The EROE MOKA Pot and The COFFEE Beans

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY
Statement of Purpose
Legal Structure
Owners
Location
Business Concept
Mission Statement
Vision Statement

II. MANAGEMENT & ORGANIZATION

Management Team
Hiring Practices
Organizational Structure
Staffing Expense/Benefits

III. PRODUCTS & FACILITIES

Initial Products or Services
Proprietary Features
Future Planned Products or Services
Physical Facilities
Equipment Requirements
Production & Process Capacity
Significant Vendors
Licensing Requirements

IV. INDUSTRY ANALYSIS

Background/Trends for Industry

Typical customers & buying patterns
Marketing niche
Competitors
Strengths
Weaknesses
Substitutes or indirect competition
Unique Selling Proposition & Overt Benefit

V. THE MARKETING PLAN

Marketing Strategy
Marketing Objectives
Promotion Plans
Sales and Distribution
Warrantees, guarantees, serving issues

VI. THE FINANCIAL PLAN

Financial summary
Historical financial statements
Financial Projections –
Start-up Costs
RMA – Risk Management Associates
Financial Ratios Analysis

1. Introduction/ Preface

2. The EXECUTIVE SUMMARY

Statement of Purpose
-To promote the best Coffee Production in the Philippines.
-To realize that we can only induce best coffee using an extractor at a
minimal cost.
-By promoting good health using only pure products.

Legal Structure/ Owners

Eroe is currently a corporation owned by Elaine Therese Basilio-

Castaneda, Christian Castaneda, Buena Grace Aquino, Jeffrey Valencia, April
Rose Castaneda, Adriane Arreza Gonzales and Thessalin Basilio.
Located at 4-5F Sunshine Condominium, Guijo co

Mission Statement
-To promote health and wellness.
-To realize that we have great coffee to offer to the world.
-To maximize the flavors of our coffee using our own moka pot product.
-To help the country promote that we have the best resources and good quality
of natural resources.

Vision Statement
-To be a PINOY WORLD CLASS brand.
-To be world renown exporters of famous coffee flavors with our own made moka
pot.
-To be able to make a livelihood on our own Charity.

VALUES
Ereo is committed to high-quality, affordable moka pots and coffee beans.
We promised to serve only the purest and the best quality we can
produce.

2.1. Highlights
2.2.1. Project Background
Name of Proposed Project:
Type of Business Organization:
Location of Project:
Proponents:
2.1.2 Management and Personnel Feasibility Summary

2.1.3 Marketing Feasibility Summary

2.1.4 Production or Technical Feasibility Summary

2.1.5 Financing and Financial Feasibility Summary

2.1.6 Socio-Economic Feasibility Summary

2.2 Conclusion to Feasibility

3. PROJECT BACKGROUND

3.1 Project Proponents

Name Nationality Address % Ownership

Filipino
3.2 Proposed Name of the Business: Ereo
3.3. Type of Business Organization: Corporation
3.4 Location of Head Office and Factory

4.0 Management and Personnel Feasiblity

4.1 Personnel (Administrative)

Owners

Admin/Finance Legal Ads/ Promo Sales Manager

HR/contract Luzon Mgr Visayas Mgr Mindanao Mgr

Salespeople
Salespeople Salespeople

Job Person Remarks

Admin/Finance Accountant
Legal Attorney
Ads/Promos
Sales Head Manager
Luzon Manager
Visayas Manager
Mindanao Manager
Luzon Salespeople
Vis Sales
Min Sales

4.2. Management Proposal

A. Job Analysis
B. Job Description
C. Job Specifications
D. Job Classifications-Line and Staff organizations
4.3 System and Forms Design

Book III: Conditions of Employment

Rule I. Hours of Work
II. Night Shift Differential
III. Weekly Rest Period
IV. Holidays with Pay
V. Service Incentive Leave
VI. Service Charges
VII. Wages
VIII. Payment of Wages

Book IV: Health, Safety and Welfare Benefits

Rule I. Medical and Dental Services

II. Occupational Health and Safety.

Book V. Labor Relations

Rule IX. Registration of collective bargaining agreements
Rule X. Voluntary Arbitration
 Rule XI. Labor Management Cooperation
Rule XIII. Picketing, Strikes and Lockouts
Rule XIV. Termination of Employment
Rule XV. General Provisions
Book VI. Post Employment
Rule I. Terminaiton of Employment and Retirement

List of Some Administrative Forms and Records

1. Employee Requisition Forms
2. Application Form
3. Pending Application File
4. Attendance or Time Record
5. Job Analysis Records
6. Job Evaluation and Classification Records
7. Merit Rating Records
8. Employment Tests
9. Physical and Medical Exam Reports
10. Employees training record
11. Termination and Retirement Records
12. Company Legal Documents Records File
13. Personnel Information Sheets
5.0 Marketing Feasibility

Checklist of Some Marketing Forms and Records

1. Sales Invoice
2. Delivery Receipts
3. Receiving Receipts
4. Official Receipts
5. Promissory Receipts
6. Check Vouchers
7. Petty Cash Voucher
8. Subsidiary Customers’ Ledger
9. Promissory Notes
10. Credit Memos
11. Debit Memos

5.1 Market Description

MARKETING PLAN
CUSTOMERS AND TARGET MARKET:
Initial customers and target for the first year of business will be those who are:
 Living in the Philippines
 Age: 16-100 years old.
 Male/Female
 Income Level: 2000-100000 and up/ monthly

5.2 Demand
A. Coffee beans

Age ‘06 ‘07 ‘08

18 – 24 31% 37% 26%
25 – 39 47% 44% 47%
40 – 59 59% 61% 61%
60 + 73% 74% 71%
Production and Industry
Coffee is one of the world's more important primary commodities. The coffee
producing belt includes approximately 70 countries worldwide and employs
approximately 20 million people. Information from the United States Department of
Agriculture shows us that the world coffee production in 2008/2009 is forecast at a
record 138.4 million bags or 132.276 pounds. The Brasil Coffee House, for example,
imports only select naturally processed green coffee exclusively from growers in the
Cerrado and South Minas region of Brasil. The Brasil Coffee House franchises the
option of owning and operating one of these unique plantation style coffee stores.

PROJECTED DEMAND FIGURES

 TOTAL POPULATION (16YO-85UP) =67,997,064

Population grew by 1.90 percent annually

Total Household population by age group

(2010 Census of Population and Housing ) 2010 92,097,978

Under 1

1–4 1,967,576

5–9 8,263,625

10 – 14 10,317,822

15 – 19 10,168,546

20 – 24 9,676,094

25 – 29 8,369,801

30 – 34 7,390,255

35 – 39 6,743,967

40 – 44 5,990,217

45 – 49 5,450,770

50 – 54 4,664,551

55 – 59 3,883,791

60 – 64 2,980,483

65 – 69 2,224,237

70 – 74 1,495,178

75 – 79 1,140,892

80 – 84 705,982

85 and over 664,191

(2007 Census of Population ) 2007 88,546,087

YEAR POPULATION(approx.) Average

Household(x/6)
2010 68M
2011 69.29M
 2012 70.6M
2013 71.95M
2014 73.31M
2015 74.71M 1.245M

*Approximately Minimum of 1.245M houses in the Philippines with ages 16-85up)

Years of Operation Total Projected Demand

5.3 Supply

SUPPLY FIGURES DATA

Georgraphical Sources

PROJECTED SUPPLY FIGURES

A. Moka Pot

Years of Total Projected Supply

Operation
Luzon Visayas Mindanao Monthly
2015 6916 6916 6916 532
2016 8990 8990 8990 691
2017 11687 11687 11687 899
2018 11687 11687 11687 899
2019 11687 11687 11687 899

Goal:
a. ¼ of 1.245M to have moka pots on each household= 311,250 pots.
b. Divided by 3 islands= 103,750
c. Divided by 5 years of supply = 20750 pots/year
d. Divided by 3 islands= 6916 pots/ island/year
*increase/ growth of sales 30% (on first 3 years)

B. Coffee Bean
Years of Total Projected Supply
Operation
Luzon Visayas Mindanao Monthly
2015 6916 6916 6916 532
2016 8990 8990 8990 691
2017 11687 11687 11687 899
2018 15193 15193 15193 1152
2019 19751 19751 19751 1645
Goal:
a. Package Price: ( Moka Pot + Coffee flavor)
b. First 3 years: (Moka Pot + Coffee Flavors increased by 30%)
c. Coffee Flavors increase by 30% yearly

5.4 Demand-Supply Analysis

A. Moka Pot

Year Demand Supply (s) D-S Gap Percentage

(1) (2) (3) (4)=(2)-(3) Unsatisfied
(5)=[(4)/(2)]x100%
Past
1
2

Projected
2015 1.245M 20748 1.238M 99.44
2016 1.268M 26972 1.259M
2017 1.293M 27004 1.281M
2018 1.317M 27004 1.305M
2019 1.342M 27004 1.330M

B. Coffee Bean

Year Demand Supply (s) D-S Gap Percentage

(1) (2) (3) (4)=(2)-(3) Unsatisfied
(5)=[(4)/(2)]x100%
Past
1
2

Projected
2015 6916
2016 8990
2017 11687
2018 15193
2019 19751

Supply Measurements
A. Local Production Capacities
1. MOKA POT
2. COFFEE BEANS
Local Production Locations:
Cordillera Administrative Region, Regions 4, 6, 10, 11, and 12
B. Importations
C. Products Substitutes

5.5. General Marketing Practices

-DEVELOPMENTAL MARKETING-the target market is looking for a product that
does not yet exist, we would want to develop a product that would satisfy the
demand.

5.6 Proposed Marketing Program

A. Target Market

 Living in the Philippines

  Age: 16-100 years old.
 Male/Female
 Income Level: 2000-100000/ monthly\

B. Sales Force

C. Marketing and Research and Development (R&D) Program

1. Budget Analysis- sales estimates, marketing costs and profits and market
tests.

Budget 2015 2016 2017 2018

Analysis
Production
Legalities
System
Ads/Promo
Profit Margin
Sales
Estimate
Marketing
Cost
Market Test

2. Source Information
3. Product Development
-Branding/Labeling and Packaging.

D. Product Mix Strategies

E. Marketing Timing and Scheduling Strategies
a. Introduction Stage
b. Growth Stage
c. Maturity Stage
d. Decline Stage
F. Pricing Strategies

COMPETITIVE ANALYSIS
Factors EROE
1. Products
2. Price
3. Quality
4. Product selection
5. Customer service
6. Product service
7. Reliability
8. Expertise
9. Image/Reputation
10. Location
11. Layout
12. Appearance
13. Sales Methods
14. Credit Policy
15. Availability
16. Management
17.Longevity/Stability
18. Advertising
G. Terms and Conditions of Sales Strategies
a. Discounts and Allowances

Types Regular Price Discounted

Quantity Discount
Trade
Season
Cash
Forward Dating

b. Promotional Allowances

Types Regular Discounted

Free Samples
Free Deliveries

H. Channels of Distribution Strategies

A. Channel level
Four-Level-(Manufaturer-Wholesaler-Retailer-Consumers)
Five-Level-(Manufaturer-Wholesaler-Jobber-Retailer-Consumers)

B. Flow Types:
-Physical Flow, Payment Flow, Promotional Flow, Title Flow and Information
Flow.
C. Horizontal/ Vertical Growth Possibilities.

I. Transportation and Deliveries Strategies

-Laguna to Manila- Land
-Manila to Davao/Cebu- Air
J. Branding and Packaging Strategies
c/o Ian and sweet for the logo, packaging and designs

-We can also consider a set of cups with the moka pot.

-Consider having different colors.

-Different sizes.

-Packaging Strategies
-Labeling Strategies

K. Advertizing and Promotions Strategies

Consider Checklists:

Strategies Target Date Launch Remarks

Personal Selling
Suppliers
Personal
Assistance
Internet via FB
Sales
Presentation
Coupons
Trade Exhibit
Free Samples
Market
Demonstration
Contests
Sales Conference
Print/Visual Ads

L. Storage and Warehousing Strategies

Strategies
Budget
Inventories
Distribution Center
Storage Space Rented/Owned
Material Handling
Expansion Posibilities
Physical Distribution

M. Physical Distribution Strategies

Consider:
-Single Plant, Multiple Market
-Multiple Plants, Multiple Market

5.7 Projected Sales

Years of Total Projected Supply
Operation
Luzon Visayas Mindanao Monthly
2015 6916 6916 6916 532
2016 8990 8990 8990 691
2017 11687 11687 11687 899
2018 11687 11687 11687 899
2019 11687 11687 11687 899

Products 2015
and By
Products
Descriptions Unit Price Quantities To be Sold Sales Revenue
Exp Loc Exp Loc Total Exp Loc Total

Grand Total:

Products Year 2
and By
Products
Descriptions Unit Price Quantities To be Sold Sales Revenue
Exp Loc Exp Loc Total Exp Loc Total

Grand Total:

6.0 Productions or Technical Feasibility

6.1 Products
-the details of products, pictures

6.2 Production Process

-flow Diagram

Process Time
Lead Time
Processing Time
Materials
Production or Activity
Flow
Management Program
Quality and Monitoring
Standards
Automation/
Computerization Project

6.3 Alternative Processes

Advantages Disadvantages

*Preparatory Plans for implementations of alternative in case of applications-

6.4 Materials Handling Design

Proposed Material
Handling

*Prove that it is better

than the altenatives

Cost
6.5 Technological Assistances

Type of Assistance Name of Office/ Address and Telephone

Specialist # and Contact Person

6.6 Project Site

Location:

Advantage Disadvantage
Location 1
Location 2
Multi-Plant Location
Current Cost of Real Loc1
Estate in the Viccinity Loc2
Loc3
Allocation for future
Expansion
Current Site condition Loc1
Loc2
Loc3

COST ESTIMATES OF SITE ACQUISITION AND PREPARATION

Item Quality Source of Funding Total

Description Local Foreign
Amount Amount
Land
Legal
Expense
Right of Way
Tenants’s
Right
6.7 Project Layout
Alternatives:
Decision
Reason

6.8 Plant Size and Production Schedule

6.9 Building and Facilities
6.10 Floor Plan

6.11 Machineries and Equipment

6.12 Utilities
6.13. Raw Material Requirement
6.14 Manpower Requirements

Department/ Position No. Rate Total

Section Basic Benefits

6.15 Waste and Waste Disposal Method

6.16 Total Production Costs
6.17 System Forum Designs

7.0 FINANCING FEASIBILITY

7.1 Total Project Cost
Items Category Debt Equity Total
A. Real Estate Rent

Total Initial
Fixed Capital
Cost

B.Pre-Operating Capital Cost

Items Category Debt Equity Total

Recruitment

Marketing and
Promotions
Legal Permits
Total Pre-
Operating
Capital Cost

C. Initial Working Capital

Items Category Debt Equity Total

Current Inventories
Assets: Raw Materials

Accounts
Receivable
Cash on Hand

Pre-Operating Salaries and

Production Wages
Costs: Raw Material
Overheads
Total Initial Working Capital
Total Cost Of the Project

7.2 Financiers
Item Category Debt Equity %
Contribution

Total 100%

-Bank Loan?

8.0 FINANCIAL FEASIBILITY

8.1 Major Assumption Used
8.2 Projected Financial Statements
8.2.1 Pre-Operating Period
Balance Sheet

Assets
-Current Assets
Cash
Pre-Paid Expenses
-Fixed Assets
Land/Rent
Equipment
Patents
Total Assets
Liabilities and Capital
Liabiliites
Long term
Short Term
Total Liabilities

Capital
Capital Contribution
Capital End
Total Capital
Total Liabilities and Capital

Cash Flow

Cash Inflows:
 Cash Contributions
Loans
Total Cash Inflows

Less: Cash
Disbursement
Rent
Patents
Prepaid Expenses
Legal Permits
Cost of Material
Miscellaneous Expenses
Total Cash Disbursement
CASH BALANCE, end

8.2.2 Operating Period

Assets 2015 2016 2017

Current
Assets:
Cash on Hand
Cash in the
Bank
Receivables
Inventories
Prepaid
Expenses
Supplies on
Hand
Investments
Fixed Assets
Rent
Patent

Schedule 1: Cash Disbursement Table:

A. Costs of
Sales
Purchases
Freight
Less: Cost of Return
Purchase
Allowances
 Manufacturing
Overhead

B. Expenses
Selling Expenses
Salesmen’s
salaries
Commisions/
Bonus
Traveling
Expenses
Sales Taxes
Ads
Delivery
C.
Administrative
Expenses
Salaries and
Wages
Taxed and
Licenses
Office Supplies
Bad Debt

Schedule 2: Cost of Goods Manufactured and Sold

8.3 Financial Analysis

Financial Ratio 2015 2016 2017 2018

Measures of Profitability
Measures of Asset Use
Measures of Liquidity
and the Use of Debt
a. For a single-Product Project
Break-Even Point 2015 2016 2017 2018 2019
Summary
BEP Selling Price:

Profit BEP Selling Price

Cash BEP Selling Price
Debt- Service BEP Selling
Price

BEP Sales Volume

Profit BEP Sales Volume

Cash BEP Sales Volume
Debt Servic BEP Sales
Volume

b. For multiple Product Project

Break-Even Point 2015 2016 2017

Summary
BEP Selling Price:

Profit BEP Selling Price

Cash BEP Selling Price
Debt- Service BEP Selling
Price

BEP Sales Volume

Profit BEP Sales Volume

Cash BEP Sales Volume
Debt Servic BEP Sales
Volume

Products 2015 2016 2017

On Selling
Price

%increase
% decrease
Production
Expense
%increase
% decrease
Production
Capacity
%increase
% decrease

8.4 System and Forms Design

9.0 SOCIO-ECONOMIC FEASIBILITY

9.1 Your Project’s Employees

ITEM
th
Year Salaries Wages 13 mo. Total
Pay

Total

9.2 The Government

TYPE OF TAXES
Year Income Licenses Etc Total

Total
9.3 Other Beneficiaries

10.0 PROJECT IMPLEMENTATION AND TIME TABLE

10.1a GANTT-Chart of Activities

Activity Duration (Unit of Time)

1 2 3 4
Project Conceptualization
Preparation of FS
Negotiation/ Approval/
release of Finance
Legal Registration
Management Training/
Recruitment
Arrangement of
Marketing
Dry Run of Operations
Start of Normal
Operations

10.1b Program Evaluation and Review Technique- Critical Path Method (PERT-
CPM)

10.2 Budgeting and Costs

Activity PRE-OPERATING COSTINGS

10.3 Assignment of Activities

Activity In-Charge Contact Numbers/

Email:A

ACTIVITY MANAGEMENT PERSONNEL MARKETING