Prepared by: Submitted to:

Mecor M. Riego Mrs. Christian Jane J. Tiu

BSM –III (Negros Group 1) Instructor –
Midwifery Entrepreneurship

EXECUTIVE SUMMARY

Churros Company is a food business which aims to provide affordable, fun, and
healthy snacks to Doña Hortencia Salas Benedicto National High School
(DHSBNHS) management, employees, professors, and students. This enterprise
offers churros and carrot peanut butter balls to the school community at Guerra St.,
La Carlota City, Negros Occidental.

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The entrepreneurs involved in the creation of this partnership are Mecor Riego,
Glen Obelidon, Marie Occeña, Rizalyn Tingson and Charmaine Trocino. The
partners are 4 educators of school and one is a registered midwife. This is the first
time they have embarked in a business undertaking.

As the project will require the consumption of various raw ingredients available in
the local market, it will contribute to the local economy by helping local
businessmen, such as peanut butter vendors and grocery store owners. Because
Churros Company has healthy offerings such as carrot peanut butter balls, banana
churros and mango churros, it will contribute in the long-run to the national
economy by nourishing students, who are the future labor force of the country. The
taxes to be paid by the entity will also help drive the national economy.

MARKETING PLAN

Description of the Product

Churros are tasty deep fried, ridged sticks of dough, sugar-sprinkled and served with warm
chocolate sauce for dipping. They have long been the working man’s breakfast or after-party
snack of choice in Spain, with churrerías often the first eateries to open in the morning, and the
last to close at night. (http://www.theprisma.co.uk/2011/07/17/churros-a-secret-history/). The
Churros Company will offer three flavours of churros: original, banana, and mango.
A classic Christmas confection in some southern states in America, peanut butter balls consist of
peanut butter and other ingredients rolled into balls. When dipped in chocolate, these are called
Buckeye Candy (http://www.deepsouthdish.com/2011/08/old-fashioned-peanut-butter-
balls.html). Churros Co. will be putting a new spin into this rich dessert by adding carrots to the
mixture. Customers can choose to have their carrot peanut butter balls dipped in chocolate and
topped with either rainbow or choco sprinkles.

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Three pieces of churros will be included per serving, and the carrot peanut butter balls will also
be served by three’s.
OUR VISION
Our vision is to be a sought-after pastry snack provider in La Carlota City to satisfy the urge for
the sweet taste that La Carloteños crave several times a day (After meals, in breaks and the
“merienda”) and that is part of our cultural and culinary heritage. Aside from these, Churros Co.
shall have the unique selling proposition of “Deliciously Fun!”
OUR MISSION
Our mission is “to bring customers delight with every taste and bite”. CHURROS CO is
dedicated to providing top of the line products and quality service. It is our goal to prosper as a
business and grow as entrepreneurs. By doing so we share our success in the global market, as
well as provide a profitable return to our team members and business partners.
OBJECTIVES
 To acquire 6% market shares in the La Carlota City
 To position ourselves as a small scale enterprise, with strong ties to the community.
 To be perceived as the cleanest, most responsive food stand within the school vicinity
 To end year 1 with a 10% increase in contribution margin.
 To increase sales , 10 % in year 2, 25% year 3 and 50% in year 4 and 5.

GOALS
 To maintain positive balance in our lives so that the business rounds us out and reflects our
values.

 To offer our community wholesome foods that are satisfying, great tasting, and worth every cent.
 To have our employee/s and customers feel appreciated, supported and satisfied, every time they
come in.
 To introduce new products in the local market

Comparison of the Product with its Competitors

Currently churros and carrot peanut butter (CPB) balls are not offered in Digos City. These are
unique products that will compete with the sweet offerings within the market area. The Churros
Co. banks on the novelty of its creations to entice customers to try our products. To retain
customers, we will ensure that every batch of churros and carrot peanut butter balls will have the
highest quality and consistency.
The snacks considered relatively comparable to our products are fried bananas, kwek-kwek,
fishballs, tempuras, cassava cake, and kamote delight.
Our price is equivalent to the price of one cassava cake, but is higher compared to the other
sweet products mentioned. The packaging for our product is more presentable than that of the
other sweet snacks in the canteen, giving us a competitive edge.

Location

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Churros Co. will operate its first stand inside the DSHBNHS campus in La Carlota City, a 3rd
class city in Negros Occidental, Philippines. Most of the production process shall take place in
the individual partners’ homes for the first three years of operations. On Year 3 onwards, initial
preparation of raw materials shall also occur in the stand.

Market Area
The Churros Company production and sales area shall be in a stand located adjacent to the
Master Siomai cubicle but inside the Students’ Lounge near the DHSBNHS canteen.

Main Customers
The main customers of Churros Co. stand shall be the students, college students, faculty, staff,
and other employees of DHSBNHS and La Carlota City College who are present during regular
school days.

Market Share
Due to time and labor limitations, it is estimated that Churros Company will serve carrot peanut
butter balls and churros at a rate of 180 servings, each, per day.

Selling Price
Churros Co. plans to sell three 3-inch pieces of churros (any flavor) in a small paper container,
along with a chocolate dip in a small plastic container, at an affordable price of P10.00. For the
same price a customer can buy three pieces of any type of carrot peanut butter ball in a wax
paper container.
Sales Revenue
Year 1 Year 2 Year 3 Year 4 Year 5
626,400.00 689,040.00 861,300.00 1,722,600.00 1,894,860.00

Promotional Measures
Churros Co. will host a grand opening and product launch with free samples on June 6, 2016.
Upbeat music shall accompany the event. Flyers shall be distributed and balloons shall be set up
around the stand.
The Churros Co. stand shall bear a sign with the Churros Co. logo and shall be decorated in a
way that reflects the Churros Co. mission and vision. The point-of-sale display will be done in a
creative manner to appear visually appealing to potential customers

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Marketing Strategy
To guide the organization and to leave a distinct impression upon its customers, the Churros Co.
shall have mission and vision statements, which will be displayed prominently on its stand. Our
mission is “to bring customers delight with every taste and bite”. Our vision is to be a sought-
after pastry snack provider in La Carlota City. Aside from these, Churros Co. shall have the
unique selling proposition of “Deliciously Fun!”
Churros Co. will position itself as a leader in the sweet snacks market by offering unique
products that will satisfy customer’s cravings and budget. This product differentiation strategy is
expected to capture the attention of the academic community.
Our marketing strategy will include word-of-mouth referrals and social media campaigns. A
Facebook page shall be set up, showcasing Churros Co. products.
Marketing Budget
Churros Co. will mostly rely on the goodwill it will generate through its innovative and high-
quality food offerings. As such, we expect our customers to share good reviews about us orally
or through social media. Thus the marketing budget is simply broken down into cash needed for
the grand opening and product launch, as follows:
DESCRIPTION QUANTITY COST TOTAL
Balloons 100 pieces 200.00/pack of 100’s 200.00
Flyers 100 pieces 1.00 100.00
Free Samples 180 servings of carrot 5.73/ serving 1,031.40
peanut butter balls

180 servings of 7.82/serving 1,407.60

churros;
60 original
60 banana
60 mango
Tarpaulin 2 2x3 ft. piece 60.00/piece 120.00
Transportation 100.00
Total 2,959.00

Raw Materials Availability

The raw materials needed are available in La Carlota Public Market and various store in Bacolod
City. These will be purchased weekly. To ensure availability and prevent stockouts, safety stock for
one week operation for non-perishable ingredients such as oil, flour, salt, and sugar shall be
maintained. Safety stock for perishable ingredients such as mango fruit, banana and carrots shall be
maintained for a two-day operation. The entity shall have its purchases of perishable ingredients
every two days.

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 OPERATING REQUIREMENTS

Production Process
The business will operate in a stand at the DHSBNHS school canteen. Before the daily operation
begins, ingredients needed and products prepared shall be placed in the stall, segregated and
stored in proper containers.
The Churros Co. stand shall be open for 8 hours from 9:00am to 5:00pm.
Preparation and Storage
Churros dough and carrot peanut butter balls shall be prepared the night before. To avoid
spoilage, these products must be stored in a cool place. As it would be impractical to buy a
refrigerator solely for this purpose, the products will be stored in the refrigerators of each
partner, from Year 1 to Year 3. But on Year 3 to 5, raw materials shall also be processed fresh on
the day the products will be sold, by the additional laborer.
Cooking
The churros dough will be cooked upon customers’ orders. It will be served in a specially
designed paper container, with the Churros Company logo, along with the chocolate syrup in a
separate plastic container. Peanut butter balls will be readily available upon order and served in a
The specially-designed churros containers shall be made annually before the start of the year’s
operations. The number of containers produced per year shall correspond to the forecasted
number of servings to be produced annually. Wax paper cup.
Fixed Capital
The business’ fixed capital shall include items which are used for more than one period and are
expected to benefit future periods. The entity’s fixed capital shall include the following

Fixed Capital Description

Large frying pan Used for deep frying churros upon customers’
order
Butane gas stove Powered by butane gas refill

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 Portable gas stove used for cooking
Pastry Tip Stainless steel mold for forming churros
Measuring cup Brand: Pyrex
Glassware used to accurately measure
ingredients

Life of Fixed Capital

The estimated useful life of the large frying pan is estimated to be 5 years. The portable butane
gas stove will also have a useful life of 5 years. The pastry tip is made of stainless steel and is
estimated to have a longer useful life of 10 years after which it will be worthless. There will be 3
pieces of pastry tip for each flavour of churros. Measuring cup which is made of glass will have
an estimated life of 10 years with no residual value. Due to the immateriality of the amount of
their residual values, such are disregarded.

Maintenance and Repairs

The nature of the business’ fixed assets does not require regular maintenance and repairs. The
entity shall use replacement method. When asset is proved to be worthless, the same shall be
replaced with a new one. Any remaining carrying amount of the old asset shall be derecognized
and charged to loss on retirement of the asset.

Sources of Equipment
The business aims to produce quality products through the use of equipment with good quality
standards. To ensure such quality, the entity shall purchase equipment at the preferred and
available suppliers.
List of sources of equipment
EQUIPMENT SUPPLIER
Frying pan Season’s Trading, Bacolod City
Butane gas stove Total Gas Station, La Carlota City
Pastry tip Chef and Bakers Bacolod City

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Measuring cup Chef and Bakers Bacolod
Planned Capacity
The business will operate at full capacity. All the partners will industrially contribute in the
preparation and production of the products, except for the 4th year onward, where the laborers
will take over production. The researchers estimate the capacity of each partner to produce 108
pieces or 36 servings of carrot peanut butter balls and 36 servings of churros dough.

Future Capacity
The partners shall hire additional laborers upon the future expansion of the business. Future
capacity will increase by 105 pcs of carrot peanut butter balls and 165 pcs of churros for each
additional unit of labor.
Terms and Conditions of Purchase of Equipment
The acquisition of the entity’s equipment shall be on a cash basis. Thus, all equipment shall be
immediately paid upon purchase.

Factory and Location Layout

The business’ production and sales area shall be in a stand located adjacent to the Master Siomai
cubicle but inside the Students’ Lounge near the DHSBNHS Canteen. Presented below is the
layout of the production area of Churros Co.

Raw Materials
The necessary raw materials for the business are as follows:
PRODUCT RAW MATERIALS SUPPLIERS
Carrot Peanut Butter Ball Peanut Butter La Carlota Public
Market/Rosario Mesaya
Margarine La Carlota Public Market
Carrot La Carlota Public Market
Colored Sprinkles Chef and Bakers
Choco Sprinkles Chef and Bakers
Confectioner’s Sugar Chef and Bakers
Wax Paper Cups Chef and Bakers

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 Churros
Brown Sugar La Carlota Public Market
Salt La Carlota Public Market
Butter Lopue’s Grocery Store
White Flour La Carlota Public Market
Eggs Taala Farms
Vanilla extract Chef and Bakers
Ground Cinnamon Chef and Bakers
Confectioner’s Sugar Chef and Bakers
Mango La Carlota Public Market
Banana La Carlota Public Market
Paper Container Chef and Bakers
Chocolate Dipping Chocolate Syrup Chef and Bakers
Small Plastic cups Chef and Bakers

Raw Materials Availability

The raw materials needed are available in La Carlota Public Market and Chef and Bakers. These will
be purchased weekly. To ensure availability and prevent stock-outs, safety stock for one week
operation for non-perishable ingredients such as oil, flour, salt, and sugar shall be maintained. Safety
stock for perishable ingredients such as mango fruit, banana and carrots shall be maintained for a
two-day operation. The entity shall have its purchases of perishable ingredients every two days.

Cost of Labor
The business will hire one (1) personnel who will be in-charge in the stand daily. Work schedule will
start from 9:00 – 5:00 pm. The partners will industrially contribute in the production of their
products. The entity shall acquire additional labor only on the third year, as well as on the fourth
year.
Churros Co. shall register its employees with the SSS, PhilHealth and Pag-Ibig when they are
employed.
For each unit of labor that will be acquired the entity shall incur salary expense of P286.00 per day,
the minimum wage for Region VI. The proponents estimate a business need of one additional labor
on the third year, and another additional labor on the fourth year. The cost of labor on these periods
shall be P50, 050.00 per year per laborer, since the entity will not be incurring labor expenses during
the 2 months of shutdown: April and May.

Labor Productivity
Each night before every workday, each partner is expected to make 36 servings of carrot peanut
butter balls and enough churros dough to make 36 servings. However, each additional unit of
external labor is expected to produce an output of 180 servings of carrot peanut butter balls and 180
servings of churros each day, since the laborer has the whole day to process the raw materials.

Rent Expense
The business shall operate and produce products in a stand at Doña Hortencia Salas Benedicto
National High School canteen. The school charges P5, 000.00 as rent expense for stand vendors.
Rent expense is paid one month in advance. In addition, a P15, 000.00 rent deposit shall be paid at
the beginning of the first month. Churros Co. plans to continue operations indefinitely, thus this
deposit shall be considered as non-current asset.

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Its rent expense shall be considered part of the factory overhead expense for the reason that the stand
is used for the production and operation of the business.
Production Cost
During the first year of operation, the Grand Opening of the Churros Co. stand requires free samples
of 180 servings each for carrot peanut butter balls and churros. The costs of these amounts will be
expensed instead of added to inventory.
The entity shall maintain a desired ending inventory equal to the safety stock of one week operation
of the next year’s sales. Budgeted production shall equal the annual forecasted sales. The sales of
each flavour and variation are derived by multiplying the annual sales by the sales mix ratio.
It is assumed that prices will remain constant and stable for the first five years of operations.

 ORGANIZATION AND MANAGEMENT PLAN

 Form of Business

 Churros Company shall operate as a partnership between Mecor Riego, Marie Occeña,
Charmaine Trocino, Rizalyn Tingson and Glen Obelidon. All partners will contribute capital
and industry to the partnership.

 3.2. Organizational Structure

 The partnership shall be organized as follows:

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 The partners have decided that Ms. Riego shall be the General Manager. Ms. Trocino shall be
the operations manager, Ms. Tingson shall be the assistant operations manager, Mr. Obelidon
shall be the financial manager, and Ms. Occeña shall be the marketing manager on the first
year.

 FINANCIAL MANAGER
 Responsible for all financial matters relating to the business.
 Ensures that proper accountability and accounting is established.
 Collects and safe keeps any additional capital contributions from the partners.
 Finds ways to generate more income for the company.
 Initiates proposals for investing excess cash.
 Maintains a set of books for accounting.
 Prepares financial reports and budgets.
 The following are the duties and responsibilities of each member of the organization
 OPERATIONS MANAGER
 Oversees the business operations.
 Manages logistics and inventory concerns.
 Keeps production and product quality reasonably high and constant.

 OPERATIONS ASSISTANT MANAGER

 Assists the operations manager in the management of the main business activity,
 Prepares inventory lists.
 MARKETING MANAGER
 Manages relationships with customers.
 Develops marketing strategies and plans.
 Responsible for advertising concerns

 Pre-operating Expenses
 The following table shows the pre-operating expenses of Churros Company:

 ACTIVITY  AMOUNT
 Research and  581.22
development
 Training  361.20
 Organization Cost  14,605.00
 Setup of Stand  17, 676.02

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  Total  33,381.02

 Research and Development Breakdown Cost

 Particulars  Quantity  Price  Total
 Brown sugar  37.50 g  40.00 per kg  1.50
 Salt  16.68 g  18 per kg  0.30
 Margarine  351.99 g  10.00 per 100 g  35.19
 White flour  2 kg  42.00 per kg  84.00
 Eggs  6 pcs  6.00 per pc  36.00
 Vanilla extract  18 ml  260.00 per 450  10.41
ml
 Ground  4.71 g  560.00 per kg  2.64
cinnamon
 Confectioner’s  187.50 g  130.00 per kg  24.36
sugar
 Chocolate  1 bottle  92.95 per bottle  92.95
 Bond paper  5 pcs  1.00 per pc  5.00
 Mango  1 pc  20.00 per pc  20.00
 Banana  2 pcs  5.00 per pc  10.00
 Peanut butter  1½ cup  35.00 per cup  52.50
 Carrot  3 medium-sized  10.00 per pc  30.00
 Toothpick  1 box  35.95 per 1000  35.95
pcs
 Wax paper cup  6 pieces  6.25 per 90pcs  0.42
 Sprinkles  ½ kg  128.00 per kg  64.00
 Transportation  76.00
 TOTAL  581.22
 

 Particulars  Quantity  Price  Total

 Brown sugar  12.50 g  40.00 per kg  0.50
 Salt  5.56 g  18 per kg  0.10
 Margarine  72.33 g  10.00 per 100 g  7.23
 White flour  656.25 g  42.00 per kg  15.75
 Eggs  2 pcs  6.00 per pc  12.00
 Confectioner’s  62.50 g  130.00 per kg  8.12
sugar
 Bond paper  10 pcs  1.00 per pc  10.00
 Mango  ½ pc  10.00 per pc  5.00
 Banana  1 pcs  5.00 per pc  5.00
 Peanut butter  ½ cup  35.00 per cup  17.50
 Carrot  1 medium-sized  10.00 per pc  10.00
 Transportation  270.00
 TOTAL  P 361.20
 Training Cost Breakdown

 Administrative Expenses
 The budget for annual administrative expenses are as follows:

 ITEM  QUANTITY  AMOUNT

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  Bond Paper  1 ream  300.00
 Special Books  4 pcs  150.00
 Envelopes  5 pcs  40.00
 Ballpens  12 pcs  60.00
 Stapler  1 pc  85.00
 Stapler Wires  1 box  50.00
 Total   685.00

 Organization Cost Breakdown

 Procedure  Estimated Cost

 Registration and Verification at Securities  40.00
and Exchange Commission
 Preparation of Legal Documents 
500.00
 Bank Account Opening 
250.00
 Notarization of SEC Documents 
500.00
 Registration at SEC and TIN acquisition  3,500.00
 Obtain Barangay Clearance  300.00
 Submit document and pay for business  8,100.00
permits
 Apply for Certificate of Registration and  115.00
TIN at the Bureau of Internal Revenue
 Registration as Barangay Micro Business  1,000.00
Enterprise with the City Treasurer’s
Office
 Total  14,605.00

  Permits and License  1,200.00
  Transportation Expenses  150.00
  Administrative Expenses  685.00
  Business Tax  1,836.00
  Pre-Operating Expenses  33,381.02
  Initial Cash  1,571.56
  TOTAL COST  103, 500.00

 Financing Plan and Loan Requirement

 The partners have decided to finance the business using their own money. They shall
contribute P 20,600.00 each, amounting overall to P 103,000.00 The partners shall
register the business as a Barangay Micro Business Enterprise (BMBE) to avail of the
income tax exemption. A BMBE is defined as any business enterprise engaged in
production, processing, or manufacturing of products, including agro-processing, as well
as trading and services, with total assets of not more than P3 million (RA 9178).
However, the business is not exempt from paying monthly percentage tax of 3%. The
business is exempt from the minimum wage requirement.

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  MANAGEMENT PLAN

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


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