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procedures, limitations and other areas related to terms and conditions of employment
must be remembered and observed. The conduct unbecoming of an employee will only
be warned thrice, if an employee is yet to change bad habits or attitude towards the
establishment, this will lead to termination or suspension.

Attendance. Employees must observe punctuality and commitment within the business.
The employees should inform the owners a day before their log in time when they can’t
be able to work. Employees will only be considered excused when they can present a
document of evidence. Failure to comply and follow will lead to suspension, and if the
employee has obtained 4 absences within the month and has not informed the owners
as to why were they absent will be subject for termination.

Cleanliness and Sanitation. All employees should be responsible and has the sense
of empathy within the surroundings. They are required to observe cleanliness from in
and out of the business area.

Employee Leaves. All employees are granted not to report for work and can file a leave
with considerable reasons with or without pay as may be provided by the law.

Operating Hours. Business hours will operate from 8am to 5pm, Monday to Saturday.
Therefore, employees are expected to be present upon the said business hours. On
Sundays, the business shall be closed and will serve as a rest day for everyone.

Dress Code. The company will not require the employees to wear a specific uniform,
thus, the employees should wear proper attire and not too revealing clothes. Sando,
shorts, spaghetti straps, slippers, pedals, skirts above the knee, crop tops, shirts with
foul designs, high heels (measuring 5 inches up) and ripped jeans are not allowed.
Haircut for men and fixed bun for women should be observed.

Relationship with Co-Employees. Employees are forbidden to have any mutual

relationship, romantic relationship or of any form to avoid distraction and maintain
respect within the business co-employees. If so, they are obliged to sign and abide by
the administrative policies that the relationship will not keep them distracted and will not
have any personal problems causing and harming the peace of the business
environment, if so happens, termination will then be applied to both parties.
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Usage of Cellphones and Gadgets. Employees are prohibited the usage of any form
of cellphones, gadgets and electronic devices until end of duty to prevent distraction
and promote focus within their line of work. Employees shall be issued lockers for their
things and valuables and shall be located at the manager’s office for security and safety
of belongings. Failure to abide by the policy shall be sanctioned for counseling on first
offense, warning status for second offense and subject for termination on final and third
offense.

CHAPTER 4

FINANCIAL ASPECT

This study provides information on the financial feasibility of the project. It covers

the project cost summary, financial assumptions, financial projection, and financial

analysis.

PROJECT COST SUMMARY

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A. Capitalized Expenditures

Tools, Equipment, Appliances 145,747.00

Furniture and Fixtures 15,000.00

B. Direct Expenditures

Pre-operating Expenses 1,500.00

Pre-operating Activities Expense 19,500.00

Other pre-operating Activities 1,500.00

Operating Supplies Expense 108,000.00

Miscellaneous Expense 2,120.00

Rental Expense 10,000.00

Utilities Expense 10,000.00

C. WORKING CAPITAL

Salaries, 27,300.00

SSS, Pag-Ibig, Phil Health Contribution 3,607.50

GRAND TOTAL 346,771.5

WORKING CAPITAL 350,000.00

FINANCIAL ASSUMPTIONS

1. Sales will increase by 5% every year.

 26

2. Cost of sale will increase by 5% every year.

3. All Profit are cash on hand.

4. All purchases and operating expense will be paid in cash.

5. Depreciation expenses are computed using straight line method.

6. There will be no additional capital in the next 3 years.

7. Income Tax is based on Philippine Income Tax Table for individuals / Train Law

8. Salaries expense will increase by 5% annually

Final Projection

5 Year Projected Income Statement

 27

Year 1 Year 2 Year 3 Year 4 Year 5

Product Revenue 2,340,000 2,457,000 2,574,000 2,698,800 2,831,400
Cost of Sales 1,296,000 1,360,800 1,428,840 1,500,282 1,575,296
Gross Sales 1,044,000 1,096,200 1,145,160 1,198,518 1,256,104
Less: Operating Expenses
Pre-Operatiing Expense 1500 1500 1500 1500 1500
Pre-Operatiing Activities Expense 19500 19500 19500 19500 19500
Pre-Operating Supplies Expense 1500 1500 1500 1500 1500
Depreciation Expense 29099 29099 29099 29099 29099
Salaries & Wages 370,890 370,890 370,890 370,890 370,890
13 Month Pay 30907.5 30907.5 30907.5 30907.5 30907.5
Utilities Expense 120,000 120,000 120,000 120,000 120,000
Rent Expense 10,000 10,000 10,000 10,000 10,000
Miscellaneous Expense 720 720 720 720 720
Net Income Before Tax 459,884 512,084 561,044 645,309 671,988
Less: Income Tax Expense 44,971 58,021 70,261 91,327.25 97,997
Net Income After Tax 414,913 454,063 490,783 553,981.75 573,991

Table 10

5 Year Projected Cash Flow

 28

Year 1 Year 2 Year 3 Year 4 Year 5

Cash Flow From Operating Activities
Net Income Before Tax 459,884 512,084 561,044 645,309 671,988
Depreciation 29099 29099 29099 29099 29099
Payment of Income After Tax 58,021 70,261 91,327.25 97,997
Net Cash Flow From Investigating Activities 488,983 483,162 519,882 583,080.75 583,080.75
Cash Flow From Investing Activities
Property & Equipment 145,747 0 0 0 0
Furniture & Fixture 15,000 0 0 0 0
Space Renovation 20,000 0 0 0 0
Net Cash From Investing Activities 180,747 0 0 0 0
Cash Flow fro, Financing Activities
Owner's Capital 350,000
Proprietorship Income 414,913 454,063 490,783 553,981.75
Net Cash Flow From Financing Activities 350,000 414,913 454,063 490,783 553,981.75
Net Increase\Decrease in Cash Balance 600,038
Cash Balance Beginning 523,139 643,000 698,166.00 695,746
Cash Balance End Year 600,038 523,139 643,000 698,166.00 695,746

Table 11

5 Year Projection Balance Sheet

 29

Year 1 Year 2 Year 3 Year 4 Year 5

Current Assest
Cash 600,038 623,139 643,000 698,166.00 695,746
Total Current Asset 600,038 623,139 643,000 698,166.00 695,746
Non-Current Asset
Space Renovation 20,000 20,000 20,000 20,000 20,000
Furniture & Fixture 15,000 15,000 15,000 15,000 15,000
Property & Equipment 145,747 145,747 145,747 145,747 145,747
Accumulated Depreciation 29,099 58,198 87,297 116,396 145,495
209,846 238,945 268,044 297,143 326,242
Total Asset 809,884 862,084 911,044 995,309.00 1,021,988
Current Liabilities
Income Tax Payable 44,971 58,021 70,261 91,327.25 97,997
Total Liabilities 44,971 58,021 70,261 91,327.25 97,997
Owner's Equity
Owner's Capital 350,000 350,000 350,000 350,000 350,000
Total Capital 350,000 350,000 350,000 350,000 350,000
Add: Net Income 414,913 454,063 490,783 553,981.75 573,991
Total Owner's Equity 764,913 804,063 840,783 903,981.75 923,991
Total Liabilities & Owner's Equity 809,884 862,084 911,044 995,309.00 1,021,988

Table 12

Financial Analysis
 30

Formula Implications

A. Profitability 414,913

Return on Sales The business has a

= Average net income = 414,913 profitability ratio of 16%.
Average Sales/ Revenue 2,340,000
= 0.16
Return on Asset The 25% profitability of the
= Average net income = 414,913 business is attributed from
Average total asset 809,884 the utilization of its
resources. The total assets
are utilized favorably.
=0.51

Return on Net Worth The profitability of the

=Average net income = 414,913 business in relation to its
Capital 350,000 capital is 108%. The capital
is averagely utilized.
= 1.18

Liquidity
Current Ratio The business is liquid in
=Average Current Asset = 600,038 terms of paying its debt. The
Average Current Liability 44,971 total current asset of the
business is more than
= 13.34 enough to pay its current
obligation.
Solvency
Debt Utilization or The business is very solvent
Leverage = 809,884 because it has the capacity
= Average total asset 44,971 to pay its maturing
Average total obligations on due date.
Liability

= 18.00
 31

Return on Investment
Average Net income = 414,913 In terms of Return on
Capital 350,000 Investment, the business
capital is capable of earning
=.81 81%. It is favorable
operation.

Payback Period

Capital = 350,000 The business will be able to

Average Net income 414,913 recover its invested capital
= .84 within a year. The result of
the operation is favorable.

Table 13

Schedule 1: Schedule of Depreciation

Particulars Qnty. Unit Price Total Estimated Annual

Useful Depreciation
Life

Mixer 6pcs Php 452 Php 2,712 5 years 542

Plastic Puto 5years 175

Molder Cups 25 Php 35 Php 875

dozen
(small)
Plastic Puto 5 years 140

Molder Cups 20 Php 35 Php 700

dozen
(Medium)
Plastic Puto 5 years 200

Molder Cups 20 Php 50 Php 1,000

dozen
(Large)
 32

Disposable 5 years 1,500

Food
150 Php 50 Php 7,500
Container dozen

(regular)
Disposable 5years 1,950

Food
150 Php 65 Php 9,750
Container dozen

(Large)
3 Layer 5 years 1,500

Aluminum
5pcs Php 1500 Php 7,500
Steamer Pan

26cm
Mixing Bowl 10pcs Php 50 Php 500 5 years 600
Spoon 2 dozen Php 130 Php 260 5 years 52
Fork 2 dozen Php 130 Php 260 5years 52
Measuring 5 years
5 pcs Php 70 Php 350 70
Cup
Php Php 5 years
Refrigerator 2 4,020
10,500 20,100
Php Php 5 years
Motorcycle 1 14,000
70,000 70,000
Php Php 5years
Aircon 1 3,798
18,990 18,990
Ceiling Fan 1 Php 2,500 Php 2,500 5 years 500
Grand Total P 420,800 5 years P29,099
6pcs Php 452
Furniture & Qnty. Unit Price Total Estimated Annual
 33

Fixtures Useful Depreciation

Life
Wooden 5 years P240.00
2 sets Php 2,000 Php 4,000
Office Tables
Plastic Chairs 4 pcs. Php 250 Php 1,250 5 years P60.00
Signage Php Php 5 years P600.00
1 set
10,000 10,000
Grand Total P13,000 P780.00

A. Direct Expenditures

Schedule 2: Schedule of Salaries, SSS, PHIC, Pag-Ibig

Position Monthly SSS PHIC Pag Grand

Salaries - Total
Ibig
ER EE
Manager 9,100.00 663.00 327.00 112.50 100 10,302.50
Cashier 9,100.00 663.00 327.00 112.50 100 10,302.50
Baker 9,100.00 663.00 327.00 112.50 100 10,302.50
Total 27,300.00 1,989.00 981.00 337.50 300 30,907.50

Schedule 3: Miscellaneous Expense

Expense Qty. Unit Price Total Amount

Notebook 5 pcs P20 P100

Ballpens 1 box P120 P120

Calculator 1pcs P500 P500

TOTAL P720.00
 34

Schedule 4: Schedule of Revenue

Year Sales per day Daily sales Monthly Annual Sales

Sales
1 300 Puto 7,500 195,000 2,340,000

2 315 Puto 7,875 204,750 2,457,000

3 330 Puto 8,250 214,500 2,574,000

4 346 Puto 8,650 224,900 2,698,800

5 363 Puto 9,075 235,950 2,831,400

Schedule 6: Schedule of Cost of Sales Daily, Monthly, Annually

Item Quantity Price per Daily Monthly Annual Cost

Liter Cost Cost
Multi- 10 45 pesos P 450.00 13,500 162,000
Kilogram
purpose

Flour
Eden 30 boxes 48 P 43, 200 518,400
Cheese 165gram pesos/bo 1,440.00
x
Condense 20 cans 33pesos/ P660.00 19,800 237,600
Milk 300mL can
Alaska 10 cans 25pesos/ P250.00 7,500 90,000
Evaporada can
370 mL
White 5 kilos 48 P240.00 7,200 86,400
Sugar peso/kilo
Vanilla 2 bottles 25 P50.00 1,500 18,000
pesos/bot
tle
Baking 10 pcs 50 15 P150.00 4,500
Powder grams per pesos/pa 54,000
pack ck
Egg 50 pcs 6pesos P300.00 9,000 108,000
 35

per egg
Mineral 3 liters 20 P60.00 1,800 21,600
Water pesos/lite
r
Total 1,296,000